Australian Shares

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Macro Morning

By Chris Becker  Risk sentiment is only positive on Wall Street due to a surge in a handful of tech stocks, as market breadth stretches out as ridiculously thin as the overall PE valuations, with the NASDAQ up through 10,000 points overnight while European bourses slipped. Existing home sales in the US dropped to a

101

Macro Afternoon

It’s a flat start to the trading week as risk markets continue to absorb a lot of hesitation and concern from weekend stats showing the coronavirus isn’t slowing down as expected, with emerging markets and the failed US response creating a lot of “second wave” risk. Gold has lifted strongly with a decent breakout, while

4

ASX sickens on virus

The Australian dollar is down this morning and is forming a possible bearish descending triangle: It is also encouraging to see that shorts have almost all puked, opening the path to lower prices: Bonds are bid: As XJO pukes lower: Big Iron is soft: Big Gas even more so: Big Gold is strong: Big Banks

0

Macro Morning

By Chris Becker  Risk sentiment continues to fade with another hopeful session on Wall Street dashed on Friday, selling off into the close as the risk of the “second-wave” (aka giving up on the first wave) surging throughout the US, let alone other emerging countries weighed once more. Gold shot higher on Fed comments about

124

Macro Afternoon

Probable chart captions: “There is no second wave. VP Pence 15th June 2020” aka “Sometimes two plus two is five” aka “there is no spoon”…. So we end the trading week with a lot of confidence that risk market are not reflecting economic reality but fiscal and behavioral pressure with most Asian stock markets ending

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Macro Morning

By Chris Becker  Risk sentiment continues to fade with a mess Wall Street session overnight, as money pressured bonds instead as US Treasury yields fell further. Commodities were equally mixed, with oil futures lifting while iron ore and gold stumbled, while the latest BOE meeting saw their QE program expanded, sending Pound Sterling to a

101

Macro Afternoon

More hesistation and concern feeding into risk markets today here in Asia, with the shocking unemployment print in Australia absorbed without much fuss. The USD remains mixed against the majors going into the London open while gold holds fast just below the $1730USD per ounce level. In mainland China, the Shanghai Composite is up a

4

Macro Morning

By Chris Becker  Risk sentiment is fading slightly as geopolitical concerns across the Koreas and India/China border clash with the growing coronavirus outbreaks in China and the Southern/western US states. Wall Street sold off going into the close, which should translate into mild losses on the open here in Asia, while currency markets were relatively

118

Macro Afternoon

A much more measured session across stock markets here in Asia as profit taking was the order of the day – except locally as bidders kept on bidding! Concerns about coronavirus spreading in Beijing and the USA are not yet genuine or applicable to heavily goosed risk assets, with the USD retreating slightly alongside S&P

6

Most ever fundies see stock bubble

Via BofAML monthly fundie survey. The most number of fundies see a stock bubble ever: But perhaps that just means we short squeeze even higher: Nobody believes in earnings: But they’re chasing it now anyway: Hedgies are piling in. What exactly are they “hedging”? Biden risk is rising: I’d add the stock bubble itself at

6

The Robinhooders are right!

Cross-posted from FTAlphaville: If you had managed to avoid reading the financial press for the past few weeks, and then decided to catch-up on today, you might notice a new phrase being banded about in market commentary. Namely, “Robinhood investors”. Shorthand for retail punters utilising commission-free brokerage platforms (such as Robinhood) to buy stocks, a

10

Credit Suisse: Diversify to survive stock risks

Via the excellent Damien Boey at Credit Suisse: Infrastructure stimulus package in the wings? Numerous press reports are emerging that US President Trump is mulling over a USD 1 trillion infrastructure stimulus package to shore up the recovery. The reports follow recent Fed announcements (or more precisely, reiterations with more detail) on corporate bond purchasing and “Main Street”

3

Macro Morning

By Chris Becker  There’s a lot to digest from overnight markets including China and India border disputes, rising infection rates and case loads of COVID-19 in the US South, plus a swathe of economic data and Fed Chair Powell’s testimony to Congress. Coupled with the ridiculous surge in Asian stocks yesterday, it all ended up

