Both equities and bonds have been rallying in November. Inflation pressures have been easing and investors are becoming increasingly confident that the US Federal Reserve and other central banks may be done with raising rates.

Last week’s better-than-expected US CPI data showed that core inflation had fallen to its lowest reading in more than two years – stocks rallied strongly and the 10-year Treasury Yield fell below 4.4% by the end of the week. There is growing anticipation among many market participants that the Fed will begin cutting rates by the middle of next year.

Full report:
https://realmim.com/stocks-and-bonds-both-rallying-this-month/

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 US Federal Reserve kept interest rates on hold last week for the second meeting in a row. Good news, even though the federal funds rate remains at a 22-year high. Comments from Fed Chairman Powell indicating that the market expectation of one more hike may no longer be accurate gave a boost to stocks which rallied sharply. However he did add that the committee had not yet discussed rate cuts and remains focused on whether further hikes will be needed.

Full report:
https://realmim.com/stocks-rally-after-interest-rates-are-held-steady/

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.’

Global stock markets were lower last week. Fears of escalation in the war in the Middle East, higher Treasury yields (the yield on the 10-yr US Treasury briefly rose above 5% for the first time in sixteen years) and mixed earnings reports from US mega-cap tech companies weighed on investor sentiment.

Full report
https://realmim.com/fed-and-bank-of-england-expected-to-keep-rates-on-hold-this-week/

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.’

Global stock markets were mixed last week but in the main tended to finish the week higher – a resilient performance considering recent events in the Middle East. Not surprisingly though Oil rallied strongly last week as did Gold and the US Dollar.

Despite the terrible situation developing between Israel and Hamas, investors continue to concentrate on interest rates as the main focus. Some Fed members commented last week that the recent jump in long-term rates may mean there is “less of a need to raise the Fed Funds Rate” – to quote Dallas Fed President Lorie Logan.

Full report
https://realmim.com/global-stock-markets-held-firm-despite-recent-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.’

Global stock-markets were lower last week. Investors were nervous as a potential US government shut-down loomed with Congress struggling to find consensus on a short-term funding deal. Thankfully, that scenario was averted on the weekend and President Biden signed the deal into law minutes before the deadline.

Investors now re-focus on the Fed’s next move and anxiety remains high after the yield on the US 10-year Treasury rose above 4.6% last week and remains as high at the start of this week. The US central bank kept interest rates on hold in September but indicated there could be another rate hike before the end of the year. The recent rise in oil prices has not been helping that issue and a new 12-month price high was reached last week.

Full report
https://realmim.com/focus-back-on-inflation-after-us-government-shut-down-is-averted/

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 30th June 2023

All major market indices ended the week higher with a strong end to the week after the release of US Inflation Data on Friday. Investors were pleased to see the Fed’s favoured inflation measure, the core personal consumption expenditure (PCE) price index, fall to 4.6% year-on-year,

Full report
https://realmim.com/stocks-higher-last-week-and-a-slowing-indication-for-the-us-economy/

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.’

This week is an important one for data. The latest Fed interest rate decision will be announced on Wednesday and before that, on Tuesday, the US CPI inflation data will be released so there is some uncertainty over what the Fed will do.

The European Central Bank will also be announcing it’s latest rate decision on Thursday – the market is expecting a further 0.25% increase and another in July.

Full report:
https://realmim.com/unexpected-hikes-last-week-but-what-will-the-fed-do-this-week/

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.’

Over the weekend US President Joe Biden and House Speaker Kevin McCarthy agreed a deal in principle on the debt-ceiling. It now needs to pass in the House and Senate. The US Dollar index is holding above 104 today (Tuesday), its highest level since mid-March.

Stock-markets in Asia and Europe were generally lower last week. US stocks were pretty much flat except the technology sector which showed a strong out-performance.

US inflation data came in above expectations last week…

Full report:

US Debt-Ceiling deal agreed in principle

Market review – week ending 12th May 2023

Stocks were generally flat to slightly lower last week.

Inflation has been the main focus for investors for months but there was encouraging data last week. In the US, the rate of annual inflation fell to 4.9% in April; below 5% for the first time in two years and may give the Fed room to pause rate hikes next month. That’s the market implied expectation and looking further out, rate cuts are anticipated before the end of the year – this in contrast to what the Fed seems to be thinking…

Full report
https://realmim.com/market-focus-shifting-from-inflation-to-debt-ceiling/

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.’

…that’s the consensus view

US GDP slowed to 1.1% in Q1 2023. The US economy is slowing, down from 2.6% Q4 2022. The consensus is for a recession (albeit a mild one) at some point this year.

Illustrating the challenge that the Fed faces in it’s fight with inflation, the PCE Price Index came in at 4.6%, month-on-month, exceeding forecasts. The US central bank is widely expected to hike rates another 0.25% this week. The ECB will also announce this week, and the Bank of England next week. Small hikes are expected from both.

Full report
https://realmim.com/small-hikes-now-and-a-mild-us-recession-to-come/

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.’