Chris Becker

1

Chart of the Day: Euro over 10 years

Today’s chart is a monthly price chart of the Euro currency since it was adopted for circulation (after conversion from the former sovereign currencies) against the other monolithic currency, the US dollar. The Euro is the world’s largest currency union between nation-States and as such, arguably the last gold-standard currency as opposed to the standard

9

Trading Day: Turning Japanese

With Christmas over and a New Year around the corner, the Australian market was set to respond to the earlier return on US and European markets, which closed slightly up or mixed, but instead reacted negatively to Japanese data, where household spending shrank by 3.4% in November, industrial output fell 2.6% from October and retail

26

Trichet wants a EUSA

Jean-Claude Trichet, the former ECB President, has just published an op-ed outlining his call for a federalised Europe, with complete fiscal, legal and political integration. Here is the text in full: Whenever people seek a justification for European integration, they are always tempted to look backwards. They stress that European integration banished the specter of

10

Chart of the Day: Shanghai Tower

Today’s chart comes from Doug Shorts blog, and shows the remarkable rise and fall of the Shanghai Composite stock index since 2000, with some resemblance to the Eiffel Tower: The above chart is in linear scale, which is not helpful in analysing the proper magnitude of rises and falls (a 50% drop from 2000 to

21

Chart of the Day: 111 years of Oz stock market

Today’s colorful chart comes from ASXIQ’s blog, and very succintly illustrates the distribution of annual returns on the Australian stock market: Interestingly, ASXIQ has arbitratily chosen a 7-23% absolute scale, probably based on the “lumpiness” of distribution around those numbers, eschewing the more clinical 5-10% (or most quoted prediction for stock markets – “rise 10%

4

December 27 Links: Lagarde’s not so merry

Global Macro: Lagarde warns world economy in dangerous situation Huffington Post h/t Delusional Economics Jim Rogers discusses 2012 – video interview FNN transcript available Americas: Brazil takes over UK on GDP ranking FT beyondbrics but not on GDP per capita Bank of America mulls asset sales Reuters shares are down 58% for year! Europe: January

5

Trading Day

Note: Coverage of overnight markets will now be done as “Market Morning” before the Asian markets open. Trading Day will focus on the Asian session and Australian stocks. The ASX is closed Monday and Tuesday next week, so Trading Day will return on Wednesday. After a shortened session due to the Christmas break, Santa came

28

Austerity Awaits Australia

I hate to spoil the Christmas fun, but it needs to be said in the wake of the Moody’s report released yesterday that reaffirm Australia’s AAA rating: Australia’s Aaa ratings are based on the country’s very high economic resiliency, very high government financial strength, and very low susceptibility to event risk. Economic resiliency is demonstrated

2

Data over the break

Although most of us are taking a break over Christmas and New Years, there is still some important data to watch and analyze. Locally, only the RBA is releasing data on Friday with monthly private sector credit and monetary aggregates. The ASX will be closed on Monday and Tuesday and close early of Friday. Internationally,

1

Market Morning

Risk markets had a generally good day on the European and US sessions, based on two factors. First, the UK surprised with a slightly higher than expected GDP result, even though the Treasury warned of a 0.7% annualised growth rate and 2% inflation for 2012. And secondly, although US third quarter GDP was disappointing at

15

Chart of the Day: Labour pains

Today’s chart comes from Goldman Sachs, and may help the robust discussion occuring on the retailing post of yesterday: The chart, compiled by the International Finance Corporation, compares in USD per month, the minimum wage for a 19 year old worker or apprentice. Norway is almost off the chart, whilst Australia at just above $1500

10

Trading Day

Note: Coverage of overnight markets will now be done as “Market Morning” before the Asian markets open. Trading Day will focus on the Asian session and Australian stocks. Following the fizzle of the ECB bazooka last night, the S&P/ASX 200 Index dropped 1% at the open and finally closed 1.2% or 48 points down to

57

Australia is not growing at trend

The majority of reporting by the Australian financial media and associated economist punditry, focuses almost solely on a quarterly snapshot of growth in Gross Domestic Product (GDP). This is usually done in scattergun fashion, alongside a raucous display of big numbers on capital expenditure or other cherry picked data, then annualised into the beyond. What

77

Another retailer warns of falling sales

              Following in the footsteps of Billabong and JB Hi-Fi, outdoor specialist retailer Kathmandu (KMD) has warned that Christmas sales are below expectations and that its first half year earnings are probably going to be lower than the previous year. Mirroring the recent falls of the other embattled retailers,

9

Market Morning

Santa dropped some coal into European stockings last night, as the ECB “backdoor QE” appeared to be a fizzer. Sovereign downgrades (Hungary to junk), bad GDP reports (Italy to go into recession alongside Spain) and slow growth forecasts (UK particularly) jumbled the “everything is now fine” meme alongside the US Congress’ delay in funding payroll

