Deus Forex Machina

0

Macro Morning: Aussie strong, earnings weak

Thin rangy trade is the best way to characterise last nights price action as the last day of October was not the positive day that many hoped it would be. Data and earnings reinforced once again to markets what a weak economic outlook the globe currently faces. So the early stock and euro strength that Asia

5

Macro Morning: Storm of the century

When you have been in markets as long as I have you learn to take hyperbole with a grain of salt but when you hear crusty old meteorologists calling Hurricane Sandy and its convergence with another weather system a once in a life time storm you take notice. Sandy has already disrupted trade on the

5

Macro Morning: Frankenstorm

One week out from the US Presidential Election, a Frankenstorm bearing down on the east coast and in particular New York, more corporate earnings and non-farm payrolls on Friday night and this could be an interesting week for markets. Looking back on Friday we see that the US GDP print of +2% annualised was better

52

Weekend Links – October 27

Global Macro: Time to reduce equity exposure – Barry Ritholtz, Big Picture. We have been pushing this idea in Macro Investor recently The Size of Major Bull markets – Ritholtz again Transcript of 1944 Bretton Woods conference discovered – NY Times Super Rich just loving property – Business Insider The Reformed Broker having a rant

0

Macro Morning: UK bounce

Overnight the UK’s office of national statistics released Q3 GDP figures showing a rise of 1% for Q3 which was much better than the 0.6% expected and a nice reversal from the 0.4% fall in GDP reported for Q2.  Year on year the growth rate is flat. After 3 quarters of contraction, the news that

5

Macro Morning: Earnings crunch

I’ve been writing for a while now about the reality of poor earnings and revenues ultimately undermining recent elevated valuations in the stock market and last night reality bit hard across Europe and in the US as stock markets, crude, gold and copper all swooned. Du Pont and 3M were the headline acts in the

1

Macro Morning: Late rally

Stock markets are under pressure again this morning and back toward the bottom of recent ranges as concerns of the global economy remain top of mind. Trade data from Japan yesterday showing that exports fell 10.3% in September was worse than the punditry’s already jaundiced expectations of a fall of 9.9%. But it seems to

0

Macro Morning: 1987 redux

Markets celebrated the 25th anniversary of the 1987 stock market crash with a fall Friday. Key to the disquiet is the earnings reports and outlook which are being released in the US at the moment. Friday’s close saw the Dow off more than 200 points and 1.5% while the S&P 500 fell 1.7% to 1433.

29

Weekend Links October 20

Global Macro: Markets are rigged in favour of HFT – Reuters The Economist on this weeks Economics Nobel Prize Trading Secrets from Jesse Livermore – Traders Journal ht abnormal returns North America: Firm dollar weak Europe hit US companies – Reuters McDonalds profits fall on strong  dollar – BBC the US may not have crashed but it is

2

Macro Morning: Google weighs

Google had a shocker overnight releasing its earnings report early and by mistake but elsewhere it was a night of consolidation in the US as markets pulled back from its recent run. Europe did a little better and Italy managed to get a huge bond auction away which is clearly a positive. Italy sold € 18

2

Macro Morning: Euro push

Spain was the fulcrum again overnight as the market reacted to Moodys decision to leave the embattled nation with an investment grade credit rating. Markets appear also to have been buoyed by the Spanish glacial slide toward asking for a bailout. Whereas the euro reacted to the previous night it was the turn of the Spanish

0

Macro Morning: Bulls

Spain and earnings ignited a good night for stocks across both Europe and the US. Spain was the catalyst for the kick off early in the European day with reports that the embattled nation is going to ask for access to an emergency credit line from the ESM. This is a kind of bailout light

1

Macro Morning: Support holds

Stocks traded lower in Asia yesterday morning giving the S&P 500 a chance to test the important trend line support highlighted yesterday and then in European and US trade we saw a bounce as support held. That’s good news for the bulls, not even the bulls really, just the overall shape of the market because

0

Macro Morning: Big week for stocks

It is a big week for stocks and by extension risk assets – this is particularly so when you have a look at the technical set up in the S&P 500 on both the daily and weekly charts. Earnings season continues and the market seems a little non-plussed both with what it’s seen so far

44

Weekend Links October 13

Global Macro: IMF Blanchard says healing from crisis could take decades – WSJ Ambrose Evans Pritchard is bullish – kidding right? Reckons the US is rebounding and IMF wrong. UK Telegraph World’s first 3D guitar printed – Businessweek. Michael is really keen on this as the next technological revolution we just need to figure out

