THE WEEK THAT WAS<\/p>\n
After a dreamlike start to November, Wall Street went and snapped its winning streak after US yields surged on the back of a very poorly attended US Treasury 30-year bond auction on Thursday night.<\/p>\n
This was in itself largely the result of a resoundingly stubborn set of comments from the US Federal Reserve Chair J. Powell, who glowered at anyone in and out of the room that the Fed will not hesitate to tighten monetary policy further if necessary.<\/p>\n
Powell came away looking entirely uncertain about achieving the bank\u2019s 2% inflation target and looks pretty agnostic about further rate hikes<\/p>\n
In comments at an International Monetary Fund (IMF) shindig, Powell said the Fed \u201cis committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time\u2026<\/p>\n
\u201cWe are not confident that we have achieved such a stance.\u201d<\/p>\n
Tony Sycamore, IG market analyst, was among the few this week unsurprised that the Fed Chair got all hawkish and pushed back after the recent sharp easing in financial conditions (lower bond yields and higher equities).<\/p>\n
\u201cThe Federal Reserve requires financial conditions to remain tight to stay on the sidelines, waiting for inflation to moderate,\u201d he said.<\/p>\n
\u00a0<\/p>\n
Via MarketIndex<\/p>\n
Tony says local markets were supported in the early part of the week as Wall Street extended its rally, and following the Reserve Bank of Australia\u2019s (RBA) dovish rate hike.<\/p>\n
\u201cWe believe this hike likely signifies the end of the RBA\u2019s tightening cycle,\u201d Tony says.<\/p>\n
Last Week in Bullet Points<\/strong><\/p>\n The RBA raised rates to 4.35%, easing its tightening approach<\/em> It could be a positive start for the week, when trading kicks off in Sydney.<\/p>\n Local Futures are about +0.3% higher on Sunday night after US stocks rebounded strongly on Friday (Saturday morning Sydenham time) with the S&P500 closing up +1.55%, topping 4400 as bond market ructions eased.<\/p>\n For the week the broad-based US index closed up +1.3% trumping the ASX200 which edged marginally lower.<\/p>\n The Nasdaq Composite rallied hard, up +2.25% delivering its best day since July despite economic data which showed the consumer feels worse around the economy.<\/p>\n On the data front at home we have the October edition of the CommBank Household Spending Insights which drops in a few hours.<\/p>\n Both consumer and business sentiment data will drop on Tuesday via Westpac and NAB.<\/p>\n The gold standard for market moving data is the third quarter (Q3 23) Wage Price Index is released on Wednesday.<\/p>\n Via Refinitiv (LSEG) datastream<\/em><\/p>\n CBA expects a lift of 1.2%\/qtr and 3.8%\/yr, below both B A and consensus expectations of 1.3%\/qtr.<\/p>\n \u201cWhile we do expect an acceleration from the 0.8% recorded in Q2 23 and 1.1% recorded in Q3 22, our internal wage tracker suggests this softer than consensus number.<\/p>\n \u201cWe are expecting pass through from higher minimum and award wages and enterprise agreements, but there are signs private sector wages growth has plateaued.\u201d<\/p>\n Labour market data is released on Thursday.<\/p>\n Elsewhere, its Consumer Price Inflation time for both the US and the UK.<\/p>\n Via: S&P Global Intelligence<\/em><\/p>\n US October retail sales will be exciting.<\/p>\n GDP data is due for both the UK and Japan for Q3 23, while the monthly data dump for China is due.<\/p>\n Around the region, China is still providing the bulk of GDP headwinds as geopolitical tensions, volatile commodity prices, property problems and an ongoing uncertainty around which growth path China will take all weigh on confidence. Barclays says signs of an export recovery might offer Beijing and its satellites some relief, but \u2018central banks in the region are likely to pause for longer than previously expected, amid ongoing supply shocks.\u2019<\/p>\n Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.<\/p>\n \u00a0<\/p>\n AU Unemployment\u00a0<\/strong><\/em><\/p>\n Josh says that after last week<\/span>\u2018s rate rise, incoming economic data holds the key to whether Tuesday was the last hike in the RBA\u2019s current tightening cycle.<\/p>\n The first set of data we\u2019ll get to shed some light will be the jobless figures this week.<\/p>\n \u201cEmployment looks set to remain robust, with unemployment figures lingering near record lows and net employment additions expected to be solid.<\/p>\n \u201cThe RBA will know that increasing unemployment is on the horizon, with the full extent of current economic conditions yet to be truly felt by the economy. Migration is high, and data from Seek this week showed job adverts are falling.<\/p>\n \u201cMarket forecasts for unemployment month-on-month have remained fairly accurate, and while November\u2019s reading is unlikely to be the first time we see a sharp increase in the unemployment figures, it\u2019s hard to see levels remaining low far into 2024. With that being the case, it\u2019s unlikely the Reserve Bank will feel the need to tighten policy any further from here.\u201d<\/p>\n AU Consumer Confidence<\/strong><\/em><\/p>\n \u201cThis week<\/span>\u2018s reading of consumer confidence is unlikely to indicate that consumers are feeling any more positive following another rate rise from the Reserve Bank and hotter-than-expected inflation.