The Week Ahead

[Shareguy]

A great end to the week with Dow up Saturday and futures looking slightly up.

This week will be interesting. Craig's on the week ahead

US shares rose and bond yields fell last week, after the release lower-than- expected October inflation figures. The S&P 500 rose 5.9%, its best week since late June, while the Nasdaq gained 8.1% and experienced its strongest two-day rally since 2008. Since the October lows, the S&P 500 and Nasdaq have rallied 11.6% and 9.7% respectively, while remaining down 16.2% and 27.6% this year.
Meanwhile, the Stoxx 600 in Europe was up 3.7% and the FTSE 100 in the UK was little changed. The ASX 200 in Australia was 4.0% higher and the domestic NZX 50 gained 0.7%. In other markets, the dramatic collapse of crypto exchange FTX saw cryptocurrencies fall further. Bitcoin has slumped 18.8% in the past two weeks, and is down 75% from its highs from a year ago and back at November 2020 levels.
US interest rates fell as investors positioned for a less aggressive Federal Reserve in the coming months. The US two-year Treasury yield fell from 4.66% to 4.33% over the course of the week, experiencing its largest daily decline since 2008 on the day of the inflation report. Earlier this month, the two-year yield hit 4.80%, the highest since July 2007. The 10-year US Treasury yield saw its biggest daily decline since March 2020, at the height of the pandemic, falling from 4.16% to 3.81% over the week.
Interest rates elsewhere followed suit, with the domestic five-year swap rate falling 25 basis points to 4.58%. The "risk on" tone, and a seemingly more benign inflation outlook, saw the US dollar give up some of its recent strength. The NZ dollar finished the week up 2.9% against the greenback at US$0.61, a two-month high.
All eyes will be on the US consumer this week, with October retail sales due, as well as earnings releases from retail heavyweights Home Depot, Target and Walmart.
Chinese activity indicators for October are out, while Tencent and Alibaba will also release earnings reports. Last week policymakers made some changes to the strict COVID zero policy that has hurt the Chinese economy in 2022, reducing the quarantine time for inbound travellers, dropping penalties for airlines that bring in COVID-positive passengers, and scaling back mass testing.
In New Zealand, the latest Real Estate Institute report and dairy auction results will be of interest. Infratil, Napier Port, My Food Bag and Ryman Healthcare are all set to announce results, while Contact Energy and a2 Milk will hold annual meetings

[Left Field]

My forecast..... Over the next two weeks things are going to be good for my portfolio.

[Ferg]

What a difference a week makes.  One portfolio went from -12% to +1% in 1 week.

[Cod]

Current theory.

[Ferg]

I wonder if the collapse of the FTX exchange (which appears to have been a major fraud) will have an impact on financial markets beyond just the cryptocurrency universe.

[Shareguy]

White House and Republicans reach a tentative deal to avoid U.S. default

https://www.cnbc.com/2023/05/27/white-house-and-republicans-reach-a-tentative-deal-to-avoid-us-default.html?__

[Onemootpoint]

The USA markets have a day off on Monday so we won't really market reaction until Wednesday morning. One would think it's a positive, and it may well be but there have been some indications  that it may have a shorter term negative effect on the economy.

[Mr Cashflow]

https://www.youtube.com/watch?v=TvFSf_4aues

[Mr Cashflow]

https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update

[Mr Cashflow]

Weak start for Asian Pacific markets.Fairly Good day for NZ market.

[Shareguy]

Craig's thoughts for the week

The FTSE 100 in the UK was one of the stronger global indices with a 1.6% gain, while
European shares were 0.3% higher and emerging market equities fell 1.6%. The Australian
ASX 200 declined 0.6% while the New Zealand market again bucked the global trend with
a small gain. With just three trading days to go in July, the NZX 50 is up 5.4% for the month,
which sees it on pace for the strongest monthly gain in two years.
US interest rates slipped back slightly, with the two-year Treasury yield finishing at 4.4% and
the 10-year yield ending marginally lower at 4.2%. The New Zealand five-year swap rate fell
another 11 basis points to 3.86%, the lowest since August 2022 and down almost a full
percentage point from where it was three months ago.

Market pricing now suggests we will see three 0.25% Official Cash Rate (OCR) cuts this
year, and implies a 65% chance the first move will come at the Reserve Bank of New
Zealand's (RBNZ) August meeting, in just over two weeks' time. The NZ dollar has
responded to the shifting interest rate expectations, with the trade weighted index down
3.6% in July and at the lowest level in almost nine months.
Another eventful week looms, with all eyes on monetary policy decisions from the Federal
Reserve, Bank of Japan and Bank of England. Key economic releases will include the ISM
index and jobs report in the US, as well as PMIs in China. On the earnings front, big tech will
be in the spotlight with Microsoft, Meta, Apple and Amazon all scheduled to release