Latest news with #FranklinTempletonInvestmentSolutions
Time of India
a day ago
- Business
- Time of India
Wall Street's momentum machine faces a Middle East stress test
Geopolitical tensions are rising. Israeli airstrikes on Iranian nuclear sites sparked market reactions. Oil prices initially surged, but later stabilized. Investors are closely monitoring the Middle East and Washington. They await signals that could influence market sentiment next week. The focus is on the durability of the market rally. Traders are balancing risk and potential gains. The situation remains fluid. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads It's the kind of geopolitical flashpoint that might once have triggered a full-blown market meltdown: Israeli warplanes struck Iranian nuclear sites, Tehran vowed revenge — then followed through. Oil in a year where crises have come in waves, traders from London to New York opted to hold their breath rather than flee en — gold climbed, stocks slid and bonds seesawed, but there was no big stampede. The S&P 500 finished the week down modestly and remains less than 3% below its record high. Crude gave back some of its early relative calm — for now — followed a familiar playbook: Markets are shocked, prices stumble, then the habitual dip-buyers swoop in. It's a routine that has been all but cemented after months of crises that never quite landed. That got fresh impetus this week when readings on inflation and consumer sentiment came in better than airstrikes disrupted this trading pattern Friday, without shattering it. And in the end, another Wall Street phenomenon proved equally important in salvaging the week: momentum. From risk premiums in corporate bonds to crypto and stock-market breadth, trends have stayed largely positive — evidence that money managers remain concerned that missing market rebounds this year is a bigger risk than succumbing to the attention turns to the weekend. With fresh escalation underway, markets are bracing for signals from the Middle East and Washington that could shape next week's mood — and test how durable the rally reflex really is.'This has been a year where fading bad news paid off, and the FOMO theme has been growing louder,' said Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions. 'When that momentum becomes blind euphoria it can cause bulls to hit a brick wall at full speed, but we aren't there yet.'Of course, anxiety abounds, as it has throughout a turbulent year. Israel warned its attacks may go on for weeks, while Iran has vowed to respond buying is also slowing, money is edging into cash and gold, and bonds offered little comfort: the 10-year yield ended higher on Friday, a reminder that traditional havens are no sure thing as fiscal clouds the kicker: President Donald Trump has promised sweeping tariffs within two weeks, a potential supply-side disruption that could collide with an oil market already on edge.'If the stock market can muscle through this, that will only increase the FOMO. It may well engender the perception that the rally is 'bullet proof,'' said Michael Purves, founder and CEO of Tallbacken Capital Advisors. 'This increases the ultimate downside risk.'By the Friday close, commodities ended up bearing the brunt of the pressure from the ongoing conflict, with oil climbing about 8% and gold testing a record high. The S&P 500 ended the week just 0.4% lower and 10-year Treasuries traded down about 10 basis points. The Cboe Volatility Index, or VIX, ended the week just above 20 as measures for bonds and currencies closed factor in the relative resilience may come from the sheer volume of shocks investors have already absorbed in 2025 — from inflation and bond convulsions to tariffs and geopolitics. While each has caused brief selloffs, the snapbacks have been fast enough to sharpen, not dull, the momentum impulse among investors.A Societe Generale SA index tracking cross-asset momentum has this month staged one of its sharpest reversals on record, with nine of 11 components emitting bullish signals. Trends derived across fixed income, equities and currencies were all flashing green when the conflict broke out. Price action like that is hard for Wall Street's risk traders to ignore, according to SocGen's Manish Kabra.'We look at the VIX and MOVE indexes, they're showing an element of complacency in there that's a bit surprising because of all these events that occurred,' said Phillip Colmar, global strategist at MRB Partners. 'If we hadn't gone through the April fiasco, I think that the markets would be nervous right now and more negative.'Indeed, buoyant positioning is extreme enough to give some Wall Street naysayers pause. Fear of missing out has driven extreme readings in the exchange-trade funds universe, among other places, with high-beta ETFs drawing significantly more inflows than low-beta counterparts, according to Bloomberg Intelligence's Athanasios Psarofagis.'Just as there was overreaction to the downside from the initial tariff news, the rebound appears a bit too hopeful in our view,' said Nathan Thooft at Manulife Investment Management in Boston, which oversees $160 billion. 'There are still a number of uncertainties that could lead to higher market volatility in the coming months. With that sa
Economic Times
a day ago
- Business
- Economic Times
Wall Street's momentum machine faces a Middle East stress test
