Macro Afternoon

See the latest Australian dollar analysis here:

Australian dollar taken hostage by dramatic US election

Stocks are slipping again, coming up against significant buying resistance as other risk assets like oil are still flying ahead as caution spreads across Asia. Gold also fell back as the USD strengthened against all the major currencies, with the Aussie also back to its prebreakout high.

In mainland China, the Shanghai Composite is selling off going into the close, currently down 0.4% to 2872 points, with the Hang Seng Index is off about half that, down 0.2% to be at 24334 points, still unable to re-engage on its previous breakout and continuing this boring sideways move:

Japanese share markets were also unable to advance, with the Nikkei 225 putting in a scratch session to close right on 20593 points, while the USDJPY pair was relatively steady, slightly off its recent session highs on the four hourly chart but still well below the 108 handle:

The ASX200 fell the most in the region after being up on the open and looking ready to confirm its breakout. Traders are getting nervous here with a 0.4% fall to 5550 points, with the Aussie dollar also pulling back to the mid 65’s, unable to gain some traction as it retraces below its breakout level:

Eurostoxx futures are down nearly 1% with the S&P futures off nearly half that and still unable to break above its weekly resistance level at 2960 points, which is required before a decent run up to 3000 – or is this all she’s got?

Latest posts by Chris Becker (see all)

Comments

      • Burnouts. Road rage. Bad driving.

        I’d say ancestry could well be relevant.

        Where did the perp get their licence?

        • I know several dozen anglos that would do the same.

          Crikey, I even crashed into a shop whilst street-racing a friend, losing control of my dad’s XR6 when I was 17!

          Funnier again: my wife used to walk past that shop on her way to high school; she saw the shop damage and thought, “What idiot did that?!” Your future idiot husband! Gold!!

          Frankly, being a twit has little to with being Arab, Angle, or whatever.

          • Your Dad must’ve been wonderfully impressed with his fcuked up car and the damage to the shop.

          • Haha, yes.

            He was actually really good about it, despite the damage. Was just glad that my stupidity didn’t injure me much at all.

            Thankfully, insurance covered everything. Phew.

            Cops were so sorry for me (I was quite remorseful) that I didn’t even get Neg Driving (I should have).

          • Exactly. Anglos on country roads kill more wildlife, tourists & themselves than any migrant group

          • Ah yes, the old “I know white people that do it so that makes it acceptable” self-flagellation schtick to appear more moral and deflect away from the issue. Cringe.

            Why do we have to import more of it is the question that never gets answered.

          • No, Kriss. That’s a pretend, straw-man version of what I’m saying, Please don’t invoke it.

            At a glance, I just didn’t think that raising the driver’s people group was particularly relevant.

            Instead, it would have been much higher quality to just invoke that an idiot doing burnouts ran into a shop. That’s the story. Not that he was Arab, etc. Was he doing something particularly Arabic? No. So, who cares?

            If people want to have a problem with immigrants, they need to just find better reasons – the one raised isn’t a good one.

          • More immigration > more immigrants on the road > more car accidents > greater affect on non-migrants.
            (In this case perhaps not the shop owner – also a migrant, but on all those that must attend and get involved.. i.e. the police).
            The fact the driver almost certainly does not have a multiple generational connection to the nation entirely relevant.
            The fact “Anglos do the same thing” entirely irrelevant.

          • Still a low-quality point of view vs other things to take from such a story?

            Is your point valid? Yeah.

            Is it good quality vs invoking ‘idiot’? No.

            The ability to read something in, or extract a valid but poor point, does not make it good.

            Good quality, or go home.

          • My cousin’s friend was too young to drive. I was 18 he was 16. He thought he’d get his dad’s car out and street race my car. We were driving around Albert Park and he was sliding this 4 lite Ford around quite well until he smashed the axel into a kerb and bent the whole assembly. I can’t imagine how that conversation went down with dad.. lol.. dumb things we do when young.

        • reusachtigeMEMBER

          Was he bogan scum? (I hate nothing more than useless wh1te people especially the fat ch1ck ones – they are vile)

      • Untersberg Mountain

        Not if we are considering the benefits to Australia of a generous migration program!

      • drsmithyMEMBER

        Isn’t the man’s ancestry fairly irrelevant in this case?

        Wow. How long have you been reading MB now ?

