Between hope for inflation and cryptocurrency crisis, markets choose the former
The week was dominated by data on US inflation, which continued to fall in October. Hopes about the end of the FED’s restrictive monetary policy phase were rekindled and stock markets rose, with technology leading the way. The euphoria over the inflation data overshadowed the week’s other big news, the FTX crisis stirring the waters in the cryptocurrency world once again.
In the past week, 85% of the instruments and indices used for our analysis recorded a positive change. 15% experienced a negative change. Analysing by macroclass, 85% of equity instruments and indices recorded a positive weekly change. 93% of bond instruments and 82% of the other asset classes used for our analyses. These numbers confirm that the macro news had a strong impact on both the equity and bond markets, putting the hope of a closer FED pivot back into circulation; the technology sector in particular (less inflation and the hope of an end to the rate hike) was the main driver, with little room for the new cryptocurrency woes.
Improving valuations in the past week were 28% of the total. The previous week, valuations that were upwardly adjusted were 47% of the total.
In the analysis of equities, improving valuations accounted for 28% of the total.
Among the analyses relating to bonds, 44% of the total were upgraded valuations.
Among analyses relating to other asset classes, improving valuations accounted for 29% of the total. Other assets included commodities and currencies. On the latter, interesting indications come from our analysis, especially on short-term movements.
Of the valuations, 40% were above average in the short term. 46% are above the long-term average of valuations. Last week it was 58% and 52% respectively.
