In today’s show, we review the weeks market action, starting in the US – by far the most influential market, followed by Europe, Asia and Australia. There is no place to hide. Wealth is being destroyed. And there is no end in sight. Data is flagging recession, as central banks continue to raise rates and given the astronomical debt burden out there this is a big deal.
Even conservative investment strategies are being hit. “This is a train wreck,” says Alex Dunnin, executive director of research house Rainmaker Group. “When a traditionally conservative strategy is getting the worst returns then all bets are off. It doesn’t matter where you go, almost everyone will be in pain.”
The S&P 500 notched its worst start since 1970, plunging 20.6% between January and June. The Dow had its largest first-half drop since 1962, and the Nasdaq Composite had its largest percentage decline ever. And US Stocks slipped over the five days, with the S&P 500 erasing part of its rally in the previous week. Down more than 2%, the index just endured its 11th drop in 13 weeks.
All three indexes posted losses for the week. Despite this Wall Street rallied to close higher on Friday in light trading, with investors heading into the long holiday weekend and embarking on the second half of year looking for the next market-moving catalyst. All major groups in the S&P 500 rose, while the tech-heavy Nasdaq 100 underperformed. Treasuries surged after an ugly first half as weak economic data added to recession fears.
The US economic data was frankly horrid this week. An influx of data showing softer consumer spending, sagging sentiment and subdued manufacturing suggest a US economy with a more fragile foundation, prompting several forecasters to lower their estimates for growth.
Strategists at Goldman Sachs told clients on Thursday that stocks could keep falling later this year since “equities are pricing only a mild recession” and more companies will likely begin reducing their earnings expectations. In the event of a recession, Goldman’s team sees the S&P 500 dropping to 3,600, or 4.9% below Thursday’s close.
2:23 US Weak Economic Data
8:22 GDP Forecast: Down
9:00 Bond Yields
11:00 Buying The Dip
13:50 US Markets
16:00 Oil, Gold and Silver
17:00 Euro-zone Inflation Up
19:18 European Markets
20:00 Asian Markets And China Bonds
22:25 Australian Markets
24:40 Crypto Down
25:47 Tough Times Ahead
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Caveat Emptor! Note: this is NOT financial or property advice!!
Podcast edition: https://episodes.castos.com/dfa/f5757710-96ab-4bcd-9c1f-245c11556718-SHGN7-S001-S001-T014-ISO1-1-1.mp3
I disagree, wealth never disappears, only shifts hands
USA home debt lower than Australia, so in comparison If US homes tank, Australian is in trouble
What happens when these countries start trading outside of the Euro Dollar ( US dollar outside of the USA ) as they have China, Russia etc. Where will all these excess dollars end up, in USA and hence uncontrolled inflation.
Wealth is not being destroyed, it's just being transferred
Thanks Mr. Martin…Its all over now…Baby Blue.
Every single thing is over .have a look at the census.in less than twenty years half the world population would have died.it’s over all of it.
We have been through recessions before and survived.
There go the interest rate rises.
Don’t say the R word
Don’t say the R word
Don’t say the D word
Good post, thanks.
Stay safe with this wild, wet weather around Martin.
Never trust a Scomo.
The fake paper wealth obtained through greed in the last couple of years will go away soon.
An economy based mainly on the obsession of housing wealth may not end well.
I see my savings gobbled by inflation..super collapsing..
Few of your audience members recognise that in 5 years they wont even remember what covid was or that there was a dip in asset prices. Pessimists never prosper in the long term. You know that.
It should have been obvious to educated people when Sydney and Melbourne's average house price surpassed $1,000,000 value that something was really amiss. What, all of a sudden half of Australia are millionaires? As if the world is suddenly so prosperous, so fruitful in supply and productivity, so replete with goods, that people's net worth had truly blossomed so significantly? It was all a dream, a fantasy, a lie, founded upon ultra cheap credit. In a similar vein to, "if everyone is unique then no one is;" — If everyone is a millionaire then no one is.
Thank you for the update Mr North.
Really …. its just a postponememt of wealth destruction since 2008 …. in fact it just snowballed like the Powerball … and y know what? We all won.
Wealth preservation is precious, rhymes with bold.
So, that 37% increase in Brisbane house prices in 20 months, may need to come off a bit?
Or the 46% increase in SYD since the beginning of the pandemic, may ease back a little?
Australian stocks are actually reasonable value.
Earnings are likely 12 times valuation. A heck of a lot better than US stocks.
JP Morgan predict $380 per barrel oil. That’s a human depopulation event.
I think someone's finally punched the spike.
How does gold tend to work in times similar?
its fun to watch investors sizzle for a change!
Everyone on the Titanic got wet when she went down, irrespective of which deck you were on. When the everything bubble pops it will effect everyone, a select few well positioned & connected people (politicians/bankers) will make generational wealth while everyone arrive them feels the pain. Best of luck to everyone
FED, ECB buying stock market and houses in America and Europe respectively.
All manipulation big time and LIES, LIES, LIES from. Central banks FED, ECB, etc never Stops
Everyone will be in pain except one whose entire portfolio is short the markets, like me.
Thank you for a thorough and damning overview. I agree completely with the negative prognosis.
Although I can hear this podcast, it is a bit of a strain. Do others find the audio volume too low, or is it my phone?
Epidemic => Housing Prices up by 15%
Inflation => Housing Prices up by 5% more!
Crisis in NZ and US markets => Up by another 5%. Never a better time to buy!
Interest rates increase by 1% by RBA => Media: We are doomed!!! No one turns up at Auctions!!
So all the shell games that the CBs are plying is actually wealth creation? Now that it has backfired and they are out of moves we have to take the bitter pill and adjust to all the high inflation and massive increases in mortgage payments.
Keep up the awesome work
Investors .. a euphemism for .. gamblers
profiting from fear mungering by posting click bait – 2 qrts of negative growth after a few years of growth is okay – 'no end in sight' = permabear analyst
Hi Martin, interesting thought about those with buffers……. If they were smart enough to grow buffers during covid and now hear warnings of recession, they are not going to be rushing out to spend into the economy until it’s really ugly. My personal example is that I am selling my car now, going to borrow my mums as it gets little use and buy my next car upgrade when prices fall later this year or early next year….. I won’t be supporting a falling economy.
BIDEN 2024 FOR A WORLD RULED BY CHINA
You will own nothing and be happy:- Klaus Schwab. Hes lying about the last part, since he and his friends will own everything they will be happy and you better suck it up or you will be picked up in the middle of the night and never seen again.
Resassion is already here…
I think we will enter De-flation cycle soon. Everyone is talking about inflation, Demand destruction, commodities are rolling over, increasing interest rates, real estate dropping. Interesting times.