This is our weekly market update, where we start in the US, cross to Europe, and Asia, and end in Australia covering crypto and commodities on the way.
My earlier call of enhanced market volatility proved correct, as a gauge of global stocks took its biggest weekly drop in two months driven by market euphoria after the Trump win now turning, as the implications in terms of tariffs and staff appointments sink in and as trading profits are made. MSCI’s gauge of stocks across the globe lost 1.11%, to 842.61 for its fourth straight decline, following five straight advances. In Europe, the STOXX 600 index closed down 0.77% on the day and down 0.69% across the week. The 10-year U.S. Treasury yield hit its highest level in 5-1/2 months on Friday as economic data and comments from Federal Reserve officials indicated a slower pace of interest rate cuts ahead.
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Go to the Walk The World Universe at https://walktheworld.com.au/
One of the themes which comes through in our household surveys is that many people are under financial pressure, but are holding out for interest rate cuts in the short term.
But America’s election outcome continues to reverberate across the globe.
Bond markets continue to push higher with the US 2 and 10 year moving up, a trend reflected on the Australian market too. With the 10 year up to 4.7% compared with 3.8% in the middle of September. The ASX 30 days cash rate futures is still trending down, but more slowly than recently.
Financial markets and economists have been consistently pushing back the timing of the first rate cut in Australia since 2022 because inflation has proved far more difficult to tame and the labour market has remained strong. Traders are now fully priced for a move in September next year.
But some reckon there is a much higher chance of no rate cut in 2025 that the market is pricing in.
The US dollar index, which measures the greenback against a basket of six currencies, climbed to a six-month high on Wednesday. The AUD was down to 65.25 cents against the USD.
A strong greenback is likely to stoke inflation in Australia because of higher prices of imported goods denominated in US dollars such as oil, complicating the RBA’s job to bring inflation down so that it can start lowering the cash rate.
While Trump’s policies will become more of a focus next year, for now, the RBA’s focal point is the Australian economy, where higher for longer is going to play out.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
One of the themes which comes through in our household surveys is that many people are under financial pressure, but are holding out for interest rate cuts in the short term.
But America’s election outcome continues to reverberate across the globe.
Bond markets continue to push higher with the US 2 and 10 year moving up, a trend reflected on the Australian market too. With the 10 year up to 4.7% compared with 3.8% in the middle of September. The ASX 30 days cash rate futures is still trending down, but more slowly than recently.
Financial markets and economists have been consistently pushing back the timing of the first rate cut in Australia since 2022 because inflation has proved far more difficult to tame and the labour market has remained strong. Traders are now fully priced for a move in September next year.
But some reckon there is a much higher chance of no rate cut in 2025 that the market is pricing in.
The US dollar index, which measures the greenback against a basket of six currencies, climbed to a six-month high on Wednesday. The AUD was down to 65.25 cents against the USD.
A strong greenback is likely to stoke inflation in Australia because of higher prices of imported goods denominated in US dollars such as oil, complicating the RBA’s job to bring inflation down so that it can start lowering the cash rate.
While Trump’s policies will become more of a focus next year, for now, the RBA’s focal point is the Australian economy, where higher for longer is going to play out.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
In this week’s market update I am going to focus on the path of interest rates, as over this past week midst the US election we got a swathe of Central Bank rate decisions. The RBA held the cash rate on Tuesday, but the Fed, the Bank of England, Sweden’s Riksbank and the Hong Kong Monetary Authority all cut.
While Donald Trump won’t return to the White House for another 10 weeks, he’s already casting a shadow over central banks and with Trump 2.0 expected to boost growth and risk returning inflation, and actually there was (reasonable) speculation that the Fed might not cut rates after all, or at least hint heavily that it would pause at next month’s meeting. Certainly, some economists now expect fewer rate cuts from the Fed next year as trade tariffs may boost US inflation. That could reshape the easing path for central banks around the world, and add currency pressure on emerging markets.
Australia’s economic output could fall between 0.8% and 1.5%, or $20 billion to $37 billion if Trump imposed a suite of his economic policies including slashing America’s 21 per cent corporate tax rate to 15% KPMG estimated.
So all up, the level of uncertainly ahead has been amplified by the Trump victory, and the consequences will spill over into other markets. But we can expect higher interest rates in the months ahead, which is not good for those holding on by the skin of their teeth. This is going to get messy.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
In this week’s market update I am going to focus on the path of interest rates, as over this past week midst the US election we got a swathe of Central Bank rate decisions. The RBA held the cash rate on Tuesday, but the Fed, the Bank of England, Sweden’s Riksbank and the Hong Kong Monetary Authority all cut.
While Donald Trump won’t return to the White House for another 10 weeks, he’s already casting a shadow over central banks and with Trump 2.0 expected to boost growth and risk returning inflation, and actually there was (reasonable) speculation that the Fed might not cut rates after all, or at least hint heavily that it would pause at next month’s meeting. Certainly, some economists now expect fewer rate cuts from the Fed next year as trade tariffs may boost US inflation. That could reshape the easing path for central banks around the world, and add currency pressure on emerging markets.
Australia’s economic output could fall between 0.8% and 1.5%, or $20 billion to $37 billion if Trump imposed a suite of his economic policies including slashing America’s 21 per cent corporate tax rate to 15% KPMG estimated.
