1. Wall Street worries about the Fed

Stocks were down overnight and CNBC reports that market sentiment soured on the fear that the Federal Reserve will raise interest rates too far, driving the US into recession. “A hotter-than-expected reading of November ISM Services further fuelled concerns that the Fed will continue hiking after the index topped Dow Jones’ estimates and increased from October,” Samantha Subin reported. This pushed yields up on 10-year Treasuries, which isn’t good for stocks. “Clearly, equity markets want to move higher, but that’s very dependent on inflation getting under control,” said Peter Essele, head of portfolio management at Commonwealth Financial Network. “And so, when you have above expectation prints on any econ number that comes out, that tends to fuel inflationary concerns, which sends rates higher.”

2. Want to take this tip on bitcoin?

“Venture capitalist Tim Draper thinks bitcoin will hit $250,000 a coin by the middle of 2023, even after a bruising year for the cryptocurrency marked by industry failures and sinking prices,” CNBC reported. But this is not the first time Tim has predicted this target price. “Draper previously predicted that bitcoin would top $250,000 by the end of 2022, but in early November, at the Web Summit tech conference in Lisbon, he said it would take until June 2023 for this to materialize.” He reaffirmed this position Saturday when asked how he felt about his price call following the collapse of FTX. “I have extended my prediction by six months. $250k is still my number,” Draper told CNBC via email. Not surprisingly, others such as Mark Mobius of Mobius Capital Partners thinks it will go to $10,000! He tipped the $20,000 fall earlier this year, so he has some form around tipping bitcoin’s price potential.

3. RBA more likely to raise rates today

Here’s the betting on whether the Reserve Bank will raise the cash rate by 0.25% today, taking the cash rate up to 3.1%. The money markets that work out the likelihood of a rate rise say there’s an 80% chance of a rise by 0.25%, while there’s a 20% chance that Dr Phil Lowe and his board will opt for a pause. We think a pause would be a good idea, giving the previous rises a chance to show if they’re doing their job to slow inflation down. The RBA prefers the quarterly CPI for guessing inflation but we don’t see the December quarter reading until January 25! Why don’t they wait until then and if it’s too big, wack us with a 0.5% rise?

4. It looks like rate rises are working

If Dr Phil and the RBA need proof that interest rate rises are working, well, look at this from The Australian’s Patrick Commins: “Soaring inflation, a jump in wages bills and cooling mining earnings helped drive a 12 per cent collapse in company profits in the three months to September – the biggest fall since at least 1994. Ahead of what economists ­expect will be the eighth consecutive Reserve Bank rate hike on Tuesday, the quarterly business data from the Australian Bureau of Statistics revealed an unexpectedly sharp and broad-based reversal in private sector revenue.” And this is why the RBA has to be careful that it doesn’t take us into recession with excessive rate rises in too short a timeframe.

5. Albo’s coal cap hits Covid obstacle

The AFR’s Phil Coorey tells us that the PM has a Covid crisis. “Already troubled plans by the federal government to force down power prices have been thrown into further disarray after Prime Minister Anthony Albanese contracted COVID-19 and was forced to postpone Wednesday’s national cabinet meeting,” Phil writes. “In recent days, the Prime Minister had stepped in to try to broker a deal with the eastern states to cap coal prices, but the states have yet to see any detail and already chances of a final result this week were slim.” But on Monday night Mr Albanese went public with his testing positive for COVID-19 and there was no indication when he would next meet the state and territory leaders.