Tag: Market Update

Upcoming: A Soft Hard Landing Or A Hard Soft Landing? [Podcast]

In a choppy trading session indexes rose in the morning, then wavered before turning negative so Wall Street closed lower on Friday after a report of slowing U.S. labor market growth, and all three major indexes posted weekly losses as investors braced for more possible downside surprises a day after disappointing earnings from Apple.

A mixed July jobs report showing fewer than expected job gains in July, but an uptick in wages that threatens a re-acceleration in inflation and so more FED action. Still the markets are holding the faith on a soft landing for the economy as the FED tightens. It still though might feel like a hard bump.

The weekly percentage declines for the S&P and Nasdaq were the biggest since March, with some investors taking profits after five months of gains due to economic data, disappointing earnings and rising Treasury yields.

The Labor Department reported that U.S. employers added 187,000 jobs in July. Data for June additions was revised lower to 185,000 jobs, from 209,000 reported previously. Average hourly earnings rose 0.4% in July, unchanged from the previous month, exceeding expectations, taking the year-on-year increase in wages to 4.4%.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Upcoming: A Soft Hard Landing Or A Hard Soft Landing? [Podcast]
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FOMO Grips Traders As Inflation Deflates (For Now). [Podcast]

Well, dangerous investor euphoria is now spreading like a rash on the belief, at least in the US, of a perfect soft landing as inflation is vanquished, without a recession. Cash and hedges are out, replaced by demand for everything from small caps to meme stocks. Industrial shares are on a tear, junk-bond spreads are narrowing, quants are ramping up Treasury shorts and everyone is piling into stocks.

How different from the recent talk about recession, as data on the surface at least suggests the US economy is thriving amid mounting evidence the Federal Reserve is beating inflation.

On Wednesday, Federal Reserve Chair Jerome Powell said the Fed was not forecasting a recession and did not rule out another rate hike, saying it would follow future economic data. But they would not hit their inflation target until 2025.

More than half of the firms listed on the S&P 500 have reported second quarter earnings as of Friday, out of which 78.7% have surpassed analyst expectations.

All the optimism has sent the S&P 500 to the brink of its sixth advance in seven months and pushed prices in the Nasdaq 100 to almost 35 times profit. It’s manna for bulls — even as it leaves them with precious little wiggle room should anything in the economy or monetary policy not unfold as hoped.

Economic data keeps defying bearish predictions — everything from gross domestic product to consumer confidence and hiring has beaten forecasts. Reports on Friday showed the employment cost index had its slowest advance since 2021 in the second quarter, while the Fed’s preferred inflation gauge posted the smallest increase in more than two years.

The personal consumption expenditures (PCE) price index increased 0.2 per cent last month after edging up 0.1 per cent in May, the Commerce Department said. Food prices dipped 0.1 per cent while the cost of energy products increased 0.6 per cent.

In the 12 months through June, the PCE price index advanced 3.0 per cent. That was the smallest annual gain since March 2021 and followed a 3.8 per cent rise in May.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
FOMO Grips Traders As Inflation Deflates (For Now). [Podcast]
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Toppy Markets Remain Edgy On Better Than Expected Results, For Now… [Podcast]

Wall Street closed out another week with a quiet Friday on US markers as stocks found some stability after sliding the day before.

The S&P 500 edged up by less than 0.1 per cent, to 4,536.34 to cap its eighth winning week in the last 10. The Dow Jones Industrial Average added less than 0.1 per cent, to 35,227.69.

The blue-chip index was lifted by gains of more than 1% each in Procter & Gamble (NYSE:PG) and Chevron (NYSE:CVX) . It is now up over 6% in 2023, compared to the S&P 500’s 18% rise.

To be sure, the 18.1 per cent jump for the S&P 500 this year also has critics saying the rally has come too far, too fast. The risk of recession remains because inflation and interest rates remain high.

In Australia, The RBA does not expect inflation to return to the upper end of its 2 per cent to 3 per cent target band until mid-2025.

