Tuesday’s day of atonement in equities caused by the misgivings of powerful bankers has turned out to be a short-lived affair. After all, their predictions were for a future correction which might occur withing the next 24 months, not on some random day in November and only lasting for 24-hours and some 1 to 2 percent at worst.
It is impossible to overestimate the significance of the tech sector in shaping sentiment in equity markets, and fears of overstretched valuations were always to emerge. It came yesterday, together with rising anxiety about the global factory activity. Japan’s manufacturing sector shrank at its fastest pace in 19 months.
A contemplative start to the week across the investment suites is very much inspired by some of the dissension expressed by members of the US Federal Reserve. There was never going to be a doubt on how the new Trump pick, Stephen Miran, would lobby for acceleration in easing interest rates, but with Kansas City Fed Jeffrey Schmid voting for borrowing costs to be held steady, it is the first time an FOMC decision has been made more awkward by opposing views since 2019.
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