Overview: The optimism among investors appears to have evaporated in the face of new US-Chinese tensions, possible delays in the next US fiscal stimulus, and new record virus infections in Australia and Hong Kong. US stocks had pared early gains yesterday, and the high-flying NASDAQ finished lower after setting new record highs. Hong Kong (-2.25%) and …
Overview: The continued domination of the tech sector and Europe’s tentative agreement are lifting equities and risk assets more generally today. Australia and Hong Kong’s 2.3%-2.5% rally led Asia Pacific markets. The Dow Jones Stoxx 600 is higher for a third session and above its 200-day moving average for the first time since February. The Dax …
Overview: While there are signs that Europe has reached a compromise on the grant/loan issue, the spillover into the markets is quite limited. China, with Shanghai’s 3.1% gain, led a few markets in the Asia Pacific region higher, including Japan and India. Most markets were lower, and Europe’s Dow Jones Stoxx 600 is a fractionally firmer, …
Overview: Chinese stocks stabilized after yesterday’s sharp fall as did most Asia Pacific equity markets, but Tokyo fell today. European shares are little changed, though the Dow Jones Stoxx 600 is still poised to hold on to modest gains for the third consecutive week. US shares have a firmer bias, and the S&P 500 is up …
Overview: A recovery in US stocks yesterday, coupled with optimism over Moderna’s vaccine, is providing new fodder for risk appetites today. Equities are being driven higher, and the dollar is under pressure. Most equity markets in Asia advanced. China and Taiwan were exceptions, and, in fact, the Shanghai Composite fell for the second consecutive session …
The Dollar Slumps and EU Court Rules in Favor of Apple Read More »
Risk-appetites and, by implication, the capital markets entered a new phase around June 5 when the US reported an unexpectedly strong jump in the May non-farm payrolls. The risk assets had been rallying since mid-March in anticipation of an economic recovery and fueled by the massive liquidity provided by central banks and the spending plans …
It is sometimes said that two emotions drive the capital markets, fear and greed. That may cast it in moralistic terms, but there does seem to be two attractors that the pendulum of market sentiment is presently swinging between. On the one hand, central banks have eased monetary policy through conventional and unconventional measures. Governments …
Next week is important. Two G7 central banks meet and at least half a dozen emerging market central banks. There is a European Summit and perhaps a political effort to reinvigorate the UK-EU trade talks, which seem to be crashing on the shoals of stubbornness. The ECB offers its most generous long-term targeted loan that is …
Overview: Many observers are attributing the sell-off in risk assets today to the Federal Reserve’s pessimistic outlook, yet, as we note below, the Fed’s median GDP forecast this year is better than many international agency forecasts, including the OECD’s that was issued yesterday. Moreover, some near-term trends were already in place. Although the MSCI Asia Pacific …
Are Risk Appetites Satiated, or Simply Taking the Day Off? Read More »
Sometimes it is easier to have a sense of what will not happen, rather than a view of what will happen. No Negative Rates in the US: Nearly every Federal Reserve official has argued against the deployment of negative interest rates in the US. It is also not completely clear that the same Congressional authorization …