A nice little summary from Credit Suisse. Sentiment is not everything. For me, the most important indicator is that credit spreads lead the bounce. — We still have a cautious view of equities. We have the following concerns: Recession risk remains very high. We believe that US GDP needs to slow to 1%topush up the
The global recession is underway and it’s coming to an economic zone near you. Goldman’s financial conditions indexes are pointing the way. Global FCI has eased thanks to the bear market rally but remains tight: Sadly for it, the US is far too loose. Europe is tighter so the ECB is not going to get
Here’s what the Lunatic RBA said in Minutes this week: Turning to domestic economic conditions, members observed that price pressures were intensifying and there was upward pressure on wages. Activity and conditions in the labour market had been resilient in the face of global and domestic supply shocks, and strong underlying momentum was expected to
The ferrous complex was pounded on May 18, 2021: Rebar futures are breaking down: With the Chinese property bust getting worse by the day, and supply set to rebound materially, the downside risk is obvious. But, I still think it will probably take a broader commodity capitulation to bring sanity back to these markets. The
Yes, it is a non-stop nightmare for the Chinese property market as “houses are for living in, not speculation”. The great adjustment has so far been confined largely to construction volumes over prices but no more! Late yesterday China released its latest 70-city guide to prices and kapow! April price falls were modest at -0.2%
Everything but DXY, that is: AUD was pulverised: Oil fell: Metals too: Big miners reversed: EM stocks gave way: Global junk is screaming RECESSION AHEAD: The Treasury curve was steamrolled: And stocks were smashed: Westpac has the wrap: Event Wrap US housing starts in April remained elevated, at an annualised 1.724m (est. 1.756m, prior 1.728m revised
Westpac with the note. What’s “prudent” about tightening into tradable inflation, stagnant wages, and a global bust, Bill? — Recently Westpac revised down its growth forecast for 2022 from 5.5% to 4.5%. That reflected the sharp increase in the cost of living as headline inflation lifted by 5.1% in the year to March 2022, including
BofA fundie survey via ZH. — One month after the April Fund Manager Survey was downright “apocalyptic” with the majority seeing a bear market and stagflation – yet nobody rushing to sell – and with optimism plunging to levels right before Lehman, today Bank of America published the latest, May FMS (available to pro subscribers in the usual place)
Goldman with the note. The more we rally here the more this tightening is undone. Moreover, US growth needs to fall below potential if inflation is to fall. I am no inflationista but still think more will be required in the US. Our US Financial Conditions Index (FCI) has tightened by 80bp since Fed officials
What kind of hogwash is this leading the AFR? The $500 billion a year economic benefit the oil and gas industry provides to Australia could be at risk if an incoming government is taken over by “misguided” politics, the new chairman of the industry lobby group has warned. “It would be an awful shame to
The ferrous complex was soft on May 17, 2022 despite wider risk on: No news or research of note today. It remains my view that a global glut of iron ore is being managed by a hoarding impulse in miners and traders. This will not resolve until the broader commodity mania breaks down. Correlation is
OMICRON is going precisely nowhere. Sinocism: Shanghai Says It Has Stopped Community Spread of Covid – Caixin Shanghai announced Tuesday that it has achieved the goal of no community spread in all of its 16 districts, a key milestone in its over two-month battle with Covid that could embolden authorities to further ease restrictions. The
An open letter from 31 judges today demands a new parliamentary integrity body: Damn right. The Coalition and Scott Morrison in particular have been a disaster for corruption: But, hey, the land of the Rum Corps loves a bit graft.
There is always a late swing to the incumbent government as undecided voters stick with the devil they know. Today it arrives. Resolve: When voters were asked to name the parties that would receive their preferences, the results showed Labor held a lead of 51 to 49 per cent in two-party terms, a significant narrowing
It would probably be more accurate to say that the DXY rocket is taking a breather: CNY bounced: The rest writes itself. AUD, commodities and EM up: But credit is lagging, a bad sign: As yields leap: Stocks took off anyway: Westpac has the wrap: Event Wrap US retail sales in April rose 0.9%m/m (estimate +1.0%m/m),
The ferrous complex firm on May 16, 2022. Spot did not update: Yesterday’s China data has left me scratching my head. The numbers were disastrous across the board. With the exception of steel output which was only down 5%: Versus cement down 19%: I can only surmise that steel is stronger owing to accumulating inventories.
JPM Marko Kolanovic has been wrong all year but here’s his latest bullish missive: Cross-asset Strategy: Equities stand to recover if a recession doesn’t come through, given already substantial multiple de-rating, reduced positioning and downbeat sentiment. We expect EM equities to outperform on healthy earnings and a lower equity risk premium, and remain OW China
Chinese April data was out late yesterday and crashed. Pantheon: China: Industrial production growth plummeted to -2.9% y/y in April, after growing 5.0% in March. Consensus was 0.5%. China: Retail sales growth extended its collapse, at -11.1% y/y in April, from -3.5% in March. Consensus was -6.6%. China: Fixed asset investment growth slowed to 6.8%
The DXY rocket eased overnight: AUD took the opportunity to bounce: CNY survived its day of disastrous data: Gold help us all if oil breaks out: Metals were mixed: Miners rose: EM stocks are sick: And junk is still pointing everything down: The Treasury curve flattened: But stocks fell: Westpac has the wrap: Event Wrap
Anthony Albanese is upset that Labor was not consulted about AUKUS until 24 hours before it was announced even though the Biden administration demanded bipartisan support given the long horizons for the deal: Prime Minister Scott Morrison has denied that Australia broke with the Biden Administration when it decided not to consult Labor about its
Calculated Risk does the analysis. CR was superb in the lead-up to the GFC (and ever since). Bill McBride is neither a rusted-on bull nor bear. If he is right then the Fed has more work to do. — It is clear that over the next year house price growth will slow from the torrid
The marvelous constituents of Goldstein are on the verge of one of the great acts of tough love in Australian political history: Leaked internal Liberal Party polling has confirmed the worst fears for Treasurer Josh Frydenberg and his high-profile colleague Tim Wilson, just days before they face voters. Obtained exclusively by 10 News First, the
The smartest guys in the room that have survived the last six months best are more not less bearish. BofA’s Michael Hartnett, who has been the maestro conductor of this crash, leads us off: The Way We Were: “Millennials are quitting jobs to become crypto day traders”, USAToday, Aug 12th 2021. The Biggest Picture: crash
The ferrous complex was mixed on May 13, 2022: Mysteel indexes are still very weak with steel overproduction very clear: Some of this will be export-driven though wider measures of that are also still weak. Most of it is just producing steel to keep idle hands busy so they don’t tear Beijing to pieces. CISA
Chinese COVID lockdowns are relentless: The economic fallout is brutal: The property market is a mess: On the weekend we also got April credit data. Much of what I read tried to put a brave face on it but the numbers are a disaster. Total social financing came in at a paltry 910bn yuan, less
