Futures have risen this morning, as the market tries to get back on its feet after a rough month so far. The Fed’s upbeat tone on the economic recovery yesterday suggested that the timing of the tapering process of its asset purchase program would come largely in-line with market expectations, which helped push risky assets higher. Powell laid the groundwork to begin tapering as soon as November and indicated the process could end by the "middle of next year”. Markets have been nervously eyeing the start to tapering for months, but some economists estimate that it is likely to have a minimal market impact at this stage.
Investors continue to keep an eye on China Evergrande, which faces an $84 million interest payment for foreign bondholders today, in one of a string of liabilities coming due, as it tries to avert a default. The stock rallied 17% on the Hong Kong Stock Exchange after the company said it agreed to settle interest payments for an onshore note yesterday, even as the fate of its offshore payments hang in balance.
Aussie dollars continue to be weak as a fallout from the continuing Evergrande collapse. With considerable economic exposure to China (Australia's #1 trading partner, by a factor of 2.5x with the next one being Japan), Aussie exports are the most logical point of "contagion", should there be any, into the G12 countries. Aus Iron Ore exports alone would be tied for #1, and a property driven decline in China would certainly hit Iron Ore demand. While Loonies and A$ are highly correlated, and both have been declining steadily against the US$ since the spring, the A$ slide has outpaced. Pandemic aside, could this be the end of the Australian economic miracle of 28 years without a technical recession?
Move over best sellers list, say hello to #Booktok. For those of us living under a rock, TikTok is more than just a platform for viral dance moves. It shapes consumer behaviour by influencing what we read, cook (remember the feta cheese craze), and eat (Starbucks’ secret menu anyone) to name a few. With 21 billion views, #BookTok has become a powerful influencing source that companies cannot ignore. Barnes and Noble now has a dedicated a portion of its website to “discover the most popular TikTok books” (Yahoo). Diversion:
Sometimes we all space out for a second. Hopefully he eventually tossed the fish back too