In the latest market update, we look at stronger economic data from the US driving inflation and FED rates higher. We also cover Europe, Asia and Australia. Risks seem elevated with regards to future market action! A wake-up call to Bulls?
CONTENTS
0:00 Introduction 1:30 Earnings and PEG 6:24 PCE Read 9:45 New Home Sales 11:39 US Markets 14:15 Oil Prices And the USD 17:10 European Markets 19:35 Asian Markets 21:20 Australian Market 23:54 Crypto 24:11 Summary and Conclusion
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Digital Finance Analytics (DFA) Blog
Amplified Concerns Signals Further Market Falls Ahead! [Podcast]
The RBNZ Team lead by Adrian Orr was questioned in Parliament today, and we got more insight into the trajectory of rates, and the impact on households, with the debt servicing ratios set to rise higher than before the GFC! There was a sharp intake of breath!
In addition, there was a concession to the fact that if lending had been tighter, QE and money printing more controlled, then inflation would be lower. Is this the first time a Central Banker admitted this?
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This is an edited version of a live discussion about the state of play relating to the Australian economy, housing and finances with Leith van Onselen, Chief Economist at Nucleus Wealth and Co-founder of Macrobusiness.
Where are interest rates headed, and what will the fall out be?
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Digital Finance Analytics (DFA) Blog
DFA Live Q&A: HD Replay Leith van Onselen: Economics Now
So the NASDAQ ended lower on Friday as megacap growth stocks came under pressure after Treasury yields pointed to higher interest rates as yields on the benchmark 10-year Treasury note rose to their highest in more than a month following an auction on Thursday of 30-year bonds that saw weak demand. The yield on the US 10-year note rose 9 basis points to 3.743 while the two-year bill was at 4.53 per cent. And shares of ride-hailing firm Lyft plunged following a downbeat profit forecast.
The NASDAQ posted its first weekly fall this year, down 2.41%, while the S&P 500 ended the week lower 1.11% and the Dow Jones lost 0.17%, in a week dominated by hawkish commentary from U.S. Federal Reserve officials and earnings reports from more than half of the S&P 500 constituents.
But a rally in energy stocks as oil prices climbed on Russia’s plans to cut crude supplies helped push up the Dow and the S&P 500 The energy sector jumped 3.92% while the consumer discretionary sector fell 1.22%.
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The RBA’s Statement on Monetary Policy, out today suggests inflation will run hotter for longer and real wages will continue to shrink into the foreseeable future.
Some politicians are pushing for the Governor to resign as analysts lift their forward thinking on rates. But what is really going on? In short no one wants to take responsibility for the mega stuff-up.
Ordinary people are being hit hard, and there is no immediate relief in sight.
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Digital Finance Analytics (DFA) Blog
Everyone Blames Someone Else For This Mess!! [Podcast]
While some market analysts are calling a significant rise as inflation is crushed, others are more negative, seeing a potential drop in the markets, before a pivot – but not for another year or so. Investment sentiment is out of line….
So, the question is, are further market falls likely? How low will corporate earnings go?
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Digital Finance Analytics (DFA) Blog
More Market Falls Are Definitely Possible! [Podcast]
In our latest Monday chat, we look at the NSW proposal to match prospective renters with older homeowners (what could possibly go wrong?), the latest listings numbers, and the surprising demand for some property. And very important, we say to look up!
Something weird is afoot. There is much talk of falling inflation, moderating wages, record-low unemployment and possible soft landings. Yet some on Wall Street says 2023 will likely turn ugly.
Sure, we had a beautiful January for investors – but what if this is only a mirage—a stock rally that’s already gone too far.
Well, this the warning from strategists at Bank of America, who said investors could face brutal declines if economic growth crumbles in the second half of the year. The risk is that inflation flares up again over the next few months, and that the US economy faces a deeper recession (than that initially predicted) after staying resilient in the first six months of 2023, they wrote. But with more experts seeing potential success for the Fed after a year of panicky recession calls, it may be a warning that’s hard for some to heed. The “most painful trade,” the bank’s strategists wrote, is always the “apocalypse postponed.”
The traditional favourable start to financial markets in 2023, due to investor fund inflows that typically accompany the new year, has been turbocharged by data pointing to a greater possibility of a soft landing for the US economy and, most recently, the signals coming out of the Federal Reserve.
So, underinvested investors need to assess their willingness to lose as valuations surge ahead of the consensus view on the economic outlook says Mohamed A. El-Erian is a former chief executive officer of Pimco, president of Queens’ College, Cambridge; chief economic adviser at Allianz; and chair of Gramercy Fund Management.
The generalised price rally has been so quick and so big for both stocks and bonds that it raises an interesting question for underinvested investors who have not yet put their money to work. What they should do correlates closely, but not entirely, to their economic and policy views.
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