1. Positivity for Wall Street evaporating

Tech and other growth stocks are the losers as better-than-expected economic data has stock and bond market players thinking that the Fed will keep up its aggressive interest rate rises next week and beyond.

CNBC said: “This week’s moves reflect the market giving back last week’s gains as investors realize solid economic reports mean a hawkish Fed for longer, said Eric Sterner, chief investment officer at Apollon Wealth Management.” And he suggests there could be more falls ahead. “It’s just typical bear market characteristics here,” he said. “I continue to be surprised by these false starts with the markets and investors getting ahead of themselves.”

2. Jamie Dimon isn’t helping

Jamie Dimon is the CEO of JPMorgan and he’s worried that US inflation and the Fed’s response will tip the US into recession, despite the fact that the Yanks, like us, have a pile of savings, thanks to the pandemic lockdowns! He said US consumers have $1.5 trillion in excess savings because of the Covid stimulus programs and are spending 10% more than in 2021, however he knows this won’t last. “Inflation is eroding everything I just said, and that trillion and a half dollars will run out sometime midyear next year,” Dimon said. “When you’re looking out forward, those things may very well derail the economy and cause a mild or hard recession that people worry about.” (CNBC)

3. Going green with energy has been ‘Cloughed’.

Clough is a major Aussie construction company and has gone into administration after a $350 million deal with Italian firm Webuild fell through. Even if the company survives, the AFR says it could drive up the costs of the Perth-based contractor’s projects. But it has wider implications. “Federal Energy Minister Chris Bowen is seeking urgent briefings from his department as the government seeks to limit the fallout from the collapse of engineering contractor Clough, amid a threat to almost $10 billion of projects critical to Australia’s energy transition,” the AFR reported. “The failure of Clough has added another level of urgency to discussions among energy ministers due to take place in Brisbane on Thursday, regarding reforms to spur investment in infrastructure needed to keep the lights on during the shift to low-carbon energy.”

4. How many more rate rises left?

After the 0.25% rise of the cash rate yesterday, the respected RBA watcher, Karen Maley tells us that, “both markets and economists expect the Reserve Bank to increase rates twice next year, pushing the official cash rate to about 3.6 per cent.” But she thinks Dr Phil Lowe has put a twist in the plot. He has indicated that he will watch how consumers react, spending-wise to past interest rate rises. He’s also aware that many fixed rate home loan people will be forced to take up expensive variable rate home loans next year. The bottom line is, inflation-related data will determine how many more rate rises lie ahead.

5. Will lithium continue to boom?

The Australian’s Glenda Korporal thinks so, revealing that “Australia was set to become a lithium powerhouse with some $7bn in planned capital investments, according to a new KPMG report. It predicts that Australia is set to become a critical minerals refining hub, with 10% of the world’s total lithium hydroxide refining capacity by 2024, doubling to 20% by 2027.” And electric cars will be the driver. “Nick Harridge, KPMG’s national leader for mining and metals, said he expected to see a ‘significant volume of investment’ in both lithium mining and refining on the back of rising prices fueled by the global increase in demand for electric cars. “The KPMG report estimates that more than two billion electric vehicles will be needed to accommodate a transition from internal combustion engines by 2050.”