        You should know ancestry is acutely relevant to bad behaviour unless it’s white ancestry. Anything an immigrant does wrong is because they’re an immigrant (unless they’re white). That’s the underlying message of the last 4-5 years worth of “v1br4nts”-type comments.

    • reusachtigeMEMBER

      Are you sure the driver wasn’t a n1gger? That would surely increase the impact of your hate.

  1. A few virus and vaccine matters to consider …

    Why We Might Not Need A Vaccine for COVID-19 | This Morning UK … YouTube

    https://www.youtube.com/watch?v=EQ-ATT_Cd6M

    Leading oncologist Professor Karol Sikora raised eyebrows this week when he said a coronavirus vaccine might not be needed. Making the comments on Twitter, the Professor said Covid-19 could ‘peter out’ before a much-awaited vaccine arrives. But is he right? And what do the new testing rules mean for us?
    .
    .
    Scientist says a coronavirus vaccine in just 12 months is ‘fake news’ | 60 Minutes Australia … YouTube

    https://www.youtube.com/watch?v=VFyKkopIbNY

    Right now, there’s one thing all eight billion people on earth are wishing for: A vaccine for COVID-19. Political leaders everywhere, sweating on getting us to the other side of the pandemic, boldly promise it’ll happen within 12 to 18 months. But why should they be so optimistic? After all, vaccines normally take decades to formulate and manufacture, and quite often success never comes. As Liam Bartlett finds out, some scientists say talk of a coronavirus vaccine is not only raising false hope, it’s fake news.

    • Jumping jack flash

      Im sure there will be a vaccine but it will be similar to and no better than the vaccine for the regular flu. 40 – 60% effective. At best.

      Have the shot, get exposed, flip a coin.

      Meanwhile you get goodness knows what put into your body and someone gets rich from it.

  2. darklydrawlMEMBER

    For those who want to know more about Betashares GGOV (Ulta long Government Bond ETF) they have a free webinar via this link. I have done a few of these and they are informative and you can ask questions et al (and not ‘salesy’ at all which is good). Anyway, might be of interest to some on here.
    https://go.betashares.com.au/webinar_registration_ggov_retail.html

    For more on GGOV:
    https://www.betashares.com.au/fund/betashares-global-government-bond-20-year-etf-currency-hedged/

      • darklydrawlMEMBER

        I would imagine liquidity and spead would be better. Better diversification too. If you hop on the webinar you can ask them questions in the text box. If they don’t answer it on the day they usually get back to you via email within a few days with the answer (see my OOO post below). I find the webinars are usually worth the 30 mins of my time.

    • Thanks Darkly.nlooks really interesting, particularly if you (like me) think we may be headed for negative interest rates. That said, if interest rates start to rise you’d wanna jump out toot sweet!

      • darklydrawlMEMBER

        You should ask them that exact question. “What happens to the ETF’s value if interest rates rise?”

    • darklydrawlMEMBER

      Not sure what to think of Ms Irvine. She seems to swap her tune around from week to week.

      • migtronixMEMBER

        She’s Gavin 😂

        “As a recent convert from renter to home owner, I confess I do feel that sting of lost opportunity. Did the property price party end just as I got in the door?

        But then I wonder: is that such a bad thing? Do we really want to go back to normal on housing? Back to turbocharged home price gains that outstrip wages growth and put home ownership beyond the reach of many younger Australians?”

        • If I was her I’d be stuck indoors all day playing with my boobs. I can assure you I’m not her.

        • Jumping jack flash

          Nah, we want to do the Australian thing and take on crippling amounts of nonproductive debt and repay them plus interest over the next 30 years, for the sole purpose of making someone else instantly rich beyond their wildest dreams, and then hope for the duration that when the time comes, someone else will be waiting to do the same for us…

          and if they’re not then indignantly jump up and down and shout at the government to do something about it.

  3. darklydrawlMEMBER

    Whist on Betashare ETFs, I asked about OOO (their Oil ETF) and what happens if the oil price is negative in the futures market . Whilst they couldn’t answer the question during the webinar last week, they did get back to me today via email.

    ———————————————
    Thank you for attending our recent webinar. Unfortunately, we didn’t get the chance to answer your question:
    “Recently the oil futures went negative – the OOO fund adjusted the futures it is based on from one month to three months (if I understood the comms correctly). What happens to the ETF if all forward contracts go negative for an extended period?”