It's the kind of geopolitical flashpoint that might once have triggered a full-blown market meltdown: Israeli warplanes struck Iranian nuclear sites, Tehran vowed revenge — then followed through. Oil spiked. ADVERTISEMENT Yet in a year where crises have come in waves, traders from London to New York opted to hold their breath rather than flee en masse. Yes — gold climbed, stocks slid and bonds seesawed, but there was no big stampede. The S&P 500 finished the week down modestly and remains less than 3% below its record high. Crude gave back some of its early gains. That relative calm — for now — followed a familiar playbook: Markets are shocked, prices stumble, then the habitual dip-buyers swoop in. It's a routine that has been all but cemented after months of crises that never quite landed. That got fresh impetus this week when readings on inflation and consumer sentiment came in better than estimated. The airstrikes disrupted this trading pattern Friday, without shattering it. And in the end, another Wall Street phenomenon proved equally important in salvaging the week: momentum. From risk premiums in corporate bonds to crypto and stock-market breadth, trends have stayed largely positive — evidence that money managers remain concerned that missing market rebounds this year is a bigger risk than succumbing to the dip. Now, attention turns to the weekend. With fresh escalation underway, markets are bracing for signals from the Middle East and Washington that could shape next week's mood — and test how durable the rally reflex really is. ADVERTISEMENT 'This has been a year where fading bad news paid off, and the FOMO theme has been growing louder,' said Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions. 'When that momentum becomes blind euphoria it can cause bulls to hit a brick wall at full speed, but we aren't there yet.' ADVERTISEMENT Of course, anxiety abounds, as it has throughout a turbulent year. Israel warned its attacks may go on for weeks, while Iran has vowed to respond buying is also slowing, money is edging into cash and gold, and bonds offered little comfort: the 10-year yield ended higher on Friday, a reminder that traditional havens are no sure thing as fiscal clouds gather. ADVERTISEMENT And the kicker: President Donald Trump has promised sweeping tariffs within two weeks, a potential supply-side disruption that could collide with an oil market already on edge.'If the stock market can muscle through this, that will only increase the FOMO. It may well engender the perception that the rally is 'bullet proof,'' said Michael Purves, founder and CEO of Tallbacken Capital Advisors. 'This increases the ultimate downside risk.'By the Friday close, commodities ended up bearing the brunt of the pressure from the ongoing conflict, with oil climbing about 8% and gold testing a record high. The S&P 500 ended the week just 0.4% lower and 10-year Treasuries traded down about 10 basis points. The Cboe Volatility Index, or VIX, ended the week just above 20 as measures for bonds and currencies closed lower. ADVERTISEMENT One factor in the relative resilience may come from the sheer volume of shocks investors have already absorbed in 2025 — from inflation and bond convulsions to tariffs and geopolitics. While each has caused brief selloffs, the snapbacks have been fast enough to sharpen, not dull, the momentum impulse among investors.A Societe Generale SA index tracking cross-asset momentum has this month staged one of its sharpest reversals on record, with nine of 11 components emitting bullish signals. Trends derived across fixed income, equities and currencies were all flashing green when the conflict broke out. Price action like that is hard for Wall Street's risk traders to ignore, according to SocGen's Manish Kabra.'We look at the VIX and MOVE indexes, they're showing an element of complacency in there that's a bit surprising because of all these events that occurred,' said Phillip Colmar, global strategist at MRB Partners. 'If we hadn't gone through the April fiasco, I think that the markets would be nervous right now and more negative.'Indeed, buoyant positioning is extreme enough to give some Wall Street naysayers pause. Fear of missing out has driven extreme readings in the exchange-trade funds universe, among other places, with high-beta ETFs drawing significantly more inflows than low-beta counterparts, according to Bloomberg Intelligence's Athanasios Psarofagis. 'Just as there was overreaction to the downside from the initial tariff news, the rebound appears a bit too hopeful in our view,' said Nathan Thooft at Manulife Investment Management in Boston, which oversees $160 billion. 'There are still a number of uncertainties that could lead to higher market volatility in the coming months. With that sa
Yahoo
a day ago
- Business
- Yahoo
Wall Street's Momentum Machine Faces a Middle East Stress Test