0

Macro Morning: Support

Stocks had a better day in Europe today for an irrational reason but a better day nonetheless. The newswires are reporting that the main reason was a big drop in US jobless claims but also because the S&P downgrade of Spain to BBB- actually pushes Spain closer to asking for a bailout and as such

2

Macro Morning: Risk shift

Following on from the weakness the previous day and a very interesting snub from the boss of the PBOC who decided not to attend the IMF meeting in Tokyo, markets were in a funk again last night. Greece seems to be part of the problem once again with a big 24 hour strike being called

0

Macro Morning: IMF trigger

Following on from the World Bank’s downgrade of East Asian growth, the IMF yesterday cut its 2012 forecast for global growth from 3.5% to 3.3%, 2013 was also cut from 3.9% to 3.6%. As a consequence equities were generally lower across the markets and the US dollar rose. Importantly the IMF said there was a

2

Macro Morning: Earnings jitters

The World Bank downgraded its outlook for East Asia yesterday and Europe’s markets played catch up to the weaker close on Wall Street late Friday as markets drifted lower overnight. Equally European traders clearly remain a little concerned about Spain and the outlook but on a day where the Eurozone formally launched its bail out

3

Macro Morning: Earnings to test rally

Everyone is talking about the US unemployment rate which dropped to 7.8% last month, but the equity markets took a more sober view and the candlestick from Friday’s trade on the S&P 500 is on the ordinary side of ordinary. Looking at the data, non-farm payrolls wasn’t that flash rising just 114,000 in line with

20

Australian dollar on borrowed time

Find below an interesting video and a great summary of the current situation from Bloomberg asking if the Australian dollar is on borrowed time.   I agree with the points being made in the clip and have thought for some time that the worm has turned for the Aussie as perceptions about Australia and the

50

Weekend Links – October 6th

Global Macro: Investor trauma and the recency effect – Abnormal Returns Generational Warfare – National Journal Commodity markets have been financialised – BI North America: UE in US falls to 4 year low – Businessweek Good jobs report was bad – BI Jack Welch genuinely thinks the jobs data last night was tricked up –

0

Macro Morning: Boing!

The dealer played the risk-on card in the past 24 hours but the bullish bounce in Asia passed Europe by even thoughoil, the US dollar, gold and the Australian dollar reacted strongly to the improved sentiment. The rally started in Asia after the Presidential debate yesterday and some analysis was that with Romney winning the

2

Macro Morning: Slippery oil

Stocks were mixed overnight as the market continues to wait for non-farm payrolls on Friday. Key points were the big drop in oil, the Turkish retaliatory strike on Syria and the protests in Iran over the sharp drop in the value of the Iranian rial which has plunged something like 30% over the past week

1

Macro Morning: No Rajoy

Stocks were lower overnight apparently as some concerns about the coming earnings season and exactly what game Spain is playing weighed. Reuters reported: Spain will not make a bailout request right away and the country’s powerful regions have reiterated their commitment to meeting budget targets, Prime Minister Mariano Rajoy said Tuesday. At a press conference following

1

Macro Morning: ISM surprise

The see saw pattern of trade continued last night with Europe on a tear early and the rally continued even though the data on balance stills speaks of economic weakness. The US markets joined the party but were nowhere near as strong at the close. The last 24 hours saw the release of a host

0

Macro Morning: Bad Data

Turkey shooting season continued Friday with markets deciding it was time for a bit of weakness in equities and some US dollar strength. For certain the negativity made sense when  you look not just at the print from the Chicago PMI at 49.7, well below the 53 printed previously, the lowest level in 3 years

11

Is the worm turning for the Australian dollar?

There is a cracking story in the Wall Street Journal overnight about the Australian dollar and Caterpillar and their correlation by Stephen Bernard and Vincent Cignarella. In it they say, The 30-day correlation between Caterpillar stock and the Australian dollar-U.S. dollar exchange rate is currently 0.85, where 0 means there is absolutely no discernable pattern

62

Weekend Links

Global Macro: US dollar share of global CB reserves falls. Aussie and Loonie up. – Reuters Gold heading for best quarterly gain since 2010 – Reuters Sovereign Debt restructures 1950-2010 – BigPicture North America: How Bernanke pulled the Fed his way – WSJ Chicago PMI really weak – WSJ Blog – BI ChicagoFed’s take – here

23

Macro Morning: Give that Spaniard a cigar!

The only way is up, baby – for you and me now! Markets rallied overnight as data in the US was poor and Spain released its 2013 budget, which will usher in more austerity in a bid to fix its economy. Spanish PM Rajoy was so happy and comfortable that he was wandering round New