    That is correct, the Crude Oil ETF (OOO) has temporarily moved it’s exposure from one to three month contracts If the underlying contracts (at the moment, these are the October 2020 contracts) went to $0.00, the value of the fund would likely reach $0.00 and be closed, with permanent loss of investors capital. It is worth noting that even if the underlying contracts were to go negative in price, it is physically impossible for the fund to have a negative unit price. Investors cannot lose more than their initial investment.
    Sincerely,

    ————————————-
    So that is the answer. It can got to zero with the loss of investor funds – although unlike some products you cannot lose more than your original investment. Ensure you your homework with this one before investing.

    • Wasn’t there a leveraged bear Oil index recently? It went up 3x when oil went down. I wonder what happens to that one.

      • darklydrawlMEMBER

        Not familiar with that one, but there are many options out there. Some of them would have gone to zero though.

    • House exchanged today

      Agent just dropped off veuve. Had already cracked Mumm

      • Well done! Now leave 2 sealed envelopes in an inconspicuous place and label them Mortgage Exit Plan A and Plan B. Plan A contains the obvious “Find a greater fool” and Plan B contains “Give it away” ….

        • Plan A convince someone to sell before July – hope they read MB (ie know what’s going down)
          Plan B rent and be cashed up

  4. migtronixMEMBER

    Been raining pretty much all day. Oh how I’d kill for a Parma at the pub sitting by the fireplace…

  5. Any Brisbane shut ins know what the deal is with shopping arcade above Fortitude Valley station? As I was commuting through the other day I popped upstairs for a light repast to find only KFC and Curryman open. Foodworks and bottleshop open as well but everything else closed and heaps of shop refitting happening. Was this a planned closure or covid related?

    Got a $6 katsu chicken curry with rice and pickles when I was originally planning on some suspect HJ’s so it worked out for the best.

    • Prob doing fit outs like Indooroopilly is..they have ripped up all the chairs in the food court.

      Jobkeeper is the only thing saving this place…for now. I resent paying for extras for jobseeker though..no incentive to go to work now for those in it. And there is work. See all the south Americans and injuns doing delivery uber eats

  6. happy valleyMEMBER

    “– or is this all she’s got?”

    Nah, first sign of weakness and Jerome P will be out there hoovering up everything. After all, he has to outdo Kamikaze Kuroda in terms of owning a stock and every other market. Come on Jerome, The Donald will love ya.

    • This.

      Deflation might be coming (I think!), but the world’s Feds are going to try to preserve the status quo, even if it shouldn’t be preserved.

      “Whatever it takes” – even if they can’t win, they will try…

      • happy valleyMEMBER

        Yep, this may be the ultimate (possibly?) kicking the can down the road and now that they’ve probably found the longest road known to mankind, they’ll never reach the end of that one.

      • Jumping jack flash

        Deflation is already here. There isnt enough productive output to repay the debt plus interest and still have a functioning economy. We were barely scaping by before the virus, only due to slave labour. No chance now even with billions in wage subsidies.

    • The Traveling Wilbur

      Yeah. Not that. He’s not in a position for that right now, she’s not feeling the best and wouldn’t be amused.

  7. I’d like to inform you all that the Australian economy has now been saved and house prices will resume their to the moon trajectory after Gavin fckd it up. I decided to embrace my status as a dole bludger for the first time today and I went to the beach at lunch (first time I left the property in a car in nearly 3 months for something non-essential). On my way I stopped off at the take away joint and ended my 2 month long spending strike. Yes that’s right, my first discretionary spending in 2 months cost me a total of $9.66 for a piece of flake and two divine potato cakes. I’m not sure what the fuel would have cost. I have no plans to spend any more money atm, my outgoings are less than $50 a month as I am successfully parasiting off the olds. All my money is going towards the house deposit so I can justify this by saying I am doing what I am supposed to do. I am doing my bit to contribute to plummeting money velocity. I want lower house prices and I didn’t get jobkeeper so that’s my two fingers up to Joshie, SFM and everyone who benefited from the people ponzi

    When I thought I was going to get Jobkeeper I planned on ‘doing the right thing’ and spending some it but now my attitude is yeah nah, scr3w you

