- MARKET INSIGHTS
- Fév 3, 2023
DAX 40 surged on Thursday despite hawkish ECB tone.
- MARKET INSIGHTS
- Fév 3, 2023
DAX 40 surged on Thursday despite hawkish ECB tone.
U.S. equity market finished with gains last week on signs that the Federal Reserve will slow the pace of monetary tightening in December. However, the S&P 500 has opened the week on a negative note as China’s angry anti-COVID zero policy protests swept the country and supressed global equity markets. Investors are realising such event could impact global growth and concerns about China have hit the rally.
Black Friday sales, inflation data, consumer confidence, the government second estimate for Q3 GDP are due this week; however, the main highlight will be the keynote speech from Fed Chair Jerome Powell on the economic outlook and the labour market on Wednesday, and the Nonfarm Payroll report for November on Friday.
Fed Chair Powell is expected to deliver a hawkish policy message pointing to the likelihood of slowing the pace of rate hikes, but warning that rates are likely to rise to a higher peak than previously planned. Another pushback against the premature easing of financial conditions appears likely, given that inflation remains uncomfortably high.
The Nonfarm Payrolls will be the last jobs report before the Fed’s final meeting for the year. Investors will be looking for signs if the U.S. economy is beginning to bear the weight of the Fed’s aggressive monetary tightening, as they grasp the worsening trade-off between fighting inflation and the damaging consequences of this year’s aggressive rate hikes.
Expectations that the Fed will soon slow the pace of rate hikes were boosted by last week’s minutes from the central bank’s November meeting and Friday’s U.S. jobs report will test those expectations. Economists are expecting the U.S. economy to have added 200K new jobs vs. 233K the prior month, which would be the smallest increase in two years. Growth in average hourly earnings is likely to start moderating, while the unemployment rate is expected to remain unchanged, just above its 50-year low at 3.7%. However, for the year ahead economist see unemployment potentially rising to 5%.
Source: Tradingview
The turbo-charged rally from the October 2022 low might be approaching a turning point as it becomes clear that getting inflation back down to the Fed’s target rate of 2% may mean the central bank might be hiking into a recession. The Fed has been on its fastest interest rate hiking cycle since the early 1980s, reiterating that the policy rate needs to rise to at least 5% to bring down inflation. We are of the view that the market has not bottomed yet and equities have room to fall further in the coming months as the deteriorating macro-outlook might not be fully priced in.
Overall, it appears markets have not priced in an imminent recession, ignoring the likelihood of the Fed keeping interest rates above 5% throughout 2023 to succeed in taming inflation. Will the market have a better 2023 or we are in a countdown to a recession is yet to be seen, but our baseline scenario remains unchanged, leaning in favour of another significant leg down in equity markets. We look beyond the prospect of fireworks and Santa rally and take a medium-term view on what is likely to unfold in the markets in the months ahead.
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Violeta a rejoint Leverage Shares en septembre 2022. Elle est chargée de mener des analyses techniques et des recherches sur les actions et macroéconomiques, fournissant des informations importantes pour aider à façonner les stratégies d’investissement des clients.
Avant de rejoindre LS, Violeta a travaillé dans plusieurs sociétés d’investissement de premier plan en Australie, telles que Tollhurst et Morgans Financial, où elle a passé les 12 dernières années de sa carrière.
Violeta est une technicienne de marché certifiée de l’Australian Technical Analysts Association et est titulaire d’un diplôme d’études supérieures en finance appliquée et investissement de Kaplan Professional (FINSIA), Australie, où elle a été conférencière pendant plusieurs années.
Julian a étudié l’économie, la psychologie, la sociologie, la politique européenne et la linguistique. Il possède de l’expérience en matière de développement commercial et de marketing grâce à des entreprises qu’il a lui-même créées.
Pour Julian, Leverage Shares est une entreprise innovante dans le domaine de la finance et de la fintech, et il se réjouit toujours de partager les prochaines grandes avancées avec les investisseurs du Royaume-Uni et d’Europe.
Oktay a rejoint Leverage Shares fin 2019. Il est responsable de la croissance de l’activité à travers des relations clés et le développement de l’activité commerciale sur les marchés anglophones.
Il a rejoint LS après UniCredit, où il était responsable des relations avec les entreprises pour les multinationales. Il a également travaillé au sein de sociétés telles qu’IBM Bulgarie et DeGiro / FundShare dans le domaine de la finance d’entreprise et de l’administration de fonds.
Oktay est titulaire d’une licence en finance et comptabilité et d’un certificat d’études supérieures en entrepreneuriat du Babson College. Il est également détenteur de la certification CFA.
Sandeep a une longue expérience des marchés financiers. Il a débuté sa carrière en tant qu’ingénieur financier au sein d’un hedge fund basé à Chicago. Pendant huit ans, il a travaillé dans différents domaines et organisations, de la division Prime Services de Barclays Capital à l’équipe de recherche sur les indices du Nasdaq (plus récemment).
Sandeep est titulaire d’un master spécialisé en finance et d’un master en administration des affaires de I’Institut de technologie de Chicago.