ASX company profits are on track to contract in the 2024 financial year for the first time since the pandemic, casting a dim light on the forthcoming earnings season which investors and strategists warn will translate to weaker returns for shares. Soaring wage bills, the rising cost of borrowing, and high energy costs are eroding profit margins and offsetting the bullish performance of Australia’s jobs market and robust house price growth.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Toppy Markets Remain Edgy On Better Than Expected Results, For Now… [Podcast]
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Toppy Markets Remain Edgy On Better Than Expected Results, For Now…

Wall Street closed out another week with a quiet Friday on US markers as stocks found some stability after sliding the day before.

The S&P 500 edged up by less than 0.1 per cent, to 4,536.34 to cap its eighth winning week in the last 10. The Dow Jones Industrial Average added less than 0.1 per cent, to 35,227.69.

The blue-chip index was lifted by gains of more than 1% each in Procter & Gamble (NYSE:PG) and Chevron (NYSE:CVX) . It is now up over 6% in 2023, compared to the S&P 500’s 18% rise.

To be sure, the 18.1 per cent jump for the S&P 500 this year also has critics saying the rally has come too far, too fast. The risk of recession remains because inflation and interest rates remain high.

In Australia, The RBA does not expect inflation to return to the upper end of its 2 per cent to 3 per cent target band until mid-2025.

ASX company profits are on track to contract in the 2024 financial year for the first time since the pandemic, casting a dim light on the forthcoming earnings season which investors and strategists warn will translate to weaker returns for shares. Soaring wage bills, the rising cost of borrowing, and high energy costs are eroding profit margins and offsetting the bullish performance of Australia’s jobs market and robust house price growth.

http://www.martinnorth.com/

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

Has The Inflation Hurricane Abated? [Podcast]

In another volatile week, the markets latest winning week closed with a mixed finish on Friday following stronger profit reports than expected from several big US companies and more benign inflation news from the US this week.

Hopes for an easier Fed also helped stocks worldwide to strengthen, though markets abroad were also mixed on Friday. The MSCI World Equity index was little changed, staying at its peak for the year and its highest level since early 2022.

For the week, the Dow was up 2.3%, the S&P 500 rose 2.4% and the Nasdaq advanced 3.3%. The S&P 500 remains up 17% for the year to date.

Data showed on Wednesday U.S. consumer prices growing at their slowest pace in more than two years, and on Thursday the smallest increase in U.S. producer inflation in nearly three years. On Friday, the government reported that U.S. import prices dropped 0.2% last month, and U.S. consumer sentiment jumped to the highest level in nearly two years.

The US earnings reporting season is just getting underway, and Wall Street’s expectations are low. Analysts are forecasting the worst drop in earnings per share for S&P 500 companies since the spring of 2020. If they’re right, it would also mark a third straight quarter where profits sank.

Such expectations are key for financial markets, because one of the biggest factors that set a stock’s price is how much profit a company produces.

And a preliminary reading on a University of Michigan survey showed consumer sentiment at its highest level since September 2021, though lower-income consumers weren’t feeling as positive.

The big recent gains for stocks on Wall Street have some critics cautioning investors not to get carried away by hopes for what’s called a “soft landing,” where high inflation can be vanquished without a painful recession.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Has The Inflation Hurricane Abated? [Podcast]
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Has The Inflation Hurricane Abated?

In another volatile week, the markets latest winning week closed with a mixed finish on Friday following stronger profit reports than expected from several big US companies and more benign inflation news from the US this week.

Hopes for an easier Fed also helped stocks worldwide to strengthen, though markets abroad were also mixed on Friday. The MSCI World Equity index was little changed, staying at its peak for the year and its highest level since early 2022.

For the week, the Dow was up 2.3%, the S&P 500 rose 2.4% and the Nasdaq advanced 3.3%. The S&P 500 remains up 17% for the year to date.

Data showed on Wednesday U.S. consumer prices growing at their slowest pace in more than two years, and on Thursday the smallest increase in U.S. producer inflation in nearly three years. On Friday, the government reported that U.S. import prices dropped 0.2% last month, and U.S. consumer sentiment jumped to the highest level in nearly two years.

