Economics – Page 32 – Digital Finance Analytics (DFA) Blog

The Bear Market Is Not Over – Yet! [Podcast]

One characteristic of a Bear market are relief rallies, which start strong, but which also eventually run out of steam.

We have seen this during the week, as a gauge of global stocks fell on Friday to end the trading week on a down note after five straight sessions of gains. In addition, the dollar dipped against a basket of major currencies after soft data on U.S. business activity was released.

Friday was wobbly on Wall Street which posted modest losses in early trading but declines on the S&P 500 accelerated as Big Tech names such as Meta and Alphabet lost ground in the wake of earnings from Snap Inc which plunged 39.08%.

Defensive sectors such as utilities and consumer staples were among the few advancers

“Every rally we have had during this bear market, there have been a number of sharp rallies and then they fade and we set new lows and that has been a pretty consistent pattern here,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “Everybody is looking for the turn, everybody is trying to guess at when we get a sustained rally, and everybody is hoping for one, but to me there is still a lot of unknown ahead of us.”

[CONTENTS] 0:00 Start 0:15 Introduction 0:12 Bear Market Bounces 3:30 Fed and Economic Data 5:40 US Markets 8:20 US Dollar 09:40 Oil 11:10 European Markets 14:00 Wheat Agreement 18:20 Gold 19:30 Asian Markets 20:20 Australian Markets 23:20 NAB Rate Outlook Up 24:30 Outlook 27:25 Crypto 28:00 Summary and Close

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Digital Finance Analytics (DFA) Blog

The Bear Market Is Not Over - Yet! [Podcast]

00:00 / 00:29:06

Tight Credit Markets Hits Banking’s Big Beasts… [Podcast]

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and his Morgan Stanley counterpart, James Gorman, both said Thursday that they aren’t steering their firms toward shelter even as they see a confluence of global events denting the economy in the months ahead.

“The consumer right now is in great shape,” Dimon said on a conference call discussing his company’s second-quarter results. “So even if we go into a recession, they’re entering that recession with less leverage and in far better shape than they did in ’08 and ’09.”

Gorman, on his bank’s earnings call, said a deep or dramatic recession in the US is unlikely, and Morgan Stanley is “long the US” in most of its businesses. “The US is a great region to be in the world.”

Those verdicts come even as second-quarter results at both JPMorgan and Morgan Stanley were hurt by a slowdown from the pandemic-era bonanza that gave them record revenue and profits.

Risks abound, with soaring inflation spurring central banks around the world to dial back the easy-money policies that had pushed markets to all-time highs. Russia’s invasion of Ukraine, along with worries about food and energy security as well as political instability across regions, are also keeping investors on edge.

“If I had to use one word to describe it, it would be ‘complicated,’” Gorman said on the challenges facing the global economy. He said that “Europe is fighting the hardest,” with the dual threat of the war in Ukraine and pressure on gas prices that’s been particularly problematic for countries such as Germany.

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Digital Finance Analytics (DFA) Blog

Tight Credit Markets Hits Banking's Big Beasts... [Podcast]

00:00 / 00:19:26

Unemployment At 3.5% In June [Podcast]

We look at the latest ABS data as unemployment hits the lowest since 1974. That said, hours worked fell, despite the growth in jobs, and more were on the bench because of illness.

Question now is whether higher wages growth will follow.

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Digital Finance Analytics (DFA) Blog

Unemployment At 3.5% In June [Podcast]

00:00 / 00:06:11

The Guardians Of Your Super Say “Nothing To See Here”! [Podcast]

I discuss a recent RBA release about correspondence between the Treasurer and RBA about risks from derivatives. While the focus of the letters is superannuation, there are wider issues at play here, as I explore with Robbie Barwick from the Citizens Party.

https://citizensparty.org.au/

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Digital Finance Analytics (DFA) Blog

The Guardians Of Your Super Say “Nothing To See Here”! [Podcast]

00:00 / 00:39:31

The Disappearing Money Trick – Or Why The Recession Is Already Here! [Podcast]

While the technical definition of a recession traditionally is two quarters of contraction or negative growth, I think that definition is frankly irrelevant given where we are today.

