The InvestSense Podcast

April was a muddle through month where most markets ended where they started, some having moved about a bit more than others. The Nasdaq, and by extension the US market, continued to be the lightning rod for risk, but ended the month just in positive territory. Emerging markets were slightly down, while the biggest winner was Japan.

Jonathan Tolub provides a primer on Andrew Hunt’s recent research, and views on US banks and Asian economic activity in particular.

After a relatively quiet few weeks the financial newswires have sprung back into life with positive US earnings surprises, another distressed US bank and an Australian inflation print that appears to have something for everyone.

Jonathan Ramsay and Jonathan Tolub discuss the upcoming Portfolio Construction Forum Finology Summit 2023, which will be on Wednesday May 3rd 2023. If you are interested in attending the Finology Summit live or online, contact Paul Carrington at pcarrington@investsense.com.au

Markets have been remarkably well behaved since Easter, as most markets are up by 1-2% across the board with very little volatility.

With many markets closed for a few days either side of Easter and market liquidity being generally very low, the financial news been mercifully subdued (including this weeks US CPI print). There was, however, mini-scare at the end of last week as a number of jobs related reports came out suggesting that the overheating US economy might be slowing down.

Markets have calmed down a great deal in the last two weeks and more recently have mounted a bit of a recovery, with US tech and emerging markets leading the way

Early last week a much-awaited inflation gauge in the US confirmed that inflation remained ‘sticky’, and that the pace of increases might even be accelerating again. For the second week in a row a hawkish and normally market moving Fed speech that should have seen yields go higher was overshadowed by events in the banking sector that had exactly the opposite effect

On Friday morning Silicon Valley Bank (SVB) had been the 16th largest US bank and a successful S&P 500 company, but by Saturday morning it was bankrupt after a sudden run on its deposit base had rendered it unviable.

Bond yields were up again last week but so were equity markets which was a nice change that lead to the first up week in the last four. In fact, while markets have been on the back foot recently, most commentators have been pleasantly surprised that they haven’t reacted too badly to an apparent wind shift in the gusty inflationary data.

On Friday the widely followed US PCE inflation data was published, and it tied a neat bow around this thesis with broad based inflation measures covering core as well as volatile items like food and energy higher than expected. Last week, the S&P 500 traded in a 3% range, having done a 2% round trip on Thursday, followed by a 3% fall on Friday after the inflation data release and then another...

Markets followed a recently familiar path last week, rising early in the week on strong economic data and hopes of a ‘no-landing’ only to fall back as the market digests the inflationary consequences, helped by cautious rhetoric from various US Federal Reserve Board members. A ‘no-landing’ scenario is one where the US economy just keeps flying high as inflation naturally subsides, thereby easing p...

Markets were again on the back foot last week. However, despite a fair amount of volatility, most markets were flat or only down by 1% or so.

Markets think ‘we’re there’ in the global fight against inflation – but are we? Last week the RBA also proclaimed confidently that local inflation had peaked, so you might think it’s all downhill from here....

Markets ended up a few percent last week, but only after a mid-week earnings scare triggered by a flat result and weak guidance from Microsoft.

As the world’s elite gathered in a snowless Davos, markets focused on much more immediate concerns, starting with the continuing wave of layoffs in corporate America. Amazon, Microsoft, Alphabet (Google’s parent company), Salesforce and Goldman Sachs, among others, took turns to announce staff cuts. It would appear boardrooms and CEOs are lending some credence to the possibility of a recession in...

During the last few weeks, the prospect of rising interest rate expectations continued to grip markets, as the soft landing/rapid disinflation thesis was tested. Tight labour markets in the US have firmed the case for tighter monetary policy and in that sense, it was perhaps not surprising to see a continuation of the dominant trends of 2022 where interest-rate-sensitive tech stocks took the brunt...

Uncertainty stalked markets last week amidst a raft of rate hikes, but the focus on inflation shifted from the US – where the news was ostensibly quite good – towards Europe, where inflation pressures continue unabated.

Most markets were soft but stable last week while US markets were down a more significant 3%, led by the large US tech stocks.

Volatility crept back into markets, especially in the US, last week as China’s COVID woes weighed on markets early in the week before the S&P 500 rose by 3% in a few hours after US Fed chair Jerome Powell intimated that the rate of interest rate hikes might at least slow down from here.

A quiet black Friday in the shops perhaps pleases the Fed more than the retailers...

Fed officials sought to impress upon markets the notion that it would take more than one apparently weaker inflation print and an impending recession to pause this US rate hiking cycle. Headlines like “Housing industry braces for a downturn, but investors are piling in” neatly summarise the tone of a market where both the rate cycle and resultant recession has been so well telegraphed. The fact th...

Early last week it looked like an imploding crypto exchange might be the next leveraged player that the Fed hiking cycle had broken but by the end of the week early signs of a peak in inflation had sent markets rocketing higher.

US markets snapped a month-long winning streak and fell back by three percent while UK, European and Asian markets were up strongly. The negative sentiment in the US centered on the prospects for tech stocks, and the Nasdaq was down almost 6% with market heavyweights Apple, Google, and Amazon down by around 10% as investors fretted over the dual headwind of declining earnings and higher interest r...

Markets capped a very strong month with a strong week and for an apparent kaleidoscope of reasons including not as dismal as expected earnings, anecdotal evidence of slowing inflationary pressures in the US and even some economic resilience in recession bound and energy starved Europe. Against these ‘almost positives’ there was enough in the news to make a 10% rise in markets during October seem i...