The US earnings reporting season is just getting underway, and Wall Street’s expectations are low. Analysts are forecasting the worst drop in earnings per share for S&P 500 companies since the spring of 2020. If they’re right, it would also mark a third straight quarter where profits sank.

Such expectations are key for financial markets, because one of the biggest factors that set a stock’s price is how much profit a company produces.

And a preliminary reading on a University of Michigan survey showed consumer sentiment at its highest level since September 2021, though lower-income consumers weren’t feeling as positive.

The big recent gains for stocks on Wall Street have some critics cautioning investors not to get carried away by hopes for what’s called a “soft landing,” where high inflation can be vanquished without a painful recession.

http://www.martinnorth.com/

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

Good News Is Bad News Again, As Rates Push Higher… [Podcast]

Once again, good news is bad news, as overall the US economy looks strong than expected, and the US economic surprise index kept by Citi, which tracks how much incoming data is exceeding or lagging expectations, jumped to its highest in more than two years. But this leads to the thought that rates will have to go higher, forcing markets lower.

Shares closed lower in New York, reversing earlier gains, in light volume on Friday. While the June jobs data helped to ease some concerns about the interest rate outlook, it also provided further justification for a July increase.

The U.S. economy added jobs at a slower-than-anticipated pace in June, but labor conditions remain largely tight as Federal Reserve officials prepare for an upcoming interest rate decision later this month.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Good News Is Bad News Again, As Rates Push Higher... [Podcast]
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Good News Is Bad News Again, As Rates Push Higher…

Once again, good news is bad news, as overall the US economy looks strong than expected, and the US economic surprise index kept by Citi, which tracks how much incoming data is exceeding or lagging expectations, jumped to its highest in more than two years. But this leads to the thought that rates will have to go higher, forcing markets lower.

Shares closed lower in New York, reversing earlier gains, in light volume on Friday. While the June jobs data helped to ease some concerns about the interest rate outlook, it also provided further justification for a July increase.

The U.S. economy added jobs at a slower-than-anticipated pace in June, but labor conditions remain largely tight as Federal Reserve officials prepare for an upcoming interest rate decision later this month.

http://www.martinnorth.com/

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

Where’s That Recession Then? [Podcast]

In our latest market update we look back across the first half of the year, as markets have continued to drive higher in the light of higher rates and continued uncertainty.

As we move into July, the past six months on the markets have contained all types of contradictions, with prices spiked by AI, hopes the Fed will cut rates, when they lifted, and a more robust US economy than many had expected, perhaps promising higher returns ahead.

On Friday The S&P 500 rose 1.3%, the Dow Jones Industrial Average added 0.9%, and the Nasdaq rose 1.5% as markets prepared for the June 30 end point.
The S&P 500 defied recession fears and a U.S. banking crisis to notch a 15.9% gain in the first half. The Nasdaq Composite powered ahead 31.7% for its biggest first-half increase in four decades.

The Australian share market rose 0.1 per cent on Friday, and a return of 9.7 per cent for the financial year.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Where’s That Recession Then? [Podcast]
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Where’s That Recession Then?

In our latest market update we look back across the first half of the year, as markets have continued to drive higher in the light of higher rates and continued uncertainty.

As we move into July, the past six months on the markets have contained all types of contradictions, with prices spiked by AI, hopes the Fed will cut rates, when they lifted, and a more robust US economy than many had expected, perhaps promising higher returns ahead.

On Friday The S&P 500 rose 1.3%, the Dow Jones Industrial Average added 0.9%, and the Nasdaq rose 1.5% as markets prepared for the June 30 end point.
The S&P 500 defied recession fears and a U.S. banking crisis to notch a 15.9% gain in the first half. The Nasdaq Composite powered ahead 31.7% for its biggest first-half increase in four decades.

The Australian share market rose 0.1 per cent on Friday, and a return of 9.7 per cent for the financial year.

http://www.martinnorth.com/

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