Current Market Analysis

HARL shares have experienced significant volatility in recent weeks, but a push higher remains on the cards for investors with a healthy risk appetite. Harland & Wolff (LON: HARL) shares are at this point a relatively stressful investment for long term position investors. Not only is the company down by 42% over the past five … Continued

Lithium is, of course, the brave new metal of the green energy revolution. We’ve not got any other material to use for automotive batteries, not of any consequence. The assumption is that lithium demand will rise at least 1000% over the next decade or so. The price has already risen at least that in anticipation … Continued

Gold reached the resistance at 1878/88 with a high for the week exactly here. There is no sell signal yet but obviously today’s direction will be driven by the US CPI number, with 6.4% expected. The levels for today are very clear on the 4 hour chart. Silver in a 1 month erratic sideways trend. … Continued

The 2023 global recession could crash demand in the short term. But the long-term supply gap is the critical factor to consider for position investors. Two conflicting forces are conspiring to create an even more volatile environment for hard commodities in 2023. One is short-term, the other long-term, and analysts are conflicted over how these … Continued

The idea that these stocks are not sensitive to higher interest rates, while these over here are, is true. But that does depend more than a little bit on the weight we put on that word “sensitive”. For at some level of movement of interest rates all stocks will change in price. Other levels of … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 14/11/22 Nothing of note 15/11/22 RBA Minutes; China Retail Sales; UK Employment; EU GDP; German ZEW Survey; US PPI 16/11/22 UK inflation report (including CPI); US Retail Sales; Canada CPI 17/11/22 Australia Employment; EU CPI  18/11/22 UK Retail Sales

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 07/11/22 China trade data 08/11/22 US midterm elections; EU Retail Sales 09/11/22 China CPI 10/11/22 US CPI 11/11/22 UK GDP; German CPI; US Veterans Day, Bond markets closed

This latest bear-market bounce was predicated on good seasonality, the hopes for a typical mid-term election boost, and the rumors of a Fed pivot. Wall Street always finds a narrative for rallies in a bear market. But the negative economic and liquidity cycles remain unchanged: The Fed is hiking rates into a recession. Powell may … Continued

Macroeconomic/ geopolitical developments US third-quarter earnings results are largely meeting or beating expectations. About a fifth of S&P 500 companies have reported Q3 results, and approximately 73% have exceeded forecasts. Investor sentiment has been very negative, possibly assisting the market rebound, the Bank of America Fund Managers monthly survey showed investors were holding the most … Continued

Macroeconomic/ geopolitical developments US core consumer price index (CPI) inflation hit at four-decade high, at 6.6% year-over-year, higher than consensus. Earnings season began, with US financials leading the way, overall posting above expectations. In the UK, the U-turns continue on the much-criticised mini budget, with the chancellor of the exchequer, Kwasi Kwarteng a political casualty, … Continued

Macroeconomic/ geopolitical developments On the data front, Monday saw the release of the US ISM Manufacturing PMI activity data, which was below expectations, and also showed falling price pressures (fuelling a risk on theme to start the week, month and quarter). Further easing inflation fears and adding to the risk on tone, the US job … Continued

Macroeconomic/ geopolitical developments The UK mini-budget on Friday 23rd September that saw tax-cuts, the cancellation of national insurance and corporation tax increases, supply-side reforms, plus a GBP 60 billion energy support package had serious impacts on global financial markets last week. The Pound plunged across the Forex board, which saw Cable, GBPUSD, hit an all-time-low, … Continued

Macroeconomic/ geopolitical developments The key focus last week was the Federal Reserve Open Market Committee (FOMC) decision, statement and press conference on Wednesday. This brought an anticipated 75bp rate hike, but also a more hawkish tone than markets had anticipated, with rates possibly now moving to a higher peak in 2023 up to 4.50% and … Continued

Macroeconomic/ geopolitical developments Further hawkish messages from Federal Reserve officials last week have reinforced the tone evident since the Fed Chair, Jerome Powell’s 26th August Jackson Hole speech. Friday’s US Employment report saw 315K jobs added, down from the revised 526K number for July, but still a solid report. Global financial market developments The major … Continued

Macroeconomic/ geopolitical developments Markets had interpreted Fed Chair Jerome Powell’s post-meeting press conference after the July 26-27 policy meeting as a dovish “pivot”. Last week several Fed officials pushed back against this dovish market narrative and indicated that the central bank is still steadfast in raising rates until inflation is under control House Speaker Nancy … Continued

Macroeconomic/ geopolitical developments As expected, the Federal Open Market Committee (FOMC) increased rates on Wednesday by 0.75%, taking the benchmark Fed Funds rate to about 2.5% Powell highlighted a Fed Funds range of 3.0%-3.5% by year end, implying about 50-100 basis points of more tightening over the three meetings for the balance of this year, … Continued

Macroeconomic/ geopolitical developments The European Central Bank (ECB) Forum on Central Banking 2022, from Sintra, Portugal saw the world’s major central bankers reaffirm their commitment to fighting inflation. The Manufacturing Purchasing Managers Index (PMI) data was mixed last week, with some of the European data beating expectations, whilst the US PMI data from S&P Global just … Continued

Macroeconomic/ geopolitical developments As expected, the European Central Bank (ECB) pivoted to a more hawkish stance on Thursday, signaling a rate hike in July and maybe more aggressive rate hikes than anticipated thereafter. In addition, they announced the end to their Quantative Easing (QE) program, the Asset Purchase Program (APP) Friday’s US CPI data showed … Continued

Macroeconomic/ geopolitical developments Poor results from US retailers, notably Target, but also Walmart, Lowe’s and Home Depot, highlighted a weakened US consumer. This stoked fears of a larger slowdown and future recession. This on top of US and global inflation worries, and hawkish Central Banks stoked the stagflation fire. Fed speakers, including Chair Powell have … Continued

Macroeconomic/ geopolitical developments A 0.5% hike by the Fed as expected, but Jerome Powell stated that a hike of 0.75% was “not something we are actively considering.” Stock indices initially rallied strongly on this information Wednesday, then reversed these gains and more on Thursday and Friday. Friday’s US Jobs reports saw 428K jobs added in … Continued

Macroeconomic/ geopolitical developments More hawkish comments from various Fed policymakers, notably Bullard and Fed Chair Powell indicated even more aggressive interest rate hikes in 2022 and also in the near future, sending bond and stock markets lower in the US and globally. European Central Bank (ECB) hawks and doves have called for earlier and more … Continued

Macroeconomic/ geopolitical developments The financial markets have been less dominated by the Russian invasion of Ukraine, as a lack of any significant escalation has seen a further shift towards more of a “risk on” theme for stocks since mid-March. There have also been hopes from the Ukraine/ Russia talks and also from reported setbacks suffered … Continued