The market's biggest fear these days: Strong economic data
BNN Bloomberg
All of a sudden, the market’s back in “good-news-is-bad-news” mode.
Anthony Saglimbene, global market strategist at Ameriprise Financial, joins this week’s “What Goes Up” podcast to discuss his views on that. Below are lightly edited and condensed highlights of the conversation.
Q: You say that good news is bad news again for the market -- can you lay that out for us?
A: Over the last couple weeks, the markets have really settled into this idea of A, “are we headed for a recession?”, and then B, “is it going to be prompted by the Fed raising interest rates too aggressively?” And so what I mean by a good-news-is-bad-news type of market environment is the hotter that economic news comes in versus expectations kind of implies that maybe the Fed will need to continue to raise interest rates more aggressively. And so you saw a little bit of that in the reaction to the May employment report where we created 390,000 jobs in May, the unemployment rate held steady at 3.6 per cent for the third straight month. By all accounts, the employment backdrop is very strong. And the markets declined because the idea is that as long as the labor market remains strong, as long as economic activity is moving above what I think consensus estimates are, it implies that the Fed may have to raise interest rates more aggressively.
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Japan plans to start releasing oil from its stockpiles on Monday to soften the shock from the U.S.-Israeli war on Iran, a stark reminder of the oil crisis half a century ago that prompted Tokyo to create reserves.
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Prime Minister Mark Carney met Monday with Prime Minister Keir Starmer in London, and while both remarked the world has become a more challenging place since their first meeting a year ago, neither named a specific issue.
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Prime Minister Mark Carney says that countries like Canada do not need to have oil reserves as a net exporter, after the energy minister announced Canada will contribute 23.6 million barrels to help stabilize international energy markets.
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Iran’s Supreme Leader Ayatollah Mojtaba Khamenei issued his first statement on the war on Thursday, saying Iran should close the Strait of Hormuz and keep attacking its Gulf Arab neighbors as leverage. Khamenei also called on people in Gulf countries to “shut down” U.S. bases, saying promised U.S. protection is “nothing more than a lie.”
Iran’s Supreme Leader Ayatollah Mojtaba Khamenei issued his first statement on the war on Thursday, saying Iran should close the Strait of Hormuz and keep attacking its Gulf Arab neighbors as leverage. Khamenei also called on people in Gulf countries to “shut down” U.S. bases, saying promised U.S. protection is “nothing more than a lie.”
Iran’s Supreme Leader Ayatollah Mojtaba Khamenei issued his first statement on the war on Thursday, saying that the leverage of closing the Strait of Hormuz should be used and that Iran will keep attacking its Gulf Arab neighbors. Khamenei also called on Gulf countries to “shut down” U.S. bases, saying promised U.S. protection is “nothing more than a lie.”