Australian Shares

8

Macro Afternoon

Asian share markets are rebounding somewhat outside of Japan with risk sentiment improving slightly on overnight volatility. The RBNZ surprised today with a 50bps rate rise, which sent AUDNZD to a three week low as expectations firm for the RBA to play catchup. Other currency markets are seeing some firming in USD with Euro pulling

5

Macro Morning

Wall Street had the wobbles again overnight, led by a steep selloff in tech shares with European shares also unsteady with new PMI surveys coming in under expectations. The bond market saw some strength in response, with the 10 year US Treasury yield pushed down to the 2.7% level, with interest rate markets still continuing

101

Macro Afternoon

Asian share markets are seeing quite a bit of selling going into the closing sessions as risk taking reverses course yet again, this time on increased concern that both the Fed and ECB are going to hold the line on interest rate rises with Lagarde commenting as such this afternoon. Currency markets are seeing a

0

Stocks to get reverse bull whipped

Michael Wilson of Morgan Stanley has been very good this cycle. Today he picks up on one of my favorite topics, the US teetering inventory mountain. As this greatest ever pile of consumption goods is destocked then over-ordering, over-employment and all manner of supply-side tensions will enter a reverse bullwhip effect and prices plus earnings

7

Macro Morning

More Chinese stimulus news has helped buoy risk taking spirits with a healthy start to the trading week on Wall Street overnight, with European shares also rebounding. The bond market saw some weakness in response, with the 10 year US Treasury yield pushed back up to the 2.8% level, with interest rate markets still continuing

76

Macro Afternoon

Asian share markets are quite mixed as we start another trading week, absorbing the very unsettling finish on Wall Street on Friday night. Currency markets are also clawing back more ground against USD as the Australian dollar firms above the 71 level to make a new weekly high. Oil prices are stabilising with Brent crude

0

“Sell the rips”

Michael Hartnett at BofA, conductor of the bust. The jury is still out on the structural story for me but the cyclical is spot on. I still say the Fed does not pivot before oil takes down the commodity complex. That may mean the outperforming ASX has a greater downside risk than other bourses… —

2

Macro Morning

While there was a sea of green across Australian politics on Saturday, Friday night saw Wall Street put in a deep intrasession loss that was then barely filled at the end of the night. This continued high volatility is also translating into a much firmer bond market with the 10 year US Treasury yield again

85

Macro Afternoon

Yet another bounceback with Asian share markets green across the board today to finish the trading week still unsettled. Currency markets are also clawing back more ground against USD as the Australian dollar firms above the 70 level. Oil prices are stabilising with Brent crude now hovering just above the $111USD per barrel level while

2

Macro Morning

Share markets are still clutching their pearls over “inflation concerns” with European shares playing catchup overnight as Wall Street put in a scratch session with no new news to further spook equity traders. The bond market however saw more firming with the 10 year US Treasury yield pulling back to the 2.77% level, with interest

36

Macro Afternoon

Asian share markets did relatively well all things considering after last night’s crash on Wall Street, with losses in the 1-2% range, but still looking very shakey as the recent bounceback in correlated risk markets is over before it started. Currency markets are seeing more ground lost to USD as the Australian dollar has slipped

6

What to look for in an equities bottom

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

11

Macro Morning

Well the bounceback is finished and then some with Wall Street collapsing overnight in its worst run in nearly two years, with the NASDAQ losing nearly 5% in a single session. Sell in May and go away anyone? This was all about inflation concerns as the latest UK, Euro and Canadian inflation prints spiked above

105

Macro Afternoon

Asian share markets are doing relatively well given the continued bounceback on overseas markets overnight, although Chinese shares are unstable again after a big move higher yesterday. Currency markets are pushing back against the very strong USD although the Australian dollar has slipped back down to the 70 level. Oil prices are also retreating slightly

2

Fundies “apocalyptic”

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)

1

Macro Morning

Last night saw a bigger bounceback on stock markets with both European and US shares properly extending their recent gains, helped by a weaker USD. The reaction to Fed Chair Powells comment on containing inflation, and the latest US retail sales print wasn’t as spooky as expected either, although the bond market saw further weakening

36

Macro Afternoon

Asian share markets have had a better response and follow through to the bounces on overseas markets from Friday night, despite a reluctant Wall Street overnight with Chinese shares leading the way after a stumble yesterday. Currency markets are starting to fight back against the very strong USD with the Australian dollar boucning back above

1

A bullish take on stocks

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

2

Macro Morning

Last night saw a failure to confirm Friday’s bounceback on stock markets with both European and US shares playing the wobbly game amid tension over interest rates and Chinese growth concerns. The bond market moved around only a little with the 10 year US Treasury yield easing off to just below the 2.9% level, with

67

Macro Afternoon

Asian share markets have had a tepid response to the bounces on overseas markets from Friday night, with Chinese shares still spooked by the latest retail data showing the middle kingdom is slowing down appreciably. Currency markets remain constrained by a very strong USD with the Australian dollar reverting from its tiny fightback on Friday

1

Macro Morning

Friday night finally saw a proper bounceback on stock markets after weeks of downside volatility with Chinese shares leading the way into the European session and then Wall Street taking over after desperately trying to find a bottom in the mid-week. While the latest US consumer sentiment figures disappointed, the Fed is still ready to

0

Stock markets not done selling

JPM with the note. Assuredly, stock markets are not the economy but they are a discounting mechanism and what everybody may be missing is that they may, in fact, be pricing for the six shocks rocking Europe (war and energy), China (OMICRON and property), and in the US the Fed. There’s a lot more going

8

Albert Edwards: Brace for stock and property bear markets

Societe General’s Albert Edwards painting the town a deep shade of bloody red once more. — If GMO’s ‘premier league’ investor Jeremy Grantham is right and we’ve just ‘enjoyed’ the fifth great bubble of the modern era, the coming bust will surely be devastating.  Following the market turmoil of the past few weeks, this

7

How much more downside for stocks?

Morgan Stanley with a good note on where next for stocks. I would only add that there is another scenario that it does not explore that constitutes my base case. It is that in front-loading its hiking cycle, the Fed breaks something relatively quickly and markets effectively end the cycle by overshooting until it relents.