The market has chosen to read the Fed 25pb hike as a positive sign we’re on the glide path to a soft landing – but what does the market know? The charts and common sense increasingly scream recession. Take your pick: deflationary bust or stagflationary crisis?
Stocks are looking forward to a double dose of joy from strong tech earnings and the Fed close to end of the tightening phase, but these may be Potemkin Markets.. foundations in the sand and little behind the façade… says the grumpy bond trader…
US Inflation looks to have been beaten, but that might not mean very much if the global economy is still headed into recession. Rates and consumption are a lagging problem for the markets, and there is a chance even strong economies will stall.
Lots going on out there – but what does it all mean? Markets have plenty to consider from rates, inflation, micro, macro, geopolitics and climate – but the core objective remains: generating dull, boring predictable returns in difficult markets.
Stock buybacks are a contentious issue – there are times they are the right thing to do, and make sense. Often they do not. The trick is to align them with shareholder value and stakeholders and be aware of the consequences. They should not just be about the stock price!
The widening gulf in the outlook for the US and UK economies is stark. UK housing and the mortgage markets are a rising threat – but maybe we are looking at the all the wrong things as the Climate Crisis (oh, yes, remember that) comes back into focus.
US Stocks are back in bull territory, but how dangerous are Euphoric Markets determined to follow an upside narrative – no matter what the underlying reality? Markets are not clever, just voting machines reflecting how smart participants are.
The debt ceiling crisis has lifted a cloud from markets, but we’re still looking for resolution on inflation, geopolitics and a host of other issues. Maybe the real issues are about valuations – which remain over-extraordinary.
Let’s assume the US Debt crisis is averted. What comes next? A full-on speculative bubble and hype around Artificial Intelligence is underway. How will AI influence trading strategies, or turn markets into gray-goo? Will AI trading prove to be little more than finding new innovative ways to relieve retail investors of their money?
Markets are taking a breather after the recent wobbles, but the threat board has never looked, well, more threatening! Relax. Go see Guys and Dolls instead and treat yourself to a great night out.. tomorrow it will be miserable again!