Knives out
To start 2023, the finance sector follows the technology sector’s lead with layoffs. Goldman Sachs NYSE:GS (GS), Morgan Stanley NYSE:MS (MS), and others are following the lead of FAANG in laying off staff. Despite bumper revenues and profits, large US multinationals (MNCs) and the Federal Reserve are performing an unlikely delicate dance in directing the…
Stay the course
The Bank of Japan (BOJ) keeps interest rates steady. The currency markets react by sending the Yen lower against a basket of currencies. Japan and others are reaffirming their commitment to the Great Reopening and their inflation management strategies. How are the markets reacting? No going back The BOJ interest rate policy is unchanged in…
Best performing ASX stocks in 2023
The S&P / ASX 200 ASX:^AXJO (XJO) is up by 4.7% to start the year. The consumer discretionary, materials and real estate sectors lead the pack. To kick off 2023, defensive trades lag behind the more aggressive stock plays. What is driving this action, and what might create a drag on this theme going forward?…
US Dollar slide gains momentum
The US Dollar index is down 9% from early November and 1.5% to start the year. The steady decline in the US Dollar from the highs of September 2022 is generating an updraft to international securities. A return to a depreciating US Dollar eases the pressure on foreign US-denominated debt, tempers exported US inflation and…
Can gold ride the inflation wave again?
S&P/ASX 200 Materials ASX:^AXMJ (XMJ) is up 8.3% over the last 12 months. Australia’s largest gold miner, Newcrest Mining Ltd ASX:NCM (NCM), is down by 8.5% over the same period. Gold is often touted as a hedge against inflation; with the highest global inflation in 40 years, what has kept the lid on gold prices?…
Looking for a tech rebound
The S&P/ASX 200 Information Technology ASX:^AXJE (XJE) index is down 30% on the year. A combination of forces is pressuring technology stock valuations. What forces are holding down tech stock valuations, and what needs to happen for them to rise again? Inflation and tech Conventional financial theory leans heavily on the relationships between assets. When…
Energy markets finding a footing
Despite heavy selling to start the year in the energy markets, energy stocks are proving to be resilient. The push factors of China and supply loss are overcoming the drag of the economic outlook, higher US supply, and unseasonably mild weather. Despite energy markets falling considerably from their June 2022 highs, energy stocks have only…
A dual-speed economy
Struggling real estate and industrials may dent sectors sensitive to labour markets in the coming months. Sustained levels of inflation will continue to prop resources and energy company budgets. The separation in conditions between certain sectors of the economy may continue to widen into 2023. A dual-speed economy The economic outlook for the next 12…
Taking the sting out of the energy markets
Gas and power prices are down to start the year, and coal is trailing lower. Lower commodity prices are having a positive impact on debt and tech markets. Coordinated government policy on supply chain reorganisation and higher private production are starting to have a lasting effect on energy prices. Energy lower Oil prices have struggled…
Through the looking glass of 2023
Rates and technology stocks are stable at the opening. Currencies and commodities are following suit. Bank and resource stocks are lower at the open, anticipating systemic risk transmitting to the souring of credit portfolios and lower raw material demand. In the rear-view We’ve barely started the year, and the realities of 2022 are already beginning…