<\/p>\n \u201cThis latest move from the RBA will undoubtedly put pressure on households, especially as savings continue to evaporate just ahead of an expensive time of year,\u201d Josh says.<\/p>\n \u201cWith many Australian households feeling the pinch, pressure is mounting on the Federal Labor Government to reconsider its plan to introduce stage three tax cuts. One of the party\u2019s key election promises, the planned cuts to tax for high-income earners would likely cause a boost to retail sales and consumer confidence while doing little to ease the pressure felt by mortgage holders and renters \u2013 many of whom will inevitably feel the unwanted sting of this week<\/span>\u2019s rate rise, right before Christmas.\u201d<\/p>\n Alibaba and Tencent Earnings<\/strong><\/em><\/p>\n \u201cIt\u2019s been a pretty miserable year for these two tech giants, with broader tech shares globally seeing huge gains while these Chinese-based companies continue to underwhelm.<\/p>\n \u201cChina\u2019s struggling economy has weighed on these companies despite the relaxation of regulations from Chinese Authorities.\u201d<\/p>\n Josh says the good news for investors is that both these stocks have depressed valuations, making them attractive for contrarian investors.<\/p>\n \u201cAlibaba\u2019s future may be looking brighter, however, with recent news from CEO Eddie Wu indicating the company aspires to become an open tech platform and provide infrastructure for AI innovation and transformation in thousands of industries.<\/p>\n \u201cTencent also has some positives on the horizon, with the company recently announcing it will be globally launching TanLIVE, its climate community platform, at the upcoming 2023 United Nations Climate Change Conference. The platform is designed to empower and connect organisations working towards carbon neutrality.\u201d<\/p>\n Alongside lower valuations, earnings expectations are rising, Josh adds.<\/p>\n \u201cA strong set of results this week, alongside solid forecasts, could be the tailwind these tech giants need to get a leg up in this market.\u201d<\/p>\n Source: Commsec, Trading Economics, S&P Global Research, AMP\u00a0<\/strong><\/em><\/p>\n MONDAY<\/strong> TUESDAY<\/strong> WEDNESDAY<\/strong> THURSDAY<\/strong> FRIDAY<\/strong><\/p>\n \u00a0<\/p>\n Source: Commsec, Trading Economics, S&P Global Research, AMP\u00a0<\/strong><\/em><\/p>\n \u00a0<\/p>\n MONDAY<\/strong> TUESDAY<\/strong> WEDNESDAY<\/strong> THURSDAY<\/strong> FRIDAY<\/strong> <\/span><\/p>\n The post Traders\u2019 Diary: Evasive manoeuvres may be required as tricky week awaits the ASX trader<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nChina\u2019s October inflation dropped by 0.2% YoY, sparking deflation worries<\/em>
\nChina\u2019s October trade surplus decreased, with exports falling significantly<\/em>
\nCrude oil price dropped to $75.00, marking a potential second weekly decline over 5%<\/em>
\nThe gold price dropped to $1950 amid ongoing losses and some relative predictability in Gaza<\/em>
\nThe VIX Index rose to 15.28, indicating increased market uncertainty<\/em>
\nLast week also officially welcomed the world\u2019s newest island, which was violently birthed from an undersea volcano which erupted off Japan three weeks ago, off the southern coast of Iwo Jima. The as yet unnamed island is about 100m in diameter with a peak (at this stage) of about 20m above sea level.<\/em><\/p>\nTHE WEEK AHEAD<\/h2>\n
Josh Gilbert\u2019s 3 things to watch for the week<\/span>\u00a0ahead:<\/h2>\n
The Australian Economic Calendar<\/h2>\n
Monday November 13 \u2013 Friday November 17<\/strong><\/h2>\n
\nCommBank Household savings<\/p>\n
\nAustralia Westpac Consumer Confidence (Nov)
\nAustralia NAB Business Confidence (Oct)<\/p>\n
\nAustralia Wage Price Index (Q3)<\/p>\n
\nAustralia Employment (Oct)<\/p>\nThe Everyone Else Economic Calendar<\/h2>\n
Monday November 13 \u2013 Friday November 17<\/strong><\/h2>\n
\nSingapore, Malaysia Market Holiday
\nJapan PPI and Machine Tool Orders (Oct)
\nTurkey Current Account (Sep)
\nIndia Inflation (Oct)
\nGermany Current Account (Sep)
\nUnited Kingdom Regional PMI (Oct)
\nUnited States Consumer Inflation Expectations (Oct)
\nGlobal Business Outlook (Oct)<\/p>\n
\nIndia Market Holiday
\nNew Zealand Food Inflation (Oct)
\nIndia WPI (Oct)
\nUnited Kingdom Labour Market Report (Sep)
\nSouth Africa Unemployment (Q3)
\nEurozone Employment Change (Q3, prelim)
\nEurozone GDP (Q3, 2nd est.)
\nEurozone ZEW Economic Sentiment Index (Nov)
\nGermany ZEW Economic Sentiment Index (Nov)
\nUnited States CPI (Oct)<\/p>\n
\nBrazil Market Holiday
\nJapan GDP (Q3, prelim)
\nSouth Korea Trade (Oct)
\nChina (Mainland) Industrial Production, Retail Sales, Fixed
\nAsset Investments (Oct)
\nChina (Mainland) Unemployment Rate (Oct)
\nChina (Mainland) 1-Year MLF Announcement
\nIndonesia Trade (Oct)
\nJapan Industrial Production (Sep, final)
\nGermany Wholesale Prices (Oct)
\nUnited Kingdom Inflation (Oct)
\nEurozone Industrial Production (Sep)
\nEurozone Balance of Trade (Sep)
\nUnited States PPI (Oct)
\nUnited States Retail Sales (Oct)
\nUnited States Business Inventories (Sep)<\/p>\n
\nJapan Trade (Oct)
\nJapan Machinery Orders (Sep)
\nChina (Mainland) House Price Index (Oct)
\nPhilippines BSP Interest Rate Decision
\nUnited States Industrial Production (Oct)<\/p>\n
\nSingapore Non-oil Domestic Exports (Oct)
\nMalaysia GDP (Q3)
\nUnited Kingdom Retail Sales (Oct)
\nEurozone Inflation (Oct, final)
\nUnited States Building Permits (Oct, prelim)<\/p>\n