News

US markets (S&P 500 Index –1.1%) were lower overnight, as investors digested mostly weaker earnings as well as the Fed reiterating their hawkish stance, which has been mostly ignored by the market recently. 

The Australian market (ASX200 Index, -0.5%) after the Reserve Bank of Australia increased it increased interest rates for the ninth time in a row.

Long story short, tech reported “underwhelming” earnings which prompted a much needed sell-off. This was a classic Soros-style “reflexivity” trade – earlier in the week we saw a rally based upon the notion that i) The Fed would hike interest rates 25 bps and ii) the Fed might pause or pull make rates later in the year. The beaten-down “loss making companies” surged (CVNA, OPEN, etc) and acted like the tide that lifts all boats. Tech earnings acted as a much-needed antidote, with big players like Alphabet (GOOG) and Amazon (AMZN) falling anywhere from 400-1000 bps within the day. If anyone needed a reminder that the market is not rational, this was it.  

US markets (S&P 500 Index +1.5%) continued to rally as investors bet that rates are close to their peak. We think there’s a disconnect here: markets are pricing in a rate cut by the end of ‘23, whereas the Fed has said it will “stay the course” and won’t be making any cuts at all this year.

US markets (S&P 500 Index +1.1%) was in the red for most of the session but then jumped into positive territory on Wednesday, following Fed Chairman Jerome Powell’s slightly dovish tone compared to its December meeting.

The New Zealand market (NZX 50 Index, -0.6%) retreated at the ed of the month, but still posted its best monthly performance since August 2021, up +4.31% since opening January 4. Serko (-2.31%) was one of the months best performers, finishing up +14.4%, although plummeted at the end of the trading day Tuesday. The monthly performance is down to expectation that the company will surpass its pre-covid level of travel booking transactions in the 2023 financial year. 

US markets (S&P 500 Index –1.3%) have paused its January rally in time for the Federal Reserve’s latest interest rate decision due Thursday 8.00am (NZDT). Markets are expecting a 25-basis-point rate increase

US markets (S&P 500 Index +1.1%) have been buoyed by corporate earnings from Tesla (+11%) and fourth-quarter GDP coming in above expectations, at +2.9%, above expectations (+2.8%), and down from the third quarter rise of +3.2%. 

The New Zealand market (NZX 50 Index, +0.5%) advanced on Wednesday as NZ inflation data came in below RBNZ’s expectations.