European stocks and US futures erase losses sparked after Putin declared a “partial mobilization,” calling up more troops for the war in Ukraine.
Bottom-line: 100bp의 금리인상과 같은 이변이 없다면 확률적으로 이후 시장은 랠리를 보일 가능성이 있음.
US stocks may see a relief rally after the Fed, history shows, especially if officials don't spook investors with a 100 bp move or hugely hawkish remarks. Over the past 18 months, the S&P advanced after eight out of 10 Fed decisions, especially in January, March and June.
US stocks may see a relief rally after the Fed, history shows, especially if officials don't spook investors with a 100 bp move or hugely hawkish remarks. Over the past 18 months, the S&P advanced after eight out of 10 Fed decisions, especially in January, March and June.
Three in a row. The Fed raised rates by 75 bps as expected and forecast its benchmark would reach 4.6% in 2023, stepping up its fight against surging prices.
US stocks sank after some wild post-Fed gyrations as traders digested Powell's comments. The S&P 500 ended near session lows, pushing its slide from a January record to more than 20%.
Bottom-line: 세번 연속 75bp 금리인상을 했지만, 인플레이션 통제를 위해 네번도 가능함을 암시함.
The Federal Reserve’s so-called dot plot, which the US central bank uses to signal its outlook for the path of interest rates, shows the median year-end projection for the federal funds rate rose to 4.4%. The estimate for the end of 2023 was boosted to 4.6%. The Fed on Wednesday raised its benchmark rate by 75 basis points as it continues its fight to tame stubbornly high inflation.
The Federal Reserve’s so-called dot plot, which the US central bank uses to signal its outlook for the path of interest rates, shows the median year-end projection for the federal funds rate rose to 4.4%. The estimate for the end of 2023 was boosted to 4.6%. The Fed on Wednesday raised its benchmark rate by 75 basis points as it continues its fight to tame stubbornly high inflation.
Bottom-line: 인플레이션 문제의 심각성을 너무나 늦게 인지했다는 비판을 받는 중앙은행은 그 어느 때보다 명확하게 물가를 위해 침체를 용인하겠다고 함. 그들이 말하는 더 낮은 성장과 더 높은 실업은 '경기침체'란 단어와 다름이 없음.
Federal Reserve officials gave their clearest signal yet that they’re willing to tolerate a recession as the necessary trade-off for regaining control of inflation. Policy makers, criticized for being too late to realize the scale of the US inflation problem, are moving aggressively to catch up. They raised interest rates by 75 basis points on Wednesday for the third time in a row and forecast a further 1.25 percentage points of tightening before year end. That was more hawkish than expected by economists. In addition, officials cut growth projections, raised their unemployment outlook and Chair Jerome Powell repeatedly spoke of the painful slowdown that’s needed to curb price pressures running at the highest levels since the 1980s. “Powell’s admission that there will be below-trend growth for a period should be translated as central bank speak for ‘recession,’” said Seema Shah of Principal Global Investors. “Times are going to get tougher from here.”
Federal Reserve officials gave their clearest signal yet that they’re willing to tolerate a recession as the necessary trade-off for regaining control of inflation. Policy makers, criticized for being too late to realize the scale of the US inflation problem, are moving aggressively to catch up. They raised interest rates by 75 basis points on Wednesday for the third time in a row and forecast a further 1.25 percentage points of tightening before year end. That was more hawkish than expected by economists. In addition, officials cut growth projections, raised their unemployment outlook and Chair Jerome Powell repeatedly spoke of the painful slowdown that’s needed to curb price pressures running at the highest levels since the 1980s. “Powell’s admission that there will be below-trend growth for a period should be translated as central bank speak for ‘recession,’” said Seema Shah of Principal Global Investors. “Times are going to get tougher from here.”
The Bank of England delivered a second consecutive half-point hike in its battle to bring down inflation, as three officials pushed for the institution to join its global peers in moving at an even quicker pace.
Bottom-line: 많은 이들이 파월의 볼커리안에 대해 이야기하고 있으나, 정작 볼커가 홀로 인플레이션을 진압한 것인지 생각해 볼 필요가 있음. 엄밀하게 말하면 볼커는 대통령에 의한 공급 측면의 혁명과 시장 요인에 의한 도움을 받았음. 1980년대 통화정책 외 디스인플레이션에 기여한 요소는, i) 대규모의 투자로 인해 성장과 세금 측면의 이득이 있었지만 인플레이션 감소법이 이에 비견할 바는 아니며, ii) 레이거노믹스의 생산성 향상이 있었지만 작금의 경제는 생산성이 떨어지고 있음. iii) 노동자의 교섭력을 약화시키는 지대한 일들을 많이 했지만, 최근 바이든 대통령은 이와 반대의 행동을 함.
