Australian Shares

By Chris Becker  It’s getting tiresome but predictable as sentiment continues to swing from hope to caution as US stocks pulled back due to more earnings guidance being muted or reduced once more, particularly tech stocks and big caps.

The solid start to the trading week has tripped a little bit here in Asia with local and Japanese bourses putting in scratch sessions with gold heading below $1700USD per ounce as oil prices continue to fall.

It doesn’t pay to be rational, according to Bloomie: Australian shares may revisit the seven-year low reached last month as oil volatility and worries over the financial impact of the coronavirus dampened a recent rally.

By Chris Becker  Stock markets continued to rise overnight despite big falls in oil prices and other commodities, as Western nations continue with their plans for early lockdown releases in response to the impact of COVID-19 on economic life.

Its a very solid start to the trading week here in Asia with all stock markets rising following the strong lead from Wall Street on Friday night.

Via Goldman: …the S&P is now just a handful of mega stocks, because as the chart below shows the largest 5 stocks in S&P500 now account for 22% of market cap, even higher than during the dot com bubble.

The Australian dollar is up and away this morning.

By Chris Becker  Sentiment swung wildly on Friday night particularly later in the session as Wall Street rallied, leaving Europe behind as more economic lockdown easings were announced across the globe.

Aaaand, we’re off.

By Chris Becker  Stock markets were unable to translate gains in Asia to anything substantial in the northern hemisphere overnight as caution reigned with disappointing news regarding an antiviral drug plus a big spike in initial jobless gains keep sentiment tempered.

Following the bounceback on Wall Street overnight, risk markets in Asia are in the main putting runs on the board with another surge in undollar assets going into the London open, with commodity currencies in particularly lifting significantly.

Matthew Ross of Goldman Sachs estimates that up to $44 billion could be withdrawn from superannuation funds by people who have been financially hit by the pandemic.

Risk markets in Asia are fighting back late in the session after a mixed start this morning after a solid selloff on Wall Street overnight.

The Australian dollar is holding up all things considered:  One reason is RBA tapering has frozen bond yields in situ.

By Chris Becker  Market reaction was again dominated by breakdown in the oil price complex as June WTI crude futures fell nearly 70% while Brent was down 30%, both at near 20 year lows.

Two factors are combining to make stock markets nervous in today’s session here in Asia with news regarding the ill health of Kim Jong Un and the chaotic nature of oil prices.

Via the excellent Viktor Schvets at Macquarie: Another question that preoccupies investors is whether we are facing a V or W or U-shaped recovery, and the possibility that what has started as an attack on the P&L might morph into a far more deadly and prolonged balance sheet recession.

Via Global Macro Monitor: Caveat freaking emptor.

AlphaBeta’s latest weekly consumption tracker listed travel as among the hardest hit sectors of the Australian economy, with expenditure down 84% from ‘normal’ levels: It’s no surprise that within the travel industry, airlines are the hardest hit owing to the COVID-19 lockdown.

The AUD has weakened this morning: Bonds are biddish: The ASX is down modestly: BHP is now Big Iron’s whipping boy vis oil: Big Gas is copping it.

By Chris Becker  Market reaction was dominated by the oil price fallout in the US as the WTI futures contract went negative as it became a victim of its own supply.

A very mixed start to the trading week here in Asia with local stocks slumping and Japanese markets tripping over as coronavirus jitters continue to plague (sic) the region.

The Australian dollar is roughly stable this morning: XJO is soft:  Bonds are bid: Oil is the man of the moment as it falls towards zero: Make no mistake.