Australian Shares

173

Macro Afternoon

The selloff has abated somewhat here in Asia with only local markets falling on the back of both iron ore and coal concerns, as the USD remains firm against the risk currencies with gold still flummoxed at well below the $1800USD level: The Shanghai Composite is down 0.6% so far to remain below the 3600

15

Credit impulse signals doom for markets

A superb note from Nordea: The credit impulse has received a lot of attention as an asset allocation variable over the past years, and as the credit impulse is now clearly weakening, we go through how to position yourself for weaker credit growth. The credit impulse variable has been widely debated as a global asset

3

UBS: Sell Fortescue, RIO

And here they come. UBS on FMG: Downgrade to Sell: iron ore fundamentals deteriorating faster than expected We downgrade FMG to Sell (from Neutral), cutting our target to A$15/sh (from A$18/sh). Since peaking in July, the stock is down 34% while the iron ore price has more than halved. At spot (~$113/t) FMG still generates

5

Macro Morning

Wall Street volatility spiked significantly overnight in the wake of the latest strong retail sales data with the USD firming strongly against many of the risk currencies as a result, particularly the Aussie dollar which continues to fall in line with iron ore. Bond yields lifted across the curve while other commodities inched higher, although

99

Macro Afternoon

The selloff continues here in Asia as the fallout from the Evergrande collapse spreads throughout the region, with only local stocks rebounding on the latest unemployment figures. The USD is firming once more against the risk currencies with gold still holding below the $1800USD level, while Bitcoin has picked up again, pushing through the $48K

3

Macro Morning

It’s risk back on as the latest US industrial production print slightly missed expectations, but this was enough of a catalyst to get things moving again after nearly two weeks of uncertainty on Wall Street. Bond yields rose slightly while the USD fell back mainly against Yen as the other risk currencies still remain in

74

Macro Afternoon

The selloff continues here in Asia as the fallout from the Evergrande collapse spreads throughout the region, with even Japanese stocks taking a tumble. The USD is firming once more against the risk currencies although gold is just holding above the $1800USD level, while Bitcoin has peaked again at just below the $47K level as

6

Is China investable?

Obviously not. Unless you work at Goldman: In recent months, the Chinese government has embarked upon a regulatory tightening cycle unprecedented in terms of its duration, intensity, and scope. Regulations targeting specific sectors, including internet platforms, education and property markets, have wiped out more than $1tn of market cap from Chinese equities since their recent

2

Fundies worry about stagflation

China is taking care of global inflation as we speak but that hasn’t entered the minds of fundies yet. Via ZH comes the monthly BofA fundie report: Over the past few years, one of our recurring laments about the Bank of America Fund Manager Survey was the at times irreconcilable intellectual inconsistency of the survey

1

Macro Morning

It’s risk off as the latest CPI print in the US underwhelmed Wall Street, sending US stocks to a new one month low. Bond yields fell back sharply in response with the 10 year Treasury back to 1.26% while gold and other major currency pairs roundtripped around the print, with the shiny metal able to

68

Macro Afternoon

Risk taking in Asia is definitely limited to Japanese markets with Chinese bourses selling off and Australian shares unable to put in a new high as RBA Governor Lowe’s speech remaining dovish for the Aussie dollar. Gold is still struggling to get back above the $1800USD level, while Bitcoin is flat lining as well as

0

Wall Street goes all-in on inflation

The smartest guys in the room are as undiversified this week as always. Stagflation is the mem dejour with BofA still leading that pack: H2 view: macro backdrop = higher inflation, hawkish central banks, weaker growth, i.e.stagflationary; investment backdrop = rising Rates,Regulation, Redistribution (3Rs–Chart 6) & peak Positioning, Policy, Profits (3Ps); investment returns = low/negativestock/credit

7

Macro Morning

Wall Street was looking to put in a sixth consecutive down session last night, but managed a very late comeback as concerns about growth and vaccination mandates amid rising delta outbreaks lingered. Bond yields fell back slightly with the lack of any relevant events on the economic calendar providing little catalysts to move bond or

67

Macro Afternoon

A somewhat solid start to risk taking here in Asia as we start another trading week with stock markets not reacting to the falls on Wall Street on Friday night, while the USD remains relatively strong against risk currencies despite some lifts in commodities. Gold is struggling to get back above the $1800USD level, while