Many noticed Fed Chair Jerome Powell’s Volckerian echoes Wednesday. It’s not surprising that he wants to be a Paul Volcker, but it does raise the question: Was Volcker truly successful on his own sole merits? Ned Davis Research’s Joseph Kalish points out that Volcker received needed assistance from President Ronald Reagan’s supply side revolution and from market-driven factors. Kalish lays out factors outside of monetary policy that contributed to the 1980s disinflation: Massive investment: Real fixed investment grew at double-digit rates in the 1980s both before and after the double-dip recessions, which probably was helped by lower taxes for a little while, too. Presently, the Inflation Reduction Act may contribute to this, though it “lacks the punch and immediacy” of Reagan’s tax cuts. Increased productivity: Reaganomics was instrumental in boosting productivity, so much so that it rebounded strongly though faded in 1987. In the second quarter of this year, Kalish noted the slide in productivity growth to a record postwar low despite new technologies that essentially could — and should — drive productivity higher. Diminishing clout for labor: When Reagan fired close to 12,000 air traffic controllers in August 1981, Volcker saw it as a “watershed” moment that emboldened private entities to do the same, possibly becoming one of the main factors in turning the tide on inflation during that period, Kalish said. Conversely, President Joe Biden has pledged to be pro-union. “Lower inflation from weaker labor may be harder to extract this cycle.”
Many noticed Fed Chair Jerome Powell’s Volckerian echoes Wednesday. It’s not surprising that he wants to be a Paul Volcker, but it does raise the question: Was Volcker truly successful on his own sole merits? Ned Davis Research’s Joseph Kalish points out that Volcker received needed assistance from President Ronald Reagan’s supply side revolution and from market-driven factors. Kalish lays out factors outside of monetary policy that contributed to the 1980s disinflation: Massive investment: Real fixed investment grew at double-digit rates in the 1980s both before and after the double-dip recessions, which probably was helped by lower taxes for a little while, too. Presently, the Inflation Reduction Act may contribute to this, though it “lacks the punch and immediacy” of Reagan’s tax cuts. Increased productivity: Reaganomics was instrumental in boosting productivity, so much so that it rebounded strongly though faded in 1987. In the second quarter of this year, Kalish noted the slide in productivity growth to a record postwar low despite new technologies that essentially could — and should — drive productivity higher. Diminishing clout for labor: When Reagan fired close to 12,000 air traffic controllers in August 1981, Volcker saw it as a “watershed” moment that emboldened private entities to do the same, possibly becoming one of the main factors in turning the tide on inflation during that period, Kalish said. Conversely, President Joe Biden has pledged to be pro-union. “Lower inflation from weaker labor may be harder to extract this cycle.”
Bottom-line: 중앙은행들이 속속 금리인상을 진행하고 있지만 냉정하게 평가할 필요가 있음. 전세계 주요 중앙은행의 정책금리 중앙값은 3%인데, 이는 금융위기 이전 5%, 1980년대 15%에 비해 낮으며, 인플레이션 조정을 할 경우 큰 폭의 마이너스 상태에 있어 경기를 눌러주기엔 역부족이라 할 수 있음.
Don’t let the cacophony of central-bank rate-hike announcements mislead you: global policy settings are still historically loose. Monetary policy has room to tighten much more significantly, leaving asset prices exposed to further, potentially material, downside. This week the Riksbank in Sweden unexpectedly hiked 100bps, on Wednesday the Fed delivered its fifth consecutive rate increase, while the Philippines, Indonesia, Switzerland, Norway, South Africa and the UK are all expected to lift rates today. Yet despite this flurry of policy tightening, the Global Policy Rate – the median central-bank rate of the major EM and DM countries around the world – is only 3%. This rate was more than 5% before the Lehman crisis, and 15% in the early 1980s. But it’s the inflation-adjusted version of this measure that’s the real (pun intended) eye opener: the Global Real Policy Rate is very negative and still close to its historical lows. It has only recently begun to turn up, and has a long way to go to get back to zero - let alone move into restrictive territory.
Don’t let the cacophony of central-bank rate-hike announcements mislead you: global policy settings are still historically loose. Monetary policy has room to tighten much more significantly, leaving asset prices exposed to further, potentially material, downside. This week the Riksbank in Sweden unexpectedly hiked 100bps, on Wednesday the Fed delivered its fifth consecutive rate increase, while the Philippines, Indonesia, Switzerland, Norway, South Africa and the UK are all expected to lift rates today. Yet despite this flurry of policy tightening, the Global Policy Rate – the median central-bank rate of the major EM and DM countries around the world – is only 3%. This rate was more than 5% before the Lehman crisis, and 15% in the early 1980s. But it’s the inflation-adjusted version of this measure that’s the real (pun intended) eye opener: the Global Real Policy Rate is very negative and still close to its historical lows. It has only recently begun to turn up, and has a long way to go to get back to zero - let alone move into restrictive territory.
Bottom-line: 중앙은행이 시장 예상 수준의 금리인상을 할 경우 기술주가 다시 랠리를 할 것이란 전망이 있었으나 시장은 그리 단순하지 않았음. 그럼에도 불구 대다수 기관 투자자들은 중앙은행이 망치를 때리는 기술주에서 떠날 수 없음. 벤치마크에서 27%의 비중이 되는 기술주의 반등을 놓치면 본인의 커리어도 깨질 뿐 아니라, 2020년 고점 대비 -35% 하락했고, 애플과 같은 기업들은 현금흐름이나 실적에 둔화세가 크지 않기 때문에 도저히 놓칠 수가 없는 업종이 되버린 것임. 때문에 최근 액티브 매니저들은 기술주 내에서 대체 불가능한 질적인 우수성을 가진 기업을 가장 중요시 여기고 있음.
