This is an edited version of a live discussion about the current state of the markets as I was joined by Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds.
Given the rise of AI related stocks, while the broader markets go sideways, and Central Banks keep rates higher for longer, how will this play out ahead, and what does it mean for investment strategies?
The original stream, with chat is here: https://youtube.com/live/z_BA6DeJJnY
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
DFA Live Q&A Replay: Investing Now: With Damien Klassen
This is an edited version of a live discussion about the current state of the markets as I was joined by Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds.
Given the rise of AI related stocks, while the broader markets go sideways, and Central Banks keep rates higher for longer, how will this play out ahead, and what does it mean for investment strategies?
The original stream, with chat is here: https://youtube.com/live/z_BA6DeJJnY
Go to the Walk The World Universe at https://walktheworld.com.au/
In our weekly market update once again, the Nasdaq Composite and S&P 500 reset their record intraday and closing highs as tech shares continued to lure investors enthused over the potential impact of artificial intelligence across the economy. And MSCI’s gauge of stocks across the globe rose 0.76%, to 767.09 and hit a record high, as the AI love-in continues.
So again, we see the market backing AI, while choosing to ignore some of the less positive data signals, and so you have to simply ask the question, will this end well? Some of us are old enough to remember the dot-com bubble!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
In our weekly market update once again, the Nasdaq Composite and S&P 500 reset their record intraday and closing highs as tech shares continued to lure investors enthused over the potential impact of artificial intelligence across the economy. And MSCI’s gauge of stocks across the globe rose 0.76%, to 767.09 and hit a record high, as the AI love-in continues.
So again, we see the market backing AI, while choosing to ignore some of the less positive data signals, and so you have to simply ask the question, will this end well? Some of us are old enough to remember the dot-com bubble!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Sparked by Nvidia’s latest blowout earnings report, stock surge and general excitement about a “tipping point” in generative artificial intelligence, Thursday was the best day in more than a year for Wall St’s main stock indexes. And the S&P 500 and Dow Jones Industrial Average eked out another closing record high on Friday, with all three Wall Street benchmarks scoring weekly gains, with the S&P 500 up 1.7%, the Dow up 1.3% and the Nasdaq 1.4% higher, as AI stocks had enough steam to keep the rally chugging along.
Nvidia advanced again on Friday, rising a further 0.4%, and briefly traded above $2 trillion in market valuation for the first time and by the ways Nvidia’s gains on Thursday, the session after its blowout earnings, the chipmaker added $277 billion in stock market value, which is Wall Street’s largest ever daily gain. Despite a smaller advance on the final trading day of the week, its performance still dominated the market’s attention.
Yet the performance of Nvidia and other Big Tech has pushed Fed worries into the background even though investors have been walking back expectations for Federal Reserve interest rate cuts.
Recent Federal Reserve speakers echoed the content of the FOMC minutes since those were published. Communication has been understandably cautious on the inflation outlook considering the recent higher-than-expected CPI, particularly stressing the risks of cutting too early or too fast. The 29 February PCE release may well come in stronger than expected, and push rate cut expectations further away.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
AI Feeding Frenzy Creates A Headache But The Stock Market Is Not The Economy!
Sparked by Nvidia’s latest blowout earnings report, stock surge and general excitement about a “tipping point” in generative artificial intelligence, Thursday was the best day in more than a year for Wall St’s main stock indexes. And the S&P 500 and Dow Jones Industrial Average eked out another closing record high on Friday, with all three Wall Street benchmarks scoring weekly gains, with the S&P 500 up 1.7%, the Dow up 1.3% and the Nasdaq 1.4% higher, as AI stocks had enough steam to keep the rally chugging along.
Nvidia advanced again on Friday, rising a further 0.4%, and briefly traded above $2 trillion in market valuation for the first time and by the ways Nvidia’s gains on Thursday, the session after its blowout earnings, the chipmaker added $277 billion in stock market value, which is Wall Street’s largest ever daily gain. Despite a smaller advance on the final trading day of the week, its performance still dominated the market’s attention.
Yet the performance of Nvidia and other Big Tech has pushed Fed worries into the background even though investors have been walking back expectations for Federal Reserve interest rate cuts.
Recent Federal Reserve speakers echoed the content of the FOMC minutes since those were published. Communication has been understandably cautious on the inflation outlook considering the recent higher-than-expected CPI, particularly stressing the risks of cutting too early or too fast. The 29 February PCE release may well come in stronger than expected, and push rate cut expectations further away.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
It was a confusing day on the markets on Thursday as AI related Stocks drove higher on Nvida results, while weak purchasing managers index (PMI) readings from Australia and Japan, together with FED signals for higher rates for longer saw Asian traders favour the dollar, as business activity in both countries slowed through February.
NVIDIA Corporation rose as much as 10% in U.S. aftermarket trade after clocking stronger-than-expected fourth quarter earnings, while its revenue guidance for the current quarter was also above street estimates.
Gains in tech also saw the Nikkei reach an intraday record high, crossing levels last seen in 1989 before the unwinding of a massive speculative bubble through the 1990’s and 2000’s.