      • The social distancing at the takeaway place was perfect. On the beach not so much. It was Westernport Bay so not many people. I walked off in the direction of no people and was wearing tall uggs (so not wanting to get caught by a wave). When I turned back I had to pass 2 couples and one other person. I was closest to the water and it was just past high tide. None of the walkers in the opposite direction made any move to give me any space so I had to walk right up to the top of the beach to ensure I had what I considered a safe distance from them (otherwise we would have passed within a metre, maybe they were ok with that but I was not). I was rather annoyed at having to do that 3 times. They were all anglo b**mers

        • You should have stopped and have a coughing fit at them. That would put the fear of god in them… 🤣

          • I’m more a Julie Bishop death stare type actually, plus I do a really mean eye roll (unfortunately frequently in my customer facing service jobs in my previous life as an employed taxpaying lifter, I’m sure I’ve lost eye roll rights as a non human leaner now, sadly)

          • Actually tax payers are not lifters. Only little people pay tax. Important people avoid them.

    • Good luck saving for your deposit Popcod. I hope you get a nice home at a good discount to today’s inflated prices. Regional prices don’t dip (or rise) as much as city prices but sounds like there are some vendors willing to negotiate discounts away from the coast at least.

      • Thank you. I’ve got some deep thinking to do. Potential compromised immune system, vaccines or no, can I live without work outside the home, how could I earn an income from home, being single, managing a house/garden/maybe 2 acres with chronic fatigue syndrome etc. Need to assess the general economy, local economies and community, will I fit in??? So much to think about! But I remain optimistic I’ll buy something I like eventually (please dog without a mortgage) and I can start the next chapter of my life 😊

    • Bah, I splurged a grand total of $5.40 on a pepper-steak pie in a place which shall remain unnamed… it was mildly acceptable though it could have done with double the amount of meat.

      It reinforced my resolve to spend less than 3/16 of a FA on anything the “economy” needs…

      • haroldusMEMBER

        I’m planning on dropping 250 on a half soon. This is because I am a good aussie.

        • Hey Harold…I just picked up a Boss OD-1X overdrive pedal. I have a dozen overdrives most of which I built myself…Klon, Guvnor, Timmy etc and this thing is sublime. Growling, crunchy low end, singing lead and the definition between notes in chords is unbelievable.

          Do yourself a favour and check one out at your local guitar shop.

          • haroldusMEMBER

            I’m having a think.

            About amp channels and pedals.

            I think it is better to go for channels when using good amps, rather than pedals. For me, amps have always been easier.

            But small gigs, little 10w amps. They don’t have channels much.

            So, you need to get the clean sound on the amp, then your basic crunch on top of that, and then a boost for the lead.

            I’ll check the BOSS out, because teh pedals for crunch were emulated.

            Maybe I should try decent clean tone, plus straight OD/DS pedals with no modelling.

    • arthritic kneeMEMBER

      Is it just me or do others find the musings of Poppy refreshing around here? Not trying to bend the world to her train of thought, just bites of reality (a la Staggsy) that are honest and interesting. Real people doing real stuff.

    • I was looking at a commercial investment property today. A warehouse to store my car projects in. Once I sign the dotted line. I’m sure it will cause the next rapture. 😃

    • Jumping jack flash

      This!

      You do understand it is Unaustralian though? Maybe the house deposit is enough for redemption.

  8. Who remembers Auction Squad with Joanna Griggs from the early 2000s?
    Channel 7TWO sometimes plays reruns in the day and since I have no job… Watched the other day. Was interesting. Shows a more realistic property market. Detached house in the flight path suburb of Marrickville.
    https://www.realestate.com.au/property/20-robert-st-marrickville-nsw-2204
    This sold for $672,500 in October 2003 at auction on the show. Still seems pricey for Marrickville…Now valued at $2,000,000. 2 bed semis have sold for $1.7m in the past year in Marrickville… now its just NUTS mate!

  9. SweeperMEMBER

    Ardern’s call for a 4 day week makes a lot of sense provided workers get a share of the increased productivity. ie. don’t see 20% pay cuts. Higher productivity, more time to spend money, less SL etc…. everyone’s a winner.

    • Ugh!

      What’s the point of more gas if it’s not cheap?

      Even having more supply won’t help if:

      – it was extracted expensively, and
      – the market is run by a government-backed cartel.

      And…for what? We don’t even have much industry.

      Solar and wind are cheaper anyway…just work on storage of various storage, of which there are many options.

