US large-cap stocks were higher last week (small-caps were lower and still lag). Europe and Asia were mixed.
In the US The Fed kept interest rates on hold for the fourth month running with Chair Powell commenting that while it would be appropriate to lower rates at some point this year, it is unlikely that a cut will happen as soon as March. Markets are now pricing in less than a 20% chance of a March cut. The Fed wants to be more confident that inflation is heading lower and Friday’s job report probably didn’t help with that – the US economy added 353,000 thousand payrolls in January, the largest monthly gain in more than a year and much higher than expected. The US 10-year Treasury yield rose back above 4% following the report and the Dollar surged. Globally, government bond yields are higher today (Monday).
The Bank of England also left rates unchanged at 5.25% with comments from the bank’s Governor Andrew Bailey “we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates.”
US Risk Barometer 2nd February 2024
Europe Risk Barometer 2nd February 2024
Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.
This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’
