Tag: Market Update

Markets Reach Higher On Trump Change But Expect The Unexpected

This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia.

This past week saw the presidential torch passed to Trump with a flurry of edicts following, as the tech bros and rich people look on. Markets continue to speculate on the real impact of tariffs, the move to push quote ‘illegals” out, and further investments in AI and crypto, backed by the US state.

Meantime the Davos love in this week, where unelected technocrats meet up with the rich seemed to be propagating yesterday’s news, and frankly a new and partisan world order appears to be taking root.

Trump did not impose day-one tariffs and said the U.S. is not ready for universal ones, but Canada, Mexico and China are in the firing line, as is the European Union. The 10% levy faced by Beijing is dwarfed by the 25% duties promised for Trump’s neighbours, and well below the 60% blanket tariff on Chinese imports previously mooted. Fund managers are playing down Donald Trump’s tariff threats, saying the risk of stoking inflation will stop the president from rushing out destructive trade policies that could threaten global growth.

In an executive order on Thursday, he touted the digital asset industry as “crucial” to U.S. innovation, created a working group to draft new crypto rules and explore a crypto stockpile, while the Securities and Exchange Commission (SEC) spiked accounting guidance that the industry said had stymied crypto adoption.

Those measures, though light on detail, seemed to alleviate some disappointment after crypto reform failed to feature in Trump’s flurry of day-one announcements on Monday. Thursday’s executive order also required banking services for crypto companies be protected and banned the development of U.S. central bank digital currencies, which could compete with bitcoin and other established tokens.

http://www.martinnorth.com/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Markets Reach Higher On Trump Change But Expect The Unexpected
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Markets Reach Higher On Trump Change But Expect The Unexpected

This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia.

This past week saw the presidential torch passed to Trump with a flurry of edicts following, as the tech bros and rich people look on. Markets continue to speculate on the real impact of tariffs, the move to push quote ‘illegals” out, and further investments in AI and crypto, backed by the US state.

Meantime the Davos love in this week, where unelected technocrats meet up with the rich seemed to be propagating yesterday’s news, and frankly a new and partisan world order appears to be taking root.

Trump did not impose day-one tariffs and said the U.S. is not ready for universal ones, but Canada, Mexico and China are in the firing line, as is the European Union. The 10% levy faced by Beijing is dwarfed by the 25% duties promised for Trump’s neighbours, and well below the 60% blanket tariff on Chinese imports previously mooted. Fund managers are playing down Donald Trump’s tariff threats, saying the risk of stoking inflation will stop the president from rushing out destructive trade policies that could threaten global growth.

In an executive order on Thursday, he touted the digital asset industry as “crucial” to U.S. innovation, created a working group to draft new crypto rules and explore a crypto stockpile, while the Securities and Exchange Commission (SEC) spiked accounting guidance that the industry said had stymied crypto adoption.

Those measures, though light on detail, seemed to alleviate some disappointment after crypto reform failed to feature in Trump’s flurry of day-one announcements on Monday. Thursday’s executive order also required banking services for crypto companies be protected and banned the development of U.S. central bank digital currencies, which could compete with bitcoin and other established tokens.

http://www.martinnorth.com/

Markets Box At Shadows, As Trump 2.0 Arrives…

This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way. This week we saw more volatility, but with the MSCI global index up 2.56%, and up for the year to date, and 18% for the past year. The US dollar continues to hold at high levels, while bond yields eased back from recent highs. The US Volatility index slide to 15.97 ahead of the arrival of Trump 2.0 on Monday.

No doubt, investors will closely monitor stock markets on Tuesday, the day after Donald Trump is inaugurated for his second term in the White House, to see if U.S. equities can continue their recent trend of posting gains after a president is sworn in. While historically, the benchmark S&P 500 stock index has not performed well on average on inauguration day, or the day after if the inauguration falls on a market holiday, the last three inaugurations have all resulted in market gains. Total S&P 500 returns in the first year in office for Barack Obama, Trump and Joe Biden topped 20 per cent. Actually, Trump broke the cycle in 2017, making him the first Republican to take over from a Democrat and not have a recession in the first year of his presidency since Harding in 1921. Let’s see if he can make it two consecutive times.

It’s critical to distinguish market from overall economic impacts; the two shouldn’t be conflated. The U.S. economy is a net importer, as it imports more than it exports (hence the trade deficit). But the S&P 500 is a net exporter. Leading exports from these companies include agricultural products, machinery, finished vehicles, technology, electronic equipment, minerals, fuels and oils around the globe, primarily to Canada, Mexico, China, Japan and the United Kingdom.

