See the latest Australian dollar analysis here:
Australian dollar to the moon:
XJO to the moon:
Bonds still bid:
Dalian has not bounced as much as I thought on South African shutdowns:
Big Iron is up a bit:
Big Oil more:
Big Gold wants to have another go:
Big Banks to the moon:
Same for Big Maggot:
Just another dead cat bounce, this time on the US stimulus package.
Let’s see what happens when thousands of Americans begin to die in the next week or two.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
Latest posts by David Llewellyn-Smith (see all)
- CDC: Wuhan flu survived for 17 days on surfaces… - March 24, 2020
- Rundle: If you can’t pay the rent or mortgage…don’t - March 24, 2020
- Butchered Magellan turns “defensive” - March 24, 2020
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Macro Afternoon
Everything is awesome as the whole of Asia
Butchered Magellan turns "defensive"
Via The Australian: Global fund manager
Goldman: Bank profits smashed as bad debts pile up
Yesterday was another bloodbath for banks on the
No, it's not the bottom yet
It's an equal mix of delight and boredom that
Is that a dead cat bounce in ASX or AUD or both?
its like a rerun of last week, and the week before that, and the week before that
SMH Markets Live … lots of positive hope yet talking of coming high unemployment
Retail sector sold off too much, says Morgan Stanley
By David Scutt
Following a rapid rollout of measures to curb the spread of coronavirus across Australia, the listed retail sector has been particularly hard hit. Too hard, says Morgan Stanley, particularly Super Cheap Auto, Harvey Norman and JB Hi-Fi.
“Since the market top on February 20, SUL is down 57 per cent, HVN down 49 per cent, and JBH down 38 per cent versus the broader S&P/ASX 200 which is down 37 per cent,” the investment bank wrote.
“We acknowledge the market may also be pricing in broader recession concerns, but we believe these companies have been oversold.”
Given acute uncertainty towards the operating environment for retailers in the future, it believes liquidity is now a key focus for investors.
“At this stage, we are comfortable with the liquidity levels of SUL, JBH, and HVN,” it said.
Morgan Stanley has an overweight rating on SUL and is equal-weight on JBH and HVN
Weak AUD to help miners
By David Scutt
Currency weakness coupled with resilient prices has Macquarie Research feeling bullish towards Australia’s listed bulk commodity miners.
“We believe the depreciating currencies versus the US dollar provide a further earnings tailwind, while bulk commodity prices have remained resilient in CY20,” the investment bank wrote.
“Earnings upgrade momentum is robust across the bulk miners, with a spot price scenario generation greater than 50 per cent upgrades to earnings for 2020-21 and 2021-22.”
Macquarie says it prefers iron ore miners across the sector, retaining outperform ratings on Champion Iron, Mineral Resources and Mount Gibson Iron.
Of note, it has also decided to upgrade Alumina after recent share price weakness, slapping an outperform rating on the stock with a price target of $1.60. AWC shares have risen 3.5 per cent to $1.50 today.
yeah i may give Champion Iron, before it hits the canvas, the miss and buy some Sayona Mining (SYA) whilst their dirt cheap
lol
But isn’t Harvey Norman just a commercial real estate play? When will Gerry’s dodgy accounting catch up with him?
Just take a look outside and at your favorite coffee shop/restaurant/bar/cinema etc before you launch into the FOMO of picking bottoms in the ASX……
Via SMH Live……….. ANZ has crossed fingers and anything else
China expected to launch ”massive” stimulus program
With unemployment spiking and its major trade partners struggling with attempts to slow the spread of the coronavirus, ANZ Bank believe Chinese policymakers will unveil a “massive” stimulus package to ward off the potential for social unrest.
“Maintaining high employment rates is a policy priority for China, as the elimination of poverty is a key policy goal for the Politburo in 2020,” ANZ’s China economics team told clients.
“The authorities will likely unveil a massive stimulus package to boost domestic demand and employment. By setting an ambitious growth target of at least 5 per cent, not only can the government bolster sentiment but also earn some political brownie points after a relatively successful campaign at handling the COVID-19 outbreak so far.”
ANZ believes China will run a budget deficit of 3.5 per cent this year, accompanied by ¥3 trillion ($715 billion) quota for new special local government bonds.
“With the tax and government investment multipliers of 1.5 and 3.4 respectively, such a stimulus package could boost real GDP growth by 3.3 per cent,” it said.
Despite the potential for another big stimulus program, for the moment, ANZ continues to forecast that China’s economy will grow by 4.1 per cent in 2020.