1. Is reality about to bite with stocks?

CNBC reported that “the S&P 500 fell in the final hour of trading Monday as it struggled to build on its biggest weekly gain in almost five months.” This came before the close but it was always likely that last week’s big surge on stocks following the better-than-expected inflation number would be tested by those who expect a US recession. But the optimists could be on the rise. “The mood of investors is cautiously optimistic,” Sylvia Jablonski, CEO and chief investment officer of Defiance ETFs, told CNBC. “The general sentiment I’m hearing out there is that traders are more likely to expect a sustainable run from this point on — maybe it won’t be the face ripper that we hope for but sustainable upside — through the end of the year before we hit 2023 and you start to really see what the Fed hikes have done to the economy and how fragile our earnings are.”

2. World markets watched Australia for a day

The SMH’s Elizabeth Knight tells us that “the international share market spotlight was on Australia on Monday as investors around the world watched bleary-eyed as US Federal Reserve governor Christopher Waller appeared before a local conference to jawbone markets to curb their enthusiasm.”

This is what he advised: ““Everybody should just take a deep breath and calm down. We’ve got a ways to go yet.” He thinks the stock market has overreacted to those inflation numbers last week, which is code for the Fed not wanting a big rebound in stocks until inflation is falling big time.

3. Did Joe & Xi make progress?

The AFR says “In an historic meeting, Xi Jinping and Joe Biden laid down rules of engagement such as non-negotiable positions on Taiwan and North Korea, while vowing to improve the China-US relationship.” And this from Xi was promising: “The world has come to a crossroads. Where to go from here,” said Xi at the start of the meeting on the sidelines of the G20 Summit. “This is a question that is not only on our mind but also on the mind of all countries. The world expects that China and the United States will properly handle the relationship.”

Of course, words are cheap but the world economy will buy anything that looks like progress from China.

4. Are Bond Markets ready to bounce?

This year was the worst year for bonds since 1926 but experts are more positive on 2023. The AFR’s James Thomson reveals what Mike Gitlin of the $US2.6 trillion ($3.9 trillion) fund manager Capital Group, thinks about bonds going forward. Investors are hanging on to cash but he says that’s a dumb play. “They’re hoarding cash at a period of time when they shouldn’t be hoarding cash,” says Gitlin, who has been head of fixed income at the investment giant since 2010. Looking at next year, this is his take: ““We haven’t had a better opportunity to invest in a long time. You don’t want to miss the reinvestment period – and you can’t time it.”

5. Crypto crash hits 30,000 Aussies

The Australian reports that “almost 30,000 local FTX users are locked out of their accounts after the cryptocurrency platform collapsed into administration.” Shortly after FTX Australia entered administration, its global operations filed for US bankruptcy protection, wiping billions of dollars in equity value and leaving its investors facing large losses. “The collapse of FTX, one of the largest trading platforms before a run of withdrawals and the abrupt cancellation of a deal to sell the operation to rival Binance, has had a major impact on the sector,” The Oz explained.