So all up, the level of uncertainly ahead has been amplified by the Trump victory, and the consequences will spill over into other markets. But we can expect higher interest rates in the months ahead, which is not good for those holding on by the skin of their teeth. This is going to get messy.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the UK, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way. And yes folks, this is a dense data-rich show, so be warned!
On Friday, global stocks slipped, finishing the week lower amid U.S. election jitters, while oil prices rose due to concerns about fighting in the Middle East. Israel hit back with further if somewhat restrained strikes on military targets in Iran overnight, so that may change sentiment next week, we will see.
Republican former President Donald Trump and Democratic Vice President Kamala Harris are polling neck-and-neck in crucial swing states ahead of the Nov. 5 election. Investors are anxious about a contested result roiling world markets and unleashing fresh geopolitical uncertainty.
But a rally in stocks faded as banks dragged down the broader market despite gains in tech shares. And bitcoin slumped after a news report that federal investigators are probing cryptocurrency firm Tether.
As the earnings season rolled in, traders also braced for the US presidential election and key economic data — including next week’s jobs report — for clues on the scope for Federal Reserve rate cuts. We are coming up to a couple of pivotal weeks which could well shape the markets for months ahead.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the UK, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way. And yes folks, this is a dense data-rich show, so be warned!
On Friday, global stocks slipped, finishing the week lower amid U.S. election jitters, while oil prices rose due to concerns about fighting in the Middle East. Israel hit back with further if somewhat restrained strikes on military targets in Iran overnight, so that may change sentiment next week, we will see.
Republican former President Donald Trump and Democratic Vice President Kamala Harris are polling neck-and-neck in crucial swing states ahead of the Nov. 5 election. Investors are anxious about a contested result roiling world markets and unleashing fresh geopolitical uncertainty.
But a rally in stocks faded as banks dragged down the broader market despite gains in tech shares. And bitcoin slumped after a news report that federal investigators are probing cryptocurrency firm Tether.
As the earnings season rolled in, traders also braced for the US presidential election and key economic data — including next week’s jobs report — for clues on the scope for Federal Reserve rate cuts. We are coming up to a couple of pivotal weeks which could well shape the markets for months ahead.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, a data-packed show where we start in the US, cross to Europe and Asia and end in Australia, covering crypto and commodities along the way.
The wild ride on the markets continued this week, with the S&P 500 and the Dow scoring record closing highs on Friday, thanks to big boosts from financial stocks after banks reported strong quarterly results despite the fact the latest inflation data fueled expectations for a smaller U.S. Federal Reserve rate cut in November. Traders kept bets steady for a roughly 88% probability the Fed would cut rates by 25 basis points at its November meeting, and a 12% chance it will leave rates unchanged. A slower pace of interest rate cuts potentially presents pressure on Wall Street, given that U.S. stock valuations scaled record highs on expectations of a sharp reduction in rates.
Major financial companies kicked off earnings season with upbeat comments from their top executives that should further ease investor worries that elevated borrowing costs were weighing on consumers and pushing the economy to the cusp of a downturn.
The US reporting season will gather momentum over the next three weeks amid general optimism. Still, concerns persist that stock prices have risen too fast, that the labour market is weakening fast and investors are on alert for geopolitical and US presidential election shocks.
European stock markets traded marginally higher on Friday, as investors digested lackluster British growth data.
China’s highly anticipated announcement of financial stimulus plans on Saturday was big on intent but low on the measurable details that investors need to ratify their recent return to the world’s second-biggest stock market. Saturday’s news conference by Finance Minister Lan Foan reiterated Beijing’s broad plans to revive the ailing economy, with promises made on significant increases to government debt and support for consumers and the property sector.
The Australian share market edged lower on Friday as traders awaited further signs of direction in the global economy after evidence of weakness once again reared its head in the US.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, a data-packed show where we start in the US, cross to Europe and Asia and end in Australia, covering crypto and commodities along the way.
The wild ride on the markets continued this week, with the S&P 500 and the Dow scoring record closing highs on Friday, thanks to big boosts from financial stocks after banks reported strong quarterly results despite the fact the latest inflation data fueled expectations for a smaller U.S. Federal Reserve rate cut in November. Traders kept bets steady for a roughly 88% probability the Fed would cut rates by 25 basis points at its November meeting, and a 12% chance it will leave rates unchanged. A slower pace of interest rate cuts potentially presents pressure on Wall Street, given that U.S. stock valuations scaled record highs on expectations of a sharp reduction in rates.
Major financial companies kicked off earnings season with upbeat comments from their top executives that should further ease investor worries that elevated borrowing costs were weighing on consumers and pushing the economy to the cusp of a downturn.
The US reporting season will gather momentum over the next three weeks amid general optimism. Still, concerns persist that stock prices have risen too fast, that the labour market is weakening fast and investors are on alert for geopolitical and US presidential election shocks.
European stock markets traded marginally higher on Friday, as investors digested lackluster British growth data.
China’s highly anticipated announcement of financial stimulus plans on Saturday was big on intent but low on the measurable details that investors need to ratify their recent return to the world’s second-biggest stock market. Saturday’s news conference by Finance Minister Lan Foan reiterated Beijing’s broad plans to revive the ailing economy, with promises made on significant increases to government debt and support for consumers and the property sector.
The Australian share market edged lower on Friday as traders awaited further signs of direction in the global economy after evidence of weakness once again reared its head in the US.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
More Records Broken, As Markets Swing Positive, For Now…
