Slow and Uncertain Start to an Important Week August 19, 2024 Equity markets this Monday have traded mixed, with a few significantly drops such as -1.8% in Japan, -0.9% in South Korea and 0.5% in New Zealand outnumbered by rises elsewhere of less than 1%. U.S. stock futures were up by the thinnest of margins…
A Pause after Some Weak U.S. Housing Data August 16, 2024 A surprisingly frenzied move into riskier assets this week hit a mild speed bump from weak U.S. housing starts and building permits last month. Starts dropped 6.8% on month to a four-year low and were 16% below the year-earlier level. Permits fell 4% on…
Recession Fears Assuaged by Data August 15, 2024 Since midyear, worries about intractable inflation had been overcome by concerns that tight monetary polices in the United States and elsewhere had hung around too long and were now pushing economies toward recession. Data reported today seemingly lessen the possibility of that alternative danger. A Goldilocks scenario…
New Zealand’s First Interest Rate Cut of the Cycle August 14, 2024 There’s been a 25-basis point reduction in the Reserve Bank of New Zealand’s official cash rate to 5.25%. Its the first easing of the cycle and was not widely expected by analysts. “Surveyed inflation expectations, firms’ pricing behavior, headline inflation, and a variety…
Heavy Diet of Price and GDP Growth Data August 14, 2024 The dollar had lost 0.4% against the euro and 0.2% versus the Swiss franc and Chinese yuan an hour and a half into the U.S. trading day this Wednesday. Larger net movements of -1.0% and +1.0% had been clocked against the Mexican peso and…
Japanese Stock Market Rebound and Lower-Than-Forecast U.S. PPI Inflation August 13, 2024 Japan’s Nikkei-225 equity index surged over 1000 points (3.5%). Smaller stock market gains in the Pacific Rim were experienced in China, Hong Kong, Indonesia, Singapore and Australia, but India’s Sensex fell 0.9%. Share prices in Europe are marginally firmer. The S&P 500 and…
Bottom Fishing August 6, 2024 After Monday’s historically sharp movements across many financial market types, investors overnight and early today took a chance on those movements being overdone but remained cognizant of the risk for aftershocks. The backdrop to Monday’s selloff remains pretty much intact, and today’s additional news hasn’t been particularly remarkable. One continuing…
Major Risk-Off Alert August 5, 2024 Reminiscent of October 19, 1987, a.k.a Black Monday when a difficult Friday session coalesced into a category 5 stampede out of risky assets culminating in a record 22.6% single day plunge in the DOW, today has seen a cascade of eye-popping equity market drops. And like then, an element…
Next Week’s Menu: August 3-9, 2024 August 2, 2024 Central Banks: Monetary policies will be reviewed next week in Mexico, Peru, Moldova, Australia and India. The Bank of Japan will publish a summary of the recent Board meeting and minutes from the previous one. Holiday and Special Events: There is a Civic Holiday in Canada…
U.S. Jobs Report Reinforces View that Fed Has Misread the Economy and Delayed Easing Too Long August 2, 2024 Unemployment in the United States rose from 4.1% in June to 4.3% last month, triggering the Sahm Rule that stipulates that if its 3-month moving average (4.1% in this case) happens to exceed the prior year’s…