The InvestSense Podcast

This week rates have headed resolutely upwards, and stocks have not liked it much with most markets heading steadily downwards throughout the week.

Markets were down early in the week, on the back foot by a few percent. However, having got to the end of the week things have improved quite a bit and most markets are now actually up a few percent, with China leading the way.

Last week markets were down again, reflecting the trends that took root in September - long-term yields pushing higher with markets on the back foot. Most major asset classes were in negative territory for September, which had overtones of 2022, as concerns over rising interest rates, the slowing pace of disinflation, high oil prices and a potential global recession weighed on investor sentiment.

Equity markets around the world fell more or less in unison last week by about 3-4%, before bouncing slightly on Friday. The UK was really the only market to buck the trend, as the Bank of England unexpectedly kept rates on hold after inflation fell by more than forecast.

US markets closed flat last week as investors feared further interest rate hikes from the Federal Reserve, leading to a decrease in optimism. However, markets in Australia, Europe, and the UK saw growth due to strong performance from companies reliant on Chinese exports. In Europe, the European Central Bank hinted at the end of its monetary tightening campaign, while the UK saw a decline in its ec...

Global economic sentiment shifted in the week as US data strengthened, and Eurozone data weakened. Weaker global economic data raised concerns about central bank hawkishness, leading to a stronger US dollar and weaker currencies. Crude oil prices remained resilient amid supply concerns, while tech stocks led US markets lower as Apple took a hit.

The week of August 28th to September 1st, 2023, saw a delicate balance between economic indicators and market sentiment play out in markets. The United States enjoyed what appears to be Goldilocks labor conditions, with strong job growth and a tightening labor market.

Wrapping up this year's Portfolio Construction Forum Strategies Conference.

Fed Chair Jerome Powell's Speech at Jackson Hole SymposiumThe week began with great anticipation for Fed Chair Jerome Powell's speech at the Jackson Hole Economic Symposium. While some expected ground-breaking announcements, Powell's speech proved to be relatively anticlimactic. Doves interpreted his remarks as a signal that there would be no immediate plans for additional rate hikes, while hawks...

Amidst the concluding chapters of COVID-19 and its market upheavals, the global economic landscape is teetering on the brink of a potential regime change. This article dives deep into three distinct economic scenarios – Bull, Bear, and Muddle-Through – each outlining varying futures shaped by productivity gains, global debt, and decision-making by central authorities. In an environment where econo...

Last week markets continued in general to be on the back foot, particularly China, while global cyclicals remained strong.

Global markets experienced a mixed week, as Fitch cut the US government's credit rating, while earnings were resilient.

Markets were again flat to slightly positive last week which means that, barring an overnight mishap in the Northern Hemisphere, most equity portfolios will be up another 2-3% for the month.

Last week was uneventful and markets have been more or less flat for the last 10 days, with the exception of the UK, which rallied on the news that inflation was not as high as expected (though still higher than most places), plus some of the economic data has not been quite as dire as has been expected.

Most markets were up last week and while tech stocks and AI beneficiaries continued to lead the way the rally was more broad-based than we have seen recently, with most sectors and markets up by 2 - 5%.

Last week we saw some volatility creep into markets as we turned the page on a new financial year. US labour data was mixed but just strong enough to suggest that higher rates might be around for a bit longer. This caused some volatility in bond markets, with short term (2 year) rates up again and hitting 15-year highs.

Hopes of a soft economic landing permeated markets last week and even the hapless UK market caught a bid late in the week, leaving it up a percent along with the ASX, while Europe, Japan and he US ended the quarter on a high note, up by 2-3%.

We had intended to retire the AI but following some quite positive feedback (which we don’t usually get) it gets a reprieve.

US inflation moderated, the Federal Reserve temporally paused its rate hiking cycle while consumer sales and sentiment gauges firmed. On the face of it, this looks like an immaculate ‘disinflation’, and the dominant narrative in the press is that a resilient US consumer has fanned hopes of a soft landing.

This week we used a couple of AI programs to produce an AI generated market summary, and then added our own commentary below for comparison.

It may be drawing a long bow but it now seems plausible that, just below the surface, AI inspired optimism has helped markets remain surprising resilient throughout this year, particularly when facing the US regional banking crisis that started in mid-March and more recently the polemic surrounding the US Debt Ceiling.

All that mattered in markets last week was AI, at not just who is going to make money in this space but who already is...

Nothing continued to happen last week (and the week before that, for that matter). Apart from two outlying and positive market moves, that is, the Nasdaq went up and so did Japanese equities, for reasons that couldn’t be more different.

As John Wayne said in The Lucky Texan (1934), “It’s quiet out there. Ain’t natural”. That seems to sum up what many traders and managers feel about markets at the moment, as the noisy post-COVID data environment continues to confuse.