European shares ended on a positive note on Friday, benefiting from a broad-based rally which was fuelled by declining government bond yields and encouraging economic data from China, with the STOXX 600 logging its fourth straight weekly rise. The benchmark index, which rose by 0.7%, recorded a more than 2% gain over the week, achieving its fourth consecutive week of advances, its longest winning streak since Aug. 26 last year. Most STOXX sub-sectors were trading higher, with rate-sensitive sectors, like construction and industrials boosting the index, rising 1.6% and 1.5% respectively.

Most Asian stocks rose on Friday, buoyed by gains in Chinese stocks following robust economic data, while Japanese equities declined sharply on expectations of an interest rate hike next week. Gains were limited as regional markets were cautious ahead of the U.S. President-elect Donald Trump’s inauguration due next week.

China’s economy grew more than expected in the fourth quarter of 2024, gross domestic product data showed on Friday, as Beijing doled out a slew of stimulus measures aimed at supporting growth.

Australian shares edged lower on Friday as investors took profits in the banks ahead of US president-elect Donald Trump’s inauguration early next week. Hundreds of billions of dollars in Australian retirement savings are invested in American equities, benefiting from bullish market sentiment as traders hoped Mr Trump’s administration will boost company earnings. The lack of breadth has caused some fund managers to avoid US tech stocks altogether.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Markets Box At Shadows, As Trump 2.0 Arrives…
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Brace For Market Uncertainty!

This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way.

And this past week saw markets lower, with the MSCI global index down another 1.58% and down nearly 4% for the past month. Wall Street’s main indexes closed their second consecutive week in the red even as the US Dollar was stronger with the US Dollar Index Futures up 0.44% at 109.67, which will put further pressure on other economies around the world in including Australia.

Unexpected strong December payrolls data, with the US economy adding far more than expected jobs last month, hammered hopes for lower interest rates though US stocks closed off their session. Bond yields continued to climb, with the haunting risk of higher rates for longer putting more pressure of some stocks, ahead of the Trump 2.0 agenda turning from speculation to reality in the next couple of weeks. Longer-dated U.S. Treasury yields, which move inversely to prices, jumped to their highest levels since November 2023, with the 10-year hitting a high of 4.79%.

Yields have gained 20 basis points since the beginning of the year amid a global government bonds selloff that has hit UK government bonds particularly hard, pushing 30-year gilt yields to their highest since 1998.

Outside of bonds, rising U.S. Treasury yields could dampen investor interest in stocks and other high-risk assets by tightening financial conditions and increasing borrowing costs for businesses and individuals.

Traders now see the FED lowering borrowing costs for the first time in June and then staying steady for the rest of the year although BofA Global Research is forecasting a potential rate hike saying the Federal Reserve’s rate-cutting cycle “is over”.

Traders’ confidence in the pound has taken its biggest dive this week for a third straight session of declines since the 2022 UK budget crisis ending at 1.2208 against the USD as a global bond selloff added to growing unease over Britain’s finances with Britain’s government bond market in the crosshairs as 30-year gilt yields there hit 27-year highs and 10-year benchmarks reaching levels not seen since 2008. This puts Britain’s finance minister under pressure as concerns over Trump’s policies have pushed the British government’s borrowing costs higher. Even though those gilt yield rises are largely just in line with what’s happened in U.S. Treasuries a worrying development in the UK is that sterling has turned tail too and stopped following domestic yields higher.

The ASX fell on the final trading day of the week, as a gloomy outlook for Wall Street trading ahead of a key jobs report pushed the bourse lower. The S&P/ASX 200 Index reversed modest gains earlier in the session to close at 8294.1 points, down 0.4 per cent.

The Australian dollar’s slump against the US greenback to around levels last recorded in the 2020 pandemic and 2008 global financial crisis has a lot of people talking. The Australian dollar ended the week 0.4 per cent lower against the greenback, touching a new two-year low of US61.47. There are consequences. A weaker currency is stimulatory for the economy and inflation, while a stronger exchange rate slows the economy and helps cool inflation.

So, standing back, we are right in the zone of uncertainty, with expectations of higher for longer rates back on the table with a strong US dollar likely to break things elsewhere. All up, we continue to expect periods of severe volatility, and lower growth trajectory, so no surprise to see more holding cash and waiting to see what plays out.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Brace For Market Uncertainty!
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Brace For Market Uncertainty!

This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way.

