Australian Shares

3

Stocks to buy as yields rise

The bond back-up continued in the US overnight and caused some dyspepsia for stocks. JPM has more on where this leads: As bond yields have moved up, there has been a general focus on whether this will 1) become a problem for the broader market, due to elevated multiples and 2) whether it will continue

5

Macro Morning

Wall Street dropped for the third day in a row despite yet more strong economic and pandemic data with USD finally pulling back after its week long trend upwards. 10 year Treasury yields remain elevated at year highs, pushing through the 1.3% level at one stage while commodities were mixed as copper continued its own

159

Macro Afternoon

Asian stock markets are mixed given the lack of confidence on Wall Street overnight, as strong US economic data continues to push the USD higher and leaves the risk markets a little hesitant. The latest unemployment figures locally didn’t cause much movement while the return of mainland Chinese markets saw the only bright spot across

0

Macro Morning

Strong economic data from the US is haranguing risk sentiment with the USD strengthening once more on the presumption that the easing may ease off sooner than expected. Retail sales and industrial production all outshone predictions, sending Wall Street down slightly while boosting commodities and a keeping US Treasury yields elevated at year highs. Bitcoin

123

Macro Afternoon

Asian stock markets are somewhat mixed given the stumble on Wall Streets return from a long weekend overnight, with overextended Japanese stocks falling back the most as expected while mainland Chinese risk markets remained closed for NY holidays. Bitcoin has again briefly touched the magical $50K level, as is trails ever higher ready for a

0

Macro Morning

Wall Street returned from its most ironoic holiday over night and stumbled, pulling back European stocks and potentially upsetting the groove that started in Asian equities at the start of the trading week.  The USD came back against the majors with the Aussie dropping alongside gold while US Treasury yields rose again with the 10

134

Macro Afternoon

Asian stock markets have doubled down on their great start to the week with gains across the region, including the return of some Chinese markets. Bitcoin almost touched the magical $50K level but is still trailing high at well above the $49K level as nothing can stop this bubble: The Shanghai Composite remained closed for

0

UBS: BHP dividend boom a positive

Via Glynn Lawcock at UBS: ONE LINER NPAT miss but higher dividend a positive. KEY NUMBERS Underlying EBITDA of US$14,680m (+21% y/y) vs UBSe US$15,361m (Vuma cons US$14,689m). Underlying NPAT of US$6,036m (+16% y/y) vs UBSe US$6,640m (Vuma cons US$6,331m). Underlying EPS of US119.4cps (+16% y/y) vs UBSe US131cps (Vuma cons US125cps). DPS of US101.0cps

2

Macro Morning

Wall Street was on holiday last night but that could not stop the bulls with European stocks putting in a twelve month high as positive risk sentiment across the risk complex cannot be held back.  The USD fell back slightly with some intrasession volatility across the majors while futures indicate that Treasury yields will rise

3

The tech bubble inflates some more

For those old enough to remember the last tech bubble it was given away by the rise of swags of unprofitable firms with vast valuations based upon delusional extrapolations of earnings. Hello Tech Bubble 2.0: Good morning. Having survived the cold snap intact, FT Alphaville woke from our winter slumber this dreary Monday to find

89

Macro Afternoon

Asian stock markets have started the week in an ebullient mood given the solid lead from Wall Street on Friday night with the USD given back ground against the major currency pairs as US Treasury yields continue to spike higher.  Bitcoin gapped much higher this morning, almost above the $49K level before crashing back down

1

Goldman lifts profits outlook again

Since the rise of vaccines, we have been expecting a profits boom to emerge in developing economies as accelerated revenue gains associated with catch-up growth land upon recession depleted cost bases. The recent profits season was excellent and Golmand has upgraded the outlook again: Raising our S&P 500 2021 EPS forecast to $181 following 4Q

0

Macro Morning

Friday night saw a continuation of positive risk sentiment across the risk complex with Wall Street lifting higher as it goes into a long weekend holiday.  The USD was effectively unchanged with some intrasession volatility across the majors evening out while Treasury yields rose to a near 12 month high. Commodities saw solid returns again

2

Goldman: Expensive stocks to get expensiver

Goldman has been the great bullish Pide Piper of the post-COVID recovery. Today it continues the bullish line even though, as we all know, some asset prices are clearly bubbly: Since our last update investor sentiment has continued to be bullish, and we think risky assets are generally overweight in global portfolios. Retail and hedge

