Beyond the obvious impact – a sharp equity market sell-off – there is a more subtle connected impact when the markets fall like a knife. Single stock volatility, a function of idiosyncratic (specific) risk, relative to index volatility is rising sharply. In basic parlance the domination of the Mag 7 has masked the increase in … Read more
Interest Rates US bond rates reversed the recent trend over the past month after Chairman Powell mid-Friday indicated the Fed can be patient in determining its next course of action and that the economy was stable. This was despite an earlier softer payrolls report that had moved rates lower. At close Friday, the 10-year treasury … Read more
We have just had another interesting week dominated by Trumps antics in the White House. Putting aside the Trump theatre, the market appears to have reached the remarkable conclusion that the DOGE and now Congress cuts to fiscal expenditure will trigger an economic contraction – even in the March quarter of 2025. The word ‘absurd’ … Read more
The Reserve Bank of Australia (RBA) has delivered its first interest rate cut of 0.25% since it began its tightening cycle in 2022. Relative to most of its global peers in other developed markets, RBA is probably the last central bank to begin its easing cycle. However, the interest cut was accompanied with comments from … Read more
Words fail me when asked to explain what the RBA was thinking, but here is what the media have reported: RBA interest rate cut: governor Michele Bullock says the board weighed up both sides. But did the Reserve Bank deliver the first cut in more than four years because it should have, or because it … Read more
RBA rate cut? A big week ahead with the market fully priced for a rate cut. If the rate cut does not occur it will because: The RBA is actually an independent central bank and so does not care if the Albanese government is re-elected. The RBA uses its trimmed mean measure of inflation when … Read more
The Federal Reserve’s Task has certainly been made a lot more difficult by the Trump Administration. Firstly, we perhaps should restate the Federal Reserve mandate that appears to be overlooked by most analysts and commentators that look to the Federal Reserve as having the ability and responsibility to cure all. Federal Reserve Mandate is for … Read more
Chinese artificial intelligence (AI) startup DeepSeek has dominated headlines over the weekend by disrupting the global tech landscape, raising significant questions about the sustainability of America’s dominance in the AI industry. DeepSeek’s latest AI model has grabbed attention due to its cost-effectiveness and ability to run on less advanced hardware than US equivalents, painting a … Read more
Labour market remains resilientIn line with market expectations, the latest Australian jobs data showed Australia’s unemployment rate at 4.0% as of December 2024. On a positive note, employment increased by 56,300 which was well ahead of expectations of 15,000, however this was driven by part-time jobs which may be perceived by the market as lower … Read more
At the start of every year market strategists from across the globe pen down their forecasts for the year. So, in keeping with this tradition, our first article for 2025 will aim to do as much for our readers. However, what we aim to present below are several non-consensus calls for 2025. They may seem … Read more