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mr.h
I hate F$U and ND
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6 million Chinese in lockdown.
mr.h
I hate F$U and ND
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Asian stocks buoyed by smaller Fed rate hike bets, but China lags
Investing.com | Nov 24, 2022 01:23AM ETBy Ambar Warrick
Investing.com-- Most Asian stock markets rose on Thursday amid growing expectations that the Federal Reserve will temper its pace of interest rate hikes, although Chinese equities lagged as the country logged record-high COVID-19 infections.
Japan’s Nikkei 225 index jumped 1% in catch-up trade, while India’s Nifty 50 index added 0.5%. Japanese stocks largely looked past data showing a prolonged contraction in the country’s business activity.
Malaysian stocks surged 2%, and were the best performers in the region after Anwar Ibrahim was confirmed as the country’s new Prime Minister, ending five days of political deadlock. A tightly-contested general election saw Malaysia experience its first-ever hung parliament this week.
Democrat judge or Republican?
I'm all in.“BUY THE FEAR”…….
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mr.h
I hate F$U and ND
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Inflation is dropping, our supply chains are opening, we are bringing in manufacturing jobs, so far our recession is mild,
oil prices are lower, the bi-partisan infrastructure bill is being rolled out, the S&P is at 4000….more?
I believe we have a Christmas rally and a smaller rate hike. I also believe 2023 will make up the losses of 2022.
Yes people are spending, but they have jobs. We are not going to see millions unemployed.
Happy Thanksgiving and yes I’m an optimist.
mr.h
I hate F$U and ND
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Bloomberg) -- Chair Jerome Powell is expected to this week cement expectations that the Federal Reserve will slow its pace of interest-rates increases next month, while reminding Americans that its fight against inflation will run into 2023.
Powell is scheduled to deliver a speech, nominally focused on the labor market, at an event on Wednesday hosted by the Brookings Institution in Washington. It will be one of the last from policymakers before the start of a quiet period ahead of their Dec. 13-14 gathering.
this should give us a Christmas rally
we are going to see a 50bp hike with a warning that we Could see higher rates if inflation is persistent.
oil is plummeting with the China covid crises, but otherwise they are a supply problem for the US.
Powell is scheduled to deliver a speech, nominally focused on the labor market, at an event on Wednesday hosted by the Brookings Institution in Washington. It will be one of the last from policymakers before the start of a quiet period ahead of their Dec. 13-14 gathering.
this should give us a Christmas rally
we are going to see a 50bp hike with a warning that we Could see higher rates if inflation is persistent.
oil is plummeting with the China covid crises, but otherwise they are a supply problem for the US.
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PanteraCanes
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If the bottom falls out of that then we will finally see some change. Though this certainly breaks all fiduciary responsibilities.
As Biden said on a hot microphone when all this calamity started two years ago:
“ plausible deniability “
By definition, ESG is rarely in a Fiduciaries best interest.
C'mon man, why so negative?
p.s. we may enjoy a seasonal rally heading into December, but at some point in 2023, the market is going to do a Gattis.
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Powell says 2% against CORE CPI
CORE CPI is 6.3%
FED Funds is 4%
IF they are going to have a softer landing, they have to NOT raise rates in December or go up by only .25%.
Doing so would likely cause the mortgage spread to drop from 2.9 to 1.7 over the coming months while stabilizing the 10-year around 4% thus getting mortgage rates to drop from 7% to 6% helping a large percentage of the economy with breathing room.
IF Powell goes to 4.5 vs 4.75%, we may see a small rally but are not likely to see the SP over 4100 as he will now be above his own target of 2% inflation on CORE CPI. The only chance we are at the bottom would be staying at 4% and seeing what happens with inflation. Powell isn't likely to stop rate hikes. I actually think he could keep hiking if inflation remains and some economists believe he will have to be over the inflation rate by 1-2% to beat inflation.
