The long-awaited broadening in the 2023 equity advance is bringing gains to corners of the market even unabashed bulls may view uneasily.
Boats seaworthy and otherwise are being lifted by the rising tide in stocks, itself part of a cross-asset “everything rally” last week that was the biggest in three years.
Gains spread, with banks and commodity producers in the ascendant. And there were flimsier propositions: Meme stocks had their best week since January, while unprofitable tech companies rose 11 per cent.
“I don’t know the staying power of the ‘junk rally’, because it’s more sentiment driven – it’s not fundamental driven,” said Abby Yoder, US equity strategist at JP Morgan Private Bank. “Regardless of whether you’re in the camp of us going into a recession or a camp of a soft landing, the reality is that growth is probably slowing.”
For bulls who have been calling for the unseating of the artificial-intelligence oligarchy that has ruled markets since December, it s a case of be careful what you wish for, at least going by the cyclical playbook that has prevailed since the pandemic.
The market gets a lift, sceptics buy in – then speculative fever breaks out in time for gains to fizzle.
Whether the pattern is repeating, this was a week of nearly unprecedented buoyancy across asset classes.
Among five major exchange-traded funds tracking stocks, Treasuries, corporate bonds and commodities, each was up more than 1.7 per cent. In data going back almost a decade, only once was there a bigger concerted rally: March 2020.
And while that particular echo may stoke bulls, a lot has changed between now and then in terms of policy and valuation.
Back when the pandemic was raging, the Federal Reserve rushed to lower interest rates and the government doled out trillions of stimulus checks to Americans. The S&P 500 was valued at roughly 14 times earnings, while 10-year Treasury yield stood below 1 per cent.
Now, the central bank is in the midst of the most aggressive monetary tightening in decades, the 10-year rate has risen to 3.8 per cent, and the S&P 500’s price-earnings ratio hovers near 20.
On the other hand, the prospect of a soft landing has improved, with inflation cooling and economic growth holding up. And the Fed may stop increasing interest rates after another later this month.
Weakening prices, in particular, are driving the synchronised gains across assets, according to Michael Rosen, chief investment officer at Angeles Investments.
“Inflation is the scourge of investors: It harms bonds, of course, but also equities, as it erodes profit margins and destroys wealth over time for everyone,” he said. “We are not out of the woods, although good news is good news, and markets are reflecting that.”
The possible end to monetary tightening jump-started a broad risk-on move in the currency market, with traders seeking higher returns in everything from the euro to Mexico peso.
The US dollar, a long-favoured haven, sank the most since November, losing more than 2 per cent of its value over five sessions.
In stocks, fringe corners are springing back to life.
A Goldman Sachs Group basket of unprofitable technology companies had its best week since January. Newly-minted shares jumped as the Renaissance IPO ETF climbed almost 7 per cent on the week.
Retail investors, who were burnt by 2022’s bear market, are staging a comeback. The Solactive Roundhill Meme Stock Index, tracking the crowd’s favourite shares, rallied about 8 per cent this week, led by crypto-related stocks.
Day traders scooped up a net $2.8 billion of shares in the week through Tuesday, an amount that’s way above its 12-month average, according to JP Morgan Chase estimates derived from public data on exchanges.
Elsewhere, money managers are cutting their short positions while moving cash to stocks.
I don’t know the staying power of the ‘junk rally,’ because it’s more sentiment driven – it’s not fundamental driven
Abby Yoder,
US equity strategist, JPMorgan Private Bank
An index tracking investors’ equity positioning has spiked from depressed levels at the start of the year, reaching readings higher than 68 per cent of the time since 2010, according to data from Deutsche Bank.
As much as the buying urge has propelled stocks, it may sow the seed for troubles.
If there is a lesson to be learnt from 2023’s rally, it is that paranoia is the best thing bulls can hope for because that sets the stage for a market rebound.
With gaming spirits raging back, it’s a contrarian sign to be cautious, said Jake Schurmeier, portfolio manager at Harbor Capital Advisors.
“Sentiment has clearly swung towards the positive extreme,” he said. “It certainly caught me off guard. I think 1999-2000 may be a better parallel in terms of how it ends.”
THE BIO
Ms Al Ameri likes the variety of her job, and the daily environmental challenges she is presented with.
Regular contact with wildlife is the most appealing part of her role at the Environment Agency Abu Dhabi.
