Why I’m making a significant change in my overall market view
David Rosenberg: It’s time for a broad move into cash. Even most bonds and commodities have become too riskyWell, it’s time to revisit the thesis from 60,000 feet up in the air and make a rather substantial change in my overall market view. In fact, what is most important is less my personal opinion of the backdrop but rather anticipating how investors, broadly speaking, will be assessing the financial market landscape, and what will ultimately cause perceptions to shift.
The Nasdaq Composite was crushed -2.2% to close out the week and suffered a total weekly loss of -3.2%. It has also dropped in two of the past three weeks and now sits below its 21-day exponential average . We are in the process of witnessing a key test here as the initial Trump winners are now round-tripping in a major way, and many stocks flashing “buy signals” less than two weeks ago are now faltering badly.
Jay Powell has subtly altered his dovish stance since the recent FOMC meeting, and the futures market is now down to 60% odds of another 25-basis point rate cut at the December 17th -18th FOMC meeting, from 72% on Thursday November 14th , and 86% in mid-October. In fact, the market-based odds of there being just one or no rate reductions between now and June 2025 have swelled to 28% from just 1% a month ago.
Of course, there is all the “dereg!” coming, and that is business-friendly for equities and disinflationary for bonds — in addition to any success Elon Musk has in his drive to cut the fat out of federal government spending . But the overall economic impacts here are glacial in nature and exert a less direct effect on growth and inflation than the magnitude and breadth of the tariff increases that Trump is proposing.
The prospect of a Chinese yuan devaluation stemming from a 60% Trump tariff hike is real and would likely trigger mega capital outflows and major weakness and instability across Asia and Emerging Markets . China is still grappling with the property market bust, and the size of the proposed tariffs for an economy still highly dependent on exports would likely be devastating.
Again, you do what you want to do; I am not telling anyone what to do … I am simply telling you what I am doing. The challenge for any investor is that there is simply too much uncertainty, and this is no time to be playing a guessing game. We just do not have enough conviction to know what will happen and the stakes are extremely high. In my view, it is better to wait it out and make a more informed decision when the dust settles.
Canada News Breaking News Video Canadian Breaking News Breaking News Globe And Mail Breaking News Globe And Mail Canada News Photos World News Local News National News Us News Foreign News Sports News Arts News Life News Lifestyle Canada Traffic Canada Weather Trudeau Government Federal Government Canada Sports Canada Sports News Politics Politics News Political News Political Opinion Environment Economy Technology Education Travel Canada Alberta Bc British Columbia Manitoba Ontario Quebec Nova Scotia Pei New Brunswick Newfoundland And Labrador Nunavut Northwest Territories Yukon Globe And Mail
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
David Rosenberg: Why I feel sorry for Donald TrumpAt some point during his tenure, this massive stock market bubble is going to burst
Read more »
David Rosenberg: If Donald Trump wins, the Canadian dollar is in big troubleSay hello to a 66-cent loonie
Read more »
David Rosenberg: If Donald Trump wins, the Canadian dollar is in big troubleSay hello to a 66-cent loonie
Read more »
David Rosenberg: If Donald Trump wins, the Canadian dollar is in big troubleSay hello to a 66-cent loonie
Read more »
David Rosenberg says investors should favour TSX over S&P 500Canadian stocks offer better dividend yields with greater downside protection, one veteran Bay Street economist says.
Read more »
Rob Shaw: David Eby lost this election, even though the BC NDP wonVoters were clear in their mandate for change, denying the BC NDP another majority
Read more »