  10. What do other MBers think of:

    Titomic (ASX:TTT).

    https://www.titomic.com/

    Additive-based metal manufacturing; think 3D printing of metal and composite items.

    This seems like the future to me.

    Though, their share price has had a rough ride recently…might be cheap now, or soon?

    I will keep an eye on them for “the” reflation (whenever that is…).

    Hope they aren’t hoping to make many aircraft components in the near future…!

    • darklydrawlMEMBER

      The share price has been on a wild ride. My biggest concern is it might be easier / cheaper just to send the design to somewhere in asia and get the finished product back. Also consider https://www.auroralabs3d.com/ (ASX : A3D) if you are interested in this space. Disclaimer: I own TTT stock – was circa 100% up but now currently in the red – hint – I could use some buyers!! get in there tomorrow BW – don’t miss out.

      I ended up putting the most coin into RBTZ (Betashares AI and Robotic ETF). This one is up 10% still and remains fairly solid.

    • I’ve had my eye on them for a while and bought a small amt in March. So I’m up atm but I expect the prove to drift lower, and drop in a general market sell off. They’re fully funded for 2 years and closed a $25m aud contact in march with a U.S. defence contractor which gave me the courage to buy. I would consider one more small purchase in a general market downturn for a medium term hold. They now have metal printing in the us which I think is good given the direction the world is going in. I don’t think they’ll shoot the lights out in the short term but if the company is successful they could do well medium to long term. It looks like they’ve de risked thebusiness a fair bit in the past 12 months but time will tell

      • just had a quick look at their Income Statement (from Reuters) and most of their expenses are from Sales and General Admin.. Hope this is reporting error as last FY their highest expense was R&D which would have made lot of sense.

        • I’ll check that out. I hadn’t noticed that, I thought r and d was their largest expense. My understanding is the type of contacts they’re going after usually have long lead time but given that they’ve apparently got world leading tech r and d should still be their main expense I’d have thought

    • I will do some research on the weekend if I get a chance. What can you tell us about TTT? Are they competitive, do they have any unique IP that separates them from the crowd etc.. Just some highlights.. you got me interested.

      • Popcorn seems to be the one in the know here. I just heard about them in an industry newsletter I receive, and considered taking a spare change punt.

  11. The Traveling Wilbur

    Look about and find myself appalled.
    I thought it was just me.
    Bumping passers-by reminds me of others.
    A vacant glance a distant stare.
    Distrust and anxiety linger on the surface.
    Passing idly by touching the thin veneer
    Separating self-interest and empathy.
    A sea of lookalikes
    Like a thousand empty shop windows
    Reflecting back an empty vessel.
    Emptied. Reused. Recycled.
    Awaiting a better purpose.
    Free of the bullsiht.

    Apologies to whomever here wrote the words in the first two lines. And thanks for the inspiration.

  12. took a gamble and almost sold all shares. Only hold ALK (reduced by over half) and very little of RWD. Now I am hoping for price of gold to fall about $50 – $100 and DOW to fall about 2k points between now and mid July. Preferably these falls to happen inside one week.

    • darklydrawlMEMBER

      Bold move Niko. Well done. I feel the S&P and ASX will hit a (giant wall of sh!tty) reality at some point. Not sure when that will be though :-/

    • Gutsy, and admirable.

      I sold half my gold stocks today, as well as more USD.

      Held some AUD, and rotated into more risky, but diversified, positions….

      I have a gut feel that markets will break through their various, simultaneous resistances soon.

      We will see.

      • how do you get exposure to USDs? I actually want to buy few as my view is AUD is about to crash due to geopolitics.

      • I still think we’re going to get another leg down in the bear market but I think it may take longer to arrive than many expect. However if it doesn’t arrive in the next few month’s I’m happy to change my mind on that and accept the centralbanks won. I’m trying not to be high conviction either way atm

          • darklydrawlMEMBER

            Having some coin stored outside of the monetary system entirely seems prudent. I guess it is similar idea to the folks who hold metals rather than money.

    • You guys are too bearish. The fed will just do more money printing. More QE. Cash won’t hold value. I’m holding Blue Chip companies that have remote workers and productivity. That, Gold, Stocks, BTC (maybe some), collectibles, like vintage cars and real estate (low leverage) is how I intend to ride this out.

    • Options traders don’t necessarily love it. Depends if their book in long or short.