Australian Shares

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ASX follows oil into the red

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. Things will get much worse as Brent suffers the same fate as WTI: Big Gold is up: Big Banks are sagging on oil exposure: We need to

3

Macro Morning

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. Brent crude fell over 6% to match its previous lows, as other industrial commodities also slipped as Wall Street took the blunt and a

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Macro Afternoon

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. European futures are looking a bit brighter however and Chinese stocks are rallying later in the afternoon. The Shanghai Composite is up nearly 0.4% going into the

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Macro Morning

By Chris Becker  Green across the board on stock markets on Friday with traders discounting the future by looking at current COVID-19 results as governments around the world itch to get back to “business as usual”. The USD closed slightly lower against the majors, except gold which fell again, while commodity prices rose, and Treasury

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Macro Afternoon

Risk markets are all beside themselves as Trump pushes his “open America to a 2nd wave of coronavirus” agenda this morning, pushing the risk complex ever higher as it prices in the soon-to-be economic upside while forgetting any problems in the long run. Nothing unusual there. Gold has fallen back below the $1700USD per ounce

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Inside FANG stoopid

Cross-posted from FTAlphaville: In the market sell-off during the coronavirus crisis, the fabled FANG stocks (that’s Facebook, Amazon, Netflix and Google) have diverged. Netflix and Amazon have split from their compatriots due to their business models being uniquely suited to a stay-at-home driven economic shock: The divergence is a reminder that, for all their attempts

10

Macro Morning

By Chris Becker  Before the open this morning, markets are reacting – hastily of course – to the US plans to shoot themselves purposely in the face with very early re-openings of their economy, but this has been almost overshadowed by more OPEC communication where they’ve admitted more or less that more production cuts are

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What happens economically if we find a coronavirus treatment?

Via Stat: A Chicago hospital treating severe Covid-19 patients with Gilead Sciences’ antiviral medicine remdesivir in a closely watched clinical trial is seeing rapid recoveries in fever and respiratory symptoms, with nearly all patients discharged in less than a week, STAT has learned. Remdesivir was one of the first medicines identified as having the potential to impact SARS-CoV-2,

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Macro Afternoon

A solid down day here in Asia for stock markets in response to the falls on Wall Street and in Europe overnight as risk aversion starts to creep in. The local unemployment print had little effect on the falling Australian dollar while bond markets are remaining flat as well.   The Shanghai Composite was down before

5

AEP: Stocks delusional again

From Ambrose Evans-Pritchard today: Investors are repeating the mistake they made all through February and early March. They are again underestimating the immense economic shock of COVID-19. Can there be any parallel in market history to the surreal clash of narratives we saw this week? Global bourses soared even as the International Monetary Fund painted

0

Global fundies confirm bear market

While they all buy like mad? Via BofAML: 1. BofA April FMS shows extreme investor pessimism…cash levels jump from 5.1% to 5.9% = highest level since 9/11 terrorist attacks; we say April = peak pessimism. 2. 93% expect global recession in 2020; investors think global GDP cuts largely over, but global EPS cuts just beginning

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Macro Morning

By Chris Becker  Before the European session yesterday, a wave of fear gripped markets as the IMF forecasts and then later, US economic data pointed to a bigger contraction than expected due to the coronavirus. US retail sales for March were the worst drop on record, with the USD spiking against all the majors save

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Macro Afternoon

A mixed day here in Asia as stock markets stumble instead of surging following the bigly increase on Wall Street overnight. The USD is coming back against the commodity currencies in particular with sharp falls in Aussie, Kiwi and Loonie although notably Yen remains firm as US equity futures also pullback.  The Shanghai Composite is

5

Macro Morning

By Chris Becker  Another big surge on Wall Street as hope and delusion continued to be mixed up by traders watching case counts of COVID-19, instead of the underlying macro problems mounting. Oil prices continued to fall despite the OPEC+ production cut promises, with the USD falling alongside against all the majors as gold remained

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Macro Afternoon

With all risk markets back on deck, it was a co-ordinated buy-in with Japanese markets pushing the hardest despite a stronger Yen. Gold continued its epic run, now up to an eight year high above the $1700USD per ounce level. The Shanghai Composite is surging at the close, currently up 1.2% to 2816 points while

5

Macro Morning

By Chris Becker  A big weekend with a lot of big news to absorb as most markets fully return on the open today here in Asia. The OPEC+ production cut was met with a wide selloff in oil prices, while the latest EU financial package only saw a mild slump in Euro as most traders

3

ASX fades Wall Street

The Australian dollar is still running amok this morning: Bonds are bid: XJO is up but has largely fading overnight gains again: Big Iron is mixed: Big Gas still hopeful: Big Gold still crap: Though not as crap as the fake profits, dividend-free banks: Big Realty is nowhere near fair value: Some sense shown in

2

How to value stocks with all earnings at zero

Cross-posted from FTAlphaville: The problem in the era of coronavirus is that nearly all company earnings, without massive government intervention, are going to zero. Indiscriminately. So really, everything is overvalued ceteris paribus. Which sort of makes writing on something trading at 100 times earnings feel kind of silly. What would help our cause, however, was

2

UBS: Stocks nowhere near bottom

Via UBS: How much could EPS fall in a recession and what’s the true market PE? Using consensus, the market 12m forward PE is 14.7x. However, consensus does not appear to have fully accounted for COVID-19 due to uncertainty in the range of outcomes. So far consensus only expects a 3% contraction in market EPS

2

Macro Morning

By Chris Becker  US stock markets remain detached from reality and continued to bid higher as oil prices also keep the delusion going as DOE oil inventories reached record highs overnight. The latest FOMC minutes failed to raise any caution that earnings are not being priced properly with Wall Street surging 3%, dragging proxies like

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Macro Afternoon

Risk markets are mixed across the region with local shares taking a wild ride throughout the session as a succession of banking related and bond related news hit the newswires. Only Japanese shares advanced substantially with a minor knockback in major currencies including gold as USD regained some strength. The Shanghai Composite is putting in

0

Macro Morning

By Chris Becker  The risk complex is in short termism mode as nobody was ready to keep surging equity prices higher overnight, with Wall Street eventually slipping into the red and setting up for some confused options on the open here in Asia today. European bourses ran with the Asian surge but then hit a