Thus, we wait to see if Powell is going to go with .5 or .75 AND how many more hikes we will see. I'd assume rate hikes continue maybe at .5 per meeting then slowing in Q2 to 0 or .25 based on inflation. Assuming .5 * 3 + 4% now, we get to 5.5% heading into Q2 with loan spread dropping from 2.9 to 1.7 thus keeping mortgage rates between 6.5 and 7.5%. Inflation would have to cool to 3-4% from 6.3% for Powell to likely pause as he will be in that 1-2% over inflation. Expecting Q2 for the pause potentially last into Q4 unless inflation continues to drop. This could cause the real estate market to see losses, especially on the commercial side as a large % of those are about to get called and would see a 1.5x rate hike.
What does this mean for equities, I expect layoffs to jump and unemployment to hit 6% by year-end 2023 mostly focused on real estate and finances. Big tech will continue to get weaker due to a lack of easy capital. Equities could get some help as they already have from the USD's strong position. That position will weaken as we slow and then pause hikes.
Thus, it is still time to be defensive as the bottom isn't now. Now if you are a 30-40 year-long equities investor then dollar cost averaging will keep you ahead no matter what happens as I'm a big believer in the US economy.
CORE CPI is 6.3%
FED Funds is 4%
IF they are going to have a softer landing, they have to NOT raise rates in December or go up by only .25%.
Doing so would likely cause the mortgage spread to drop from 2.9 to 1.7 over the coming months while stabilizing the 10-year around 4% thus getting mortgage rates to drop from 7% to 6% helping a large percentage of the economy with breathing room.
IF Powell goes to 4.5 vs 4.75%, we may see a small rally but are not likely to see the SP over 4100 as he will now be above his own target of 2% inflation on CORE CPI. The only chance we are at the bottom would be staying at 4% and seeing what happens with inflation. Powell isn't likely to stop rate hikes. I actually think he could keep hiking if inflation remains and some economists believe he will have to be over the inflation rate by 1-2% to beat inflation.
Thus, we wait to see if Powell is going to go with .5 or .75 AND how many more hikes we will see. I'd assume rate hikes continue maybe at .5 per meeting then slowing in Q2 to 0 or .25 based on inflation. Assuming .5 * 3 + 4% now, we get to 5.5% heading into Q2 with loan spread dropping from 2.9 to 1.7 thus keeping mortgage rates between 6.5 and 7.5%. Inflation would have to cool to 3-4% from 6.3% for Powell to likely pause as he will be in that 1-2% over inflation. Expecting Q2 for the pause potentially last into Q4 unless inflation continues to drop. This could cause the real estate market to see losses, especially on the commercial side as a large % of those are about to get called and would see a 1.5x rate hike.
What does this mean for equities, I expect layoffs to jump and unemployment to hit 6% by year-end 2023 mostly focused on real estate and finances. Big tech will continue to get weaker due to a lack of easy capital. Equities could get some help as they already have from the USD's strong position. That position will weaken as we slow and then pause hikes.
Thus, it is still time to be defensive as the bottom isn't now. Now if you are a 30-40 year-long equities investor then dollar cost averaging will keep you ahead no matter what happens as I'm a big believer in the US economy.
onshoring, the infrastructure bill and the infamous "Inflation Reduction Act" are all highly inflationary, thats part of the problem. Oil appears to have strong support at these levels, and that is with China in lockdowns and Europe in recession.
Most Wall Street research is calling for another leg down to test the previous lows.
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Blurb from today's WSJ:
Reading the economic tea leaves is hard, of course. The closest thing we have to a sure-fire indicator in the U.S. is the yield curve that tracks varying maturities for Treasury bills, notes and bonds. When short term rates are significantly higher than long term ones it has, almost without fail, signaled an impending recession. The inversion is now the steepest since 1981.
Reading the economic tea leaves is hard, of course. The closest thing we have to a sure-fire indicator in the U.S. is the yield curve that tracks varying maturities for Treasury bills, notes and bonds. When short term rates are significantly higher than long term ones it has, almost without fail, signaled an impending recession. The inversion is now the steepest since 1981.
China's Nov factory, services activities fall to 7-month lows on COVID curbs
China's factory activity contracted at a faster pace in November, an official survey showed on Wednesday, weighed down by COVID-19 curbs and softening global demand, underscoring the increasing pressure faced by the world's second-largest economy.
www.reuters.com
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