And this past week saw markets lower, with the MSCI global index down another 1.58% and down nearly 4% for the past month. Wall Street’s main indexes closed their second consecutive week in the red even as the US Dollar was stronger with the US Dollar Index Futures up 0.44% at 109.67, which will put further pressure on other economies around the world in including Australia.

Unexpected strong December payrolls data, with the US economy adding far more than expected jobs last month, hammered hopes for lower interest rates though US stocks closed off their session. Bond yields continued to climb, with the haunting risk of higher rates for longer putting more pressure of some stocks, ahead of the Trump 2.0 agenda turning from speculation to reality in the next couple of weeks. Longer-dated U.S. Treasury yields, which move inversely to prices, jumped to their highest levels since November 2023, with the 10-year hitting a high of 4.79%.

Yields have gained 20 basis points since the beginning of the year amid a global government bonds selloff that has hit UK government bonds particularly hard, pushing 30-year gilt yields to their highest since 1998.

Outside of bonds, rising U.S. Treasury yields could dampen investor interest in stocks and other high-risk assets by tightening financial conditions and increasing borrowing costs for businesses and individuals.

Traders now see the FED lowering borrowing costs for the first time in June and then staying steady for the rest of the year although BofA Global Research is forecasting a potential rate hike saying the Federal Reserve’s rate-cutting cycle “is over”.

Traders’ confidence in the pound has taken its biggest dive this week for a third straight session of declines since the 2022 UK budget crisis ending at 1.2208 against the USD as a global bond selloff added to growing unease over Britain’s finances with Britain’s government bond market in the crosshairs as 30-year gilt yields there hit 27-year highs and 10-year benchmarks reaching levels not seen since 2008. This puts Britain’s finance minister under pressure as concerns over Trump’s policies have pushed the British government’s borrowing costs higher. Even though those gilt yield rises are largely just in line with what’s happened in U.S. Treasuries a worrying development in the UK is that sterling has turned tail too and stopped following domestic yields higher.

The ASX fell on the final trading day of the week, as a gloomy outlook for Wall Street trading ahead of a key jobs report pushed the bourse lower. The S&P/ASX 200 Index reversed modest gains earlier in the session to close at 8294.1 points, down 0.4 per cent.

The Australian dollar’s slump against the US greenback to around levels last recorded in the 2020 pandemic and 2008 global financial crisis has a lot of people talking. The Australian dollar ended the week 0.4 per cent lower against the greenback, touching a new two-year low of US61.47. There are consequences. A weaker currency is stimulatory for the economy and inflation, while a stronger exchange rate slows the economy and helps cool inflation.

So, standing back, we are right in the zone of uncertainty, with expectations of higher for longer rates back on the table with a strong US dollar likely to break things elsewhere. All up, we continue to expect periods of severe volatility, and lower growth trajectory, so no surprise to see more holding cash and waiting to see what plays out.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Uncertainty Rules As Markets Face A Wicked New Year!

This is our weekly market update, starting in the US, Europe, Asia and ending in Australia, covering crypto and commodities along the way.

2024 ended up as an eventful year for markets, as many stock indices recorded sizeable double-digit gains, though with significant volatility. But the start of 2025 could well mark a shift in tone, with the MSCI global index down 2.08% over the past week. US stock indices were slightly in the red at the start of the new year too, encapsulating the overall market uncertainty about the short-term outlook. Inflows into U.S. equity funds fell sharply in the week through Jan. 1 hit by rising Treasury yields and year-end profit- taking, along with concerns about a slower pace of Federal Reserve rate reductions this year. U.S. equity funds received just $490 million worth of investments during the week, significantly smaller than the $20.46 billion in net purchases in the week before.

But on Friday The Dow Jones Industrial Average rose 0.80%, to 42,732.13, the S&P 500 gained 1.26%, to 5,942.47 and the Nasdaq Composite gained 1.77%, to 19,621.68. Even so, all three indexes posted modest declines for the week, with the S&P 500 logging its third weekly loss in four.

Australian shares shrugged off a decline on Wall Street to close higher on Friday, buoyed by a rally in energy stocks. The S&P/ASX 200 closed at 8250.50 up 0.6 per cent. The All Ordinaries index closed at 8511.9. On Thursday and Friday, the benchmark pared back earlier losses in the holiday-shortened week for a flat four-day return.

