Yesterday I noted how disconnected valuations have become from the immediate risk environment: First, the world EPS growth outlook: And valuations: There’s lot of discounted risk in those numbers. Much more even than during the Mining GFC of 2015 when China was sinking. The US is similar: Valuations are fine: The US is going to
Risk is up and this is why, via CNBC: A Vancouver judge set a $10 million CAD bail ($7.5 million U.S.) for Huawei Chief Financial Officer Meng Wanzhou Tuesday, capping a week of increasing trade tensions and strong market reactionsaround the dispute between the Department of Justice and one of China’s largest hardware companies. The
By Chris Becker Volatility was the name of the game overnight on risk markets with European bourses rebounding while US markets exchanged gains for losses although the broader S&P500 finished with a scratch session. I think all traders are ready for a Christmas break because the culmination of Trump’s trade war, Brexit and other geopolitical
A mixed result following the very late rally on Wall Street overnight with Japanese stocks retreating while the rest of Asia had minor gains, showing a distinct lack of confidence across the region. The Shanghai Composite is up only a few points going into the close, or 0.1% to 2586 points, hanging on but still unable to get
What are spooked stock markets discounting? Let’s run through some charts. First, the world EPS growth outlook: And valuations: There’s lot of discounted risk in those numbers. Much more even than during the Mining GFC of 2015 when China was sinking. The US is similar: Valuations are fine: The US is going to slow next
The AUD is holding up this morning despite the NAB survey swoon: Bonds are consolidating after the big bid. More buying to come: The ASX can’t get off the mat after yesterday’s knockout: Dalian is stable: Big Iron too: Big Gas not so good as oil ignores OPEC: Big Gold has a sniff of the
The Australian says: Escalating China-US trade tensions pummelled the Australian sharemarket yesterday, pushing the local bourse to record its third $35 billion-plus wipe-out in as many months. The benchmark S&P/ASX 200 index took a 129-point, or 2.27 per cent, dive to 5552.5 points, its lowest level since December 2016 and just shy of a two-year
By Chris Becker After a solid session of selling in Asia yesterday, European stock markets lost all their confidence later in the session as PM Theresa May lost her bolt on the Brexit vote, sending Pound Sterling down to a new low for the year. US stocks surprisingly came back strongly in the second half
The Australian dollar has gapped lower this morning on lousy Chinese data: XJO is down heavily and looks likely to close at new two year lows: Bonds continue to boom: Big Iron is solid on hopes of MAOR from Pooh of China: Big Gas is down despite OPEC: Big Gold is flying as the Fed
It’s been a relatively good finish to the trading week here in Asia despite epic overseas volatility with stock markets putting scratch sessions or slightly higher closes. The currency and bond markets are poised for tonight’s US unemployment print, the result of which hinges on the Fed’s next interest rate move. The Shanghai Composite has escaped
By Chris Becker US markets reopened and immediately went into sell mode overnight, down nearly 3% in mid-session before a late rally saw prices recover to a scratch session. European stocks were not so lucky, with big falls across the board as the trade war continues, Trump still distracted by the Mueller investigation to effect
It’s been a straight risk-off session here in Asia as the Huawei headlines are fracturing the possibility of a trade deal between the US and China, fueling safe haven bids and dumping of stocks. US Treasury yields continue to fall while commodity currencies their downward trajectory as markets expect a dour night on Wall Street
Via the ABC: Canada has arrested Huawei’s global chief financial officer in Vancouver, where she is facing extradition to the United States on suspicion she violated US sanctions against Iran, reports say. Meng Wanzhou, who is one of the vice chairs on the Chinese technology company’s board and the daughter of company founder Ren Zhengfei,
By Chris Becker Risk markets were helped overnight due to the US holiday although European bourses caught up to the previous Wall Street carnage, like in Asia yetserday the falls weren’t as strong. Currency markets retreated in volatility although the Aussie and Kiwi fell slightly, the Euro was largely unchanged while gold put in another high. Recapping Asia’s
The carnage from Wall Street overnight has not been exactly translated into the same falls here in Asia, but it’s certainly sent volatility higher as the fallout from the US/China “trade deal that’s not a deal”. The Shanghai Composite is down 0.5% to 2651 points, still remaining above the previous support level at 2600 points, digesting the volatility
The Australian dollar is down smartly post-GDP: Bonds are verging right at breakout: ASX is also right at critical support: Big Iron is mixed: Big Gas smashed: Big Gold has a bid with some justification: Big Banks are puking: And Big Realty: A little bit of reality creeping in…
By Chris Becker Big falls overnight as risk sentiment reversed and then slumped as it became apparent that The Great Deal Maker was full of hot air over the US/Chinese trade war truce. US stocks were drowned in a bath of blood, down nearly 4%, with the US 10 year Treasury yield also down considerably
The positive mood from the weekend’s G20 meeting has turned sour as the Trump trade “deal” between China and the US has fizzled into empty promises with both sides dialing back expectations. No surprises there. Stocks have retreated with the US Treasury yield curve inverting once more while the US fell against Yen and the other majors.