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Macro Afternoon

It was “let’s forget about Monday” on Asian share markets today in response to the next layer of the Fed punchbowl and the potential for another Trump crony bailout/looting spree aka bailout package announced overnight. Stock markets soared with the ASX200 up over 4% at one stage while currency markets were relatively mild, as gold

24

Hertz bubble says it all

Via FTAlphaville: Hertz, the bankrupt car rental company which has become the poster-child for the current market’s speculative excess over the past fortnight, just filed this with the SEC. In case you’re wondering what that is, it’s the document outlining the company’s unprecedented $500m share sale which was sanctioned by American courts Friday night. Despite, we should add, the

6

Macro Morning

By Chris Becker  The Fed rides to the rescue! After looking into a 1000 drop in the Dow overnight, the Federal Reserve stepped in and announced they were buying up all the corporate bonds, injecting $750 billion into the rotten, sucking “risk” edifice that lapped it up with glee. Another papering over of real macro

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Macro Afternoon

Not a good start to the week for Asian stocks with a strong selloff across the region and Wall Street ready to tumble as markets reopen tonight. This is in the wake of the surge in COVID-19 cases across the US and in Beijing, with risk off extending to currencies with gold and Bitcoin both

18

ASX bleeds into spreading pandemic

The Australian dollar has opened sharply lower this morning and is forming a short term bearish descending triangle pattern: Bonds are bid: Stocks are down modestly: Big iron is hanging on: Big Gas is up a tick: Big Gold is the same: Big Banks haven’t fully realised that the value rotation is cooked: Big Chunt

3

Stocks hammered by rotation volatility

Via the excellent Damien Boey at Credit Suisse: Extraordinary factor rotation of late. In early June 2020, momentum and value factor portfolios have been experiencing wild swings. One week it was value very sharply up, and momentum very sharply down, only for the factors to switch places on the leader board the following week. The last time we saw such sharp factor rotation

2

Macro Morning

By Chris Becker  Another night of mixed sentiment to finish the trading week on Wall Street on Friday with US shares opening higher before settling with a minor bounceback, relatively speaking from their volatile previous session. Other risk assets were largely range bound, unsure of where sentiment truly lies given the surge in COVID-19 cases

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Macro Afternoon

Another red day for stocks across Asia but not as bad as expected given the huge risk off mood from Wall Street overnight with a late rally in the afternoon session covering a lot of the losses. Meanwhile the USD has firmed against most of the majors, particularly Yen while the Aussie almost broke the

24

ASX slaughter resumes

The Australian dollar is free-falling this morning: Bonds are boom bid: XJO is being slaughtered again: Big Iron is down: Big Gas ouch: Big Gold is holding: Big Banks slaughter: Big Chunt yawn: My base case for this correction is to wipe out all of May’s gains as the fantasyflation value rotation into banks etc

1

Macro Morning

By Chris Becker  Hilarity ensued last night on risk markets as traders finally worked out the second wave of COVID-19 in the US is coming faster than the first, as new cases and ICU bed use balloon outside of NY. The Fed helped things along with the release of some very gloomy economic figures which

15

Hertz bubble pops

Via FTAlphaville: Well, that didn’t take long. Just as the undead equities rose from the grave to haunt portfolio managers, market strategists and journalists over the past few days, so they now must return to the earth. After all no one, not even our most venerated religious figures, can escape the after life. Yes that applies to

18

ASX bath of blood returns for banks

AUD is struggling this morning: Bonds are bid and the yield curve has been crushed: Stocks have erased a poofteenth of the recent ramp: Big Iron is soft: Big Gas too: Big Gold needs a breakout to restore faith: Big Banks have reversed down with the yield curve. This nicely illustrates the market’s bizarre fakeflation

3

Macro Morning

By Chris Becker  Last night saw the latest FOMC meeting pass, where the Fed’s stance was more accommodative than expected, and coupled with inflation data that was slightly weaker than expected, caused the bond market to tip over into a buying frenzy, with the 10 year yield falling from 0.83% to 0.73%. The USD fell,