Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Markets in Asia have rebounded having absorbed the Chinese virus fears with a sea of green across stocks and European/US futures looking bullish.

Chinese stocks have moved higher in solid reversals, with the Shanghai Composite rising nearly 0.4% to close at 3063 points, while the Hang Seng Index arrested its very sharp fall from yesterday, closing 1.2% higher at 28311 points. This keeps it above trailing support but still poised here and not yet back above its previous high:

Japanese share markets did well as Yen sold off with the Nikkei 225 rising nearly 0.8% to 24031 points, getting back above the key 24000 point resistance level. The USDJPY pair has bounced off its own daily and weekly support line and is just hovering over the 110 handle:

The ASX200 did exceptionally well given the modest returns on Wall Street overnight, lifting nearly 1% higher to close at 7132 points to a new record high. The lower Aussie dollar helped here, making new session lows with a late recovery, but still below the previous two weeks of price action:

Both S&P and Eurostoxx futures have lifted nearly 0.5% in line with the risk on mood in Asia, with the four hourly chart of the S&P500 showing a new record high and a return to the ridiculous uptrend line above:

The economic calendar is relatively quiet tonight with only the Canadian CPI print to watch out for, with the main game being in Davos and the US Senate.

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  1. I honestly don’t know whats happening with the sharemarket. Another relative Boom(er) day today pushing my humble index portfolio into new grounds, up 5.5% this calander year and 25% in the last 12 months. It seems hopes and prayers are driving things, as not much else is.

    I can see another win this year by Donny boy and at least 12 months more growth utnil things get found out, but being a faithful indexer I’m likely to stay the course and just keep buying when the markets down.

    • I suspect markets will start to get nervous if Sanders manages to win the Dems primaries. There was some mathematical analysis done on market positioning. The estimate was a 30% stock market drop if someone like Sanders wins presidency vs a 10% rise if Trump wins.

      • I could see some jitters with Sanders, especially if talk about a wealth tax – ironically the people they’re targeting have their cash tied up in their own shares, so aren’t THAT wealthy.

          • No I actually come from money and have some of that stuff, made good packet selling all my physical gold holdings at near peak panic post GFC. Can only imagine how some felt watching go splat in expectations of going to 40-60K on fear alone.

            Only assets like that I have anymore is rocks.

            So what does it say about those that prophesied insane valuations that never came true, but waffle on about everything else.

    • Guess that’s the last interview Mr Kennedy will do with an LNP minister. Not that Mr Kennedy will never be heard of again, which is a possibility, more the LNP will retreat to safe havens like Sky News, 2GB and the odd scripted appearance at 9Fax.

    • Most of the interviews I’ve heard on the selective sports funding from Bridget have this structure. A question is asked and the interviewee, this time Greg Hunt, just talk long and slow in an attempt to prevent too many more from coming along. Most frustratingly, almost none of what they are saying relates to the question being posed.

      • happy valleyMEMBER

        Business as usual for LNP politicians, unless of course they can throw in that everything (and they mean everything) is Labor’s fault?

    • Mining BoganMEMBER

      I remember coming back from there with meaningless $100k and $20k notes years ago. I think the $20k at the time could buy three beers. Now who knows what with inflation and dropping the zeros at one stage.

      I did get to fly over the falls in an ultralight though. Stupidest thing I’ve ever done and I’ve done plenty of stupid things.

  2. Outbreak of a new, contagious and lethal virus on the cusp of the very massive Chinese New Year migration. Good luck with that.

    • I suggest they have learnt a lot. Bank executives and mortgage brokers keep their bonuses. The only ones who go to prison are home owners that have sign falsified documents. Deposits and bank insolvency are the government’s problem.

  3. happy valleyMEMBER

    @Nikola above
    There are ICACs and ICACs and off memory, Federal Parliament was planning for an ICAC that was an ICAC when you are not having an ICAC – because it’d be a waste of time and money as there’s never anything to see when it comes to the Federal Government?

    • Its worth considering that Aborigines permanently changed/destroyed Australian forests due to their widespread practice of starting fires to draw out animals. All of those animals around that property would have been lunch.

      What is the carbon intensity of Aboriginal settlement, if you consider the entire destruction of huge swathes of forest and rainforest? Possibly greater than European settlement, and they left nothing useful for civilization.

      With constant fire, Eucalyptus takes over and not much comes back.