Macro Afternoon

by Chris Becker

Asian stocks sold off today to finish the week unsettled. There’s still no news on Trumps new tax plan and confidence is waning in general at his administration’s inability to push anything but stock markets higher.

The Shanghai Composite is down a little over 0.5% after the lunch break to be at 3212 points, retreating after its recent breakout. The Hang Seng Index is off about the same, down 0.6% to just below 24000 points finally retracing from its very overbought status:

HSI.fsDaily

Japanese stocks are down about the same off again even as the Yen falls very slightly against USD. The Nikkei closed down 0.5% to finish just on 19234 points.  The hourly chart for USDJPY show a small consolidation here at just above the 113 handle after the falls of recent days but momentum is already waning so watch the low moving average closely:

USDJPYH1

S&P futures are flat with no confidence here as everyone goes “WTF” at Trump’s latest press conference. Still, BTFD remains the key investment strategy!

S&P.fsH1

The ASX200 eked out a very small loss today, down only 0.18% and finishing the week just above the 5800 point level. It was a case of financials doing well as mining stocks – and particularly energy –  retreated and earnings continued.

The Aussie dollar climbed a little on the Sydney open but has come back below the 77 handle going into the London session. I’m watching ATR support at 76.80 to hold here before another attempt back to the previous high at 77.25:

AUDUSDH1

The data calendar tonight is very quiet tonight although the G20 foreign ministers meeting in Brussels might cough up something interesting.

Comments

  1. US car loans starting to go bad now.

    http://www.zerohedge.com/news/2017-02-16/auto-bubble-burst-begins-subprime-delinquencies-soar-2009-levels

    US farms feeling the pinch also…. corn costs $4 bushel to grow… price is now $3 bushel

    http://www.zerohedge.com/news/2017-02-16/ag-paradox-farm-incomes-and-equipment-purchases-tank-while-john-deeres-stock-soars

    Part of the reason John Deere stock price is high is that their foundry operations are vital to US armament manufacture.

  2. *ring ring*
    Yes
    Returning call about 23 Rental Address
    Oh yes, thank you. I see you’ve dropped the price to $400
    Um, I’ll have to check.
    No. You’ve dropped the price. It was $410 six weeks ago.
    I’m not sure.
    I am. I applied. (Note to reader: offered $380)
    Oh yes, that’s right. The owner has dropped the price.
    Yeah, he must be bleeding money having it empty all that time. How much negotiating room?
    He’s firm on $400.
    You told me that he was firm on $410. Bleeding get too much?
    No, he’s just looking for the right applicant.
    Okay. I see 18 months ago it rented for $420. Must be hard to make money out this way with prices dropping like that.
    Prices are booming!
    Nah, can’t be. I’ve looked at 19 places over the last six weeks. Only two have gone and they had to drop prices. Think there’s another four or five that have dropped and still sitting empty. Not real good business.
    *agent now getting angry*
    That’s because we put more focus on applicants.
    What, more important than making a return on investment?
    And so on…

    Hope I ruined his night. Lovey says I’m not doing us any favours but she was giggling as she listened in.

    • [email protected]

      First they ignore you, then they laugh at you, then they fight you, then you win.

      1 more step to go…..

      • There’s a couple of them annoyed at me. The ‘right applicant’ bit was trying to be a slur in my direction. We’ve been approved a few times but the price has been the stalling point. That conversation is pretty close to what it was. The numbers are bang on. 19 rentals, 17 still empty, some even after price drops. There’s a few that are at $15-20 less than two years ago.

        The numbers on the ground doesn’t seem to match the spruik.

      • And some are confused about the term price en-elasticity or ceteris paribus, without regard to the psychological and financial dependency due to previous environmental conditions conflicting with changes.

        disheveled…. a bit like drug addiction…. rehab requires about 6 months of abstinence with complete removal from all past environmental factors…; something about the human brain and group-think reinforcement thingy….

