Search posts
Don’t chase the rally; tech has a short profit window | Ausbiz
Expectations of another rate hike by the Federal Reserve to tame high inflation helped push a closely watched part of the U.S. Treasury yield curve to its deepest inversion since 1981 on Monday. This has, once again, put a spotlight on what many consider a time-honored recession signal. Isaac Poole from Oreana Financial Services says the jobless report was soft, but not enough to prevent a hike.
He says both central banks are likely to hike in Europe and Canada. The global push to higher rates late in the cycle is increasing the risk of a recession in early 2024 – and additional hikes could intensify the recession.
Outside of economic data, the US yield curve remains really important to keep an eye on. Isaac says a steepening yield curve back towards zero is an important indicator for the timing of a recession. Isaac also notes oil prices, manufacturing PMI and jobless claims. He says there is limited scope for more selling off with 2-year Treasury yields back up at around 5.0%. That means we could see the curve begin to steepen over coming months.
His word of advice for investors? “Don’t chase the rally. Investors with short time-frames can remain invested in tech, but there is a relatively short window- maybe 6 months- to lock away profits. Moreover, the back up in yields is a good opportunity to lock in downside protection, as shorted dated government bonds look particularly attractive.”
(Source: Ausbiz)
Click here to watch the interview.
Related Posts
Insights
Read our latest insights to help you make better investment decisions and build stronger portfolios.
Melbourne
Level 17, 627 Chapel Street, South Yarra, Melbourne, Victoria, 3141
Australia
T +61 3 9804 7113
F +61 3 9804 8377
Please email your request to
info@oreanafinancial.com
Sydney
Level 3, 31 Alfred Street,
Sydney, NSW 2000
Australia
T +61 3 9804 7113
F +61 3 9804 8377
Please email your request to
info@oreanafinancial.com
Hong Kong
Suite 1002, 10th Floor
Cambridge House, Taikoo Place
979 King’s Road, Quarry Bay, Hong Kong
T +852 3185 0200
F +852 2110 0736
Please email your request to
info@oreanafinancial.com
A Licensed Financial Firm
In Hong Kong we are licensed by the Securities and Futures Commission (license no. AHX191), the Insurance Authority (license no. FB1443) and the Mandatory Provident Fund Authority (license no. IC000563).
In Australia we are licensed by the Australian Securities and Investments Commission (AFSL No: 482234, ABN 91 607 515 122).