Macro Afternoon

A mixed session to start the week here in Asia, although dead cat’s are bouncing and rolling over here and there, the local market is soaring due to the pro-bank and pro-mining party getting voted in over the weekend. The Australian dollar is also on a tear post the election, although still remains below 70 cents, while gold has made another new daily low.

The Shanghai Composite has started the week poorly, staying below 2900 points and down nearly 1% going into the close, currently at 2856 while in Hong Kong, the Hang Seng Index is not doing much better, down 0.7% or so to 27740 points as the rollover to a new daily low seems complete for this dead cat bounce:

US and Eurostoxx futures are treading water at best with the four hourly S&P500 chart showing an inability previously to close at a new weekly high, still well below the 2900 point level but some support building at the 2860 point level:

Japanese share markets have advanced on a good Q1 GDP print, with the Nikkei 225 closing 0.25% higher to 21305 points helped along by a weaker Yen. The USDJPY pair gapped higher on the Monday morning open after a surge on Friday night, staying above the 110 handle but stalling just above tentative former trailing ATR resistance on the four hourly chart:

Australian stocks have done the best due to local issues – the financial sector up nearly 5% as bank share voters want more dividends and less tax revenue! Or something like that – mining stocks did well too for the same reasons with the ASX200 rocketing nearly 1.7% higher to close at 6476 points. This is despite a much higher Australian dollar which gapped back above the 69 handle this morning following the election, currently at 69.20 where it could advance a little higher as The City plays catchup to the news of another Morrison government:

The economic calendar starts the week with a few central bank speeches and the usual weekly Treasury auctions.

Comments

  1. Can we please keep some perspective on the post-election economic prospects… (housing included)?

    Let’s not forget, Scott Morrison prevailed in one of history’s most uninspiring contests. If I read this blog and elsewhere (ASX = WTF?), it’s like we’ve elected goddam FDR and the turnaround will be swift and massive. We are in the economic toilet for good reason and Scomo’s efforts in beating Bill hasn’t divined him any more ability than he had 3 days ago.

      • Exactly. It’s almost like Scomo wasn’t the Treasurer & PM who oversaw 2 years (so far) of price declines…

      • I honestly think we may see prices go up again in the short term, it would be a huge turnaround, but it may slow the falls, longer term who knows? I am hoping a global credit squeeze is coming or some big bank collapses like in 08′ but that’s just wishful thinking. All I know is that nothing in life is fair.. and the property “market” is the most rigged market in town. I almost feel like going all in on BTC is a safer bet at this stage.

      • The poo hat conceals a mass mind control device provided by NewsCorp, prototyped during the run up to election – set only to ‘fair dinkum bloke’ – it is now perfected and set to full power!

      • Spruikers gonna spruik and dopes gonna listen so the maimstream media will do what it does best and run with the new narrative without an ounce of self awareness, consistency or even memory of what they were writing two days ago.

      • @Jacob, not sure I’m following? Are you advising to buy or not to buy? Or are you saying buy outside of Australia or buy in a smaller town outside of Sydney / Melbourne?

      • If you buy real estate outside AUS while living in AUS, I am not sure that you can get negative gearing handouts – although some places may have no capital gains tax at all.

        If you buy a $200k property in a village in AUS, you get all sorts of handouts.

    • Banks up close to 6% due to no more Franking Credit Reforms. That gives you an indication of how many non-taxpaying retirees are rorting the system. I am sure these “poor” retirees with $1m in bank shares will fully expect a bailout if house prices keep crashing and the banks fold.

    • If this US china tariff sticks and interest rates go down AUD goes down too and inflation in petrol, farming and transport will surge. That will put a lid on prices and the already stretched economy me thinks

    • Mining BoganMEMBER

      There’s a weird feeling out there. The clowns who were yelling about electric cars and pensioner taxes last week were yelling louder today. My thoughts is after being smug about rolling OL Bill they’ve realised that three more years of Scummo lay ahead. I said beauty, he’s the guy who gave us 15% off house prices. The NGers hated that.

      The markets may just have that same realisation.

  2. Tanya drops out of the leadership contest.

    Thank goodness.

    She wanted 50% of year 12 finishers go into “uni”! That would be a complete waste of time and money.

