Insights from the Trail - 16/12/22
Twas the week before Christmas, and the Fed finally did it. They came to the market and tried the pivot!
As widely expected, the FOMC raised the target range for the federal funds rate by 50bp this week.
The Goldman Sachs CEO commented that there are “bumpy times ahead”. The JP Morgan Chief likened crypto tokens to pet rocks. China is repealing its Covid Zero stance. And Teslas market value fell below $500 billion for the first time since November 2020. So we’ve really come full circle!
Our friends across the ditch have banned anyone born after January 1 2009 from smoking. It is the first time any country has effectively imposed a lifetime ban on cigarettes for a sector of its population; in this case, anyone currently aged 13.
And Australia Post has got 6,000 more posties on the job to meet Christmas demand. The Australian Retailers Association has bumped up its pre-Christmas spending forecasts by $2 billion, predicting a record $66 billion in spending during the November to December Christmas period. Happy shopping! Or thieving for the Firetrail team as we head off for our Christmas party…
Three other things that got the team talking this week:
1. The IPO show rolls on...
Last year it was one of the busiest years on record for corporate activity in Australia. This year it was China’s turn. Chinese companies raised a record $92 billion in IPO proceeds this year, accounting for 46% of the global total. And with the end of Covid Zero in sight, 2023 could be another big year. The pipeline already looks solid, with over 376 companies announcing IPO plans over the past six months that are now pending, meaning they could go public next year.
2. The new frontier...
The World Health Organisation (WHO) declared Covid a global pandemic 1,010 days ago. Can we declare it now dead?
What will 2023 bring?...
3. Who dares wins...
For the first time in a long time, the sell side are predicting the S&P 500 to end 2023 down. But fund managers are betting equities rise 10% in 2023.
Chart of the year
In 2023 the Federal Reserve raised interest rates the most in a single year since the 1980s. If only we used this chart to predict the extreme rate hike – which shows the correlation between Fed Chair heights and interest rates. Jay Powell towers over Janet Yellen, who is just 5 foot 3 inches tall.
Rates currently sit at 4.25%-4.5% in the US, the highest level since 2007. And predictions are for it to get to 5.1% in 2023.
And that’s a wrap for the Firetrail weekly for 2022!!
Thanks for all your continued support throughout the year. We really enjoy bringing you these insights each week and hope we have been able to help you out with not only fun facts and fun puns, but insights into what the Firetrail team is thinking about.
Have a safe and happy Christmas and holiday period.
We can’t wait to see you back on the Trail in 2023!