Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
I caught up with Senator Rennick (LNP Queensland) after his recent outings in Senate Estimates and his speech on Superannuation. We explored the broader economic issues which we face, and why we need some different approaches from our regulators and the RBA.
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Global stocks rallied on Friday for a second day on hopes cooler U.S. inflation would lead to less aggressive interest rate hikes by the Federal Reserve, an outlook that pushed the dollar to its biggest two-day drop in 13 years.
On Wall Street, stocks rose to add to the prior day’s biggest daily percentage gains for the S&P 500 and Nasdaq in more than 2-1/2 years after year-over-year inflation in October fell below 8% for the first time in eight months.
“We got a potential view that the Fed may not need to get as horrible as we thought over the last couple of weeks,” Marvin Loh, senior global macro strategist at State Street in Boston, said about the market’s exuberance. “Risk could be stabilizing here.” The Fed has no choice but to press on, but if inflation is no longer rising, that indicates the end of more extensive tightening may be near, Loh said.
The Dow Jones Industrial Average rose 0.1%, the S&P 500 gained 0.92% and the Nasdaq Composite advanced 1.88%. Energy stocks rose more than 3%, buoyed by rising oil prices as China eased some of its Covid-19 restrictions, stoking hopes for a jump in demand.
The banks rose, with ANZ up 1.48%, CBA up 1.7%, NAB up 1.15% and Westpac up 1.99%. Macquarie was up 5.6%. So old world financials did well.
Where as in Crypto Pain land. Sam Bankman-Fried’s digital-asset empire filed for Chapter 11 bankruptcy, capping the downfall of one of crypto’s wealthiest and most influential moguls and his collection of high-flying ventures including exchanges and a massive trading operation.
At his peak, crypto mogul Sam Bankman-Fried was worth $26 billion. At the start of this week, he still had $16 billion. Following the collapse of his crypto exchange FTX and his Alameda Research trading house, his assets in the Bahamas have been frozen by the authorities, he’s being investigated by the US Securities and Exchange Commission for potential violations of securities rules, and regulators in Cyprus are poised to suspend his license to operate in Europe. By Thursday, the Bloomberg Billionaires Index was valuing FTX’s US business at $1, down from $8 billion in January. That’s not a typo. One dollar.
Go to the Walk The World Universe at https://walktheworld.com.au/
My latest chat with Journalist Tarric Brooker, as we answer questions relating to inflation, on the day after the latest data from the US was lower than expected. So, we examine why that is, and what the implications may be.
Sides available here: https://avidcom.substack.com/p/charts-that-matter-11th-november
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited edition of a live discussion about the current state of the financial system and whether it’s fit for purpose featuring both John Adams, and also Robbie Barwick from the Citizens Party. https://citizensparty.org.au/ Go to the Walk The World Universe at https://walktheworld.com.au/
The Bank of England raised interest rates by the most since 1989 on Thursday but warned investors that the risk of Britain’s longest recession in at least a century means borrowing costs are likely to rise less than they expect.
The BoE increased Bank Rate to 3% from 2.25% and warned that the British economy might not grow for another two years – the longest slump in records dating back to the 1920s – if rates were to go up by as much as markets have recently bet. The pound tumbled after the decision, while London-listed stocks fell and UK bonds came under pressure.
“We can’t make promises about future interest rates but based on where we stand today, we think Bank Rate will have to go up by less than currently priced in financial markets,” Governor Andrew Bailey said, in an unusually blunt message.
The BoE said it now expects inflation will hit a 40-year high of around 11% during the current quarter, more than five times its 2% target. But it also thinks the economy has entered a recession that could mean it contracts in both 2023 and 2024 and shrinks by 2.9% in total.
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Today’s post is brought to you by Ribbon Property Consultants.
The RBA released their latest Statement On Monetary Policy, which contained a higher forecast inflation rate, and a lower growth forecast, out beyond 2024. Their revisions to growth are down again, while rates would have to be higher for longer.
Compared with other Central Banks, the RBA is being too timid which will mean more pressure on households and businesses for longer.
https://www.rba.gov.au/publications/smp/2022/nov/
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My latest Friday afternoon chat with Journalist Tarric Brooker. We look at the latest charts, and discuss where things are going.
You can see the charts here: https://avidcom.substack.com/p/charts-that-matter-28th-october-2022
Tarric’s upcoming event is here: https://cloud.go.pepperstone.com/pepp-talks-melb-nov-2022
Go to the Walk The World Universe at https://walktheworld.com.au/
The news continues to confuse, as Wall Street contended with another volatile session. Investors mulled the Federal Reserve’s path of interest-rate hikes while assessing mixed economic data and a slew of earnings reports, whilst the ECB doubled official deposit rate, and Credit Suisse revealed their plans to revamp their business.
At the end of the day, the Dow closed higher on Thursday, as a rally in Caterpillar and Boeing cushioned the rout in tech after META delivered disappointing quarterly results. The Dow Jones Industrial Average gained 0.61%, the Nasdaq was down 1.6% and the S&P 500 fell 0.55%. The S&P 500 closed lower, after swinging between gains and losses for most of the session.
The big news was Meta Platforms which fell nearly 25% after reporting third-quarter results that missed on the bottom line and were an “absolute train wreck,” according to Wedbush.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
In this week’s market review we highlight once again the volatility in the markets. The fear gauge in the US is sitting at around 30, and still signals more uncertainty ahead. It is worth remembering that such massive swings are being harvested by the algo’s and big financial players who are able to trade on them, and which in turn help to exacerbate the moves. Such large swings are not a sign of a well-functioning market, more a sign of the how close to chaos we are. And as normal we will start with the US, look across Europe and Asia and end in Australia.
Equities have been under pressure this year as the central bank has embarked on an aggressive rate hike path as it attempts to reign in stubbornly high inflation, increasing worries of a policy error that will send the economy into a recession.
The latest edition of our finance and property news digest with a distinctively Australian flavour.
Go to the Walk The World Universe at https://walktheworld.com.au/
Once again, volatility continues to surge, as the S&P 500 gave up gains on Thursday driven by rising Treasury yields despite the bulk of quarterly results suggesting corporate America is in better shape than feared. Recession fears are growing. More broadly the stresses and strains are showing across UK Politics, Oil, and Investment Banking, so we will touch on all these in today’s post.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
