Macro Afternoon

No surprise that Asian markets would react to the overnight selloff as the US shutdown, Mattis’ resignation and the usual end of year positioning add to the dour mood.

The Shanghai Composite is down over 1% going into the close, currently at 2501 points as the selloff gains momentum.  The Hang Seng Index is treading water, down only 0.2% to 25569 points. This keeps it well under previous support at 25600 and the very tentative uptrend line, with a retest to the previous lows at 24500 likely:

US and Eurostoxx futures are off slightly going into the London open, with no evidence of buyers around. The four hourly S&P 500 futures chart still looks well oversold but apart from the long pin bar from overnight there is no evidence of a slowdown or bounceback:

Japanese stocks had another bad day, with the Nikkei 225 closing more than 1% lower to 20166 points taking it below the September 2017 lows after failing at terminal support at 21000 proper. The USDJPY pair has finally stopped falling however, stabilising just above the 111 handle with a few successive blue bars suggesting there might be some bounceback soon:

The ASX200 didn’t do too bad all considering, down 0.6% to 5467 points, but this breaks important psychological support at the 5500 point level and sets up for a bad start to next week. The Aussie dollar has continued its overnight falls, hovering just above the 71 handle but remaining quite oversold and ripe for a bounceback:

The economic calendar finishes the week with two big ones, Durable Goods for November, and 3Q GDP for the US.

Comments

    • Yeah not a peep about the cause either. Immigration. Ruined by Jimmy Grants. Crowded to the max and gouged by every rent seeking vampire there is. Thank God I plan to leave soon. If my family was based here I’d be stuck and miserable about it.

      Bring on the crash/reset for Sydney and Melbourne. For if he’s clinging to the lowest of low property ladder rungs now, soon he will be in deeper shyte I suspect.

      We truly have ruined the Australian way of life in our big cities.

      Melbourne ain’t far behind. Guess I’ll end up buying there and leaving again for somewhere less congested.

      • Mining BoganMEMBER

        I saw one on eBay for 60 bucks. Bargain.

        I’m thinking my motorbike armour might do a better job though.

      • The Traveling Wilbur

        Happy to help you test out the various options if it’ll help.

        Bear in mind I’m pitching, not catching.

      • Bear in mind I’m pitching, not catching.

        I’m trying to think of a circumstance in which that statement does not bode at the minimum, significant discomfort for the catcher.

      • in actual baseball, a catcher will have a much longer career and have far less debilitating injuries through retirement than a pitcher.

        so i guess it’s just a matter of the time horizon you consider

  1. Just heard today a major paint manufacturer HQ based in Sydney recently sold to an American Company earlier this year has laid off over 100 employees this week. Not so Merry Xmas for some.
    Scomo where are the jobs and growth?

      • hey TW, Cee and I are definitely different people. What do you think I do and what has Cee done that you think I’d hire him/her ?

      • TailorTrashMEMBER

        @cee ….so our world class universities do turn out people who can write bulls1shit after all ……

      • The Traveling Wilbur

        @Monty
        Because the only thing missing from the carefully extracted quotes and analysis was a business plan for how the inferred supply chain issues could be resolved through a consultant’s management expertise.

        That’s why.

      • understood. you think I’m in the buzz-word bingo, feel good pop-psych voodoo field of management consulting ?

        I’m in IT. Which has it’s own buzz-word bingo and voodoo feel-good marketing but, tends to have 3 or 4 less “0s” on the contract value.

      • The Traveling Wilbur

        Supply chain management and distribution with an emphasis on business process re-engineering, was actually what I was thinking.

        But sure ‘IT’. OK.

    • Brother in law was made redundant a couple of weeks ago. 20 years same printing company in Moorabbin. They lost a big contract and have been making cost cutting decisions ever since.

      He’s got 2x long service built up to carry him over. Don’t think he has any debt, but not sure what job he will do next or how well paid it will be.

      • Sorry to hear that Gavin.

        Printing money for RBA?

        I always remember the smells of printing ink from walking past a continuous-roll print operation in Abeckett St most mornings on my way to RMIT in the 1990s.