    • [email protected]

      low ball ’em @350p/w and tell ’em you’re leaving head room for the right applicants

      • I would but now I’m running out of time. Starting a new job in a few weeks so want to get everything sorted before that begins.

        Sucks after all the hard work I’ve put in annoying wankers. But, the place we’ll probably take is down $15 on three years ago. That’s a minor win.

        Edit: we’re only moving because the owner is moving in. Rent here hasn’t changed in three years and is $15 less than in 2012. Where’s these raging rent increases?

    • [email protected]

      okey doke well…given the timeframe, “played ‘ard done good”

  3. I’ve been reading this blog since day one.

    I am so depressed at where we are now.

    This country has limited chance of actually surviving the fall out from this – literally.

    I am considering going into politics – will need support.

    It will be a utilitarian party. Science based.

    Ermagerd.

    • You’re right, we’re toast. 18 months, two years ago I always thought some change would come. Optimist see. Everything always works out. But no, we’re driving off a cliff.

      It is depressing.

    • I hear ya. Politics in Australia never fails to find a new low. Just when you think “surely this is it”, nup, out comes another moronic policy, brain fart, half assed thought whatever that plumbs new depths to challenge the madness of Caligula.

    • This too shall pass. We humans have a natural tendency to hyperfocus on the negative and ignore the positive, doubly so when it comes to memory. Hence, the press (which includes this site) will always follow the same formula: if it bleeds, it leads.

      Sitting on this site all day will definitely lead to a grim outlook. In fact, that’s the point. It’s their niche. Why do you think there’s usually an unlocked shitstorm of a political thread? Note: the authors are getting paid and we have no idea if they follow their own financial advice. Think about it for a moment.

      Perhaps the economic crisis will come, and a new batch of useful leaders (preferably in the mould of Curtin / Chifley) will emerge with a mandate to rebuild. Maybe you’ll be part of it. Maybe not. But in all probability you’ll be just fine – as will most everyone else.

      • Great comment Tony.been reading MB for over five years and you can see people getting consumed by the always grim message. It’s not all that bad in OZ

    • I’m pretty fed up also, considered going into politics to make a difference, worried I’ll become a product of the system. I sometimes think geez I know nothing about how politics works, then I realise this bunch have no idea either, so what’s stopping me?

  4. Something is going on at the Central Coast. The last 6 months or more the missus and I did a bit of tyre kicking. In the last couple of days a barrage of emails purporting to property match invitation.
    Smells like desperation after the previous smugness when they were selling like hot cakes

    • Agree …tracked a few places up there ………you can see the restrained desperation in the ads ………please , please , come and look at this great opportunity ……for the seller………………….yeh but ..no but !

  5. The ABC ( which Thousands of Australians pay for ) no longer lets me forward articles from their online iPad site …….so I copy and paste their conclusion to a ” report ” currently sitting on their site ……….have a look at it ………gaping hole ? ……..no mention that Australia is struggling with housing because it’s more profitable to sell homes to non citazens and their proxies than it is to the…… bumiputra ……..and what a great word that is ! ……….one Straya needs to understand …racists that they are ! ……….otherwise go Straya ………4th world here we come …………..

    ABC
    “Instead of finding new and ever more creative ways of boosting demand and further stretching Australians’ already tortured ability to pay for over-priced homes, how about we look at some ways to start kicking our housing habit?
    Capital gains tax discount reduction, negative gearing reform and/or a national land tax could be a start.
    “After all, increasing tobacco taxes has helped Australia in the battle against smoking, so why not raise property taxes in the fight against non-productive land speculation?

    Yeh OK ….good …at least they are starting to wake up ……but look at the whole problem ………..yeh but …no but ?

  6. ORL looks cheap….. time to recall half the aircraft off USS-SLR and strike, along with DRM.

    Will BAL come back down to below $4 again?

    Can SLX hold the all-important 70c line?

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