Australian Shares

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Macro Morning

Strong corporate earnings could not keep Wall Street elevated overnight, as the self induced selloff in Chinese tech issues turned into a bath of blood now spilling over and upsetting the mood in risk taking world. Treasury yields fell back to their recent lows while the USD was mixed everywhere, selling off mildly against Euro

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Macro Afternoon

A bloodbath in Chinese tech stocks is putting a dampener on risk taking here in Asia while European and US futures indicate lower opens this evening. Risk currencies like the Aussie dollar are falling back while commodities are holding on, although gold continues to drop below the $1800USD per ounce level. Bitcoin is holding on

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What next for yields?

Goldman with the note: In 1H rising inflation expectations and inflation surprises have been a driver of higher rates volatility, resulting in a more negative equity/bond yield correlation. But more recently investors’ worries of a growth slowdown in 2H have increased. In particular last Monday risk appetite fell sharply and risky assets sold off, only

4

Big Iron blowoff drives another ASX all-time high

XJO is at another new record high this morning as the economy hurtles into recession! Which bonds yields are clearly signaling as the curve is obliterated: The Australian dollar rally stalled out on Sydney’s still rising infections: Big Banks are struggling other than the CBA bubble: But today’s star is Big Iron. BHP has roared

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Stock market quietly deflates

Morgan Stanley with the note: NBER confirms the shortest recession in history at just 2 months. From the day the recession began last year, we’ve been ahead of the consensus with the progression of this new cycle staring with the v-shaped recovery. It’s all happening faster than normal and that means rotations and changing leadership

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I will say it again, never invest in China

There are few investment ideas that show the power of groupthink better investing in Chinese stocks. For years, we have seen investing legends crippled by such investments as one after another they fell prey to the inherent sovereign risk of the CCP. Sure, there are fortunes to be made. But there are fortunes to be

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Macro Morning

Strong corporate earnings kept Wall Street elevated overnight, but only just with the selloff in Chinese tech issues overshadowing the new record highs as Treasury yields bounced a little after some strong auction results. USD sold off mainly against Euro while commodities lifted with oil up 1%, copper up over 4% while gold fell back

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Macro Afternoon

While Wall Street made a new record high on Friday night that embiggened Asian stocks today, Chinese stock markets are selling off on their own as US-listed issues bear the brunt of Beijing’s self-induced tech breakdown. Commodities and currencies are more stable although Bitcoin gapped sharply this morning, lifting more than 12% to almost break

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Investing legends tortured by bond “pain trade”

Mwahahaha! The FT has a great story today on the bond market pain trade: Heavyweight bond investors are sticking with bets against US government debt, saying an unflagging rally paints a false impression of deep concern about the economic outlook. BlackRock and JPMorgan Asset Management are among the fund managers continuing to wager that US

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Macro Morning

Nobody can stop the music as Wall Street surged once more on Friday night to a new record high with the latest corporate earnings a strong tailwind.  While stocks rose everywhere, currencies and bond markets were largely unchanged with commodities also mixed as oil and copper rose slightly while gold and iron ore fell back. 

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Macro Afternoon

Asian stock markets are listless going into the end of the week due to the absence of Japanese traders and continued concern over delta variant outbreaks in the region. Bitcoin however is lifting sharply this afternoon, almost tripping over the $33K level to make a new weekly high while gold is falling back again to

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Lombard: Don’t worry about Delta

TS Lombard with the note: Don’t let your heart rule your head. There are times when one cannot help being emotional, and the last 18months have pushed many of us to emotional breaking points. But when it comes to managing money, introducing emotion into the equation often leads to bad decision-making. (This author was guilty

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Macro Morning

Sentiment continues to swell positive with another solid night across all equity markets with tech stocks leading the way this time due to some solid earnings results on Wall Street. Bond yields slipped on a very dovish ECB meeting with commodity prices continuing their own bounceback, oil up 2% alongside copper while gold got back

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Macro Afternoon

Optimism is creeping back across Asian stock markets in response to the broad moves higher on both sides of the Atlantic as the buy the dip crowd steps in, helped along by a surge in oil prices. Bitcoin is floating along above the $32K level thanks to some Elon-pumping while gold is still suffering after

