Hello Morning Bid readers!
Warnings about a stock market bubble grew louder this week, with the Bank of England, IMF and JPMorgan boss Jamie Dimon all expressing concern about the potential economic fallout if Wall Street were to suddenly stop defying gravity. Meanwhile, another epic rally – the runup in gold above $4,000 per ounce – stalled on Thursday, likely reflecting profit-taking following the yellow metal’s more than 50% rise this year.
ROI editor-at-large Mike Dolan this week took a look at the twin rallies in equities and gold, noting that investors may be eager to chase artificial intelligence stocks higher, but they are also hedging fears of a prolonged inflation burst due to lax monetary and fiscal policy in many advanced economies.
If you want to understand why governments across the developed world have turned so dovish, ROI markets columnist Jamie McGeever argues you might take a look at a chart that IMF Managing Director Kristalina Georgieva recently spotlighted about the decline in economic mobility.
Meanwhile, the U.S. government shutdown has entered its second week. One of the biggest concerns for markets has been the delay of important economic data releases, like monthly jobs figures. But Jamie McGeever argues that investors may not need official data. If they want to know how the economy is doing, they can just look at the stock market.
In energy markets, oil prices rose early in the week on news that the latest OPEC+ supply increase was smaller than expected. However, ROI Energy Columnist Ron Bousso warns that – regardless of the size – the continued oil output increases are eroding OPEC+’s spare production capacity, a vital cushion that has helped to mitigate volatility in recent years.
Oil prices then fell on Thursday, as a ceasefire deal was agreed to by Israel and the Palestinian militant group Hamas.
Geopolitical conflict remains a serious risk to energy markets, however. Ron Bousso points out that Russia's heavy bombardment of Ukraine's natural gas infrastructure ahead of winter could have a knock-on impact on Europe's energy market.
On the renewables side, ROI Energy Transition Columnist Gavin Maguire highlights the extent of China’s clean energy dominance and explains why Texas's main power generation system is on track for a rare contraction in fossil fuel-fired generation this year.
And, finally, over in the metals world, ROI Metals Columnist Andy Home discusses the impact of Indonesia’s crackdown on illegal tin mining and then explores how the Democratic Republic of Congo is seeking to tame the notoriously volatile cobalt market.
As we head into the weekend, check out the ROI team’s recommendations for what you should read, listen to, and watch to stay informed and ready for the week ahead.
I’d love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com.