Australian investors looking to the US for better returns, with Wall Street focused exchange-traded funds reportedly pulling in at least $5 billion from Australian investors in 2024, eclipsing the record of $2.5 billion set in 2021, according to preliminary flows data compiled by ETF provider Global X. The billions of investor capital flooding into the world’s No.1 market represents a bet that US equities will continue to outpace their global peers – including Australia – for the second year running, capping a 23 per cent gain in 2024 atop a 24 per cent rise a year earlier.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Uncertainty Rules As Markets Face A Wicked New Year!
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Uncertainty Rules As Markets Face A Wicked New Year!

This is our weekly market update, starting in the US, Europe, Asia and ending in Australia, covering crypto and commodities along the way.

2024 ended up as an eventful year for markets, as many stock indices recorded sizeable double-digit gains, though with significant volatility. But the start of 2025 could well mark a shift in tone, with the MSCI global index down 2.08% over the past week. US stock indices were slightly in the red at the start of the new year too, encapsulating the overall market uncertainty about the short-term outlook. Inflows into U.S. equity funds fell sharply in the week through Jan. 1 hit by rising Treasury yields and year-end profit- taking, along with concerns about a slower pace of Federal Reserve rate reductions this year. U.S. equity funds received just $490 million worth of investments during the week, significantly smaller than the $20.46 billion in net purchases in the week before.

But on Friday The Dow Jones Industrial Average rose 0.80%, to 42,732.13, the S&P 500 gained 1.26%, to 5,942.47 and the Nasdaq Composite gained 1.77%, to 19,621.68. Even so, all three indexes posted modest declines for the week, with the S&P 500 logging its third weekly loss in four.

Australian shares shrugged off a decline on Wall Street to close higher on Friday, buoyed by a rally in energy stocks. The S&P/ASX 200 closed at 8250.50 up 0.6 per cent. The All Ordinaries index closed at 8511.9. On Thursday and Friday, the benchmark pared back earlier losses in the holiday-shortened week for a flat four-day return.

Australian investors looking to the US for better returns, with Wall Street focused exchange-traded funds reportedly pulling in at least $5 billion from Australian investors in 2024, eclipsing the record of $2.5 billion set in 2021, according to preliminary flows data compiled by ETF provider Global X. The billions of investor capital flooding into the world’s No.1 market represents a bet that US equities will continue to outpace their global peers – including Australia – for the second year running, capping a 23 per cent gain in 2024 atop a 24 per cent rise a year earlier.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

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From Here, Where For The Markets?

This is our weekly market update where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. And as this is the last full trading week, we will also look back at the last year.

There is a nice meme going round, highlighting that high priced stocks attract, others do not, but that does also beg the question, should we follow the crowd – and is the smart money or dump money lurking there? Sometimes its better to zig when everyone else zags!

The MSCI global index was down 0.59% on Friday, through up 0.88% across the week, and the one-year return was 17.14%, as we will see, driven by tech and US markets in the main. Remember though that light trading and short hours mean the markets are capable of giving deceptive signals this past week.

AMP’s head of investment strategy, Shane Oliver, is warning of a “volatile ride” given the sharemarket’s stretched valuations – the ASX 200 is trading at more than 18 times forecast earnings – and heightened geopolitical risk as Donald Trump returns to the White House. Still, Dr Oliver is tipping the ASX 200 to achieve 8800 points. He said the prospect of better growth in late 2025 should deliver “ok investment returns” with the caveat that a 15 per cent market correction during the year was “highly likely”.

JPMorgan’s Jason Steed is adopting a bearish footing, tipping Australia to be the only major sharemarket to decline in 2025. His target of 7900 implies a decline of about 6 per cent from current levels because of a weaker economic backdrop with gross domestic product below 2 per cent, and a softening earnings outlook.

Finally, in crypto. The overall cryptocurrency market capitalisation approached $3.8 trillion, nearly doubling over the past year. To the surprise of many, 11 bitcoin (spot) ETFs were approved by the SEC early January. Since launch, they have attracted more than $40 billion net inflows and their cumulated assets under management are almost as large as those held by Gold ETFs.

Looking ahead to 2025, an especially complex and uncertain future awaits. Expect a reacceleration of US inflation which will cause the FED to pause more cuts, and add-in the possibility of serious geopolitical shocks, and it is easy to get anxious.

The future is complicated by the advent of the new Trump regime, which renders so many different potential paths and potentially false signals. The partnership between Trump and Elon Musk could be key, if that relationship survives. But given the stretched market valuations and rising inflation risks, as global debt expands further, perhaps its not that surprising that some are taking profits, and waiting to see what happens next. Time will tell.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
From Here, Where For The Markets?
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From Here, Where For The Markets?

