A survival strategy for British retailers

American shops are splitting off their web divisions – that could release value for British retailers too, says Matthew Lynn.

from Moneyweek RSS Feed https://moneyweek.com/investments/stocks-and-shares/retail-stocks/604205/a-survival-strategy-for-british-retailers
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The charts that matter: a tough week for bitcoin

Cryptocurrency bitcoin slid by some 20% this week. Here’s what else happened to the charts that matter most to the global economy.

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The Fed may Hike Interest Rates two Times Next Year to Tame Inflation

The US economy continues to expand at a solid pace and it is increasingly difficult for the Fed to dismiss the accompanying price pressures, which in less than a year reached their highest level since the early 90s:Events are changing so fast that less than half a year has passed from the Fed’s intention to continue QE at full speed in 2022 to the possibility of unwinding the asset purchase program already in February! It is clear that the Fed needs higher rates as quickly as possible so that during the next crisis there will be a tool to boost activity. Now speculation is intensifying in the market that the dot plot at the upcoming meeting will already point to 2 rate hikes next year. This, by the way, is felt well in the foreign exchange market, the dollar index is gradually moving up.In November, the Fed announced that it was beginning to cut its $120 billion/month supply of liquidity to the banking sector. In November, the volume of asset purchases fell by $15 billion, then by another $15 billion in December. Maintaining this pace of contraction, the Fed will complete QE in May next year, however, an important caveat was made that the pace of decreasing asset purchases could increase if economic forecasts change. And the forecasts have really changed. Households, firms, government and even regional Fed officials are sounding the alarm as inflation is approaching 7%, so in a previous speech, Powell hinted that policy normalization could happen faster.Despite the spread of the omicron strain, proposals to accelerate the QE cut are unlikely to meet with resistance, as inflation leaves no choice, so at the upcoming meeting we will probably hear that the Fed is increasing the rate of reduction in asset purchases to $30 billion per month in January and another $30 billion dollars in February. Thus, by early March, the Fed may complete QE, while the volume of assets on the balance sheet will be about 9 trillion dollars, which is twice the level before the pandemic.The balance of risks for the dollar after the Fed meeting is shifted towards further rally. A potential weakening in US growth forecasts will be offset by a shorter cycle of reductions in the QE program and a hint of a second rate hike in the dot plot next year. It was dot plot that acted as the main driver of dollar growth in June and September of this year.The biggest gains in the dollar are likely to be against low-yielding currencies such as the yen and the Euro. In December, EURUSD was trading in the range of 1.18-1.1380 and the Fed meeting could be a catalyst for a decline and a potential breakthrough of 1.10 for the pair. Although investors can listen to the ECB before finally considering selling. USDJPY may target the 115 level again.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/the-fed-may-hike-interest-rates-two-times-next-year-to-tame-inflation"
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Change is coming – but your investment approach should stay the same

High inflation, extreme market volatility, populations at loggerheads. Things are changing fast, says Merryn Somerset Webb. But for investors, the usual rules apply: look for long-term resilience at a reasonable price

from Moneyweek RSS Feed https://moneyweek.com/investments/investment-strategy/604218/change-is-coming-but-your-investment-approach-should-stay
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Germany’s new government marks a radical transformation

New chancellor Olaf Scholz, who takes the reins from Angela Merkel, was in many ways the continuity candidate. But his government has radical plans for the future.

from Moneyweek RSS Feed https://moneyweek.com/economy/eu-economy/604217/germanys-new-government-marks-a-radical-transformation
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Slow and steady wins the race: five stocks to buy for the long term

Balancing quality and price is the key to successful investing, says Richard Beddard – both poor-quality stocks and overvalued top-notch ones are risky. Here are Britain’s best large and medium-sized companies

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Mexican stockmarkets lose their spice

Mexico's economy is in poor shape – its GDP shrank by 8.3% last year and the recovery has been bumpy. And despite a 13% rise in value this year, investors are deserting its stockmarket.

from Moneyweek RSS Feed https://moneyweek.com/investments/stockmarkets/emerging-markets/604208/mexican-stockmarkets-lose-their-spice
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Omicron variant takes a bite out of bitcoin

Far from being a modern safe haven against market crashes, bitcoin fell by more than 20% this week as the Omicron variant ran rampant.

from Moneyweek RSS Feed https://moneyweek.com/investments/alternative-finance/bitcoin-crypto/604207/omicron-variant-takes-a-bite-out-of-bitcoin
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Interest rates: could Jerome Powell remove the markets’ “punch bowl”?

