$1 Club, page-15654

First 15654 Last

Share
Profile

Follow
sincos

88 Posts.

3

05/03/21

08:12

Post #: 51536536
Share

Originally posted by Ryzie: ↑

@LJohn

Powell did exactly as expected. If he started raising interest rates to taper off inflation then borrowing money becomes more difficult. The issue that many investors have is fear of hyperinflation. Powell has basically said that inflation is up but not enough to justify raising interest rates. He's said this on quite a few occasions.

Just a note on what's happening; what we're seeing is exactly what occurs at the start of a new business cycle after a recession. Fiscal stimulus is generated to increase consumer demand. As demand picks up, prices begin to increase. This is when we would see the Fed start to raise rates inline with inflation. More jobs become available and unemployment drops. The issue is that jobs aren't back to normal yet and the amount of stimulus that has been generated is going to show increases across a raft of different areas in the economy. GDP will recover fairly sharply as it did in the December quarter in Australia. The Feds roll in this is to determine if these increases are demand driven or stimulus driven. Powell is stating that it's too soon to act on interest rates because this is not demand driven. Nevertheless, money is being moved in anticipation of rate increases.

Growth stocks will continue to come out of favor but when they drop too far support will come in particularly because most of the growth stocks are intertwined in everyday life e.g. Netflix, Google, Square, AfterPay, Z1P.

Also worth noting is that the recovery in SE Asia will follow China's lead rather than the US.

Expand

"Also worth noting is that the recovery in SE Asia will follow China's lead rather than the US."

US is China's largest trading partner, I can't see how it'll be detached from a global correction. More so, SE Asia is unlikely to take leads from a market that is predominantly driven by retail trading volumes (c.80% of China's stockmarket volume is retail-driven).

IOU Price at posting: 50.0¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

SWP

Swoop lobs $18M offer at microcap telecom Vonex – in which it holds 19.9%

IRX

InhaleRX snags $38.5M in funding from VC biotech funder Clendon

M4M

Macro, Norden set up transport solutions initiative for West Pilbara

What's causing the cost-of-living crisis, and how to navigate it

MTH

Mithril's drilling in Mexico picks up silver at 997g/t, gold at 28g/t

SNX

Sierra Nevada raises $2M for silver exploration at Blackhawk

TLG

Talga Group wins key permit for flagship graphite mine in Sweden

NVU

Nanoveu surges 10% after benchmark testing for new AI chip begins

Week 42 Wrap: HotCopper's top picks; new ASX 200 record; world yawns at war

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint