Global Stocks were generally weak on Monday and Tuesday. US ISM Services PMI data showed a fall to 52.6 in February, below forecasts of 53 and down from a four-month high in January. Equities fell, especially tech stocks on fears of an economic slowdown but began recovering ahead of Fed Chairman Powell’s testimony before Congress on Wednesday. He stated that the central bank was “not far” from beginning to cut rates which he said would be this year, although he did add “we want to see a little bit more data” to confirm inflation is continuing to fall. The US Dollar fell in response, with the Dollar Index almost reaching an 8-week low on Friday.

Full report
https://realmim.com/stocks-boosted-last-week-by-powell-testimony-before-congress/

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.’

US stocks were higher last week. So was Europe and UK while Asian stockmarkets were mixed.

In the US, both Services and Manufacturing PMI data (Purchasing Managers Index) came in above expectations and above 50, indicating expansion. The US Manufacturing print was a 15-month high. Another US data point last week that surprised to the upside was fourth-quarter GDP growth which came in at 3.3% annualised; with 2% forecasted. The market lowered the expectations of a March rate cut to 40% (was above 60% just a week ago) and the US Dollar index rose to a six week high.

Full report:
https://realmim.com/busy-week-coming-big-tech-companies-report-fed-meeting-and-us-jobs-data/

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.’

US stock indices were higher last week, apart from the Russell 2000 Small-Cap index. The US technology sector out-performed.

Member of the Federal Reserve Board of Governors, Christopher Waller, set risk assets back earlier in the week with his comments on interest rates.. “with economic activity and labour markets in good shape and inflation coming down gradually to 2 percent, I see no reason to move as quickly or cut as rapidly as in the past“.

Full report
https://realmim.com/uk-inflation-rose-unexpectedly-us-stocks-continue-to-out-perform/

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.’

Last week, US stocks bounced back strongly from the previous week’s decline, although Small-Caps underperformed again. European and UK stocks put in a much more muted performance.

US consumer inflation data came in higher than expected last week. CPI for December came in at 3.35%, up from 3.14% in November (a 5-month low), and above forecasts of 3.2%. Following the data there were comments from Fed members suggesting that it is too soon to think about cutting rates – even so, the market is pricing in a 70% chance that the Fed will cut in March (this was previously 90%).

Full report
https://realmim.com/mixed-us-inflation-data-last-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.’

2023 ended up as a reasonably good year for investors with bonds making a comeback and equities rallying strongly through November/December following a period of weakness.

In the US, inflation has been falling sharply while the economy has remained strong. Markets are now seeing a 90% chance that the Fed will cut rates as early as March.

In the first week of 2024 investors will be closely monitoring some important data releases, including US jobs numbers and minutes of the Federal Reserve’s meeting last month.

Full report:
https://realmim.com/markets-expect-fed-to-cut-rates-as-early-as-march/

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.’

Focus for investors last week was the US Fed meeting and both stocks and bonds rallied after the event. The interest rate was kept on hold but there were indications from the central bank that it would likely adopt a more accommodative stance next year. Comments from Fed Chair Powell that “you’d want to be reducing restriction on the economy well before 2% so you don’t overshoot” were of particular interest. Along with lower yields and cooling inflation (data last week showed that US Inflation has slowed to 3.1%) – the US economic soft-landing narrative has been given a boost.

Full report:
https://realmim.com/a-tale-of-two-central-banks/

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.’

In this coming week, investors will be closely watching Tuesday’s US CPI data along with the meeting of the US Federal Reserve which concludes on Wednesday. The Fed’s final policy decision for the year
will almost certainly be to keep interest rates on hold but clues may be given by policy makers regarding if/when cuts will come in 2024. With evidence of cooling in the US jobs market and inflation falling faster than the Fed expected, optimism is increasing that the initial cut will come in the first half of the new year.

Full report
https://realmim.com/focus-this-week-on-us-cpi-data-and-fed-meeting/

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.’

Last week was a very good one for US stocks, European stocks, bonds and gold (gold has reached a new all-time high today). All responding to the expectation that rate cuts may be coming next year, possibly as early as March. The Dollar Index was lower and the yield on the 10-yr US Treasury fell to its lowest level since the start of September.

Full report
https://realmim.com/bulls-growing-in-numbers-fast/

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. Europe was generally higher, Asian markets were mostly flat to lower, but the US out-performed with the S&P 500 up for the fourth consecutive week. An impressive November so far following the disappointing performance of the previous three months.

Full report:
https://realmim.com/global-stocks-were-mixed-last-week-and-fed-minutes-contained-no-surprises/

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 US equities had a late rally on Friday which has pulled Europe higher today (Monday). Generally though there was a consolidation of the previous week’s strong gains which is encouraging.

Federal Reserve Chair Jerome Powell spoke at a meeting of the International Monetary Fund (IMF) last week. He said it was still too early for the central bank to announce the end of its series of interest rate hikes. Although he did not present a case for further rate increases, he highlighted that the Federal Open Market Committee (FOMC) is committed to a monetary policy stance that will bring inflation down to 2 percent over the long term. Powell expressed caution about prematurely claiming success and stated that officials will closely monitor economic conditions to avoid the risk of raising rates excessively. He also emphasised the importance of not being swayed by short-term positive data but instead taking a careful approach. US stocks sold-off on Thursday after Powell’s comments but recovered strongly on Friday to end the week on a high.

Full report:
https://realmim.com/stocks-held-previous-weeks-strong-gains-inflation-data-due/

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.’