Equities managed to finish generally higher for the week although it was a volatile period with more banking trauma and investors weighing central banks’ response and inflation concerns.

Full report
https://realmim.com/stock-markets-finished-higher-last-week-despite-rate-hikes/

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.’

Bank sector woes continued last week increasing concerns about the stability of the US economy. Many investors now think the Fed may be forced to pause its current cycle of rate increases in response. We’ll find out on Wednesday.

Following the collapse of Silicon Valley Bank in the US, which prompted a sell-off in risk-assets, stocks rebounded after US CPI data on Tuesday showed the annual inflation Rate fell to 6% in February. This provided some relief although core inflation was reported higher than forecasted.

News came on Wednesday that Credit Suisse was also having problems and yesterday (Sunday) UBS was persuaded by regulators to buy its rival in an emergency deal with the hope that confidence could be restored. Today (Monday) markets are a bit calmer – equities are holding steady, the US 10-yr Treasury Yield is slightly higher and the Dollar down a little.

Full report
https://realmim.com/markets-calmer-today-after-bank-sector-turmoil/

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 have weakened after last week’s failure of Silicon Valley Bank and Fed Chairman Jerome Powell’s testimony before Congress. The US Dollar declined. The yield on the 10-year US Treasury note has fallen back from above 4% last week to 3.5% today (Monday).

On Tuesday Powell said that the task of bringing inflation back to the long-term target of 2% might have to include raising rates higher than previously anticipated and at a faster pace, adding that the process “is likely to be bumpy”.

Full report
https://realmim.com/stocks-lower-today-after-hsbc-buys-uk-arm-of-collapsed-silicon-valley-bank/

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 market analysis – w/e 3rd March 2023 from Realm Investment Management.

Fed Chairman Jerome Powell will give testimony before the US congress this week and is expected to explain that interest rates will probably need to go higher than recently expected. With persistent low unemployment and inflation remaining high, markets already see the Fed lifting rates above levels anticipated just a couple of months ago and there is no longer a general expectation that the Fed will pivot to easing rates later this year.

Full report
https://realmim.com/back-and-forth-on-rate-expectations-continues/

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 24th February 2023

Minutes from the most recent meeting of the Federal Reserve released early last week showed that “almost all” policymakers were in favour of slowing down the pace of rate increases and thought the 0.25% increase at the meeting was the way to go (although “a few” officials could have supported a 0.5% hike). However, on Friday the Fed’s preferred measure of inflation, the Core PCE price index (excludes food and energy) came in above expectations causing stocks to sell-off at the end of the week. The annual rate of inflation came in at 4.7%, reigniting expectations that the Fed will need to keep rates higher for longer. The yield on the US 10yr Treasury Note ended the week close to 4%, its highest level since November.

Full report:
https://realmim.com/good-news-is-bad-news-remains-a-problem/

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 17th February 2023

Concerns rose last week that the US Federal Reserve will stick with large rate hikes. US CPI data for January came in above forecast at 6.4%, US producer prices in January reached a 7-month high and US initial jobless claims came in lower than expected. The yield on the 10-year US Treasury Note rose above 3.9% on Friday, its highest level since November.

Subsequent comments from Fed officials re-inforced the idea that another 0.5% rate hike in March might be back on the table – Loretta Mester, Cleveland Fed President, said there was “compelling economic case” for it. Markets are now pricing in two more 0.25% interest rate hikes from the Fed this year at a minimum.

Full report:
All things considered – stocks did well last week – Realm Investment Management (realmim.com)

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 10th February 2023

After rallying from their lows three months ago, Bonds turned lower last week following the stronger-than-expected US jobs report released 3rd February. The US 10yr Treasury yield was up strongly, finishing on Friday above 3.7%. Key US inflation data is being released tomorrow (Tuesday).

Full report
https://realmim.com/key-question-is-strong-us-jobs-data-good-or-bad-for-the-market/

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 week-ending 23rd January 2023 from Realm IM

Global stock-markets were generally higher last week despite some disappointing fourth quarter earnings from major US companies including Microsoft, IBM and Intel. Equities were higher on growing optimism that a recession in the US might be milder than previously expected (Bank of America), or avoided altogether (Goldman Sachs), and that the Fed may be able to pivot on monetary policy later this year as inflation cools fast.

Leading indicators do not necessarily confirm the more optimistic views. The Conference Board reported that its ..

Full report:
https://realmim.com/investors-cautious-ahead-of-rate-announcements-this-week/

Market Review from Realm Investment Management – week ending 20th January 2023

US stocks sold-off midweek on increasing recession fears but bounced back strongly on Friday. Comments from US Federal Reserve officials that the central bank has not finished with the tightening campaign worried investors – for instance, Fed Vice Chair Lael Brainard commented “policy will need to be sufficiently restrictive for some time“.

Things change day to day though and on Thursday weak economic data indicated that policy is having the desired impact and helped the view that the Fed can slow the pace of further rate hikes. The rally back on Friday was led by tech and growth stocks. Markets are now pricing in a 0.25% rate increase in February.

On the other side of the coin though, and for the longer term focus, US employment data is still indicating that the labour market remains tight (not what the Fed wants to see) evidenced by last week’s jobs report which showed solid growth and lower-than-expected unemployment claims.

Full report:
https://realmim.com/fed-will-be-watching-jobs-data-like-a-hawk/

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.’

Investors breathed a sigh of relief after the much-anticipated December US CPI report was released on Thursday. The annual inflation rate came in at 6.5%, the sixth straight month of slowing but still remains more than three times above the central bank’s target of 2%. Investors are hopeful that US inflation peaked at 9.1% in June of last year.

Bonds and stocks rallied with much of the action apparently driven by short-covering. Markets are now pricing in a 90% chance that the next move in interest rates will be a smaller-than-previously-expected hike of 0.25% in early February.

Full report
https://realmim.com/us-inflation-data-taken-well-by-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.’