Latest from the markets continue to show weakness, and the latest came from the IMF which will down forecast growth – and recession is a rising risk. We are ships in choppy waters… We are in a world of more fragility.
And more from Fed member saying rates must continue to rise.
Markets still need to digest this downside news.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Latest from the markets continue to show weakness, and the latest came from the IMF which will down forecast growth – and recession is a rising risk. We are ships in choppy waters… We are in a world of more fragility.
And more from Fed member saying rates must continue to rise.
Markets still need to digest this downside news.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
In today’s market update we look at the ongoing volatility hitting the markets at the moment – as part of the October Effect. Wall Street stocks closed lower on Wednesday, unable to sustain a late-day surge, after data showing strong U.S. labor demand again suggested the Federal Reserve will keep interest rates higher for longer. And the Russian directed Opec + confirmed a formal reduction in Oil production to try to keep prices high.
And A fifth consecutive 50-basis-point rate hike from the Reserve Bank of New Zealand (RBNZ) on Wednesday reminded investors that inflation remains the main focus of central banks. The New Zealand dollar was last up 0.14% at $0.5744, having jumped as much as 1.3% earlier in the session. The Aussie dollar was last up 0.12% near flat at $0.6494.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
In today’s market update we look at the ongoing volatility hitting the markets at the moment – as part of the October Effect. Wall Street stocks closed lower on Wednesday, unable to sustain a late-day surge, after data showing strong U.S. labor demand again suggested the Federal Reserve will keep interest rates higher for longer. And the Russian directed Opec + confirmed a formal reduction in Oil production to try to keep prices high.
And A fifth consecutive 50-basis-point rate hike from the Reserve Bank of New Zealand (RBNZ) on Wednesday reminded investors that inflation remains the main focus of central banks. The New Zealand dollar was last up 0.14% at $0.5744, having jumped as much as 1.3% earlier in the session. The Aussie dollar was last up 0.12% near flat at $0.6494.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing alongside you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
The Markets are starting to believe Central Banks are going to blink – as we saw yesterday when the RBA lift the cash rate by a less than expected 0.25% – though as I said one smaller rate rise does not a pivot make.
The S&P 500 index posted its biggest single-day rally in two years on Tuesday after softer U.S. economic data and Australia’s smaller-than-expected interest rate hike stirred hope for less aggressive tightening by the Federal Reserve.
The RBA is the first major central bank to recognize that now is the time to slow down after aggressively raising rates this year, said Anthony Saglimbene, chief market strategist at Ameriprise Financial. “There’s hope that the Federal Reserve at some point in the fourth quarter will say the same thing. Not stop raising interest rates, but just slow the pace,” he said. “That’s what the market’s kind of rallying on below the surface.”
Still, Fed Governor Philip Jefferson said inflation is the most serious problem facing the U.S. central bank and it “may take some time” to address. San Francisco Fed President Mary Daly said the central bank needs to deliver more rate hikes.
Overnight, the US Labor Department in its Job Openings and Labor Turnover Survey, or JOLTS showed vacancies remained above 10 million for the 14th straight month. Layoffs also stayed low, signs of a still-tight labor market, which likely keep the Federal Reserve on its aggressive monetary policy tightening path.
“Even as higher interest rates and inflation, and weaker business and consumer confidence are beginning to tamp down labor market activity, the labor market still remains healthy,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “We expect that the Fed is not yet ready to pause.”
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
This past week was momentous, as Central Banks continued to lift rates in an attempt to crush inflation. A half dozen central banks, including in the United States, Britain, Sweden, Switzerland and Norway, delivered rate hikes this week to fight inflation, but it was the Fed’s signal that it expects high U.S. rates to last through 2023 that caught markets off guard.
“There had been some optimists out there saying that inflation may be coming under control, but the Fed effectively told them to sit down and shut up,” said David Russell, VP of market intelligence at TradeStation Group. “The Fed is trying to rip the band-aid off, trying to kill inflation while the jobs market is still strong.”
So finally, I think markets are waking up to what’s happening – no immediate pivot, higher rates for longer – and even if house prices or markets fall.
