Our decision to dump all the stocks in our three portfolios last week is looking a bit foolhardy. Since then, the market has gone into “risk off” mode, sparked by a surprisingly weak US jobs report that has reduced the likelihood of an immediate US interest rate hike. In recent days, the US dollar has weakened and stocks are broadly higher. However, we still expect heightened volatility in the weeks ahead, and are comfortable sitting on the relative gains our portfolios have generated.
On June 3, the US non-farm payroll numbers for May saw a gain of 38,000, which was the weakest figure since 2010, and significantly trailed the consensus estimate of 160,000, according to a Bloomberg poll. US Federal Reserve chair Janet Yellen herself seemed surprised by the number. “Recent signs of a slowdown in job creation bear close watching,” she said.
While that has reduced the chance of a US rate hike in June or even July, the US economy is continuing to perform well and it could be only a matter of time before rising wages begin to translate to higher inflation. Indeed, even after the weak jobs report, Yellen said she expects that “the US economy will continue to improve” and “further gradual increases in the Federal Funds Rate will probably be appropriate”. When that happens, there could be another vicious market sell-off, and perhaps some currency volatility.
Meanwhile, Britain’s EU Referendum, scheduled for June 23, could have broad and far-reaching repercussions, according to the latest issue of The Edge Singapore. In the event of “Brexit”, market sentiment is likely to be severely impacted, and the British pound and euro could face a big sell-off. That could further complicate the monetary policy outlook for major central banks.
Fortunately, even though polls suggest that Leave camp is gaining on the Remain faction, a bookmaker puts the odds for Brexit at just 28%, according to The Edge Singapore. Still, given the historic nature of the vote, and the strong interest the British public is showing in the matter, the outcome of the referendum isn’t a foregone conclusion.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
On June 3, the US non-farm payroll numbers for May saw a gain of 38,000, which was the weakest figure since 2010, and significantly trailed the consensus estimate of 160,000, according to a Bloomberg poll. US Federal Reserve chair Janet Yellen herself seemed surprised by the number. “Recent signs of a slowdown in job creation bear close watching,” she said.
While that has reduced the chance of a US rate hike in June or even July, the US economy is continuing to perform well and it could be only a matter of time before rising wages begin to translate to higher inflation. Indeed, even after the weak jobs report, Yellen said she expects that “the US economy will continue to improve” and “further gradual increases in the Federal Funds Rate will probably be appropriate”. When that happens, there could be another vicious market sell-off, and perhaps some currency volatility.
Meanwhile, Britain’s EU Referendum, scheduled for June 23, could have broad and far-reaching repercussions, according to the latest issue of The Edge Singapore. In the event of “Brexit”, market sentiment is likely to be severely impacted, and the British pound and euro could face a big sell-off. That could further complicate the monetary policy outlook for major central banks.
Fortunately, even though polls suggest that Leave camp is gaining on the Remain faction, a bookmaker puts the odds for Brexit at just 28%, according to The Edge Singapore. Still, given the historic nature of the vote, and the strong interest the British public is showing in the matter, the outcome of the referendum isn’t a foregone conclusion.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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