This is our weekly market update where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. And as this is the last full trading week, we will also look back at the last year.

There is a nice meme going round, highlighting that high priced stocks attract, others do not, but that does also beg the question, should we follow the crowd – and is the smart money or dump money lurking there? Sometimes its better to zig when everyone else zags!

The MSCI global index was down 0.59% on Friday, through up 0.88% across the week, and the one-year return was 17.14%, as we will see, driven by tech and US markets in the main. Remember though that light trading and short hours mean the markets are capable of giving deceptive signals this past week.

AMP’s head of investment strategy, Shane Oliver, is warning of a “volatile ride” given the sharemarket’s stretched valuations – the ASX 200 is trading at more than 18 times forecast earnings – and heightened geopolitical risk as Donald Trump returns to the White House. Still, Dr Oliver is tipping the ASX 200 to achieve 8800 points. He said the prospect of better growth in late 2025 should deliver “ok investment returns” with the caveat that a 15 per cent market correction during the year was “highly likely”.

JPMorgan’s Jason Steed is adopting a bearish footing, tipping Australia to be the only major sharemarket to decline in 2025. His target of 7900 implies a decline of about 6 per cent from current levels because of a weaker economic backdrop with gross domestic product below 2 per cent, and a softening earnings outlook.

Finally, in crypto. The overall cryptocurrency market capitalisation approached $3.8 trillion, nearly doubling over the past year. To the surprise of many, 11 bitcoin (spot) ETFs were approved by the SEC early January. Since launch, they have attracted more than $40 billion net inflows and their cumulated assets under management are almost as large as those held by Gold ETFs.

Looking ahead to 2025, an especially complex and uncertain future awaits. Expect a reacceleration of US inflation which will cause the FED to pause more cuts, and add-in the possibility of serious geopolitical shocks, and it is easy to get anxious.

The future is complicated by the advent of the new Trump regime, which renders so many different potential paths and potentially false signals. The partnership between Trump and Elon Musk could be key, if that relationship survives. But given the stretched market valuations and rising inflation risks, as global debt expands further, perhaps its not that surprising that some are taking profits, and waiting to see what happens next. Time will tell.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Is It Hard Hat Time As The Santa Rally Turns Decidedly Frosty?

This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way.

Recently, we saw markets charging higher, as many markets touched all-time highs again on the expectation of more rate cuts, but that changed this week, following another pivot from the FED and more strong economic readings gave pause for thought. While the U.S. central bank on Wednesday cut its benchmark overnight interest rate by 25 basis points to the 4.25%-4.50% range, it projected only two rate reductions in 2025, citing the economy’s continued resilience and still-elevated inflation.

We also briefly had the risk of a US Government shut down to content with, though that was averted. The messy process of averting a U.S. government shutdown offered investors a glimpse into challenges the incoming Trump administration will face in implementing its agenda, adding a market concern for the coming year. At very least Trump is likely to lead with bold threats and leverage them to push negotiations in his favor. Republican hardliners who normally are ardent Trump supporters are resisting his push to raise the U.S. debt ceiling, sticking to their belief that government spending needs to be pruned and defying his warnings of revenge. “Granted, Trump isn’t president yet, but he will interject ideas at the last minute and there’s no guarantee every member of the Republican Party in Congress is going to go along with his ideas,” said Brian Jacobsen, chief economist at Annex Wealth “That is a formula for gridlock, uncertainty, and volatility.”

And we also had the triple witching, where options contracts expire which added to the complexity.

All up although Friday saw US markets turning more positive again, across the week, drops were widespread, with the MSCI Global index down 2.53%, though still up 16.13% year to date, with the Dow Jones Industrial Average was up 1.18%, but still down 2.25% for the week, its longest losing streak since October 1974. The S&P 500 index gained 1.09%, but down 1.99% across the week while the NASDAQ Composite index climbed 1.07% having fallen 1.78% across the 5 days.

Michael Saylor, Chairman of MicroStrategy, dropped his usual post on X Saylor issued a four-word statement: “Wear a Hard Hat.” as Bitcoin experienced a sharp decline, falling to $94,000 from its peak of over $100,000.

Saylor’s advice could well be true for other market participates too, as given the high quantum of uncertainly in the weeks ahead, wearing a hard hat makes sense as market volume declines over the holiday period, and as many stocks are in over valued territory. It could be a very frosty period for investors.

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Is It Hard Hat Time As The Santa Rally Turns Decidedly Frosty?
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