(Bloomberg) — It's the kind of geopolitical flashpoint that might once have triggered a full-blown market meltdown: Israeli warplanes struck Iranian nuclear sites, Tehran vowed revenge — then followed through. Oil spiked. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Yet in a year where crises have come in waves, traders from London to New York opted to hold their breath rather than flee en masse. Yes — gold climbed, stocks slid and bonds seesawed, but there was no big stampede. The S&P 500 finished the week down modestly and remains less than 3% below its record high. Crude gave back some of its early gains. That relative calm — for now — followed a familiar playbook: Markets are shocked, prices stumble, then the habitual dip-buyers swoop in. It's a routine that has been all but cemented after months of crises that never quite landed. That got fresh impetus this week when readings on inflation and consumer sentiment came in better than estimated. The airstrikes disrupted this trading pattern Friday, without shattering it. And in the end, another Wall Street phenomenon proved equally important in salvaging the week: momentum. From risk premiums in corporate bonds to crypto and stock-market breadth, trends have stayed largely positive — evidence that money managers remain concerned that missing market rebounds this year is a bigger risk than succumbing to the dip. Now, attention turns to the weekend. With fresh escalation underway, markets are bracing for signals from the Middle East and Washington that could shape next week's mood — and test how durable the rally reflex really is. 'This has been a year where fading bad news paid off, and the FOMO theme has been growing louder,' said Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions. 'When that momentum becomes blind euphoria it can cause bulls to hit a brick wall at full speed, but we aren't there yet.' Of course, anxiety abounds, as it has throughout a turbulent year. Israel warned its attacks may go on for weeks, while Iran has vowed to respond forcefully. Retail buying is also slowing, money is edging into cash and gold, and bonds offered little comfort: the 10-year yield ended higher on Friday, a reminder that traditional havens are no sure thing as fiscal clouds gather. And the kicker: President Donald Trump has promised sweeping tariffs within two weeks, a potential supply-side disruption that could collide with an oil market already on edge. 'If the stock market can muscle through this, that will only increase the FOMO. It may well engender the perception that the rally is 'bullet proof,'' said Michael Purves, founder and CEO of Tallbacken Capital Advisors. 'This increases the ultimate downside risk.' By the Friday close, commodities ended up bearing the brunt of the pressure from the ongoing conflict, with oil climbing about 8% and gold testing a record high. The S&P 500 ended the week just 0.4% lower and 10-year Treasuries traded down about 10 basis points. The Cboe Volatility Index, or VIX, ended the week just above 20 as measures for bonds and currencies closed lower. One factor in the relative resilience may come from the sheer volume of shocks investors have already absorbed in 2025 — from inflation and bond convulsions to tariffs and geopolitics. While each has caused brief selloffs, the snapbacks have been fast enough to sharpen, not dull, the momentum impulse among investors. A Societe Generale SA index tracking cross-asset momentum has this month staged one of its sharpest reversals on record, with nine of 11 components emitting bullish signals. Trends derived across fixed income, equities and currencies were all flashing green when the conflict broke out. Price action like that is hard for Wall Street's risk traders to ignore, according to SocGen's Manish Kabra. 'We look at the VIX and MOVE indexes, they're showing an element of complacency in there that's a bit surprising because of all these events that occurred,' said Phillip Colmar, global strategist at MRB Partners. 'If we hadn't gone through the April fiasco, I think that the markets would be nervous right now and more negative.' Indeed, buoyant positioning is extreme enough to give some Wall Street naysayers pause. Fear of missing out has driven extreme readings in the exchange-trade funds universe, among other places, with high-beta ETFs drawing significantly more inflows than low-beta counterparts, according to Bloomberg Intelligence's Athanasios Psarofagis. 'Just as there was overreaction to the downside from the initial tariff news, the rebound appears a bit too hopeful in our view,' said Nathan Thooft at Manulife Investment Management in Boston, which oversees $160 billion. 'There are still a number of uncertainties that could lead to higher market volatility in the coming months. With that said, we do believe worse-case scenarios regarding tariffs are off the table.' Building a case that the Trump trade war is poised to launch the US into a recession anytime soon has gotten harder amid a parade of positive economic reports. Data this week showed both consumer and producer inflation was lower than forecast in May. On Friday, the University of Michigan said its preliminary consumer sentiment index rose, topping all expectations in a Bloomberg survey of economists. 'A steady stream of favorable, or at least neutral, headlines may keep the 'buy the dip' party going,' said Michael Bailey, director of research at FBB Capital Partners. 'The barely noticeable rise in the VIX today suggests that investors view the Israel-Iran conflict as a fairly contained geopolitical event, helping to keep the new bull market alive.' American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Wall Street's Momentum Machine Faces a Middle East Stress Test