    Tanya Plibersek has been slammed over a remark she made in the lead-up to the election, which may have cost her party the crucial state of Queensland.

    https://www.news.com.au/national/federal-election/tanya-pliberseks-disastrous-comment-that-cost-labor-queensland/news-story/ce23063dae5823f165f9c8b6f8c26453

    • Honestly, it’s not about Coal… but trust the media to report it that way. Fwits.

    • Interesting. She would’ve been disastrous for the party.

      The ALP needs to get outside of it’s Melbourne and to a lesser extent Sydney centric bubble. Someone from a regional seat would be good for that party’s leadership. They might have to catapult Wayne Swan’s old knob shiner boy Jim Chalmers up to the position.

      Another case of choose the least-worst person game.

  3. Democracy is like a Marriage,
    One must be graceful,
    Especially when the outcome is unfavourable

  4. Mining BoganMEMBER

    So apparently Clive put out a call to Scummo on Sunday about permissions for his mining type property next to Gina and Adani. Spend $60m, grab a few percent of votes, direct them to Scummo and bang, he be happy with a rail line funded by the taxpayer and new mine. Maybe even a power station. Bargain.

    Well played Obesity, well played.

    • If he spent $60 million on developing a fat loss pill and successfully developed one, he would be a global hero!

    • Maybe, we’ll see. But he did help to bring down the “Debt & Deficit Disaster” mob during his parliamentary term. I’d give me lots of credit just for that service to the nation.

  5. bzunicaMEMBER

    I teach in a very well off private school in Sydney’s north shore. The kids today were all upset that the Coalition had won and the reason was all about their unwillingness to tackle climate change. The young people know that this needs to be fixed for their lifetime, but it seems the older generation don’t nearly as much, because well, they won’t be around to see its effects. I really worry about how self-centered we are becoming in this country.

    • Yes, this. I don’t think that older people realise that young people were seeing this election as a kind of referendum on their futures re: housing and the environment.

      Maybe now, with the election backhand, they will realise the system is not stacked for them, and is not really that interested in them, and they will speak up louder, and vote accordingly. Time for the young to rise, I think.

      The above sentiment is what I sent in a message to my local Fed member, newly re-elected (Labor).

    • +1 to both of you, I’m disappointed as I finally felt it was our turn (our time) that the next generation took the planet and country in a better direction. Sadly it seems more of the same is what the doctor prescribed.

    • ErmingtonPlumbing

      Well with Mum and Dad guaranteeing a Privilaged education, paying for Uni, organising jobs through old boy networks and “Setting them up” on the property ladder at a young age, these litte pukes don’t really have anything else to be upset about!,….Do they?

      I have come across so many of these lower North Shore young establishment #fakeleft wana be Cool #FakeRebels.
      They out grow it pretty fast.
      Threaten their trust funds after their gap year in South America and Europe and/or post Uni and watch them swing back to the Liberal party in droves.

      • That might be my kids (lower north, privileged education etc.) though I hope they skip #fakeleft thing and become little tyrants directly.

      • I agree, they will vote Greens in the lower house and the Libs in the senate, no path to a change in government there.

      • ErmingtonPlumbing

        Ha Ha @Olaf,
        Yes I wish the same for my kids.
        I always have a great respect for people who honestly and unapologetically wear their hearts on their sleve,…even when I don’t like em.

        If they be tyrants tell em to own it!

      • organising jobs through old boy networks and “Setting them up” on the property ladder at a young age, these litte pukes don’t really have anything else to be upset about!,….Do they?

        Yep. Most of them need not compete against 457 visa staff. Competing against 457 visa staff for a position is something that poor voters have to do.

    • drsmithyMEMBER

      I teach in a very well off private school in Sydney’s north shore. The kids today were all upset that the Coalition had won and the reason was all about their unwillingness to tackle climate change. The young people know that this needs to be fixed for their lifetime, but it seems the older generation don’t nearly as much, because well, they won’t be around to see its effects. I really worry about how self-centered we are becoming in this country.

      MB comments have devolved to the point where I wasn’t sure after reading this whether you were referring to the kids or the older generations.

  6. Mining BoganMEMBER

    I heard something on the wireless about forgetful Uncle Arfur $inodoni$ saying that Scummo should adopt some of OL Bill’s election policies. You know, in the name of unity and all that.

    Anyone know who or what he’s trying to con this time?