Even as the Federal Reserve jacks up interest rates and sends technology stocks tumbling, it only gets harder to stay away from the sector. On the one hand, there’s so much to like: The Nasdaq 100 Index is now 35% cheaper than at its 2020 peak, megacap companies like Apple Inc. are still filling their coffers with cash and the earnings outlook shows no sign of a significant slowdown. But, the Fed. The market chatter going into Wednesday’s monetary policy meeting was that there was a high likelihood of a relief rally in tech if the central bank, as expected, raised its benchmark rate by 75 basis points. Turns out it wasn’t that straightforward. The Nasdaq 100 slumped to early July lows, pretty much erasing most of the summer rally, after a more hawkish tone than hoped for from the Fed. So why not avoid tech until the dust settles? That just isn’t an option for most institutional investors, given that the industry is by far the largest in the S&P 500 Index, at almost 27% of the benchmark. If tech stocks turn around and you miss out on the rally, it can be career-ending. Stockpickers thus are gravitating towards “quality” companies with durable businesses or stock charts. Apple Inc. is down just 13% this year. T-Mobile US Inc., cybersecurity company Palo Alto Networks Inc. and chipmaker Texas Instrument Inc. are a few of the others that also have managed to beat most of their tech peers. “Look for businesses with high market share, a good moat, and low substitution risk,” said Brian Battle, director of trading at Performance Trust Capital Partners. “Microsoft makes stuff that people pay for. Apple sells billions in consumer goods, and it is hard to replace those.”
Even as the Federal Reserve jacks up interest rates and sends technology stocks tumbling, it only gets harder to stay away from the sector. On the one hand, there’s so much to like: The Nasdaq 100 Index is now 35% cheaper than at its 2020 peak, megacap companies like Apple Inc. are still filling their coffers with cash and the earnings outlook shows no sign of a significant slowdown. But, the Fed. The market chatter going into Wednesday’s monetary policy meeting was that there was a high likelihood of a relief rally in tech if the central bank, as expected, raised its benchmark rate by 75 basis points. Turns out it wasn’t that straightforward. The Nasdaq 100 slumped to early July lows, pretty much erasing most of the summer rally, after a more hawkish tone than hoped for from the Fed. So why not avoid tech until the dust settles? That just isn’t an option for most institutional investors, given that the industry is by far the largest in the S&P 500 Index, at almost 27% of the benchmark. If tech stocks turn around and you miss out on the rally, it can be career-ending. Stockpickers thus are gravitating towards “quality” companies with durable businesses or stock charts. Apple Inc. is down just 13% this year. T-Mobile US Inc., cybersecurity company Palo Alto Networks Inc. and chipmaker Texas Instrument Inc. are a few of the others that also have managed to beat most of their tech peers. “Look for businesses with high market share, a good moat, and low substitution risk,” said Brian Battle, director of trading at Performance Trust Capital Partners. “Microsoft makes stuff that people pay for. Apple sells billions in consumer goods, and it is hard to replace those.”
Credit risk measures are slowly waking up to the Fed’s warnings on what it might take to curb inflation.
Bottom-line: 러시아는 당초 계획보다 향후 2년 간 국방부문 예산을 43%, 안보 및 법 관련 예산을 40% 증가시키며 전쟁을 장기로 치를 수 있음을 보여줌.
President Vladimir Putin is looking to spend far more on the military in the next two years than initially planned as Russia tailors the budget to the needs of a longer and increasingly costly war in Ukraine. Defense expenditure is now set to exceed next year’s initial budget assumptions by more than 43%, while the related category of national security and law enforcement will go up by over 40%, according to a three-year fiscal plan seen by Bloomberg. The shift reflects a greater commitment to a war that’s already come at enormous cost in blood and treasure to Ukraine and Russia. Major setbacks on the battlefield saw Putin escalate his efforts to regain some momentum this week, when he announced a “partial mobilization” to draft as many as 300,000 reservists.
President Vladimir Putin is looking to spend far more on the military in the next two years than initially planned as Russia tailors the budget to the needs of a longer and increasingly costly war in Ukraine. Defense expenditure is now set to exceed next year’s initial budget assumptions by more than 43%, while the related category of national security and law enforcement will go up by over 40%, according to a three-year fiscal plan seen by Bloomberg. The shift reflects a greater commitment to a war that’s already come at enormous cost in blood and treasure to Ukraine and Russia. Major setbacks on the battlefield saw Putin escalate his efforts to regain some momentum this week, when he announced a “partial mobilization” to draft as many as 300,000 reservists.
US futures tumbled and European stocks plunged to the lowest since December 2020 at the end of a week that underscored expectations for higher rates and slowing economies. A dollar gauge rose to yet another record and 10-year Treasury yields to the highest in more than a decade.