You simply have to look at the trends in consumer confidence, which are ultra-low in many western countries, from Australia, New Zealand, the UK and the US. And what is driving this is the concern about inflation – which is why central banks are jaw-boning their ability to get inflation under control. Quite simply, people’s money is disappearing fast, and they’re worried it could get a lot worse.

By the way, pause for a moment to ask why a 2-3% inflation target is used – it have become a convention, but there is little to explain why that number is correct. The truth is, that number was grabbed from thin air years ago, and has taken on a life of its own.

Note that Goldman Sachs Group Inc. economists put the risk of such a slump in the US in the next year at 30%. Others put the probability considerably higher, with the risks building beyond that time frame.
But for many it already feels like it’s here.

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Digital Finance Analytics (DFA) Blog

The Disappearing Money Trick - Or Why The Recession Is Already Here! [Podcast]

00:00 / 00:26:54

Volt Bank Loses Its Spark! Others May Follow…. [Podcast]

Neo-Bank Volt has closed its doors and is returning deposits to its customers and selling its mortgage book. We look at why this happened, and whether other banks are at risk in this rising rate environment.

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Digital Finance Analytics (DFA) Blog

Volt Bank Loses Its Spark! Others May Follow.... [Podcast]

00:00 / 00:07:07

No Escape! Recession Will Destroy Wealth. Period. [Podcast]

Apologies to our podcast users, we have had technical issues which stopped us posting – now fixed. We will upload archive recordings when we can!

In today’s show, we review the weeks market action, starting in the US – by far the most influential market, followed by Europe, Asia and Australia. There is no place to hide. Wealth is being destroyed. And there is no end in sight. Data is flagging recession, as central banks continue to raise rates and given the astronomical debt burden out there this is a big deal.

Even conservative investment strategies are being hit. “This is a train wreck,” says Alex Dunnin, executive director of research house Rainmaker Group. “When a traditionally conservative strategy is getting the worst returns then all bets are off. It doesn’t matter where you go, almost everyone will be in pain.”

The S&P 500 notched its worst start since 1970, plunging 20.6% between January and June. The Dow had its largest first-half drop since 1962, and the Nasdaq Composite had its largest percentage decline ever. And US Stocks slipped over the five days, with the S&P 500 erasing part of its rally in the previous week. Down more than 2%, the index just endured its 11th drop in 13 weeks.

All three indexes posted losses for the week. Despite this Wall Street rallied to close higher on Friday in light trading, with investors heading into the long holiday weekend and embarking on the second half of year looking for the next market-moving catalyst. All major groups in the S&P 500 rose, while the tech-heavy Nasdaq 100 underperformed. Treasuries surged after an ugly first half as weak economic data added to recession fears.

The US economic data was frankly horrid this week. An influx of data showing softer consumer spending, sagging sentiment and subdued manufacturing suggest a US economy with a more fragile foundation, prompting several forecasters to lower their estimates for growth.

Strategists at Goldman Sachs told clients on Thursday that stocks could keep falling later this year since “equities are pricing only a mild recession” and more companies will likely begin reducing their earnings expectations. In the event of a recession, Goldman’s team sees the S&P 500 dropping to 3,600, or 4.9% below Thursday’s close.

[CONTENT]

0:00 Start
0:15 Introduction
2:23 US Weak Economic Data
8:22 GDP Forecast: Down
9:00 Bond Yields
11:00 Buying The Dip
13:50 US Markets
16:00 Oil, Gold and Silver
17:00 Euro-zone Inflation Up
19:18 European Markets
20:00 Asian Markets And China Bonds
22:25 Australian Markets
24:40 Crypto Down
25:47 Tough Times Ahead

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Digital Finance Analytics (DFA) Blog

No Escape! Recession Will Destroy Wealth. Period. [Podcast]

00:00 / 00:31:33

Welcome To The Danger Zone: With Tarric Brooker [Podcast]

My latest Friday chat with journalist Tarric Brooker @AvidCommentator on Twitter. We look at the latest economic and financial news, and consider the consequences.

Tarric’s slides are available at: https://avidcom.substack.com/p/charts-that-matter-10th-june-2022

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Digital Finance Analytics (DFA) Blog

Welcome To The Danger Zone: With Tarric Brooker [Podcast]

00:00 / 01:06:06