The S&P/ASX 200 [ASX:XJO] copped a beating this week as the relentless rise in long-term interest rates around the world continued.
Oil prices finally exploded higher again, with Brent crude oil nudging US$110, up 15% over the past week.
The European Central Bank (ECB) raised rates, pointing out that inflation remains elevated.
US Producer Price Index (PPI) were released last night. In the ​12 months through August, the PPI advanced 5.4% after rising 4.8% in July.
Surging diesel prices caused much of the jump in the PPI.
Coal demand continues to surge as disruptions to oil and natural gas supplies cause countries to turn to coal to keep the lights on.
The Baltic Dry Index, which tracks rates for ships carrying dry bulk commodities, is trending sharply higher due to strong demand for coal and iron ore.
Soft commodities are also catching a strong bid, with sugar, wheat, corn, soybeans, and cotton seeing shifts in their long-term trend.
The coming super-sized El Niño could be making investors nervous.
It feels like a perfect storm, with the war in Iran at its epicentre, driving instability. Although I think rising Japanese interest rates are another piece of the puzzle, placing pressure on bond yields elsewhere.
Is this what Trump needs to see before he capitulates and takes his bat and ball home?
He is racing towards the Midterms and getting so desperate that he is promising to hand out trillions of dollars as bribes for votes.
I can’t imagine that will help keep inflation expectations down…
There’s a lot to discuss today with so much going on, so I hope you enjoy today’s instalment of The Closing Bell.
Closing Bell
Regards,
Murray Dawes,
Retirement Trader, International Stock Trader and
Murray’s Trading Room
PS: In just one hour, I can show you how to get better at picking stocks… better at timing your entry… better at managing your risk… and better at knowing when to sell. You’ll learn all of this in my new online investing masterclass – free for a limited time. Go here for access.
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