Bassanese Bites Archives | BetaShares

U.S. recession likely

Global markets
It was another horror week for global equity (and bond) markets as the previous week’s hotter than expected U.S. consumer price index report led to fears that the Fed would hike by 0.75% at last week’s meeting. Following a well-timed media leak, those fears were realised. The Fed’s updated ‘dot plots’,

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June rate hike: RBA delivers shock and awe

The Reserve Bank of Australia has decided to inflict shock and awe on the economy today, no doubt with a view to eliminating any lingering complacency with regard to the inflation outlook.
Although the official wage estimate remains relatively benign, the RBA is clearly concerned that a tight labour market together with already high energy and commodity driven consumer price inflation could lead to a lift in inflation expectations and a potential “wage-price spiral”.

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Praying for a pause

Weekly market recap
Global equities staged a nice comeback last week, reflecting short-term oversold conditions, signs U.S. inflation is past its worst, and – most importantly – desperate market hopes that the Fed could pause its aggressive rate hike plans after two 50 point hikes in June and July.
As I’ve noted in recent weeks,

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Recession watch

Global markets
Global equities weakened further last week, although not due to another surge in bond yields. Rather, it was due to signs of a weakening in corporate earnings from two major US retailers, Target and Walmart. That said, most Fed speakers (including Powell) continued to talk tough, suggesting they are still intent on hiking rates by 0.5% next month.

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Growth scare

Global markets
It was another challenging week for global markets, not helped by a higher than expected U.S. inflation report and a concession by Fed chair Powell that he might not be able to stop the economy tumbling into recession. China’s harsh yet seemingly futile efforts to contain COVID via lockdowns is also unnerving sentiment,

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A glimmer of hope?

Global markets
Such is the potentially oversold nature of global equity markets in at least the short-term, stocks managed to surge last week on the day the U.S. Federal Reserve delivered the widely expected 0.5% interest rate increase – merely because Fed chair Powell seemingly ruled out larger 0.75% rate increases at future meetings.

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Breaking point

Global Markets
Mixed earnings reports, hot U.S. wage and price inflation, and the prospect of an aggressive U.S. Fed rate hike conspired to send global equities lower again last week. Of course, we can add to this worrying mix, renewed concerns over China’s economy due its harsh lockdowns and the raging war in Ukraine.

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RBA to hike 0.15% next week

Global Markets
It was a familiar story last week, with global equities again under pressure from the onslaught of hawkish rhetoric from central bankers. The highlight was no less than U.S. Fed Chair Powell hinting at a 50 basis point rate hike at next week’s Fed meeting. Of course, the bond market has been pricing this risk for sometime (it is also pricing in a 50bps move in June),

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Becalmed

Global Markets
Global equities consolidated last week after solid gains over the previous two weeks, with the most notable market movement being a sharp drop in oil prices as the U.S. announced the biggest ever withdrawal from its strategic reserves. Equities continue to hope for a peace deal between Russia and Ukraine,

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Faster is better

Global markets
There continues to be a strange divergence in global financial markets. Global bond yields surged further last week as strong U.S. economic data and hawkish Fed rhetoric saw bond markets almost fully price in a 0.5% rate hike at the May Fed meeting – in line with my base case outlined last week.

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