1

Taylor sticks with 2012 recession call

An interesting interview of John Taylor, CEO of FX Concepts, on Bloomberg, where he makes the call for a European recession, highlighting that Germany should be helping out more trying to weaken the Euro. Further, that the US will go into a mild recession next year, but not much stimulus available on the table. He

11

Chart of the Day: Inequality in USA

Today’s chart, leading on from the “Indignant Billionaires” story in FT today, comes from Jesse’s Cafe Americain blog and succintly shows the gains in real family income across the US by percentile, with a huge divergence in the post-WW2, Bretton Woods era: Not only is the gap widening, but more importantly, US real incomes have

27

Trading Day

Note: Coverage of overnight markets will now be done as “Market Morning” before the Asian markets open. Trading Day will focus on the Asian session and Australian stocks. Following the lead on overnight markets, the S&P/ASX 200 Index rallied strongly on the open and maintained the high, closing up 2% or 86 points to 4139

8

Market Morning

Note: Market Morning is an update on overnight markets that was previously performed late in the afternoon in the “Trading Day” post. This will be more timely and provide our readers with an overview before the Asian risk markets open. Risk markets surged overnight, with two factors at play: first in Europe, a very successful

15

Should I stay or should I go now?

According to the December Westpac-Melbourne Institute Consumer Sentiment survey, it appears most Australians will stay at home for Christmas, but those who intend to travel, no surprise, will be heading overseas. The so-called “staycation” option outweighs travelling by 69% to 31% – but in context, the latter stat has been slipping, with 38% travellng in

12

Chart of the Day: US unemployment falls

Today’s chart comes from Calculated Risk again and on the back of last nights excellent housing starts number which has ignited the long awaited Santa Rally, examines the current US unemployment rate, vs. the recession high: Obviously there has been aggregate improvement in the number, although this is the underreported U-3 measure, not the realistic

11

Trading Day

Note: Coverage of overnight markets will now be done as “Market Morning” before the Asian markets open. Trading Day will focus on the Asian session and Australian stocks. After yesterdays walloping, the S&P/ASX 200 Index closed down just over 2 points to 4060 today, after absorbing another night of turbulence on risk markets. As I

32

Brokers very bullish

With the Aussie share market still battening down the hatches and the 85% probability of a Santa Rally sinking hopes each day, its interesting to see what the consensus is saying about where the market should be. The table below comes from ASXIQ who has collated the median price targets of analysts and brokers followed

46

ACTU releases first jobs report

The Australian Council of Trade Unions (ACTU) has released its inaugural Jobs Report, and is packed full of fascinating charts, analysis and details on the Australian job market. The summary highlights the sideways economy of 2011 (which has only grown 0.53% per capita since March 2008) – highlights added: Employment rose by 40 400 in

7

Fitch: Mortgage arrears by postcode

Fitch has released its latest mortgage arrears report for end of September 2011, with marked declines across the country since the March report. All states and territories showed improvement, overall delinquencies fell from 1.77% to 1.42%, according to Fitch on “account of stable interest rates”. Notably, the 10 worst performing regions were the same in

1

Market Morning

Note: Market Morning is an update on overnight markets that was previously performed late in the afternoon in the “Trading Day” post. This will be more timely and provide our readers with an overview before the Asian risk markets open. Risk markets fell overnight, most likely due to the comments by ECB President Mario Draghi

3

Chart of the Day: US deleveraging

Today’s chart comes from Calculated Risk and calculates the Mortgage Equity Withdrawal (MEW), as a percentage of disposable income. This is derived from the Fed Flow of Funds Data, as explained: This is an aggregate number, and is a combination of homeowners extracting equity (hence the name “MEW”, but there is little MEW right now!),

19

Trading Day

The S&P/ASX 200 Index closed down almost 100 points or 2.43% to 4060 today, after falling sharply in the morning and following the news of the death of North Korean dictator Kim Jong Il. However, its not the death of a despot that has driven markets down. As I suggested last week, the market appeared

45

No super for you (updated)

With the end of the calendar year approaching and with the market still oscillating around its lows, super funds are scrambling to put a good light on their meagre returns. The news today for non-self managed funds was foreboding: Research firm Chant West estimates that the average fund will have shrunk in value by around

21

Billabong dries up

The slow death march of the retailers continue, with Billabong (BBG) added alongside JB Hi-Fi today, announcing an estimated $20-25 million or approx. 25% drop in earnings (before interest and tax) for the six months ending December 2011, compared to the same period in 2010. The clothes manufacturer and retailer noted that this estimate is