Tag: Market Update

Uncomfortable Highs And Wonky Data Says Brace, Brace, Brace…

In this week’s market update as normal, we will start in the US, cross to Europe, Asia and end in Australia, and cover the key points in Oil, Gold and Crypto. My aim is to try to integrate the main themes of the week, and point forward to what may happen next.

There were a few main themes, first some key markets are touching all-time highs even if on Friday many markets took a breather, driven by profit-taking after a week of record-setting advances which were fuelled by a series of dovish central bank signals. The US dollar struggled to extend a gain as U.S. yields ticked lower.

But Central banks are still watching for greater certainty on inflation trends, and there is building speculation that the neural interest rate is higher than expected. In addition, the fuzziness in the data flows continues – a problem for central bankers who want to be data dependent, perhaps too data dependent.

The U.S. central bank sharply upgraded its outlook for growth in 2024, and Thursday’s data suggested the U.S. economy remained on solid footing after the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February. This suggests the Fed doesn’t need to be in any hurry to cut rates going forward.

Investors in the coming week will be watching Friday’s personal consumption expenditures price index that will offer the latest read on inflation. The end of the first quarter also could prompt volatility as fund managers adjust their portfolios.

Investors in the coming week will be watching Friday’s personal consumption expenditures price index that will offer the latest read on inflation. The end of the first quarter also could prompt volatility as fund managers adjust their portfolios.

Its worth noting that overall, the ASX 200, excluding resources, currently trades at 18.5 times forward earnings, which is 40 per cent above its long-run average of 13.5 times, but 12 per cent above the previous peak in May 2007, just before the global financial crisis. And no, this is not just about Commonwealth Bank being at record highs. The median stock on the ASX is also trading at a P/E multiple well above its long-term average.

http://www.martinnorth.com/

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

The Market’s Uncertainty Principle…

This is our latest weekly market update.

Formulated by the German physicist and Nobel laureate Werner Heisenberg in 1927, the uncertainty principle states that we cannot know both the position and speed of a particle, such as a photon or electron, with perfect accuracy; the more we nail down the particle’s position, the less we know about its speed and vice versa.

I think the same can be said of the markets, as light is dawning that its hard to pin down the true vectors of inflation, and so market value as bonds yields are tending to rise, despite the expectation of rate cuts from Central Bankers soon. As a result, the US$ and US markets, alongside Japan seem more in favour than Europe, while gold and crypto might be risk shelters, or not.

But overall, the past week was an object lesson in uncertainty, as emerging data questioned analysts’ assumptions as we saw weekly declines that snaped seven straight weekly gains, while the dollar rose and was on track for its strongest week since mid-January, as U.S. inflation data has diluted hopes for interest rate cuts. Plus, we had the triple Witching, which always adds uncertainty.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
The Market’s Uncertainty Principle…
Loading
/

The Market’s Uncertainty Principle…

This is our latest weekly market update.

Formulated by the German physicist and Nobel laureate Werner Heisenberg in 1927, the uncertainty principle states that we cannot know both the position and speed of a particle, such as a photon or electron, with perfect accuracy; the more we nail down the particle’s position, the less we know about its speed and vice versa.

I think the same can be said of the markets, as light is dawning that its hard to pin down the true vectors of inflation, and so market value as bonds yields are tending to rise, despite the expectation of rate cuts from Central Bankers soon. As a result, the US$ and US markets, alongside Japan seem more in favour than Europe, while gold and crypto might be risk shelters, or not.

But overall, the past week was an object lesson in uncertainty, as emerging data questioned analysts’ assumptions as we saw weekly declines that snaped seven straight weekly gains, while the dollar rose and was on track for its strongest week since mid-January, as U.S. inflation data has diluted hopes for interest rate cuts. Plus, we had the triple Witching, which always adds uncertainty.

http://www.martinnorth.com/

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

Is A Market Pull-Back Coming?

This is our weekly market update.

A week of records, and dips this week as shares opened higher in New York on Friday after the February jobs data failed to slow the market’s upward momentum. The S&P 500 initially reset its record high as did Nvidia, AMD, Meta Platforms and Super Micro Computer In early trading as Nvidia rose 5 per cent and Apple recovered above $US170 a share.

But the rally stalled as Wall Street took profits, while U.S. Treasury yields dipped after the Labor Department said U.S. job growth accelerated in February, even as the unemployment rate jumped from 3.7% to 3.9%, and wage gains moderated. The mixed report kept on the table an anticipated interest rate cut in June by the Fed. “The payroll data suggests that the Fed should be on hold, but the wage, hours worked, and household data all suggest that a cut will be appropriate at some point soon,” Jefferies said in a note.

But from here, it’s possible we will see a decent market pull back, five or 10%, over the course of next month or two.

http://www.martinnorth.com/

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

Digital Finance Analytics (DFA) Blog
Is A Market Pull-Back Coming?
Loading
/

Is A Market Pull-Back Coming?

This is our weekly market update.

A week of records, and dips this week as shares opened higher in New York on Friday after the February jobs data failed to slow the market’s upward momentum. The S&P 500 initially reset its record high as did Nvidia, AMD, Meta Platforms and Super Micro Computer In early trading as Nvidia rose 5 per cent and Apple recovered above $US170 a share.

But the rally stalled as Wall Street took profits, while U.S. Treasury yields dipped after the Labor Department said U.S. job growth accelerated in February, even as the unemployment rate jumped from 3.7% to 3.9%, and wage gains moderated. The mixed report kept on the table an anticipated interest rate cut in June by the Fed. “The payroll data suggests that the Fed should be on hold, but the wage, hours worked, and household data all suggest that a cut will be appropriate at some point soon,” Jefferies said in a note.

But from here, it’s possible we will see a decent market pull back, five or 10%, over the course of next month or two.

http://www.martinnorth.com/

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

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/

Digital Finance Analytics (DFA) Blog
DFA Live Q&A Replay: Investing Now: With Damien Klassen
Loading
/

DFA Live Q&A HD 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/

The AI Craze Continues…

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/

Digital Finance Analytics (DFA) Blog
The AI Craze Continues...
Loading
/

The AI Craze Continues…

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/

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/

Digital Finance Analytics (DFA) Blog
AI Feeding Frenzy Creates A Headache But The Stock Market Is Not The Economy!
Loading
/