01/05/2023 09:06

Chart of the Week

When we compare 2 tech-based ETFs which track the NASDAQ it uncovers a major worry percolating beneath the surface of the current advance by tech stocks:

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23/03/2023 09:29

First Up

The ASX200 enjoyed a solid 60-point rally on Wednesday as investors weighed up what the Fed would both do & say this morning. Hopes have been rising that the Fed’s interest rate decision and accompanying minutes will address investors’ concerns of a potential meltdown across the global Banking Sector. The rescue of Credit Suisse by UBS had returned some order to financial markets but the interpretation of Jerome Powell’s statement over the next 24-48 hours is likely to dictate risk appetite over the coming weeks.

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03/03/2023 09:27

Global Markets

US stocks rallied overnight with the S&P500 finishing up +0.8%, even as bond yields nudged ever higher i.e. the market is gaining strength in our opinion when the S&P500 can make reasonable gains even when the US 2-year yields test 4.95%. Equities appeared to gain in confidence following comments from Atlanta Fed member Raphael Bostic that the central bank could be in a position to pause rate hikes sometime this summer.

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02/03/2023 09:18

Global Markets

US stocks drifted lower overnight following strength in bond yields i.e. the same playbook as the last 12 months. The catalyst last night was a gauge for manufacturing improving for the 1st time in 6-months plus we saw measurements of prices paid also rising i.e. not indicators the Fed are hoping for.

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01/03/2023 09:28

Global Markets

It would appear US stocks are becoming adjusted to higher bond yields, at least in the short term, with the NASDAQ outperforming overnight even as the interest rate sensitive 2-year bonds nudged up towards 4.8% - as we often say markets that can dismiss bad news are strong.

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28/02/2023 09:13

Global Markets

US stocks experienced another choppy session overnight recovering from their session lows as investors appeared to accept rates would be higher for longer i.e. nothing new at this stage although gains were dented by one Fed governor reiterating the central bank’s 2% inflation goal. US 2-year yield slipped back under 4.8% which saw the $US trade back below 105.

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27/02/2023 09:02

Equity Indices

The tech-based NASDAQ has led the decline through February but considering that short-dated 2-year bond yields are trading at 16-year highs we believe the sector is gaining relative strength following its aggressive revaluation last year although of course, it regions vulnerable if yields surprise further on the upside.

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24/02/2023 09:48

Global Markets

US stocks experienced another choppy session overnight as traders weighed up the prospects for an economic soft-landing as the Fed becomes increasingly hawkish. Retail investors are one group who have taken a bearish view with the bull-bear spread at its most pessimistic stance since the start of 2023.

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16/02/2023 09:19

Global Markets

US tech stocks continue to rally even in the face of rising short-term bond yields which suggests an eventual Fed Cash Rate of ~5% is fully baked into today’s prices. MM is still overweight the sector although we are looking to take some profits into further strength.

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06/02/2023 09:07

US Markets

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.

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