The AUD is roughly flat through the morning: Bonds are threatening to break out as the bid booms. Pleased to report we went long a fortnight ago: And the ASX struggles: Dalian is flat: Big Iron is mixed: Big Gas is sinking again. Spot regional LNG prices are now sliding with oil: Big Gold is
By Chris Becker The positive outcome from the weekend G20 summit continued overnight after making stocks and risk currencies gap on Monday morning. US Treasury yields fell below 3%, with interest rate futures still indicating an 80% chance of another Fed hike in December, with added confirmation as the latest ISM manufacturing print surprising to the
The weekend’s G20 meeting with the trade war truce between China and American has seen some big gaps up in risk assets, with Chinese stocks in particular rallying hard. The Australian dollar has been a big benefeciary, gapping up against all the majors and crosses, as has the Kiwi with the Yuan weakening considerably. The Shanghai
By Chris Becker Looking at Chinese stocks first, where last week saw the Shanghai Composite again fail to stabilise above tentative support at the 2600 point level, but at least there hasn’t been any new lows. The weekend news of a potential truce in the trade war between America may give some added spark to this depressed
Outside Australia it’s been a good finish to the week on stock markets across Asia as aniticpition builds for the Trump-Xi meeting at the G20 conference this weekend. The Chinese manufacturing PMI came in bang on no expansion, which may have been behind some of the lack of confidence on Australian markets. The Shanghai Composite is up
A fairly muted response to the big surge on Wall Street overnight here in Asia today, with modest gains outside of China, while the Middle Kingdom share markets suffered a small setback. The USD continued its selloff however, especially against Yen and Kiwi, while the Aussie dollar remains above 73 cents. The Shanghai Composite is down 0.3% to 2594 points
AUD is down during the morning after the big spike: Bonds are bid again: XJO is up meekly: Big Iron is up and away. I still think RIO is fundamentally well positioned and hope that head shoulders top dissipates! Big Oil is up, wrongly. OPEC looks ever more snookered by Kashoggi meaning oil must go
Via Damien Boey at Credit Suisse: In our recent note “Style rotation after a panic”, dated 31 October 2018, we highlighted that for this stage of the risk appetite recovery cycle, value has been underperforming badly as a style, while quality has been significantly outperforming. The performance gap has not really narrowed in November. Overnight,
By Chris Becker The Fed has spiked the punch bowl with Chairman Powell seeming to backtrack the faster pace of normalisation of interest rates in a speech overnight. Treasury yields and the USD dropped in response and set a fire under equities with US markets closing nearly 2% higher across the board. The 3Q GDP
Outside Australia, it’s been a good day for stock markets across the region with currency markets relatively quiet leading up to an important speech by Fed Chair Powell tonight, which is likely to involve some twitter dribbling in response from Trump. The Shanghai Composite is up 0.7% to 2592 points going into the close, perhaps finally making some
The AUD is down during the morning after poor construction work done: Bonds are bid but nowhere near enough. There is growing evidence that the Sep QTR was the pivot to much lower growth ahead: XJO is flat: Dalian is boring: Big Iron is down. RIO has a horrible head and shoulders topping pattern which
Via the AFR comes T Rowe Price’s head of Australian equities, Randal Jenneke: The fund manager’s base case view sees house prices falling by between 10 and 20 per cent, but outside factors such as the 2019 federal election could escalate the downturn. “The Labor Party wants to change a lot of policies around negative
