Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

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?

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  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/

      • 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?”

  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.

  4. 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

  5. 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.

  6. 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

    • 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…

    • 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. 😃

  7. 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!

  8. 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.

  9. 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.

  10. 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.

  11. 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.

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