(Bloomberg) -- It's the kind of geopolitical flashpoint that might once have triggered a full-blown market meltdown: Israeli warplanes struck Iranian nuclear sites, Tehran vowed revenge — then followed through. Oil spiked. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Yet in a year where crises have come in waves, traders from London to New York opted to hold their breath rather than flee en masse. Yes — gold climbed, stocks slid and bonds seesawed, but there was no big stampede. The S&P 500 finished the week down modestly and remains less than 3% below its record high. Crude gave back some of its early gains. That relative calm — for now — followed a familiar playbook: Markets are shocked, prices stumble, then the habitual dip-buyers swoop in. It's a routine that has been all but cemented after months of crises that never quite landed. That got fresh impetus this week when readings on inflation and consumer sentiment came in better than estimated. The airstrikes disrupted this trading pattern Friday, without shattering it. And in the end, another Wall Street phenomenon proved equally important in salvaging the week: momentum. From risk premiums in corporate bonds to crypto and stock-market breadth, trends have stayed largely positive — evidence that money managers remain concerned that missing market rebounds this year is a bigger risk than succumbing to the dip. Now, attention turns to the weekend. With fresh escalation underway, markets are bracing for signals from the Middle East and Washington that could shape next week's mood — and test how durable the rally reflex really is. 'This has been a year where fading bad news paid off, and the FOMO theme has been growing louder,' said Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions. 'When that momentum becomes blind euphoria it can cause bulls to hit a brick wall at full speed, but we aren't there yet.' Of course, anxiety abounds, as it has throughout a turbulent year. Israel warned its attacks may go on for weeks, while Iran has vowed to respond forcefully. Retail buying is also slowing, money is edging into cash and gold, and bonds offered little comfort: the 10-year yield ended higher on Friday, a reminder that traditional havens are no sure thing as fiscal clouds gather. And the kicker: President Donald Trump has promised sweeping tariffs within two weeks, a potential supply-side disruption that could collide with an oil market already on edge. 'If the stock market can muscle through this, that will only increase the FOMO. It may well engender the perception that the rally is 'bullet proof,'' said Michael Purves, founder and CEO of Tallbacken Capital Advisors. 'This increases the ultimate downside risk.' By the Friday close, commodities ended up bearing the brunt of the pressure from the ongoing conflict, with oil climbing about 8% and gold testing a record high. The S&P 500 ended the week just 0.4% lower and 10-year Treasuries traded down about 10 basis points. The Cboe Volatility Index, or VIX, ended the week just above 20 as measures for bonds and currencies closed lower. One factor in the relative resilience may come from the sheer volume of shocks investors have already absorbed in 2025 — from inflation and bond convulsions to tariffs and geopolitics. While each has caused brief selloffs, the snapbacks have been fast enough to sharpen, not dull, the momentum impulse among investors. A Societe Generale SA index tracking cross-asset momentum has this month staged one of its sharpest reversals on record, with nine of 11 components emitting bullish signals. Trends derived across fixed income, equities and currencies were all flashing green when the conflict broke out. Price action like that is hard for Wall Street's risk traders to ignore, according to SocGen's Manish Kabra. 'We look at the VIX and MOVE indexes, they're showing an element of complacency in there that's a bit surprising because of all these events that occurred,' said Phillip Colmar, global strategist at MRB Partners. 'If we hadn't gone through the April fiasco, I think that the markets would be nervous right now and more negative.' Indeed, buoyant positioning is extreme enough to give some Wall Street naysayers pause. Fear of missing out has driven extreme readings in the exchange-trade funds universe, among other places, with high-beta ETFs drawing significantly more inflows than low-beta counterparts, according to Bloomberg Intelligence's Athanasios Psarofagis. 'Just as there was overreaction to the downside from the initial tariff news, the rebound appears a bit too hopeful in our view,' said Nathan Thooft at Manulife Investment Management in Boston, which oversees $160 billion. 'There are still a number of uncertainties that could lead to higher market volatility in the coming months. With that said, we do believe worse-case scenarios regarding tariffs are off the table.' Building a case that the Trump trade war is poised to launch the US into a recession anytime soon has gotten harder amid a parade of positive economic reports. Data this week showed both consumer and producer inflation was lower than forecast in May. On Friday, the University of Michigan said its preliminary consumer sentiment index rose, topping all expectations in a Bloomberg survey of economists. 'A steady stream of favorable, or at least neutral, headlines may keep the 'buy the dip' party going,' said Michael Bailey, director of research at FBB Capital Partners. 'The barely noticeable rise in the VIX today suggests that investors view the Israel-Iran conflict as a fairly contained geopolitical event, helping to keep the new bull market alive.' American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Star
