Category: Market Outlook

Not many people know this, and this is really important. Demand for US treasuries, especially the short (1 year) to mid-term (10 year) treasuries typically spike for 2 main reasons.

First, there is a genuine concern over the financial markets, for example, recessions and market corrections.

Second, the Fed increases the Federal Funds rates aggressively, which drives demand to hold US treasuries.

However, something really weird is happening right now. The Fed is aggressively hiking the Federal Funds Rate, yet the demand to hold US treasuries is low.

What exactly is happening here?

The Federal Reserve is intensifying its fight against inflation…

US Fed Chair Jerome Powell has recently pledged to do “whatever it takes” to curb the four-decade high inflation…

Increasingly, it seems, aggressively rising interest may lead to “the one thing” the Fed has been trying to avoid: a recession!

So, are we heading towards it?

Well, the current macro-economic conditions seem to be pointing in that direction, with many economists arguing that the stock market and US economy will get much worse before they get any better…while Wall Street bulls believe that these fears are overblown…

Additionally, a good argument can also be made on:

How do markets perform just prior to, during, and towards the end of a recession, and how can you safeguard your portfolio?

And this article will help you uncover all these questions…

Last night the US issued a very important economic indicator – the consumer price index (CPI) result which highlights the inflation in the world’s largest economy.

Inflation concerns are front, left, right, and centre in everyone’s mind right now. Therefore, our expert market research team has decided to send out a note to share our views on the matter.

Towards the end of March 2022, something ominous emerged that market commentators and economists had been anticipating for a while. The U.S. yield curve inverted for the first time since 2006!

And the topic of “the yield curve and its inversion” hit the financial world with the same intensity as Will Smith’s smack in the face of Chris Rock.

This coordinated international move has plunged many markets into mayhem, especially the energy market.

Many have started to compare this to the 1970s oil shocks, which resulted in dire economic consequences for the world economy.

The recent invasion of Ukraine by Russia resulted in severe economic sanctions by the Western world on Russia.

This coordinated international move has plunged many markets into mayhem, especially the energy market.

Many have started to compare this to the 1970s oil shocks, which resulted in dire economic consequences for the world economy.

As the Fed is going to start its rate hike cycle, might the markets rally as counter-intuitive as it may sound?

No, you haven’t got it wrong. Even though conventional wisdom tells us that whenever the US federal reserve hikes rates, the stock market falls. That’s what everybody thinks should logically occur.

Well, it’s no secret that markets are currently operating in the most uncertain environment where investors are already under the pressure of rising interest rates, inflation hitting new record highs and now the geopolitical concerns over Russia and Ukraine.

First, the US stock market reflects the economy and more. Existing economic conditions and historical ones are already priced into the stock market as old and current news. More importantly, the US stock market prices into current stock prices, future expectations of the economy.

It’s the question in everyone’s mind this week, what will happen to my investment portfolio if Russia invade Ukraine?

Well, it’s no secret that markets are currently operating in the most uncertain environment where investors are already under the pressure of rising interest rates, inflation hitting new record highs and now the geopolitical concerns over Russia and Ukraine.

First, the US stock market reflects the economy and more. Existing economic conditions and historical ones are already priced into the stock market as old and current news. More importantly, the US stock market prices into current stock prices, future expectations of the economy.

Did you know that the AAII (retail) sentiment survey results provided a rare signal on the 3rd February 2022, that was only seen 9 previous times in the past 35 years?

Traders and investors that have skin in the game should understand these concepts well to appreciate the stock market.

First, the US stock market reflects the economy and more. Existing economic conditions and historical ones are already priced into the stock market as old and current news. More importantly, the US stock market prices into current stock prices, future expectations of the economy.

There is a rule of thumb circulating around social media that when the U.S. The Federal Reserve starts hiking interest rates, it is in general, bad for the stock market.

In Economics 101, what is often taught in school is that if Central Banks want to curtail economic growth, one classic technique will be to increase interest rates. By increasing interest rates, the cost of borrowing for companies will increase, thereby making it more restrictive for companies to grow. Hence, the logic is that when companies are restricted, this surely is bad for listed companies in the stock market!