Australian Shares

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Macro Afternoon

The selloff from overnight markets has proven contagious here in Asia with drops across the boards, led by Japanese shares. The USD remains very strong against the majors with the Australian dollar about to break the 69 cent level on the mixed unemployment print while Euro has given up all its meagre gains as it

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Macro Morning

Risk sentiment stumbled overnight with strong UK inflation numbers offset by the release of the latest FOMC minutes later in the session but it still resulted in falls on both sides of the Atlantic with the USD rising against the major currencies again. Euro escaped any further selling while the Australian dollar slumped well below

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Macro Afternoon

A fairly solid session for Asian stocks with Chinese bourses playing catchup after the interest rate shenigans from yesterday not overshadowed by the small stumble on Wall Street overnight as traders await the latest FOMC minutes. The USD remains strong with Australian dollar faltering as it clings on just above the 70 cent level while

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Hartnett: Get short

BofA’s excellent Michael Hartnett has released his latest monthly fundie survey and has had enough of the bear market rally. ——————————————————————————————————————————– Our survey says: sentiment remains bearish, but no longer apocalyptically bearish as hopes rise that inflation & rates shocks end in coming quarters (Chart1); BofABull &Bear Indicator stays at “max bearish” 0=no immediate reversal

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Sell BHP with both hands

We’ve reached the blowoff profits phase of the COVID commodity mania. The AFR is on its knees sucking the proverbial: The biggest contributor to Australia’s record trade surplus, BHP, has vowed to be disciplined as it pursues growth in “future facing” commodities after reporting its biggest profit in Australian dollar terms, record dividends worth $23.2

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Macro Morning

Wall Street stumbled slightly overnight on the latest US industrial production numbers while European markets continued to rally. The USD remained strong but unchanged overnight as the Euro halted its recent crash with the Australian dollar stabilising just above the 70 cent level. Bond markets saw roundtripping of yields with 10 year Treasuries eventually finishing

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Macro Afternoon

Another relatively mixed session for Asian stocks with Chinese bourses unstable with only the ASX200 lifting substantially as the Australian dollar continues to falter as it hovers at the 70 cent level while Euro flops around after a very poor start to the week. Meanwhile oil prices are also slipping, with Brent crude retracing further

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Brace for corporate misery

BofA with the note. I will add that higher inventories meeting weakening demand is not a recipe for good profits. Not everything is about the second derivative Waning demand and pricing power plus continued wage pressure do not seem like reasons to celebrate. But Wednesday’s weaker CPI (note)(a mere 53bp drop) was met with applause–peak

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Has the market priced a Fed put that’s not even coming?

Michael Wilson at Morgan Stanley. There is a Fed pivot coming in my view as inflation falls relatively quickly. But it’s coming because so is the global recession led by China and Europe but also landing in the US. Earnings are going to fall a lot further yet and that is not priced.   ———————————————————————————————————————————- The

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What will end the crash-up?

The Market Ear with more great charts. What could make this rally more durable? JPM’s head of US market intelligence Andrew Tyler points out what could take this even higher (not saying it will): 1. lower Sept CPI 2. human participation – closing shorts, going long, and then levering up 3. dovish inflection from the Fed. and what would

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Macro Morning

Risk markets reacted fairly positively overnight to some weak economic data out of China and the US with Wall Street lifting slightly to continue its previous solid trading week.  The USD as a result extended its gains with a near 1% rise against the major currencies with Euro the main casualty, but also knocking the

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Macro Afternoon

A relatively mixed start o the trading week for Asian stocks in response to very solid session on Wall Street on Friday night, with Chinese stocks the laggards as the USD returns to strength. The Australian dollar has faltered slightly to be just below the 71 cent level while Euro continues to fall going into

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No bears left!

The Market Ear with more on how far the bear market rally has run to correct market positioning. Short covering getting extreme Short covering getting extreme as net US hedge fund flows turn positive. JPM writes: “…the short covering has been the main driver of late and is now one of the most extreme in the

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Macro Morning

Stock markets finished the trading week with vigour on Friday night with big gains on Wall Street as inflation expectations may have peaked with the latest US CPI print. The USD returned to form and gained some 0.5% against the major currencies with Euro in the main retracing back most of its post-CPI gains, while

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Macro Afternoon

A flat end to the trading week for Asian stocks in response to the overnight hesitation on Wall Street, although Japanese shares are playing catchup after a mid-week holiday. Currency markets are still applying pressure to the USD with the Australian dollar pushing through the 71 cent level. Meanwhile oil prices are holding on to

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Bears are now contrarian!

The equity market has now gotten so excited with its manic reflation that it is recreating the Fed’s inflation problem. Good job! The Market Ear has more on the wild sentiment swings. That went fast: being bearish is now finally contrarian In mid June we ran a series of thematic emails (premium subs only, sign

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Macro Morning

Risk markets were contained overnight with both European and US stocks unable to gain traction post the US CPI print in the previous session. The USD remains slightly weak against the major currencies with Euro holding on to its recent gains while the Australian dollar is at a two month high above the 71 cent

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Macro Afternoon

Asian stocks are in solid buying mode today as risk markets react positively to the “not too bad, all things considering” inflation print in the US overnight as Wall Street bounced nearly 2% dragging everything else higher as USD sunk. Yen remains strong while the Australian dollar is pushing up against the 71 cent level.

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Markets price out risk

The Market Ear with a nice summation of the crash in risk and crash-up in equities. Bear market blow-off time. VIX – welcome to inverse panic We are finally reaching the volatility puke we have been writing about for the past two weeks. VIX has not closed here in a long time. Reversal strategists are

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Macro Morning

Risk sentiment reversed sharply on the “not too bad” inflation data from the US overnight, with Wall Street rallying at least 2% as the USD was sold off against the major currencies, with the Dollar Index down over 1%. The Australian dollar launched straight into the high 70’s as a result with stock futures suggesting

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Macro Afternoon

Asian stocks are in sell mode today as the poor lead from Wall Street overnight combined with the stronger USD sees risk sentiment sour, not helped by the German and US inflation prints coming in later tonight. The USD has pushed local currencies around again with the Australian dollar right on the mid 69 level

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The elephant in the earnings room

BofA pokes the elephant in the earnings room. As huge inventories are confronted with declining demand, corporate pricing power is going to collapse and margins crater. This is the downside of the inflation trade that is on the offing but not yet priced. Nearly 90% of 2Q earnings are in and 2Q EPS is tracking

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Market squeeze prices out recession

A couple of nice chart series from The Market Ear today. US recession has been priced out. Recession is out People are forgetting about the recession, or is the recession not happening? Google Recession talk not spiking The proportion of firms mentioning “recession” in quarterly earnings calls came to a halt, way below COVID crash

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Macro Morning

Risk sentiment is in hesitation mode as traders await the next US CPI print and the fallout from the Fed as tech stocks also took a battering. The USD remains strong against most of the major currencies although Euro tried to break out of its current funk, the Australian dollar is looking to roll over