US Markets

Last week saw US equities embrace both sides of the coin which are driving risk markets at present:

• On Thursday morning AEST the Fed hiked rates by 0.25% while also offering some optimism to investors when Jerome Powell said “we can now say for the first time that the disinflationary process has started,” stocks, bonds and commodities soared higher while the $US made fresh 11-month lows.
• However on Friday morning the US Jobs Report came in significantly higher than expected i.e. economists were targeting 188,00 new jobs and the US economy delivered 517,000 leading to a total reversal across financial markets in just 48 hours

We still think the Fed will hike rates above 5% and then refrain from cutting them until the picture is crystal clear hence investors may become disappointed further over the coming months, but in the short term, we still think most of the FANG stocks will enjoy some buying into dips but the “easy money” on the upside already feels like it’s behind us.