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Goldman: Stocks to correct

More grist for the growth scare mill from a new Goldman note: 11 point Checklist – Consensus client feedback for a quick equity risk reduction into potentially lower buy demand into Jackson hole. The consensus feedback seems to be calling for a -5% correction, which really gets to -4%. This is a recap of the

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Macro Morning

The big fill in the recent dip in equity markets continued overnight with European shares outshining Wall Street, although the latter is almost back to where it started. Oil played catch up with a 4% rise in Brent futures while gold fell back despite a rise in undollar assets as Euro and the Australian dollar

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Macro Afternoon

A generally positive mood across Asian stock markets in response to the bounceback on Wall Street overnight, although oil prices remain depressed and continue to drag commodity currencies including the Australian down further. This move is likely to be shortlived as the COVID 19 delta variant economic impact has not yet been priced in. Bitcoin

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ASX powers back, into lockdown

It’s one of those delightful ironies of contemporary markets. The worse an economy gets, the higher asset prices go! It’s not quite so simple of course but you know what I mean. The truth is, the ASX isn’t setting its own prices at all. It’s simply following Wall St, so the local lockdown is pretty

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Morgan Stanley: Sell materials, buy staples

Finally, a Wall Street strategist that is making perfect sense. Michael Wilson at Morgan Stanley: The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth. Inventory builds are unlikely to offset if order books prove to be inflated as we suspect. Our mid-cycle

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Macro Morning

The bounce is in as dip buyers step in amid a snap correction in stock markets as the COVID-19 delta variant continues to wake up risk-takers if not policy makers. Wall Street saw a 1.5% or so bounce across the board while European bourses did about a third that level, but all remained in the

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Macro Afternoon

Asian stock markets continue to selloff in response to the wider risk-off mood prevailing on overseas markets overnight, with oil prices off by nearly 10% in response to both more supply and probable economic slowdowns as the COVID 19 delta variant sparks widespread concern. Bitcoin has broken below the $30K level and its start of

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Where next for reflation?

Goldman with the note: 1. The shift towards more cyclical and value leadership that dominated the period from the 2020 March low to the beginning of this year reflected a particularly strong inflection point in growth and inflation expectations following unprecedented policy support and progress on vaccinations. Given that there were record valuation spreads between growth

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BTFD ASX and AUD

The significant risk case of a sharp slowing in global growth through H2 is both real and ephemeral. So it is no surprise to see markets lurching between fear and greed as they attempt to process the prospect. For the second day in a row, significant gaps lower have been followed by enthusiastic BTFD. XJO

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Macro Morning

Things are not looking good in risk-taking land with the COVID-19 delta variant causing a lot of concerns that are spilling over into equity markets which fell sharply overnight. Coupled with the snap OPEC supply surge that has seen oil fall over 7%, commodity markets and commodity currencies are selling off while Treasury yields are

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Macro Afternoon

A snap OPEC meeting over the weekend has sent oil prices lower as more supply will be coming online in August, helping some risk currencies although the Aussie dollar missed out. Sentiment on stock markets is very poor as we start the trading week in reaction to the falls on Wall Street on Friday night

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Wall Street stink! Boom or bust approaching?

Morgan Stanley says its a boom: Our US cycle indicator skips the ‘recovery’ phase and switches straight to ‘expansion’. Historically, this has supported owning equities and driven important changes in leadership. Our cycle model switches to ‘expansion’: Big moves in consumer confidence and initial jobless claims mean that data which drive our cycle indicator are

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ASX hammered with AUD

It’s a bit of fun on the bourse today as XJO slumps. No technical damage done at this point: We can’t say the same for yields as the reflation trade goes “poof”: Which means bye, bye banks. The CBA bubble is still not burst: Which, in turn, means adieu AUD: Offshore earners are trending up

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Macro Morning

Sentiment was mixed all of last trading week and it culminated in a co-ordinated selloff on Wall Street to end the trading week on a bad note. It was all about inflation – expectations that is – with the US running a little scared the so-called “transitory” inflation may turn out hotter than expected. Bond