Market Review from Realm Investment Management – week ending 16th December 2022

On Tuesday, a lower-than-expected U.S. inflation reading of 7.1% increased confidence that the Federal Reserve would slow its tightening policy. Stocks rallied and the Dollar fell.

At the end of the Federal Reserve’s two-day policy meeting on Wednesday, the central bank duly delivered the expected 0.5% hike in interest rates but stocks fell after an suggestion from Fed Chair Jerome Powell that interest rates would stay elevated for some time. This despite indications that

Full report
https://realmim.com/powell-suggested-rates-will-stay-high-for-some-time-markets-did-not-like-it/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 9th December 2022

US stocks, especially small-caps, ended last week on a soft note after Friday’s producer price (PPI) data showed a rise of 0.4% in November. That’s higher-than-expected inflation data and all eyes will now be on the latest US CPI report tomorrow, Tuesday, in the hope it will indicate some slowing. The UK will also be releasing inflation data this week.

On Wednesday this week, the US Federal Reserve is expected to announce a hike in interest rates of a further 0.5% and investors will be keen to hear the central bank’s forecasts for inflation and interest rates. The Bank of England also has a monetary policy meeting this week; the BoE is expected to announce a 0.5% rate hike on Thursday.

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Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 25th November 2022

Stocks rallied for the week helped by some decent US earnings reports and the release on Wednesday of Fed minutes from the last FOMC meeting. A number of Fed members had recently hinted that the size of the next rate hike might be less than previously expected, and this was affirmed in the minutes – “a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.” A hike of 0.75% next month is no longer the consensus and stocks rallied. Utilities was the best performing Sector with Energy stocks lagging as the price of oil fell sharply (today Crude Oil futures have fallen to their lowest level year-to-date).

Full report
https://realmim.com/fed-minutes-were-encouraging-but-concerns-increase-over-china/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 18th November 2022

Equity markets were mixed last week following a strong advance the week before. UK and European markets were generally a little higher with US stocks giving back some of the previous week’s gains.

In the US, speeches from Fed officials were quite hawkish including one from James Bullard, president of the St Louis branch, who lifted his view of where the Fed funds rate should be to between 5%-5.25%. His comments that rate rises so far had only had a “limited effect on observed inflation” sent stocks lower on Thursday.

US recession worries increased as the 2-year/10-year yield curve, a much-watched indicator, inverted further to its lowest level in over forty years and consequently a recession is now expected by many investors. This now begs the questions, how long it will last? and how bad it will be?

Full report:
https://realmim.com/fed-hawk-upsets-markets/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 11th November 2022

In last week’s US Midterm elections, the forecasted “red wave” did not materialise and a surprisingly strong performance from the Democrats saw them retain control of the Senate. They also have a chance that even the House could remain theirs, although that hope looks to be fading today (Monday) with Republicans edging ahead in a tight race. Either way, the outcome mat not be decided for a few days yet.

Last week was also very much about Thursday’s cooler-than-expected US Consumer Price Index (CPI) data. CPI was just 0.2% less than expected and equities responded with a strong rally – the S&P 500 ended the week with its best performance since June. Investors obviously saw much to cheer but some commentators have advised caution saying there remains plenty to be concerned about including the outlook for corporate earnings. It should also be noted that Fed Chairman Jerome Powell reiterated his view that the “historical record cautions strongly against prematurely loosening policy”.

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Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 4th November 2022

There were three big events last week. Here’s what happened:

On Wednesday the Fed announced its latest interest decision – which was a further 0.75% hike. The signal from Chair Powell was that the central bank is likely to slow the pace of future increases but the level at which interest rates finally top could well be higher than the market currently anticipates. For those seeking clues as to when the Fed might pivot the message was made clear “it is very premature to think about a pause in our interest rate hiking cycle”…”we have some ground left to cover here — and cover it, we will.” US CPI data for October, due to be released on Thursday will help investors judge how well the Fed is doing in its efforts to tame inflation and the likely path for rates going forward.

Full report
https://realmim.com/hike-for-hike-us-uk/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

On Wednesday the US Federal Reserve FOMC meeting will announce its decision on rates. There are hopes that the Fed might start slowing the pace of increases after this meeting and Chairman Powell’s statement at the press conference will be closely examined for such clues.

On Thursday, the Bank of England will also be making a decision on interest rates. The market has been pricing in a 0.75% hike, although some analysts have begun forecasting a lower increase of 0.5%.

This Friday will see the release of the US October Jobs Report – a potential market mover.

Full report:
https://realmim.com/an-important-week-coming-up-with-three-big-events/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

The yield on the UK 10yr Gilt has fallen back below 3.8% today on news that Rishi Sunak will be the new Prime Minister. This chart shows the recent ups and downs of the Gilt yield. This chart gives a long-term perspective. Equities have moved higher today.

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Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Today (Monday) things are calmer in the UK markets with the Pound and UK stocks strongly higher and gilt yields lower after new Chancellor, Jeremy Hunt, announced a reversal of nearly all the tax cuts in the government’s recent mini-budget. US stocks are also up following positive third-quarter earnings reports from major US companies including Bank of America.

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Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Stock-markets were higher last week despite a sharp sell-off on Friday following a stronger-than-expected (yes, stronger) U.S. jobs report. Positive economic news is not what investors are looking for at the moment because they are focused on the Federal Reserve’s reaction to data rather than the data itself.

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Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’