CPI, Writing on the Wall?
Markets Asia stocks are trading with an upbeat tone as optimism over cooling inflation has traders placing markers on the softening trend to continue. With automotive fuel prices down by over 12% in December, the writing is on the wall, and US CPI should decline for the second time since 2020. Anything other could cause…
Stocks higher on softer inflation projection
MARKETS US stocks advance amid optimism over the cooling inflation outlook as investors await confirmation bias in the latest inflation data, which could tilt the scales in favour of a .25 bp hike. Admittedly, there is still some residual uncertainty on the 25bp vs. 50bp question because the FOMC minutes were inconclusive, so Thursday’s CPI…
Pre Asia Open: Pendulum Still Swinging Around
MARKETS U.S. stocks traded off the session high as the pendulum still swings around the Fed reaction function despite some investors getting gingerly comfortable with the notion that the U.S. can achieve a ‘soft landing.’ In a case of “Deja vu all over again,” early in the U.S. session, markets assumed a risk-on, pro-cyclical stance,…
EU Open: Not enough returns to harvest for US stocks
US stock futures are very reluctant to follow through on Friday’s bounce. With recession risk providing a significant overhang amid a hawkish Fed drumbeat, traders still think US stocks are not cheap enough to harvest above-market returns relative to risk-free assets. European stocks should continue to thrive, catching a tailwind from the China border reopening…
Asia Open: Border Reopening Bounce
Asia risk sentiment is off to a rousing start coat-tailing the rise in US equities as investors revel in the unexpected contraction in services sentiment while hoping a slowdown in wage growth will dull the sharp edge for the Federal Reserve’s rate hike onslaught. The U-turn in China’s Covid policy is consequential to growth and…
Earnings and CPI Should Make for A Bumpy Ride Ahead
MARKETS The first week of 2023 came with the usual slew of major economic data points, which on net point to the curious post-pandemic era combination of a resilient labour market set against eroding business confidence across the US economy. And if this trend keeps up, it will likely make for a highly bumpy trading…
A Weekend Epiphany of Sorts
US MARKETS U.S. stocks traded notably higher Friday, with investors embracing a weak Services sector business sentiment survey, the first of this cycle, amid signs of descending wage inflation as crucial indications that the Fed will be able to ease its monetary tightening process, which may be optimal for equities The U.S. jobs report had…
Asia Open: The trifecta of positive labour data
US stocks are trading lower as Thursday brought more robust jobs data out of the US economy, underscoring the Fed’s uphill battle to balance an overheating labour market. Although ADP has not been the sharpest predictor for NFP, any incremental evidence that the labour market remains hot supports the Fed’s hawkish impulse. On Wednesday, the…
It’s Difficult To Price In What the Fed Is Feeding Markets
MARKETS US stocks snapped an early year run of negativity on Wednesday as markets digest fresh economic data suggesting progress is being made on achieving a soft landing this year. But I am remiss not to suggest that the China reopening impulse is providing an early-year comfort blanket to global stock pickers. At the same…
Pre Asia Open: Demand jitters will likely define the market
US stocks are trading lower to start the year as rallies in Asia, and Europe fail to carry over to the US, where concerns around higher rates, slowing growth and elevated inflation abound; indeed, old problems for a New Year. Two factors significantly contributed to the 2022 Tech Bubble 2 deflation: (1) the Fed and…
