We should expect volatility to amp up Monday and is already heading for its biggest two-month surge in a year, according to a gauge of cross-asset expectations for price swings in Treasuries, U.S. stocks and global currencies. Treasuries are leading the way. But this potentially is another Lehman moment, as the U.S. and its European allies stepped up their response to the escalating conflict as Vladimir Putin ordered Russia’s military advance to proceed, announcing plans to sanction the central bank in Moscow and cut off various Russian lenders from the critical SWIFT financial messaging system. That comes on top of earlier moves against the country’s biggest banks and restrictions on the nation’s bonds. Russia’s currency has fallen to a record low amid the current crisis.
As a result, it is likely that all thoughts of QT and inflation control will be swamped by the potential need for liquidity and Central Banks will do what they keep doing.
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In this weeks market update, which is overshadowed by the action in Ukraine, we consider whether the markets are looking past Russia’s intervention.
The spike in volatility through the week triggered wild swings in global shares, commodity prices and safe haven assets, including government bonds and gold, as investors recalibrated their positioning.
Well certainly U.S. stocks jumped for a second day on Friday with the Dow up more than 2% in afternoon trading and Oil prices fell back below $100 a barrel, easing some concerns about higher energy costs.
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/
I caught up with Steve from his bond kingdom. We discussed the latest from the FED, and the expected trajectory of inflation, bond rates and the potential for deflation as stimulus is withdrawn.
Why are the markets in inflationary la-la land?
Steven Van Metre, Certified Financial Planner™ Professional, (CA Insurance License #0D45202 & Investment Advisory Representative with Atlas Financial Advisors, Inc., a Registered Investment Advisory firm.) is a financial planner, portfolio manager, and President of Steven Van Metre Financial. He specializes in retirement income strategies and the direct management of client assets.
Given the myriad of issues at the moment, Tarric and I had an additional discussion today, replead with some very significant slides. Journalist Tarric Brooker is @AvidCommentator on Twitter
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/
Digital Finance Analytics (DFA) Blog
Things Have Gotten Even More Interesting: With Tarric Brooker! [Podcast]
In today’s show we round up the market action for the week, as the Fed put the interest rate cat among the pigeons, markets saw significant rotation away from tech stocks, and inflation fears continued to take hold. What we are not seeing yet are the practical effects of the informal COVID driven lock downs as more businesses and households are being impacted, and as confidence takes a hit. Another reason to believe the uncertainty will continue.
In the US , the S&P 500 closed down Friday, marking its worst weekly start to a year since 2016 amid pressure from tech stocks as Treasury yields continued to rally on rate hike expectations despite a mixed monthly job report.
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0:00 Start 0:19 Introduction 1:30 US Jobs Report 5:40 Yields Higher And Fed Catch-Up 7:30 US Markets 8:45 Gamestop and NFT 11:30 Gold Still Weak 13:40 Oil 17:00 US Consumer Credit Up 18:20 Europe 19:40 China Economy 20:50 China Property 24:00 China Credit 26:00 Olympics 28:20 Australian Market 30:45 PayPal Stable-coin 33:05 Summary and Close
Digital Finance Analytics (DFA) Blog
More Fuel For Rate Hikes? - Market Update 8th Jan 2022 [Podcast]
The archetypal cartoon picture of a character running off a cliff, legs cycling, and hanging in mid-air, until the truth dawns, and then falls, came to mind today as U.S. stocks fell sharply on Wednesday, with the NASDAQ plunging more than 3% in its biggest one-day percentage drop since February and it also represents the steepest slide to begin the first three days of a year in 13 years, when the financial crisis gripped the globe. So much for the hopeful note at the start of the New Year.
The S&P 500 fell more than 1%, its biggest daily percentage decline since Nov. 26, the first day of trading after news of the Omicron variant of the coronavirus. The Russell 2000 index also suffered its biggest one-day drop since Nov. 26, while the S&P 500 financials index fell 1.3%, a day after it registered an all-time closing high.
The reason, the release of the U.S. Federal Reserve meeting minutes which signaled the central bank may raise interest rates sooner than markets had expected. I have said before that the markets continue to believe the FED will save them, but, what if rates do rise harder and faster?
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Digital Finance Analytics (DFA) Blog
The Markets ‘Running Off A Cliff’ Moment? [Podcast]
From the upcoming Federal Election, to market corrections, Gold, and Crypto we discuss the main themes for the new year. We highlight some of the emerging themes, frankly there are a range of icebergs in our path.
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Wall Street finished lower on Friday, weighed down by Big Tech as investors worried about the Omicron coronavirus variant and digested the Federal Reserve’s decision to end its pandemic-era stimulus faster.
Stock moves were magnified by intense activity in the options market, potentially making Friday one of the busiest trading days of the year due to the S&P Dow Jones Indices quarterly re-balance, which comes into effect after markets close on Friday. It is also “quadruple witching” day in U.S. markets, when options and futures on indexes and equities expire. With options expiring, volume on U.S. exchanges jumped to 16.6 billion shares, far above the 11.9 billion average over the last 20 trading days on Friday.
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/
Digital Finance Analytics (DFA) Blog
The Witches, Virus, Central Bank Volatility Dance – Market Update 18th December 2021 [Podcast]
Markets in the US had a strong end to the week, as investors reacted to the fact that November’s consumer prices gains met expectations, and continue to hope it will fall back, so easing pressure on the Federal Reserve to accelerate it taper and the timing of a rate hike.
Looking to next year, supply chain challenges will continue to drive up prices in the near term but are expected to fade as Americans shift toward more normal consumption patterns. Still, other factors, like labor constraints and housing costs, may keep inflation elevated.
The CPI report from the Labor Department showed consumer prices surged last month to a 6.8% annual growth rate, the highest reading in more than 39 years.
While that was distorted to a degree by upheavals in prices a year ago due to the pandemic, the core rate — which strips out more volatile food and energy prices – also hit a 30-year high of 4.9%. The headline rate rose by 0.8% on the month and the core rate by 0.5%, both chunky increases that suggest that companies are still able to pass on higher costs to their customers more or less at will.
CONTENTS
0:00 Start 0:17 Introduction 1:57 US CPI 4:00 Inflation – Here To Stay? 7:00 Political Reaction 7:45 Market Movements 10:29 Coffee Futures 12:03 Short Sellers Under Scrutiny 12:57 UK Markets on Plan B 15:15 You Can’t “Invest” In Crypto 17:40 China Evergrande 18:45 WCI Index Up Again 19:25 Australian Market 21:38 Summary and End
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Digital Finance Analytics (DFA) Blog
The Inflation Bazooka Wasn’t – Market Update 11 Dec 2021 [Podcast]
This last week could be one that many investors will want to forget, stocks, commodities, currencies, inflation, and the impact the Omicron variant are all in play. Importantly the yield curve is flattening, signalling an increased level of uncertainty, and as we will see, the future could be inflationary, deflationary, or just a muddle ahead.
Then US stocks fell sharply after the November jobs report missed expectations and as more cases of omicron were detected across the globe. The US economy added just 210,000 new jobs last month, well below economists’ expectations for 550,000 new jobs. That was its smallest gain this year
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/
Digital Finance Analytics (DFA) Blog
A Week Is A Long Time In These Crazy Markets! [Podcast]