Markets have bounced on suggestion that the Omicron variant may be a less serious strain of Covid-19. But the Federal Reserve has turned hawkish, and there will be no more market bailouts.

from Moneyweek RSS Feed https://moneyweek.com/investments/stockmarkets/us-stockmarkets/604206/interest-rates-could-jerome-powell-remove-the
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Share tips of the week – 10 December

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.

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Three big tech stocks tackling climate change

Professional investor Ben Goldsmith of Menhaden Capital Management picks his three favourite big companies that are working to reduce their environmental footprint.

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Market Update – December 9 – Caution dominates

• USD (USDIndex firmed at 96.25) as caution dominated.  Profit taking knocked stocks a little lower after recent gains as concerns over Omicron and the renewed restrictions in the UK and in other areas weighed on the more optimistic growth outlooks into 2022.
• Asian stock markets have sold off across the board, with Topix and Nikkei currently down -0.8% and -1.0% respectively.
• China Evergrande Group and Kaisa Group Holdings Ltd officially defaulted on their dollar debt.
• China’s central bank meanwhile took further steps to limit the Yuan’s strength by setting the weakest reference rate relative to estimates since 2018, – according to Bloomberg. The bank already raised the foreign currency reserve requirement yesterday for a second time this year.
• German HICP inflation was confirmed at 6.0% y/y, the national CPI rate at 5.2% y/y. The final readings for November were no surprise and the breakdown confirmed that higher energy prices were a key factor.
• UK GDP weaker than expected in November – More arguments then for the BoE to sit out yet another meeting next week and push the rate hike debate into 2022.
• US Yields: 10-year Treasury yield is up 0.5 bp at 1.50% – Treasury yields richened, in part on the risk off in stocks and on short covering as some of the recent selling pressures were overdone
• USOil – dip to $70.16 – biggest weekly gain since late August! Brent & WTI both on >6% rise this week. – RISK: China’s domestic air traffic recovery faltering due to zero-COVID policy, that has led to tighter travel rules in Beijing and weaker consumer confidence after repeated small outbreaks.
• FX markets – US Dollar firmed at 96.25, Chinese Yuan got a boost, EURUSD settled below 1.1300 on ECB’s debate news, Cable at 1.3214.  Yen generally steady to lower against most currencies.

European Open – The March 10-year Bund future is down -15 ticks, slightly underperforming versus US futures, while in cash markets the 10-year Treasury yield is up 0.5 bp at 1.50%, after the paper erased overnight gains. GER30 and UK100 futures are down -0.5% and -0.4% respectively, after a broad sell off across Asian markets.

In Europe, expectations for a BoE rate hike have been pushed back as the UK ramps up virus restrictions. The ECB is set to confirm the end of PEPP, but seems to be still debating if and how to soften the blow with a strengthened APP program. In any case, net asset purchases will continue even when the emergency PEPP program has ended.

Today – Data releases today focus on ECB’s Lagarde speech, US inflation and Michigan index.

Biggest FX Mover @ (07:30 GMT) XAUUSD (-0.20%) Currently MAs are aligned lower with the asset below PP. MACD signal line & histogram are oving southwards below 0 and RSI is retesting OS barrier, with Stochastic declines suggesting furthe pressure.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

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from HF Analysis /293838/
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George Maher: what we can learn from the fall of the Roman Empire

In the latest MoneyWeek Podcast, Merryn talks to actuary and author George Maher about the economy of the Roman Empire and what eventually led to its downfall – and the parallels with today.

from Moneyweek RSS Feed https://moneyweek.com/economy/604220/moneyweek-podcast-george-maher-fall-of-the-roman-empire
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Dollar Static Ahead of Key CPI Release; Sterling Flat After GDP Data

from Forex News https://www.investing.com/news/forex-news/dollar-static-ahead-of-key-cpi-release-sterling-flat-after-gdp-data-2706942
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