Category: Market Updates
Equity investors are looking forward to Q4, hoping it plays out better than last quarter. Beset by a Delta variant flareup, consumer spending sagged, leading most markets lower. The S&P 500 fell nearly five per cent in September and limped through Q3 flat, in essence. Large caps finished the first nine months of the year nearly 16 per cent higher.
Real estate bubbles are pernicious problems for advanced economies because they often involve outsized levels of debt. When they pop, financial crises ensue, prompting lenders to withdraw credit for fear of insolvency. History is littered with real estate bubbles and busts. One notorious example was Japan’s land bubble of the late 1980s. Between 1956 and 1986, Japan’s land prices skyrocketed by as much as 5,000 per cent.
Evergrande, China’s largest property developer, missed interest payments to at least two of its largest bank creditors earlier this week, and appears to have averted defaulting on domestic bond payments due on Thursday (tomorrow). News of the troubled conglomerate, which has more than $300 billion of liabilities, rocked Chinese equities and sent shockwaves through global markets…
President Biden’s $3.5 trillion economic package is the biggest and most ambitious legislation on his economic agenda to date. The 10-year program, which Biden has termed “Human Infrastructure,” seeks government investments in childcare, education, health care and green energy. If approved, the plan would dwarf the $1.9 trillion fiscal stimulus passed earlier this year…
Liquidity, the abundance of money to borrow spend and invest, is the lifeblood of risk taking. Expressed in anatomical terms, interest rates and the Federal Reserve represent the circulatory system of the financial markets. When money is abundant and interest rates are low, risk-taking is rewarded as consumers borrow and spend, and businesses borrow and invest…