However, elsewhere most Asian currencies retreated on Thursday, while the dollar stemmed recent losses as a slew of signals from the Federal Reserve showed that the central bank was likely to keep interest rates high in the near-term.
The Australian dollar was flat as preliminary PMI data for February showed sustained weakness in business activity. The Judo Bank Flash Australia Composite PMI® Output Index* posted 51.8 in February, up from 49.0 in January. The latest reading signalled that private sector activity returned to growth for the first time in five months and at the fastest rate since April 2023. However, while Australia’s private sector activity improved midway into the first quarter, growth was driven solely by the service sector where service providers reported increased enquires from a widening of customer bases, supporting an expansion in output and employment.
However, in contrast, manufacturing new orders fell again, sending production down at the fastest rate since the worst of the COVID-19 pandemic in 2020. Manufacturers continued to see high interest rates and soft conditions dampening demand.
And combined with recent stronger-than-expected wage price index data, driven by a raft of negotiated settlements across both the private and public sectors, which were released on Wednesday, drove traders to pricing in a greater chance that the Reserve Bank of Australia will keep interest rates higher for longer.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
It was a confusing day on the markets on Thursday as AI related Stocks drove higher on Nvida results, while weak purchasing managers index (PMI) readings from Australia and Japan, together with FED signals for higher rates for longer saw Asian traders favour the dollar, as business activity in both countries slowed through February.
NVIDIA Corporation rose as much as 10% in U.S. aftermarket trade after clocking stronger-than-expected fourth quarter earnings, while its revenue guidance for the current quarter was also above street estimates.
Gains in tech also saw the Nikkei reach an intraday record high, crossing levels last seen in 1989 before the unwinding of a massive speculative bubble through the 1990’s and 2000’s.
However, elsewhere most Asian currencies retreated on Thursday, while the dollar stemmed recent losses as a slew of signals from the Federal Reserve showed that the central bank was likely to keep interest rates high in the near-term.
The Australian dollar was flat as preliminary PMI data for February showed sustained weakness in business activity. The Judo Bank Flash Australia Composite PMI® Output Index* posted 51.8 in February, up from 49.0 in January. The latest reading signalled that private sector activity returned to growth for the first time in five months and at the fastest rate since April 2023. However, while Australia’s private sector activity improved midway into the first quarter, growth was driven solely by the service sector where service providers reported increased enquires from a widening of customer bases, supporting an expansion in output and employment.
However, in contrast, manufacturing new orders fell again, sending production down at the fastest rate since the worst of the COVID-19 pandemic in 2020. Manufacturers continued to see high interest rates and soft conditions dampening demand.
And combined with recent stronger-than-expected wage price index data, driven by a raft of negotiated settlements across both the private and public sectors, which were released on Wednesday, drove traders to pricing in a greater chance that the Reserve Bank of Australia will keep interest rates higher for longer.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update covering the US, Europe, Asia and Australia plus gold, oil and bitcoin.
This was another volatile week on the markets, as traders played the volatility card and as U.S. stocks fell on Friday with the Nasdaq showing the largest decline after a hotter-than-expected producer prices report eroded hopes for imminent interest rate cuts by the Federal Reserve. Higher for longer.
Earlier this week, a hot consumer prices report sparked a selloff in equity markets as Tuesday’s latest US Consumer Price Index inflation report for January showed both headline and core prices in both monthly and annual terms climbed faster than economists’ forecasts. The former rose 3.1% year-over-year last month, hotter than the +2.9% expected. That makes it harder for the Fed to cut rates. Then later a slump in January retail sales on Thursday stoked hopes of rate cuts.
Fridays producer price index for final demand rose 0.3% last month after declining by a revised 0.1% in December, the Labor Department’s Bureau of Labor Statistics said.
Higher for longer was reinforced by Atlanta Fed President Raphael Bostic who said he needed more evidence inflation pressures are easing, but is open to lowering rates at some point in the next few months and San Francisco Fed President Mary Daly said “there is more work to do” to ensure stable prices, despite remarkable progress.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update covering the US, Europe, Asia and Australia plus gold, oil and bitcoin.
This was another volatile week on the markets, as traders played the volatility card and as U.S. stocks fell on Friday with the Nasdaq showing the largest decline after a hotter-than-expected producer prices report eroded hopes for imminent interest rate cuts by the Federal Reserve. Higher for longer.
Earlier this week, a hot consumer prices report sparked a selloff in equity markets as Tuesday’s latest US Consumer Price Index inflation report for January showed both headline and core prices in both monthly and annual terms climbed faster than economists’ forecasts. The former rose 3.1% year-over-year last month, hotter than the +2.9% expected. That makes it harder for the Fed to cut rates. Then later a slump in January retail sales on Thursday stoked hopes of rate cuts.
Fridays producer price index for final demand rose 0.3% last month after declining by a revised 0.1% in December, the Labor Department’s Bureau of Labor Statistics said.
Higher for longer was reinforced by Atlanta Fed President Raphael Bostic who said he needed more evidence inflation pressures are easing, but is open to lowering rates at some point in the next few months and San Francisco Fed President Mary Daly said “there is more work to do” to ensure stable prices, despite remarkable progress.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
