Macro Afternoon

Outside Australia it’s been a good finish to the week on stock markets across Asia as aniticpition builds for the Trump-Xi meeting at the G20 conference this weekend. The Chinese manufacturing PMI came in bang on no expansion, which may have been behind some of the lack of confidence on Australian markets.

The Shanghai Composite is up 0.3% to 2573 points going into the close, vainly trying to recover from yesterday’s quite steep selloff as it struggles to get back above key support at the 2600 point level.s.  The Hang Seng Index is up about the same to 26551 points, after previously building above both the previous support level and ATR trailing resistance at 26000 points:

US and Eurostoxx futures are down slightly with the four hourly S&P 500 futures chart showing how its gravitating around against significant resistance at the the 2745 point level from several weeks ago (horizontal black line on the left):

Japanese stocks have put in a good day despite a listless Yen, as the Nikkei 225 closed nearly 0.4% higher to 2234 points.  The USDJPY pair has stabilised somewhat after its recent selloff with the pair bouncing off tentative support at the 113.20 level but unable to get back above the high moving average:

The ASX200 has seemingly collapsed, falling some 1.6% or nearly 100 points to 5667 on the back of a selloff in bank shares and the rout in CocaColaAmatil (CCA), completely retreating below the previous 5700 point support area. The Aussie dollar has basically been unchanged to rest just above the 73 handle after its recent move higher, finding resistance a little too strong at the 73.30 level from two weeks ago:

The economic calendar finishes the week with the EZ-wide CPI print for November, a couple Fed member speeches and then a private oil rig count.

Comments

  1. The Traveling Wilbur

    And the lack of confidence on Australian markets is due to the Yves Saint Laurent wearing muppets getting their books burnt – the same ones I was predicting that outcome for earlier in the week. Given *over* double the usual turnover on the ASX today and the financials index down exactly as much as the ASX200, I’ll call it, admittedly it was a bit premature, and take that as a win.

    Makes we want to livestream the Hayne RC…

    • Australian shares are on track to record their worst December quarter since the GFC following another sell-off during November.
      WW now we have momentum and loss of confidence
      Huge.

  2. Global warming, not as hot as a match.
    “The latest emergency comes after two men were arrested for arson as authorities continue to battle extreme conditions and more than 114 fires across the state.”
    WW any rural fire fighter will tell you the majority of rural fires are arson.

    • Here is a Bolstrood scenario that could occur:
      After 21 days of high temperatures and low humidity the blustery hot winds arrived in Sydney from the parched centre of the continent.
      No one knows how it started ,
      but, a fire in a bush gully in the drought stricken mountains soon became a raging inferno.
      The fire storm raced thru the bush to the city’s edge and the winds carried it across the highways and into the suburbs.
      Homes exploded into flames and the winds swept it from house to house.
      Thousands of people fled.
      The real catastrophe occurred when the fires ignited a high rise apartment block covered in highly flammable cladding.
      It just exploded in flames, none of the occupants stood a chance
      Worse was to come as neighboring blocks of units took fire, like a spark in a box of fireworks, one after another of these closely built towers erupted in flames.
      By nightfall a quarter of the city was in flames.

      Some physics for you: for every 17C rise in temp
      the rate of spread of a fire doubles.

      • Hugh would say as a lobbyist for the developer … coughs… ideological advocacy … coughs… developer lobby … that we need to dereg more land for supply cuz freedom.

        The escaping in your freedom vehicle through the fire storm is how rugged individuals like it ….

      • How about if we ask who would set fire to the joint
        and how about if setting fire to the joint was ever coordinated

  3. Corelogic daily indices point for another big fall next Friday.. Sydney and Melbourne are in real trouble.
    Also, BBSW rates appear to be on the way up again.

  4. https://www.abc.net.au/news/2018-11-30/coca-cola-amatil-to-sell-spc/10570956?section=business
    this is what is going on wiht adani
    adain will build the mine
    it will then be found to be not profitable
    and the govt will be needed to bail into the project
    to prevent job losses
    it is one of the oldest tricks in the business book re govt manipulation
    this strategy may also be afoot with the gupta steel revival plan
    for comparison have a look at the share price of blue scope.BSL

  5. Bureaucrat used photo of Kate Upton on LinkedIn profile, court told
    https://www.abc.net.au/news/2018-11-30/public-servant-sentenced-for-tricking-government/10571448

    Electric cars in China secretly send location information to government-backed surveillance centres
    https://www.abc.net.au/news/2018-11-30/electric-cars-in-china-secretly-send-information-to-government/10570820

    Encryption bill could have ‘catastrophic’ outcomes for Australian business, industry leaders warn
    https://www.abc.net.au/news/science/2018-11-30/encryption-bill-tech-business-damage-international-reputation/10570316

    • So the public servant who didn’t take her medication also organised a job for her brother at the Premiers Dept. I would be interested in more info as to how that happened.