Goldman slashed its year-end target for the S&P 500 to 3600 from 4300, which it had made in mid-August. “The expected path of interest rates is now higher than we previously assumed, which tilts the distribution of equity market outcomes below our prior forecast.”
“Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable, and their focus is on the timing, magnitude, and duration of a potential recession and investment strategies for that outlook.”
Federal Reserve chairman Jerome Powell said the US economy may be entering a “new normal” following disruptions from the COVID-19 pandemic. “We continue to deal with an exceptionally unusual set of disruptions,” Powell told business and community leaders at a Fed Listens event in Washington.
Go to the Walk The World Universe at https://walktheworld.com.au/
Tomorrow the Fed will announce its next rate decision. If its 75 basis points as expected by many in the market, we will probably see little reaction, unless there are some trajectory changing comments in the post announcement press conference. If they do a full one percent that might change the market dynamics. The takeaway is that everyone does expect rates to go up—and by an amount that, prior to the past couple of months, would have been shockingly large.
Perhaps then no surprise that on Tuesday Wall Street ended lower as the eve of a U.S. Federal Reserve, in recognition of the FED’s aspiration to quash inflation, despite economic and market consequences.
One of the main drivers of continued inflation is expectations, which can become a self-fulfilling prophecy.
Expectations are very hawkish, and the Fed can come out just as expected and still be more dovish than expected. That may limit the market downside from this meeting and just may provide some upside going forward.
But then, earnings expectations are falling, and markets remain over-valued relative to the weaker economy, so that may pull markets further down. But I suspect the FED theatre will be a bit of a yawn. At least for now.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing alongside you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
As foreshadowed, we are now seeing the sharp reversal in asset prices, which were driven through the roof due to ultra-low interest rates, central bank quantitative easing, and government support through COVID plus huge debt growth.
Of course, the recent gains were largely spurious, and a correction was always going to come – hopefully some watching our shows are best prepared for this process (which will take some time), but be clear wealth will be destroyed across property, shares, bonds, metals and crypto.
No surprise then that U.S. stocks ended sharply lower on Friday, tumbling to two-month lows as a warning of impending global slowdown from FedEx hastened investors’ flight to safety at the conclusion of a tumultuous week. The session also marked the monthly options expiry, which occurs on the third Friday of every month. Options-hedging activity has amplified market moves this year, contributing to heightened volatility.
All three major U.S. stock indexes slid to levels not touched since mid-July, with the S&P 500 closing below 3,900, a closely watched support level and suffering its worst weekly percentage plunge since June.
“It’s been a tough week. It feels Halloween came early” said David Carter, managing director at JPMorgan in New York. “We are facing in this toxic brew of high inflation, high interest rates and low growth, which isn’t good for stock or bond markets.”
Go to the Walk The World Universe at https://walktheworld.com.au/
As foreshadowed, we are now seeing the sharp reversal in asset prices, which were driven through the roof due to ultra-low interest rates, central bank quantitative easing, and government support through COVID plus huge debt growth.
Of course, the recent gains were largely spurious, and a correction was always going to come – hopefully some watching our shows are best prepared for this process (which will take some time), but be clear wealth will be destroyed across property, shares, bonds, metals and crypto.
No surprise then that U.S. stocks ended sharply lower on Friday, tumbling to two-month lows as a warning of impending global slowdown from FedEx hastened investors’ flight to safety at the conclusion of a tumultuous week.
The session also marked the monthly options expiry, which occurs on the third Friday of every month. Options-hedging activity has amplified market moves this year, contributing to heightened volatility.
All three major U.S. stock indexes slid to levels not touched since mid-July, with the S&P 500 closing below 3,900, a closely watched support level and suffereing its worst weekly percentage plunge since June.
“It’s been a tough week. It feels Halloween came early” said David Carter, managing director at JPMorgan in New York. “We are facing in this toxic brew of high inflation, high interest rates and low growth, which isn’t good for stock or bond markets.”
Go to the Walk The World Universe at https://walktheworld.com.au/