    • I think it was suggested to him. I hear Fran on my drive to work and caught the back end of it. I also heard the Joel Fitzgibbon interview that followed. Labor need to figure out what they want to be. Joel noted that he has miners and retirees in his electorate. He took a hammering and still held his seat. He said that there needs to be rural representation within Labor. That’s very true. He also went on to say that they need to represent their blue collar background and shift to the center. Well, they will then be isolating one group, come up with a useless compromise, or appeal to one while lying to the other. Besides, the blue collars have done quite well over the past 20 years. Not as well as the executive class but a lot better than others. If they were interested in the struggling they would go into bat for the precariats and bring the blue collars along with them. Every young Labor person I’ve met over the past 15 years makes me doubt that they will stray from the old script regardless of the audience they are performing it in front of.

      • Mining BoganMEMBER

        Problem is blue collars don’t see themselves as blue collars. They’re property investors or entrepreneurs or something exciting but never working class. The flash car proves it. My workplace is full of folk earning $70k but completely deny their roots. They’re also the same smug shouty ones mentioned above.

        Would Labor even know how this type thinks let alone plan how to drag them back?

    • Mining BoganMEMBER

      Nope, the smug shouty guys at work say electric cars can never replace the automobile. They own investment properties so they’d know. They continuously ran with the fast charging invented drama and tradies being forced into electric utes and missing jobs because charging time. Seriously, the power of media fibs.

      • Just extremely occupied with work Andrew, but thanks for the thought.

        Persoanly I find the election boils down to a classic case of irrational fear served Bernays style by the camp that only knows that one trick. When there is no society and only a atomtisic market, where ones sense of well being is just a case of one awshite wipes out a thousand attaboys you’ll get that.

        Aside I was talking with a 20 year Uni academic today, retired not long ago, he laughed when I said he got out just in the nick of time.

  7. proofreadersMEMBER

    Hell hath no fury like a negative gearer, franking credit leaner or coal miner scorned?

    • They get a vote too. Politics is the art of the possible. Shorten and Bowen went for purity and have now died with untainted souls.
      A bit more grandfathering, perhaps a few modestly generous caps and/or gradual phase in periods and maybe we would have a different PM.

  8. After singlehandedly wrecking the country again for another 3 years journalists can’t give the public 3 minutes peace without telling everyone why they voted for Morrison and how they secretly predicted it.
    These people are just the worst. Stop trying to invent reasons when you know you *you* were the reason. You got Morrison re-elected with your campaign of stupidity and fear.
    There is just a real deficit in these people imo. A total lack of self esteem which is so obvious. Why else the need to constantly be predicting things and making post-hoc rationalisations and then claim no responsibility for what you do because your a “journalist” above the fray. Like a “journalist” doesn’t suffer the same bias as mere mortals and have total self awareness.

  9. The Google – Huawei announcement should be interesting. Xi will be throwing his toys out of the cot soon. Can’t wait for the SCMP articles claiming google is rashist.

    This will be hilarious, and potentially big.

  10. proofreadersMEMBER

    The LNP seems to be getting frighteningly close to a majority or defacto majority in the Senate. How good is that, Straya?

    • Scary but I have enough money to ride out this sh!tstorm. As for the rest of the supposed ‘middle class’ indebted I hope they lose their shirts

    • tripsterMEMBER

      I don’t know what numbers you are looking at but they are nothing close to a majority in the Senate according to the ABC data. It looks like they will need most of the cross bench assuming Labor and the Greens vote as a block.

      • proofreadersMEMBER

        Off memory, there was a graphic quickly flashed up by Antony Green in his election report on ABC TV news tonight, which projected the Coalition having 35 Senate seats and Labor 26?

  11. The Traveling Wilbur

    So a complete rout.
    Carnage for the reds all over the north.
    The Treasury will be pillaged to pay for a bunch of empty promises.
    The rich will fatten on a larger share of the pies.
    And the friends of the heads of state will wield yet more power and influence unchecked.

    But enough of GoT. What do people reckon about all these vote for a party that doesn’t back Australian homeowners 110% politicians finally getting the boot?

    • I liked how the costume designers took their cues from H3llraiser. Pinhead jumped to mind when I saw Sansa and Danerys in the final episodes. On things macabre, has anyone else played ‘I have no mouth and I must scream’? It’s a good short story and a great game. The author is a hoot. https://youtu.be/9dBap0UfQ_U

    • PetervmMEMBER

      Well you know what they say about Queensland – Labor one day, perfect the next

  12. TailorTrashMEMBER

    I’m waiting for the first photo of the post resurrection Scomo to appear on MB to see if he is wearing the poo hat ….or a halo