She loves to explore new destinations and lives by her motto of being a voice in the world, and not an echo.
She is the youngest of three children, and has a brother and sister.
Her favourite book, Moby Dick by Herman Melville helped inspire her towards a career exploring the natural world.
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
WHAT%20IS%20THE%20LICENSING%20PROCESS%20FOR%20VARA%3F
%3Cp%3EVara%20will%20cater%20to%20three%20categories%20of%20companies%20in%20Dubai%20(except%20the%20DIFC)%3A%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECategory%20A%3A%3C%2Fstrong%3E%20Minimum%20viable%20product%20(MVP)%20applicants%20that%20are%20currently%20in%20the%20process%20of%20securing%20an%20MVP%20licence%3A%20This%20is%20a%20three-stage%20process%20starting%20with%20%5B1%5D%20a%20provisional%20permit%2C%20graduating%20to%20%5B2%5D%20preparatory%20licence%20and%20concluding%20with%20%5B3%5D%20operational%20licence.%20Applicants%20that%20are%20already%20in%20the%20MVP%20process%20will%20be%20advised%20by%20Vara%20to%20either%20continue%20within%20the%20MVP%20framework%20or%20be%20transitioned%20to%20the%20full%20market%20product%20licensing%20process.%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECategory%20B%3A%3C%2Fstrong%3E%20Existing%20legacy%20virtual%20asset%20service%20providers%20prior%20to%20February%207%2C%202023%2C%20which%20are%20required%20to%20come%20under%20Vara%20supervision.%20All%20operating%20service%20proviers%20in%20Dubai%20(excluding%20the%20DIFC)%20fall%20under%20Vara%E2%80%99s%20supervision.%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECategory%20C%3A%3C%2Fstrong%3E%20New%20applicants%20seeking%20a%20Vara%20licence%20or%20existing%20applicants%20adding%20new%20activities.%20All%20applicants%20that%20do%20not%20fall%20under%20Category%20A%20or%20B%20can%20begin%20the%20application%20process%20through%20their%20current%20or%20prospective%20commercial%20licensor%20%E2%80%94%20the%20DET%20or%20Free%20Zone%20Authority%20%E2%80%94%20or%20directly%20through%20Vara%20in%20the%20instance%20that%20they%20have%20yet%20to%20determine%20the%20commercial%20operating%20zone%20in%20Dubai.%C2%A0%3C%2Fp%3E%0A
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
Roger Federer's record at Wimbledon
Roger Federer's record at Wimbledon
1999 - 1st round
2000 - 1st round
2001 - Quarter-finalist
2002 - 1st round
2003 - Winner
2004 - Winner
2005 - Winner
2006 - Winner
2007 - Winner
2008 - Finalist
2009 - Winner
2010 - Quarter-finalist
2011 - Quarter-finalist
2012 - Winner
2013 - 2nd round
2014 - Finalist
2015 - Finalist
2016 - Semi-finalist
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.3-litre%204cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E299hp%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E420Nm%20at%202%2C750rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E10-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E12.4L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh157%2C395%20(XLS)%3B%20Dh199%2C395%20(Limited)%3C%2Fp%3E%0A
Everybody%20Loves%20Touda
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Nabil%20Ayouch%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Nisrin%20Erradi%2C%20Joud%20Chamihy%2C%20Jalila%20Talemsi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
Points Classification
1. Marcel Kittel (Germany / Quick-Step) 63
2. Arnaud Demare (France / FDJ) 38
3. Andre Greipel (Germany / Lotto) 25
4. Sonny Colbrelli (Italy / Bahrain) 24
5. Mark Cavendish (Britain / Dimension Data) 22
6. Taylor Phinney (U.S. / Cannondale) 21
7. Geraint Thomas (Britain / Team Sky) 20
8. Thomas Boudat (France / Direct Energie) 20
9. Stefan Kueng (Switzerland / BMC Racing) 17
10. Michael Matthews (Australia / Sunweb) 17
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ENadeera%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3ERabih%20El%20Chaar%20and%20Reem%20Khattar%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3ECleanTech%3Cbr%3E%3Cstrong%3ETotal%20funding%3A%3C%2Fstrong%3E%20About%20%241%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EHope%20Ventures%2C%20Rasameel%20Investments%20and%20support%20from%20accelerator%20programmes%20%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2012%3C%2Fp%3E%0A
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
