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.
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