{"id":1656562,"date":"2022-09-25T01:50:16","date_gmt":"2022-09-25T05:50:16","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1656562"},"modified":"2022-09-25T01:51:44","modified_gmt":"2022-09-25T05:51:44","slug":"analysis-after-feverish-week-global-investors-lick-wounds-and-brace-for-more-chaos","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-after-feverish-week-global-investors-lick-wounds-and-brace-for-more-chaos\/","title":{"rendered":"Analysis-After feverish week, global investors lick wounds and brace for more chaos"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fanalysis-after-feverish-week-global-investors-lick-wounds-and-brace-for-more-chaos%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1656562&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Davide Barbuscia and Dhara Ranasinghe<\/p>\n<p>NEW YORK\/LONDON (Reuters) \u2013     Global investors are preparing for more market mayhem after a monumental week that whipsawed asset prices around the world, as central banks and governments ramped up their fight against inflation.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\">\n<\/div>\n<p>Signs of extraordinary times were everywhere. The Federal Reserve delivered its third straight seventy-five basis point rate hike while Japan intervened to shore up the yen for the first time since 1998. The British pound slid to a fresh 37-year trough against the dollar after the country\u2019s new finance minister unleashed historic tax cuts and huge increases in borrowing.<\/p>\n<p>\u201cIt\u2019s hard to know what will break where, and when,\u201d said Mike Kelly, head of multi-asset at PineBridge Investments (US). \u201cBefore, the thinking had been that a recession would be short and shallow. Now we\u2019re throwing that away and thinking about the unintended consequences of much tighter monetary policy.\u201d <\/p>\n<p>Stocks plunged everywhere. The Dow Jones Industrial Average nearly joined the S&#038;P 500 and Nasdaq in a bear market while bonds tumbled to their lowest level in years as investors recalibrated their portfolios to a world of persistent inflation and rising interest rates. <\/p>\n<p>Towering above it all was the U.S. dollar, which has rocketed to its highest level in 20 years against a basket of currencies, lifted in part by investors seeking shelter from the wild swings in markets.<\/p>\n<p>\u201cCurrency exchange rates \u2026 are now violent in their moves,\u201d said David Kotok, chairman and chief investment officer at Cumberland Advisors. \u201cWhen governments and central banks are in the business of setting the interest rates they are shifting the volatility to the currency markets.\u201d <\/p>\n<p>For now, the selloffs across asset classes have drawn few bargain hunters. In fact, many believe things are bound to get worse as tighter monetary policy across the globe raises the risks of a worldwide recession.<\/p>\n<p>\u201cWe remain cautious,\u201d said Russ Koesterich, who oversees the Global Allocation Fund for Blackrock, the world\u2019s largest asset manager, noting his allocation to equities is \u201cwell below benchmark\u201d and he is also cautious on bonds.<\/p>\n<p>\u201cI think there\u2019s a lot of uncertainty on how quickly inflation will come down, there\u2019s a lot of uncertainty about whether or not the Fed will go through with as an aggressive tightening campaign as they signaled this week.\u201d <\/p>\n<p>Kotok said he is positioned conservatively with high cash levels. \u201cI\u2019d like to see enough of a selloff to make entry attractive in the U.S. stockmarket,\u201d Kotok said.<\/p>\n<p>The fallout from the hectic week exacerbated trends for stocks and bonds that have been in place all year, pushing down prices for both asset classes. But the murky outlook meant that they were still not cheap enough for some investors.<\/p>\n<p>\u201cWe think the time to go long in equities is still ahead of us until we see signs that the market has bottomed,\u201d said Jake Jolly, senior investment strategist at BNY Mellon, who has been increasing his allocation to short duration sovereign bonds.<\/p>\n<p>\u201cThe market is getting closer and closer to pricing in this recession that is widely expected but it is not yet fully priced in.\u201d<\/p>\n<p>Rough week in global equities    https:\/\/graphics.reuters.com\/USA-STOCKS\/GLOBAL\/dwvkrxoxapm\/chart.png<\/p>\n<p>Goldman Sachs strategists on Friday lowered their year-end target for the benchmark U.S. stock index, the S&#038;P 500, to 3,600 from 4,300. The index was last at 3,693.23.<\/p>\n<p>Bond yields, which move inversely to prices, surged across the world. Yields on the benchmark U.S. 10-year Treasury hit their highest level in more than 12 years, while Germany\u2019s two-year bond yield rose above 2% for the first time since late 2008. In the UK, five year gilts leapt 50 bps \u2014 their biggest one-day jump since at least late 1991, according to Refinitiv data.<\/p>\n<p>\u201cAt some point, the fears will shift from inflation to growth,\u201d said Matthew Nest, global head of active fixed income at State Street Global Advisors, who thinks bond yields have moved so high they are starting to look \u201cpretty attractive.\u201d   <\/p>\n<p>Central banks ramp up fight against inflation    https:\/\/graphics.reuters.com\/GLOBAL-CENTRALBANKS\/klvykaanlvg\/chart.png<\/p>\n<p>Investors fear things will get worse before they get better. <\/p>\n<p>\u201cThe question is now not whether we are going into a recession, it is how deep will the recession be, and might we have some form of financial crisis and major global liquidity shock,\u201d said Mike Riddell, a senior fixed income portfolio manager at Allianz Global Investors in London.<\/p>\n<p>Because monetary policy tends to work with a lag, Riddell estimates the renewed hawkishness from central banks means the global economy will be even weaker by the middle of next year. <\/p>\n<p>\u201cWe are of the view that markets are still massively underestimating the global economic growth hit that is coming,\u201d he said. <\/p>\n<p> (Reporting by Davide Barbuscia, Saqib Iqbal Ahmed and David Randall in New York and Dhara Ranasinghe in London; Writing by Lewis Krauskopf; Editing by Ira Iosebashvili, Megan Davies and Daniel Wallis)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/analysis-after-feverish-week-global\/attachment\/file-photo-a-staff-member-of-the-foreign-exchange-trading\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8O01N-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8O01N-BASEIMAGE\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/analysis-after-feverish-week-global\/attachment\/file-photo-traders-work-on-the-trading-floor-at-the\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8O01O-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8O01O-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Davide Barbuscia and Dhara Ranasinghe NEW YORK\/LONDON (Reuters) \u2013 Global investors are preparing for more market mayhem after a monumental week that whipsawed asset prices around the world, as<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1656562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1656562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1656562"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1656562\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1656562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1656562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1656562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}