The latest edition of our finance and property news digest with a distinctively Australian flavour.
In our weekly review, we reflect on a chaotic week in the markets, from stocks, to crypto, even as stocks rallied at the end of the week in financial markets thanks to Federal Reserve Chair Jerome Powell’s reassurance that bigger rate hikes would be off the table for now even after the hot inflation readings of the past few days. Separate comments from San Francisco Federal Reserve president Mary Daly also backed half-percentage point rate increases at each of the central bank’s next two meetings. There is a clue to why we are seeing so much craziness.
After sinking almost 20% from a record and flirting with a bear market, the S&P 500 saw a broad-based rally on Friday. It still posted a sixth straight week of declines — the longest losing streak since June 2011. The NASDAQ 100 outperformed amid a rally in giants like Apple Inc., Microsoft Corp. and Amazon.com Inc.
Meanwhile, Elon Musk caused chaos over his takeover offer for Twitter Inc., first claiming his bid was “temporarily on hold” and then maintaining he’s “still committed” to the deal — sending the social-media giant into a tailspin. Tesla Inc. jumped. Treasuries fell with the dollar.
Despite the strong gains on Friday, many traders aren’t yet convinced that equities have reached a bottom after a selloff that shaved $10 trillion from US stock values in 18 weeks. Instead, they say investors should still brace for volatility as the Fed’s ability to fight price pressures without causing a hard landing may depend on factors outside the central bank’s control. Frankly forecasting is a mess.
Back in January, stock strategists known for their enduring optimism expected the S&P 500 to add 5% in 2022.Bond strategists weren’t any more prescient. Interest rate strategists and economists were calling for 10-year Treasury rates to rise to 2% by June. Yields took out that level in early February and have touched 3.2% this month.
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