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Weekly Commentary: Losing Control

Weekly Commentary: Losing Control

Tesla’s market capitalization surpassed $1.1 TN this week, the first junk-rated company with a trillion-dollar valuation. Now the richest individual in the world, Elon Musk’s wealth this week reached a staggering $300 billion. The S&P500, Dow, Nasdaq100, and Nasdaq Composite ended the week at all-time highs. Microsoft retook the top spot as the world’s most valuable company.

October 29 – Reuters (Gaurav Dogra and Patturaja Murugaboopathy): “U.S. equity funds attracted large inflows in the week to Oct. 27… According to Lipper data, U.S. equities funds attracted investments worth a net $12.99 billion, which were the largest since the week to Aug. 18.”

Plenty to divert attention away from critical global market developments. Ominous Bond Market Convulsions.

October 28 – Reuters (Wayne Cole): “Australia’s central bank on Friday lost all control of the yield target key to its stimulus policy as bonds suffered their biggest shellacking in decades and markets howled for rate hikes as soon as April. An already torrid week for debt got even worse when the Reserve Bank of Australia (RBA) again declined to defend its 0.1% target for the key April 2024 bond, even though its yield was all the way up at 0.58%. Scenting capitulation, speculators sent the yield sky-rocketing to 0.75% while yields on three-year bonds recorded their biggest monthly increase since 1994. All eyes were now on the RBA’s policy meeting on Nov. 2 where investors were wagering it would call time on yield curve control (YCC) and its guidance of no rate rises until 2024.”

October 29 – Financial Times (Hudson Lockett and Tabby Kinder): “The Reserve Bank of Australia declined to defend its bond-yield target, a pillar of its quantitative easing programme, unleashing what one trader described as ‘carnage’ in the country’s sovereign bond market…
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