3

Macro Morning

Initial weekly jobless claims in the US spiked a little higher than expected, with continuing claims also climbing higher but that didn’t dampen all risk spirits with Wall Street edging slightly higher. The USD was effectively unchanged as were Treasury yields while commodities saw mixed returns as oil pulled back slightly while gold fell back

46

Macro Afternoon

Asian stock markets are generally higher except for local stocks despite continued mixed leads from Wall Street and European stocks overnight with local currencies still strong despite the USD coming back a little against the majors in the wake of the lower US inflation print. Bitcoin continues to stall, falling below the $45K level as

17

Gold stocks take off as results jump

It’s been a frustrating few months for gold investment. Following the big COVID-19 spike, a falling USD and real interest rates have been unable to sustain the rally, even though these are prime conditions for doing so. DXY: Gold versus TIPS: Doubtless, gold got overvalued. But its recent underperformance is either a signal that the

11

Timing the market top

Matt King at Citi is always worth a read: …we reckon many risk assets are in a bubble which has been growing since 2013. This has necessitated one of several shifts in the way we do strategy, and feels like one way in which this time really is different. Traditionally we would spend a lot

1

Macro Morning

US inflation data for January was much lower than expected, which took the edge of the weak USD meme running through currency markets as stocks also stumbled on Wall Street . US Treasury yields pulled back further while commodities kept on bidding with copper and oil making new yearly highs again. Bitcoin is having an

63

Macro Afternoon

Outside of Japan, Asian stock markets have re-engaged to the upside despite the mixed lead from Wall Street overnight with local currencies still surging against a weak USD. Bitcoin has stalled in its epic journey, falling back but not below the $46K level following the Tesla bid as momentum reverts from its overbought status on

2

Macro Morning

Steady as she goes across most risk markets overnight, although Wall Street wobbled after European bourses stalled out due to the higher Euro.  The USD remained weak against most of the majors although gold and silver were largely unchanged while US Treasury yields pulled back slightly after recently almost making a new yearly high as

84

Macro Afternoon

Asian stock markets are somewhat mixed despite the strong lead from Wall Street overnight with Chinese bourses leading the way while local stocks fell back sharply as the Australian dollar accelerated against the short squeeze on USD. Bitcoin continues its epic journey higher, now up near the $47K level following the Tesla bid as momentum

6

Profits ripping

I have noted many times recently that profits are set for a tearaway year in 2021 owing to a combination of massive stimulus, massive cost-cutting, massive demand recovery and a massive inventory cycle. BofA gives a good take on the launch pad: What recession? 4Q earnings are now up YoY vs.-2.5% in GDP Corporate earnings

1

Macro Morning

A lack of events on the economic calendar but the potential for further US fiscal stimulus kept sentiment high overnight with new record highs on Wall Street. The USD remained weak against most of the majors with small gains in gold and silver while US Treasury yields almost made a new yearly high near the

115

Macro Afternoon

Asian stock markets are following the strong lead from Wall Street on Friday night with surges across the region, as USD remains weak following its shutdown post the very weak US unemployment print. Bitcoin has broken out of its funk, finally able to make a new high above the previous resistance level above $38K as

0

MS: VAR shock over

Via Morgan Stanley: Life After VaR Shocks VAR shocks dissipate more quickly when growth is good.With systemic risk modest, upward revisions to our economic forecasts and encouraging COVID-19 developments, we remain constructive . Cross-asset, equity vol is most ‘dislocated’, while oil and cyclical FX stand out for ‘reflation’. Life after VaR shocks–fundamentals matter: The cross-asset

6

Here comes the inflation panic

At FTAlphaville We’d like to draw your attention to two articles that have recently graced FT.com. Here’s the first, from the FT’s German industry correspondent Joe Miller, which appeared online earlier today: German carmakers are considering building up semiconductor stockpiles to prevent a repeat of the crippling chip shortages that brought assembly lines to a

10

Macro Morning

The US unemployment print was bad, which is good for stocks, bad for USD so we saw a continuation of the rally in equities while a big reversal in USD fortunes jolted the currency markets. US Treasury yields made another new one month high while commodities rose across the board, except for iron ore and