20-05-2025
- Business
- The Star
‘Sell America' sentiment revived after Moody's cut
NEW YORK: Investors are facing yet another bumpy start to the trading week with US assets coming under fresh pressure, although it's mounting concern over American debt rather than tariffs generating the volatility this time. US equity and bond futures retreated with the US dollar in early Asia trading after Moody's Ratings announced last Friday evening it was stripping the American government of its top credit rating, dropping the country to Aa1 from Aaa. The company, which trailed rivals, blamed successive presidents and congressional lawmakers for a ballooning budget deficit it said showed little sign of narrowing. The downgrade risks reinforcing Wall Street's growing worries over the US sovereign bond market as Capitol Hill debates even more unfunded tax cuts and the economy looks set to slow as President Donald Trump upends long-established commercial partnerships and re-negotiates trade deals. Last Friday, 10-year Treasury yields rose as high as 4.49% in thin volumes. 'A Treasury downgrade is unsurprising amid unrelenting unfunded fiscal largesse that's only set to accelerate,' said Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions. 'Debt servicing costs will continue creeping higher as large investors, both sovereign and institutional, start gradually swapping Treasuries for other safe haven assets. 'This, unfortunately, can create a dangerous bear steepener spiral for US yields, further downward pressure on the greenback, and reduce the attractiveness of US equities.' Michael Schumacher and Angelo Manolatos, strategists at Wells Fargo & Co, told clients in a report that they expect '10-year and 30-year Treasury yields to rise another five to 10 basis points in response to the Moody's downgrade.' A 10-basis point increase in the 30-year yield would be enough to lift it above 5% to the highest since November 2023 and closer to that year's peak, when rates reached levels unseen since mid-2007. While rising yields typically boost a currency, the debt worries may add to scepticism over the dollar. A Bloomberg index of the greenback is already close to its April lows and sentiment among options traders is the most negative in five years. European Central Bank president Christine Lagarde told La Tribune Dimanche in an interview that the dollar's recent decline against the euro is counterintuitive but reflects 'the uncertainty and loss of confidence in US policies among certain segments of the financial markets.' Rising Treasury yields would also complicate the government's ability to cut back by running up its interest payments, while also threatening to weaken the economy by forcing up rates on loans such as mortgages and credit cards. US Treasury Secretary Scott Bessent downplayed concerns over the US's government debt and the inflationary impact of tariffs, saying the Trump administration is determined to lower federal spending and grow the economy. Asked about the Moody's Ratings downgrade of the country's credit rating last Friday during an interview on NBC's Meet the Press with Kristen Welker, Bessent said, 'Moody's is a lagging indicator – that's what everyone thinks of credit agencies.' Moody's move was anticipated by many given it came when the federal budget deficit is running near US$2 trillion a year, or more than 6% of gross domestic product (GDP). The US government is also on track to surpass record debt levels set after World War II, reaching 107% of GDP by 2029, the Congressional Budget Office warned in January. Moody's said it expects 'federal deficits to widen, reaching nearly 9% of GDP by 2035, up from 6.4% in 2024, driven mainly by increased interest payments on debt, rising entitlement spending, and relatively low revenue generation.' Despite such sums, lawmakers will likely continue work on a massive tax-and-spending bill that's expected to add trillions to the federal debt over the coming years. The Joint Committee on Taxation had pegged the total cost of the bill at US$3.8 trillion over the next decade, though other independent analysts have said it could cost much more if temporary provisions in the bill are extended. Analysts at Barclays Plc said in a report that they did not expect the Moody's downgrade to change votes in Congress, trigger forced selling of Treasuries or have much impact on money markets. 'Credit downgrades of the US government have lost political significance after S&P downgraded the US in 2011, and there were limited, if any, repercussions,' said Michael McLean, Anshul Pradhan and Samuel Earl of Barclays. Around the same time Moody's was announcing its decision, the US Treasury was reporting China had reduced its holdings of Treasuries in March. While that may further encourage speculation the world's second-largest economy is lowering its exposure to US debt and the dollar, Brad Setser, a former Treasury official, said on X that the data suggested 'a move to reduce duration than any real move out of the dollar.' Despite the recent trade tensions and worries over fiscal profligacy, the Treasury statistics suggested foreign demand for US government securities remained strong in March, indicating no signs of a revolt against American debt. — Bloomberg