  6. Got a call (after 6) from a real estate agent offering to chaperone my family and I around all weekend “anytime, anywhere you want to go”.

    I asked if that house we saw last weekend with the 125k price drop has sold yet and she said “no, why do you want to go see it? Anytime.”

    I was enjoying this, but now I’m starting to get spooked. I suspect the data when it gets printed will show an apocalyptic cratering of transaction volumes over the past few weeks. Interesting times.

    • “anytime, anywhere you want to go”

      Well. “I’ve always wanted to see the Big Pineapple”. See if he twitches uncomfortably.

    • Use them as an Uber, Create a list of houses you have no intention of buying and insist on a couple of stops along the way to drop off and collect the kids from sport. Really push the limit by just grabbing “just a couple of groceries” in-between house inspections. If you start to feel a tinge of guilt remember that the vehicle is likely a notated lease.

      They are just looking to be seen to be busy, nothing more, least they get the arse just before Christmas.

      • Mining BoganMEMBER

        Mark, the rules of relations invert during downturns. No longer do the flabby, indebted slumlords *waves at Nathan Birch* get all the action. No, it becomes time for the legendary 666 man to enter the fray. What is a 666 man you ask…

        6 foot
        6 figure income
        6 pack abs

        The ladies will realise that flabby, indebted slumlords kinda smell like their hovels. That’s not attractive, especially once they start getting picked up on a scooter instead of the Roller. No, they’re going to need 666 man to carry them through the hard times. *giggles*

        Be 666 man and the world of relations can be yours.

      • Remind me again what Trumps family and himself did or do for a living again …. historically …. ummm … slum lord dad and gentrification lad …. wipes tear from eye ….

  7. Neoliberalism’s Dark Path to Fascism – Chris Hedges

    Neoliberalism as economic theory was always an absurdity. It had as much validity as past ruling ideologies such as the divine right of kings and fascism’s belief in the Übermensch. None of its vaunted promises were even remotely possible. Concentrating wealth in the hands of a global oligarchic elite—eight families now hold as much wealth as 50 percent of the world’s population—while demolishing government controls and regulations always creates massive income inequality and monopoly power, fuels political extremism and destroys democracy. You do not need to slog through the 577 pages of Thomas Piketty’s “Capital in the Twenty-First Century” to figure this out. But economic rationality was never the point. The point was the restoration of class power. – Snip

    https://www.truthdig.com/articles/neoliberalisms-dark-path-to-fascism/

    • Ha just when you think you might be getting a little bit too outspoken with frustrations – someone proves you are just soft.

      • IMO, the unsighted speaker gave some brave and considered dialogue.

        Also the cameraman/director who pans round during to an empty chair still titled from its previous occupant – subtle cinematography worthy of Lynch, Kubrick or Wells.

        Alas I suspect it will not win film awards, because the whole thing might possibly be real and after 69 days the surface has merely been scratched.

      • View in a private window browser tab. Alternatively select your browsers reading view mode and reload the page. Or disable javascript (shock horror) if the previous two fail horribly. They have desires to be found and scraped by Google. You too can exploit these desires.

      • @Cee on my mobile. So bit hard. But I often find a referral from Google search pages works to bypass paywall also.

      • @gav. Clear the cookies, browsing history, and all tracking data and try again. Repeat when you hit the article limit or use a privacy oriented browser that clears it automatically.

      • Summary as far as I can gather, a small short on a big problem – specifically pricing vs. risk due to `seasoning` and increased ratio of non-banks vs banks.

        I missed this also, looks interesting, need more time to consider: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3237169

        Not sure I would suggest `genius` or oscar worthy rating, obviously the first movie came out 10 years ago in the US – and the sequel’s script is rather `derivative`. Interesting it was released now, and it may not be art but it does not seem untrue to art.

    • RMBS article in AFR by Christopher Joye was very interesting because that was not top of head opinion but substantial investigative work over time. Yes its research to back a view but its a view that looks increasingly supported by events… and well after Chris got set of course …. Key question is whether the price decline can be managed without setting off 2nd round forced liquidations. And if AUD can act like a good shock absorber should there be an external shock.