Something of a slow dawn is going on at Morgan Stanley today: While considering potential metal and bulk commodity price direction the rest of the year, we found it useful to look through the lens of the increasingly divergent coal markets. Global seaborne metallurgical and thermal coal markets are in oversupply. According to our estimates,
The Australian Bureau of Statistics has released its April Labour Force survey and news is not much: Employment increased 14,200 (0.1%) to 11,572,900. Full-time employment increased 14,200 to 8,045,100 and part-time employment was unchanged. Unemployment decreased 400 to 713,400. The number of unemployed persons looking for full-time work increased 8,700 to 519,500 and the number
Here’s the latest in our series of pics of the major LNG projects. From Santos’ GLNG, that is one humongous fridge under construction to freeze the gas: Fit a tinnie or two in thar!
From some dude on Twitter, comes a chart showing that Karl Marx was not all wrong about capitalism and competition as 37 banks became just four in 20 years:
Credit Suisse offers a good global PMI roundup today that I agree with: The April Global manufacturing PMI edged down to 52.0 from 52.1. After three consecutive monthly declines, the index is now at its lowest level since August last year. It nonetheless remains slightly above its long-term average of 51.6, suggesting that the overall
From Credit Suisse: Event: NAB reported (company defined) cash earnings of $3,150mn (up 9% on $2,903mn 1H13) which was in line with the $3,158mn Bloomberg consensus but 2% short of our $3,216mn estimate. Interim DPS of $0.99 (up 6% on $0.93 pcp) was in line with the Bloomberg consensus but $0.04 short of our estimate.
Its’s a mad, mad world…
The Australian economy is unique. Perhaps its closest peer is Chile or Norway (though they are better managed), not Canada. It is an economy that runs on commodity income that is leveraged up through offshore borrowing and blown on houses. This wealth supports the bloated and over-priced services sector from where most of the economic
Jeremy Grantham is one of the world’s great investors. One of those rare birds that sees the system for the bubble machine that it is but can still play successfully within it. In his latest quarterly newsletter, Grantham (and his deputy Edward Chancellor) devotes considerable energy to the question of what is a bubble, how
Here are the iron ore charts for May 7, 2014: As I write this I’m skipping through a field of daisies on a bright Spring day. Paper markets are tumbling like lazy drips of sweet honey from the dewy rim of a golden chalice. 12 month swaps have cracked the carapace of Winter ice and
Citi’s Oscar Choi and Marco Sze have produced this startling assessment of the Chinese property market: A Powerful Loosening “Combo” now a MUST to Prevent a “Demand Cliff”: We believe the physical market has reached a critical point, with potential for broader- based demand shrinkage across different product-ends. Beside the recurring factors like tight credit, HPR
Cross posted from Investing in Chinese Stocks. Flat growth in the trust industry is contractionary from the late 2013 peak. If credit elsewhere picks up it can offset the decline, but it also needs to flow to the borrowers served by the trust market. Evidence from prior months points to a more generalized slowdown in
Find below a new post from Martin North’s DFA blog in which he lays out recent research showing a lot of concern among investors about the Budget. My own view of this is that there is a certain amount of “sticker shock” at work in these things and unless the Budget directly targets investors via
Looks like the RBA’s growth plan for the next three years has found an unwanted enemy. From Moody’s today: Moody’s Investors Service says that the recent appreciation in Australian house prices is not yet a concern for Australian banks but, if it persists at the current pace, could become credit negative within 12 months. “Australian
Here’s the Janet Yellen’s overnight Capitol testimony in full with a few highlights in bold. In short, it’s stimulus as she goes. Chair Janet L. Yellen The Economic Outlook Before the Joint Economic Committee, U.S. Congress, Washington, D.C. May 7, 2014 Chairman Brady, Vice Chair Klobuchar, and other members of the Committee, I appreciate this
The SMH Max Mason has cashed in on the increasing practice at Fairfax (which has today cut another 80 employees) of writing a glowing report on a junket: …While a live price is still a few years off, the increased use of iron ore derivatives allows trades to come through more frequently in a more liquid
From the Department of Employment and Education today: The Department of Employment’s Monthly Leading Indicator of Employment (the Indicator) has fallen for the seventh consecutive month in May 2014. This signals that employment is likely to grow more slowly than its upwardly revised long-term trend rate of 1.2 per cent per annum over coming
Cross-posted from The Conversation. In the English court during the 15th and 16th centuries boys were engaged to cop the punishments of young princes. These young people were referred to as “whipping boys”. When the young crown prince misbehaved, the whipping boy was beaten and made to suffer. Such practice seems fanciful now. However, the idea
The Canberra Times is carrying a story striking back at Joe Hockey’s utterly offensive recent comments about wind farms: The Bungendore farmer hosting wind turbines that Joe Hockey says are utterly offensive is challenging the Treasurer to a bull fight. Luke Osborne says George, his prized Angus bull, who has lived peacefully under the turbines for years,
Jeez, all good news today, not. The HSBC China services PMI is out for April and fell away at 51.4 versus 51.9 in March. HSBC said: The composite PMI managed a small gain: Goin’ nowhere fast.
It seems a bit harsh to pick on iron ore equities today given the overall market is taking a pasting but here are the updates anyway. For FMG: And Rio: Both are down today and FMG has passed the 20% bear market correction threshold that the MSM adores, but the gap between the iron ore
Longer term readers may recall that in 2011/12, a string of Chinese developers faced a deteriorating feedback loop of falling sales and rising debt costs from loan sharks that threatened to dump stock onto Chinese housing markets and crash prices. Of course, authorities relented then and allowed a new cycle to bloom but the problem
Hedge fund star David Einhorn gave a terrific interview to Bloomberg last night on tech bubbles, markets and a “frightening” Ben Bernanke. Not to be missed!
The national construction industry continued to decline in April, at a rate of contraction that was broadly unchanged from the previous month. The seasonally adjusted Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) registered 45.9 points in April, just 0.3 points below the reading in March. This is the fourth consecutive
Here are the iron ore charts for May 6, 2014: Physical is becalmed with the BDI capesize component up shy of 2%. Paper markets are becalmed with rebar futures flat. We are waiting for the wind to blow either way, but it still seems likely to me to blow further into trouble. From Reuters: “There’s
