Muddled markets, mixed messages
Three things happened in the US last week that caught my attention.
Number one, there was weaker-than-expected demand for long-dated US bond. Two, US equities were sold off. And three, Chair of the US Federal Reserve Janet Yellen said cash is not a good place to store wealth.
With all three asset classes apparently out of favour, where does this leave investors?
- sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 31 Mar 15
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Venezuela tension heats up
Duration 03:16
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Markets climb as investors watch US healt...
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Three things happened in the US last week that caught my attention.
Number one, there was weaker-than-expected demand for long-dated US bond. Two, US equities were sold off. And three, Chair of the US Federal Reserve Janet Yellen said cash is not a good place to store wealth.
With all three asset classes apparently out of favour, where does this leave investors?Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
Number one, there was weaker-than-expected demand for long-dated US bond. Two, US equities were sold off. And three, Chair of the US Federal Reserve Janet Yellen said cash is not a good place to store wealth.
With all three asset classes apparently out of favour, where does this leave investors?
Recent economic data also hasn’t provided any clear direction. Commentators are sending mixed messages about over-valued markets - whilst markets continue to hover at highs.
Some investors have decided to stick their money in the European and Asian markets. There certainly hasn’t been an avalanche of flows but it has pulled some money away from the US.
Janet Yellen also sent a contradictory message on Friday that rates could rise in the US even if inflation didn’t pick up.
As a result, the market will be watching Friday’s release of US average hourly earnings very closely – an inflation proxy – which is expected to rise 0.30%.
The conflict in Yemen has changed the narrative of the market recently although for now it seems to be short lived.
If the situation escalated, with ground troops from Egypt, Saudi Arabia and Iran joining the conflict for example, markets would likely be spooked for a period of time.
The conflict hit the price of oil causing it to rise 5% last week. Although this is not much compared to recent falls.
Here in Australia - data out this week will likely provide more evidence that activity is accelerating. Recent figures - leading indicators, business confidence and unemployment showed acceleration of growth in the first quarter.
This week the most interesting ones will be dwellings investments and net imports.
A narrowing of Australia's international trade would be consistent with net trade making a positive contribution to GDP growth.