Market Round Up: What to Watch 🔭  Bali H’ai 🌋

by | 9 Oct, 2018

 

1. What to watch

Despite today being a quiet day for the U.S. market, there is a plethora of Fed members scheduled to deliver remarks in the week ahead. At the moment, the market is betting on a high probability that the Fed will raise rates by another 25bps (a quarter of a percent) in December. Whilst U.S. data has been pretty strong in recent weeks, triggering last week’s rout on Treasuries (USTs), readers beware that the U.S. is already in a mature stage of the business cycle and the risk remains that the expectations of another interest rate hike are overdone.

There will also be a lot of interest later in the week when credit rating agency Moody’s releases an update on the U.S.’s sovereign debt rating. In light of the increase in UST issuance required to finance the ballooning budget deficit, everyone will be waiting with bated breath on Moody’s assessment to see whether it still deems it deserves the AAA rating.

It’s a public holiday in Japan, today, while China returns from its holiday. Markets there will be playing catch up after the Golden Week holidays. On the news front, it has been announced that Chinese investments in Australia plummeted 40% in 2017 from 2016. This sharp decline was likely due to the diplomatic spat between the two countries and a decision by the Chinese government to implement controls on the outflow of capital.

In Europe, Germany saw a contraction in its industrial production in July. Furthermore, market consensus is pencilling in a further decline in industrial production in August. The worrying aspect for this export-orientated economy is that export orders dropped at their steepest rate in five years – potentially a sign of broader suppression of economic activity at a time when trade war concerns are in vogue.

Lastly, with nothing on the cards in terms of data releases this week, all eyes will be on the UK’s Brexit plans. There appears to be some optimism that a deal could be reached soon, with reports emerging that the EU is set to be open to a free-trade deal! If any new information emerges suggesting that such a deal will be struck soon, a rally in the pound can be expected.

Companies publishing earnings this week include Walgreen Boots and WH Smiths which are worth watching to gauge the UK retail mood, Delta Air and big banks JP Morgan, Wells Fargo and Citigroup.

Related: Making a profit from trading company earnings announcements – a beginners guide

 

2. Bali H’ai

Another big event happens this week, in Bali. Finance ministers and central bankers from around the world will be among 30,000 delegates in earthquake-stricken Indonesia for the annual meeting of the IMF and World Bank. It is expected to deal with rising protectionism, vulnerable emerging markets and record debt levels.

Meeting on the travellers’ paradise island of Bali, the focus is expected to be on averting economic disasters, the Sino-U.S. trade war. Like the Organisation for Economic Co-operation and Development (OECD), which lowered its economic growth forecast for the world economy to 3.7% for 2018, IMF chief Christine Lagarde signalled the fund would cut its outlook – which stood at 3.9% last July.

Related: What are emerging markets and why are they important?

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This communication is not an offer or solicitation to purchase or sell securities. Investing in securities carries risk, including the loss of principal. Past performance is not indicative of future returns, which may vary. Online trading has inherent risk due to system response and access times that may be affected by various factors, including but not limited to market conditions and system performance. An investor should understand such facts before trading. The risks associated with investing in international securities, including US-listed ADRs and ETFs that contain non-US securities include, among others, country/political risk relating to the government in the home country; exchange rate risk if the country's currency is devalued; and inflationary/purchasing power risks if the currency of the home country becomes less valuable as the general level of prices for goods and services rises. Before investing in an ETF, an investor should consider the investment objectives, risks, charges, and expense of the investment company carefully. ETF prospectuses are accessible within the mobile application via a link under each company’s “Description.”

A fractional share is a share of equity ownership that is less than one full share. Fractional share investing has certain limitations and restrictions that investors should understand prior to purchasing fractional shares: ownership of less than one full share does not give the fractional share owner the right to vote on company matters; fractional shares are non-transferrable, meaning they cannot be transferred to another brokerage firm; and fractional share orders will be accepted as market orders only. For more information and details on fractional shares, and any associated limitations or restrictions please visit: https://drivewealth.com/fractional-shares-disclosure

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:

Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.

Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.

Brokerage services of US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth, LLC a registered broker-dealer and member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. 

DriveWealth provides no tax, legal, or investment advice of any kind, nor does DriveWealth give advice or offer opinions with respect to the nature, potential value, or suitability of any securities transaction or investment strategy. DriveWealth acts as the clearing firm for securities transactions entered on the Invstr mobile platform. DriveWealth is not affiliated with Invstr. Invstr does not participate in DriveWealth’s decision-making.

There is no minimum initial deposit required to open an investing account with DriveWealth. Expenses and Fees associated with the DriveWealth platform in conjunction with Beanstox includes either a monthly membership fee of $4.99 with a commission charge of $0.01 per share* or, in the event the membership fee is not paid, a commission charge of $0.0125 per share applies, subject to a minimum of $2.99 per transaction. There are no monthly minimum fees, or required ongoing minimum account balance. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost). View a full list of our fees at http://bit.ly/DWFees

The monthly subscription charge is four dollars and ninety-nine cents (US$4.99) per month plus one cent (US$0.01) per share traded (as examples, for a Transaction of 0.90 shares, the per share traded charge is one cent (US$0.01), and for a Transaction of 1.6 shares, the per share traded charge would be two cents ($0.02), and the quarterly subscription charge is fourteen dollars and ninety-nine cents (US$14.97) every 3 months plus one cent (US$0.01) per share traded. The monthly and quarterly subscription charges may be greater or less depending on additional services offered by a DriveWealth partners as part of the subscription model offering, or based on any subsidies provided by a DriveWealth partner as part of the subscription model offering. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost).View a full list of our fees at http://bit.ly/DWFees

This communication is not an offer or solicitation to purchase or sell securities. Investing in securities carries risk, including the loss of principal. Past performance is not indicative of future returns, which may vary. Online trading has inherent risk due to system response and access times that may be affected by various factors, including but not limited to market conditions and system performance. An investor should understand such facts before trading. The risks associated with investing in international securities, including US-listed ADRs and ETFs that contain non-US securities include, among others, country/political risk relating to the government in the home country; exchange rate risk if the country's currency is devalued; and inflationary/purchasing power risks if the currency of the home country becomes less valuable as the general level of prices for goods and services rises. Before investing in an ETF, an investor should consider the investment objectives, risks, charges, and expense of the investment company carefully. ETF prospectuses are accessible within the mobile application via a link under each company’s “Description.”

A fractional share is a share of equity ownership that is less than one full share. Fractional share investing has certain limitations and restrictions that investors should understand prior to purchasing fractional shares: ownership of less than one full share does not give the fractional share owner the right to vote on company matters; fractional shares are non-transferrable, meaning they cannot be transferred to another brokerage firm; and fractional share orders will be accepted as market orders only. For more information and details on fractional shares, and any associated limitations or restrictions please visit: https://drivewealth.com/fractional-shares-disclosure

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