Bit of a meltdown in US markets overnight.
DOW down 697 points. NASDAQ Biotech index closd down 105 points - bit of a concern for Australian Biotech companies perhaps.
Interest rates are still the main concern with a 50 basis points rise expected at the next US FED meeting as inflation continues to rise. Retail sales in the US starting to reflect this with a softening of sales revenue in latest data.
Some interesting analyst comments after last nights drop in the US markets. Not sure if they may be a little contradictory in parts.
Stock market today: Live updates (cnbc.com)Opportunities for upsides in the market still ahead, according to KKM FinancialKKM Financial CEO Jeff Kilburg thinks that investors should still remain optimistic despite the ongoing market downturn.
Kilburg believes that the uptick in the bond market is attributable to a “lag effect” from higher Fed rates rather than an indication of a bear market, adding that the 10-year note is “a tremendous buying opportunity” with the yield this high.
“The market seems [composed] despite the fact that it’s going lower at the current moment — this is just the way some investors got ahead of themselves,” Kilburg said. “There is some emotion in the market, but this downdraft is going to be bought. It’s still buoyant.”
Markets are beginning to listen to the Federal Reserve, says LPL Financial
Markets have started to listen to the Federal Reserve’s message, LPL Financial said on Tuesday.Strategists Jeffrey Buchbinder and Quincy Krosby wrote that recent economic indicators, including the Consumer Price Index and retail sales, show that inflation is still inching higher.
“The fed funds futures market quickly adjusted probabilities as well, pricing in a potential third interest rate hike at the Fed’s June meeting,” the strategists wrote.
“What has caught the market’s attention, however, is the slight probability for a 50 basis point rate hike at the March meeting has been climbing higher, as two non-voting members of the Federal Open Market Committee (FOMC), Loretta Mester and James Bullard, made comments suggesting a 50 basis point rate hike in March may be necessary to help tackle inflation. Markets are listening,” they added.
Investors will be looking toward important economic data this week that will give insight into how the Fed will continue with its monetary policy. February’s GDP growth rate will be released on Thursday, as well as the Personal Consumption Expenditures Price Index (PCE) on Friday.
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