Most global stock-markets rebounded strongly last week from losses the previous week – certainly in Europe and especially in the US after the release of improving inflation data and better-than-expected earnings reports from major US companies.

US CPI data came in at 3%, its lowest level since March 2021 and slightly better than expectations. This reduces pressure on the Fed to keep hiking although the market is still pricing in 90% odds that the central bank will hike again later this month. Even so, looking further out the market now sees less chance of further hikes. More evidence of lower inflation came from US Producer Prices data which showed a 0.1% increase – the lowest in nearly three years.

Full report
https://realmim.com/inflation-data-leads-markets-higher/

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.’

All major global stock-markets were lower last week apart from India which managed to gain slightly. Bond yield rose, commodities were mixed but generally higher.

The monthly private payrolls report from ADP (a giant US payroll processing company) showed that 497k US jobs were unexpectedly created in June – well above forecasts. This is why the US 10yr Treasury yield jumped above 4% last week for the first time since March. At the same time the yield on the UK 10-year gilt rose above 4.7%, the highest since October 2008.

Full report
https://realmim.com/jobs-and-services-data-will-keep-fed-on-their-toes/

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 the Bank of England surprised markets by lifting interest rates by 0.5% (0.25% was expected) – its 13th consecutive hike. The UK central bank said they would lift rates higher if inflation pressure continued. This followed the release of UK inflation data earlier in the week which showed CPI at 8.7% in May which was unchanged from April and higher than market expectations.

Full report
https://realmim.com/markets-anticipating-falling-inflation-in-the-us-but-slowing-economy-too/

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 16th June 2023

Global stock-markets were higher last week after the US Federal Reserve left interest rates unchanged but the Fed made it clear it plans to hike rates further in months to come. By how much and when will depend on inflation data which will determine “the extent of additional policy firming that may be appropriate.” Chairman Powell said it would probably be “about a couple years out” before rates might be cut.

Full report
https://realmim.com/pound-and-gilt-yield-higher-ahead-of-boe-decision-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.’

Market Review from Realm Investment Management – week ending 2nd June 2023

Stocks in Europe were broadly flat last week but the US had a strong week following the approval of the debt ceiling agreement.

US equities had a strong end to the week despite Friday’s payrolls report which showed the economy added 339,000 jobs in May. The number was much higher than expected and continues to indicate a tight labour market suggesting the Fed may not have room to cut rates any time soon.

Full report
https://realmim.com/market-focus-back-on-inflation-and-rates-after-agreement-reached-on-debt-ceiling/

Market Review from Realm Investment Management – week ending 19th May 2023

Stock-markets rose last week on positive corporate results and hopes that the US debt ceiling issue will be resolved over the next few days. In the longer-term there is also increasing optimism that the Fed will start cutting rates later in the year. The German DAX index was the stand-out performer last week, reaching an all-time-high.

Re the debt-ceiling countdown: a meeting on Friday night brought no agreement from negotiators but today (Monday) President Biden is due to meet Republican Kevin McCarthy in a further attempt to resolve the issue.

Full report:
Debt ceiling drama still to play out

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.’

Weekly market summary – w/e 5th May

US stocks bounced back strongly on Friday to recover the majority of the decline earlier in the week. The week started on a down note with bank concerns continuing to weigh. US regulators had stepped in on Monday to seize First Republic Bank, later announcing that JP Morgan Chase had taken over the failed bank.

On Wednesday, the Federal Reserve announced a further 0.25% rate hike in line with market expectations. A possible pause in the tightening cycle was also signalled by the removal from the central bank’s statement, of the phrase “additional policy firming may be appropriate” – this had previously been included. However…

Full report
https://realmim.com/fed-and-ecb-raise-rates-by-a-quarter-percent-boe-expected-to-do-the-same-on-thursday/

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 mixed last week. The US was lower, Europe higher. Asia markets were generally lower with Japan bucking the trend.

In the US, each week seems to bring fresh news regarding the economy and inflation to change investors’ minds. Latest consensus is that the economy is proving surprisingly resilient and therefore the Fed will have to keep interest rates higher for longer. At least that’s the way economists surveyed recently by the Wall Street Journal are seeing it and recent comments from Fed policy makers appear to concur.

Full report
https://realmim.com/us-economy-proving-resilient-and-higher-for-longer-may-be-back-on-the-table/

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.’

Latest inflation and unemployment data both indicate the US economy is slowing but maybe not enough for the Fed to delay another 0.25% rate hike in May. CPI data released on Tuesday showed that core prices increased but US inflation actually slowed more than expected in March and PPI data showed that US Producer Prices fell 0.5% mom in March, the most in nearly three Years.

Full report
https://realmim.com/us-economy-is-slowing-but-maybe-not-enough-to-avoid-a-further-rate-hike-in-may/

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 big surprise at the start of this week was the leap in oil prices after OPEC+ announced a cut in oil production. At one point today oil was up more than 8% from Friday. There was a similar gain over the previous week and not surprisingly the best performing sector last week was Energy. James Bullard, President of Fed Bank of St. Louis said that an increase in the price of oil might make the job of lowering inflation more challenging. Clearly the odds of another Fed rate hike at the next meeting just increased.

Full report
https://realmim.com/opec-shock-announcement-to-kick-off-the-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.’