Judging by trading in U.S. money markets, investors are starting to ramp up expectations for a rise in U.S. interest rates by the second half of 2023 on the prospects of more fiscal stimulus and higher inflation. Eurodollar futures contracts maturing in September 2023 on Monday were pricing more than one rate hike by the U.S. Federal Reserve by then, compared with barely one increase last week. "Markets are now definitely pricing in rate hikes by the second half of 2023, but the time frame is a long way away and it will keep shifting, especially if the U.S. continues to lose jobs as they did in December," said Kenneth Broux, a strategist at Societe Generale in London.
Like a slot machine paying off on every pull, the stock market’s most reliable bets lately have often been its riskiest. Go long a company that sounds like something Elon Musk mentioned in a tweet (but wasn’t)? Signal Advance just soared 12-fold. Lend money to a software maker to buy Bitcoin? A Microstrategy convertible bond is up 50 per cent in four weeks (its option is in the money). Throw a dart, hit a winner, so it has lately seemed. Emboldened by Federal Reserve stimulus, vaccines and the psychological conditioning that arises when no bad patch lasts, everyone from retail newbies to institutional managers is rushing to cash in on the 10-month-old meltup. Predicting exactly when such fevers will break is a near impossible task. But bubble warnings are starting to blare from every corner.
The US stock market bubble will eventually burst
While the economy has floundered, the S&P 500 has continued moving upwards so that it s now far higher than it was pre-pandemic
10 January 2021 • 7:00pm
Last week, the veteran investor and market guru Jeremy Grantham warned that stock markets were in a bubble that would inevitably burst. He said the US equity market was more overvalued now than on the eve of the Great Crash of 1929. The markets responded by continuing to rise, but does he have a point?
If you are an investor in the UK equity market, you will probably find his warning surprising. Despite recent rises, the FTSE 100 is still nowhere near its pre-Covid highs. To a large extent, this reflects the composition of the index.
The chief of the World Bank on Tuesday said Chad and several other countries were already in deep debt distress and more were expected to join their ranks this year, given the severity of the global recession triggered by the COVID-19 pandemic.
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BENGALURU (Reuters) - The dollar’s weakening trend will last at least another year, longer than previously expected, according to a majority of foreign exchange strategists polled by Reuters who cited a hunt for yields in emerging market currencies as the main reason.
FILE PHOTO: A woman counts U.S. dollar banknotes as Lebanese pounds are pictured in the background at a currency exchange shop in Beirut, Lebanon April 3, 2020. Picture taken April 3, 2020. REUTERS/Mohamed Azakir
After posting its first annual loss since 2017 last year - dropping around 7% - the dollar index has weakened as much as 1% since the new year. While on brief occasions the dollar has shown resilience, it has failed to sustain that as the factors underpinning its rally for years have largely abated.