      • Amcore was the company. As fast as I know it was printing for food packaging etc.. sounded like chemicals wouldn’t be too good for you. I think he was a little sad to leave, but that’s life. Who gets to work at the same job for 20 years anyway?

      • I always loved sniffing paint, ink, petrol, jet fumes at the airport from turboprops. The good ol’ days when even the paint and glue in grade 2 smelled great 😉

        I’ve been self employed but doing the same kind of work for the same place for 18 years.
        The staff turnover rate is rarely less than 10 years.

      • No Long Service Leave, no super (i put the extra income into savings), but it’s a mutual arrangement that gives me a ton of free time for my own research projects (for independent income), and i can take a holiday almost anytime, or leave tomorrow. Funnily, the self-employed lot seem to get quickly bored on a “holiday”. I’d rather be doing more programming 😉

  2. TailorTrashMEMBER

    Visited St Ives shopping centre today …..the outsourced company picking up the woollies trolleys used to be Koreans ……..now they are turbaned sikhs …..with the Korean company employer ? name on their yellow vests ……..all’s good in big Straya ……………everyone moving up ……..hope the tax take is too …….

  3. going by the sudden spike in houses for rent in the parts of sydney we’re looking, I’d say a whole lot of would be sellers are planning on hodling through the little bit of sideways action by renting out houses they were planning on selling.

    This suspicion is compounded by: many of the houses are sporting extensive and expensive complete renovations; and also the weekly rent some of them are asking. Which can only have been derived by “how much rent do I need to charge to just cover the mortgage ?”

    • In the Inner west rents are falling.

      I am thinking of moving from a unit to a terrace in the new year for 50 bucks more a week.

      I would be applying at Easter, when there is no chance of further students.

      USyd is filling accomodation everywhere too.

  4. Oh dog i’ve had enough of being fed fat crap today 🙁
    Went to bed late, couldn’t sleep, had to get up early 🙁

  5. A$ is tanking, US 0.7075 as I type. So much Chris for it being undervalued. At this rate it will be US0.68 soon.

  6. interested party

    On the Gen Mattis resignation thing….
    The DoD website then………

    MISSION
    The mission of the Department of Defense is to provide a lethal Joint Force to defend the security of our country and sustain American influence abroad.

    The new site …..

    Our Story
    The Department of Defense provides the military forces needed to deter war and ensure our nation’s security

    you know…just sayin…….purpose fullfilled, and all..

    It’s not just economic nationalism going on here.

    • hemp companies with a good supply chain now; and those that can get to ‘good’ vertical integration the fastest, will take over the world

      in the medium term, once hemp products reach saturation across the US market, expect them to hire lobbyists to pressure US Trade to pressure hemp (CBD and HTC) exports to US trade partners. Poor Scummo and the legion of god botherers. Soon the US is going to be pressuring little old conservative australia to legalise weed !

  7. Trying to stream some Fox because I’m too lazy to plug in the aerial for the BBL.

    I’m not sure anyone’s ever said this before, but get fvcked Malcolm, you limpid blancmange.

  8. Just watched Nathan Birch’s predictions for 2019…
    He is still forecasting a GFD (Global Financial Depression) but like 007 and the MB housing bulls is also forecasting that Australian property will recover and take-off due to government stimulus… Great minds.

    I also learnt from Nathan that all currencies peaked in Jan-18. Thats right all currencies.

  9. Chinese Media Deny WSJ Report About Global Banks Cutting Ties With Huawei | Zero Hedge

    https://www.zerohedge.com/news/2018-12-21/chinese-media-deny-wsj-report-about-global-banks-cutting-ties-huawei

    As the controversy over the arrest of Huawei CFO Meng Wanzhou rages (driven in part by Beijing’s retaliatory arrest of three Canadian citizens living in China) and more US allies agree to limit their exposure to telecoms equipment manufactured by the Chinese giant in accordance with the wishes of the US, the Wall Street Journal has reported on yet another consequence of allegations that Huawei violated US and EU sanctions on Iran: The same global banks that helped facilitate Huawei’s rise into a multinational giant that does business in more than 170 countries are now limiting or cutting their ties with Huawei. … read more via hyperlink above …