0

Macro Morning

Wall Street fell for the fifth consecutive session on Friday night, with a significant fall in industrial stocks due to concerns about growth post the US vaccination mandates. Bond yields rose however with the USD lifting slightly higher as European stocks also put in mixed finishes for the trading week as the latest industrial production

7

Send your portfolio to the Moon

I had a fascinating space investment conversation (podcast) yesterday with Dr Andrew Barton, an engineer specialising in space technologies with a long career in both Australia and internationally. For me, what is incredible is the pace of cost reductions being seen in the sector. Elon Musk’s SpaceX has brought the cost of launching equipment into

139

Macro Afternoon

A much better finish to the trading week here in Asia with stock markets rebounding following yesterday’s selloff. Risk currencies were basically unchanged, although Yen sold off against USD as risk appetites broadened throughout the session. Gold is back up above the $1800USD level but only just, while Bitcoin is again largely unchanged by hovering

2

Wall Street turns bearish

In lieu of my own assessment of the smartest guys in the room this week, here is an alternative from ZeroHedge. In my view, a commodity crash and equity correction are dead ahead as China slows much more than the market is pricing for. Inflation is not the risk, deflation is. Morgan Stanley We start

0

Macro Morning

Wall Street fell for the fourth consecutive session, taking US bond yields and the USD with them with the latest ECB meeting proving no real change in stimulus direction while US initial weekly jobless claims came in as expected. Risk sentiment also remains mixed amongst commodity markets with oil dropping more than 2%, while copper

77

Macro Afternoon

Stock markets continued to have divergent fortunes across Asia with only mainland Chinese shares advancing, despite a massive drop in Evergrande shares and bonds while Japanese political machinations continue to unravel. Risk currencies were basically unchanged, as was Bitcoin as it remained just above the $46K level while gold is really struggling here after breaking

0

Macro Morning

Sentiment continued to sour on risk markets overnight amid concerns that stimulus pullback is still coming sooner rather than later, despite a disappointing Biege Book reading from the Fed overnight. Wall Street continued with another mild selloff, while European shares dropped sharply across the continent as the USD continued to firm against the major undollar

87

Macro Afternoon

Stock markets had divergent fortunes across Asia as the wobbles on Wall Street extended to the region today, although Japanese stocks continued their epic surge.  Risk currencies continue to pull back with the Aussie dollar still well under the 74 cent level vs USD while gold is struggling to get back above the $1800USD per

3

Macro Morning

Sentiment is reversing on risk markets amid concerns that slower growth is ahead as the latest German ZEW Survey indicated future economic expectations are flagging across the continent. The return of US traders did not help quell those concerns with Wall Street putting in a poor start to their shorter trading week, while the USD

58

Macro Afternoon

Stocks continue to surge across Asia – except locally – with the lower USD and flat US stock futures still not hindering safe haven buying either. Risk currencies continue to pull back slightly with today’s RBA meeting and non-decisions keeping the Aussie dollar under control, while gold has slipped back to the $1817USD per ounce

9

A new and improved Shiller P/E

Last week I dealt with the less controversial changes to the Shiller P/E. You probably want to read that first. In this post, I derive a more advanced version: CAPE 3.0. The main finding? If you measure it differently, the last 20 years go from being an expensive aberration to a typical investment period. Factors

0

Macro Morning

The lack of US traders overnight due to Labor Day holiday saw currency markets go into a holding pattern while European stocks put in multi year highs, with German factory orders much firmer than expected. The rolling pace of vaccinations combined with more solid economic news is buoying risk taking on the continent, with Brexit

62

Macro Afternoon

Stocks have surged across Asia despite the somewhat surprising undershoot in Friday night’s US unemployment print, with a lower USD and flat US stock futures not hindering action either. Risk currencies have pulled back slightly from their recent booming ascent, including gold which surged up towards the $1830USD per ounce level, but all the action

0

Macro Morning

The latest US jobs report came and went on Friday night, setting the risk tone for the rest of the month as usual and surprised to the downside – maybe a little too much with another fall in the US ISM Manufacturing survey as well. The USD fell back only slightly while the Australian dollar