Australian Shares

5

Macro Morning

By Chris Becker  The latest US employment figures on Friday night – aka non-farm payrolls – caused an up-swell of algo trading as the nominally positive result saw risk zoom to new monthly highs across the board, which should encourage even more risk taking here in Asia on the open. Equity markets have now fully

119

Macro Afternoon

Heading into tonight’s US non-farm payroll (monthly unemployment) print, Asian stock markets have put on another strong finish to the week as risk sentiment goes back to its excessive highs following an all too brief pause. Non USD currencies are doing well before the report with gold the only undollar not to make any meaningful

10

Grantham: Market “lost”

Superb as always from the GMO crew: UNCERTAINTY HAS SELDOM BEEN HIGHER Oddly, Neither Has the Stock Market By Ben Inker As we have worked over the last couple of months to understand the likely impact of the pandemic on economies and asset classes around the world, the most striking feature is the extraordinary uncertainty

5

Macro Morning

By Chris Becker  Risk markets finally returned to some semblance of sanity overnight, with stock markets pausing and eventually retreating slightly from their orgiastic excess all week. Meanwhile risk currencies continued to new highs as the USD weakened further, while bond yields also rose in the wake of the ECB increased its asset purchase program

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Macro Afternoon

Stock markets are yet to take a breather after a week of excess with only Chinese markets pulling back ever so slightly. Risk sentiment remains well above macro reality going into tonights ECB meeting with most currencies slipping against USD except gold which has recovered slightly to just above $1700USD per ounce. In mainland China,

24

ASX fakeflates through 6000

The massively overheated Australian dollar is pulling back a bit this morning: Bonds are bid after last night’s shellacking: XJO has recaptured 6000: On a cool 20x NTM PE, the highest since 1999 and the greatest bubble of all time, until today: Big Iron ore still running and looks positively cheap with Materials on a

6

Macro Morning

By Chris Becker  Risk markets continue to transmit the message that the pandemic is completely over, business is back as usual, that there are no macro structural issues at all and earnings are going to be tremendous! European markets surged despite record low contractions in service PMIs overnight as unemployment numbers stabilised, while in the

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Macro Afternoon

Stock markets are inflating fast as the lack of any connect with reality and a weaker USD sends them careening back to their overvalued pre-COVID19 valuations. The technical recession in Australia was celebrated with the Aussie dollar almost reaching its start of year high while Brent futures shot through the $40 level on more OPEC+

24

ASX fakeflation melts up

It’s something else now. The AUD is in an unruly melt-up: As the suicidal RBA snores, bonds are selling too: XJO looks positively sober next to the currency. Not long now before it is crushed by it: Big Iron is one of the few in a real-life boom: Big Gas is lagging oil which has

5

Macro Morning

By Chris Becker  You can beat protestors, but you can’t beat exuberant sentiment across risk markets overnight with European stocks surging to new highs while Wall Street finished with a flourish despite traders having to drive their Maseratis through broken glass to get to work. The Aussie dollar again outperformed against all the major currencies,

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Macro Afternoon

Stock markets are once again oblivious to real world macro settings as the Dictator-in-Chief sends the USD plummeting against major currencies at a similar rate of decline of the US standing in the world. The RBA maintained its historically low interest rates, not going negative as many economists are pushing locally, while Bitcoin breached the

1

Defining the new Australian profits cycle

Via the excellent Damien Boey at Credit Suisse: Two different approaches to modelling ASX 200 earnings, with two different answers. We use two different top-down approaches to explain and predict the cycle in ASX 200 real earnings per share (EPS). The first simply correlates market real EPS with economic activity as measured in the national accounts. The second is more

5

Macro Morning

By Chris Becker  Stock markets continue to diverge from economic reality with Wall Street lifting higher despite rising civil unrest and growing tensions with China over Hong Kong and other trade disputes. The latest ISM manufacturing survey had some glimmer of hope within but still showed extremely weak conditions across the US as unemployment ravages

178

Macro Afternoon

A modest start to the week as Chinese equity markets react to the wet lettuce rhetoric from Trump on China’s boot on Hong Kong’s neck as most capital cities in the US burn, which should send housewares/DIY/retail stocks up when Wall Street opens later tonight. The USD is falling sharply, particularly against the Aussie dollar,

0

Macro Morning

By Chris Becker  Action on markets on Friday night was centered around the US reaction to the Chinese boot on the neck on Hong Kong, with Trump unable to enact anything but hot air in response which calmed stocks on Wall Street somewhat even though the headline Dow fell slightly. The weekend race riots across

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Macro Afternoon

A flat end to the week as the window dressing month end meme takes place across risk assets with most stock markets pulling back here in Asia. Besides the usual end of month reshuffle, risk is still waiting Trump’s policy announcement on China, but it seems he’s too busy having a dummy spit about Twitter

18

Keen versus Gurner to distract Switzer investors

Bloody Switzer won’t leave poor Steven Keen alone: WATCH | SWITZER TV PROPERTY: “Dr Doom” Steve Keen and Tim Gurner join @PeterSwitzer on our latest property [email protected]#Investing #Property #Economy #Money #Finance #HousePrices #RBA #COVID19 — Switzer (@Switzercomau) May 29, 2020 Roll out the housing bear to distract investors from this underperforming ETF:

2

Bank bid blows up

The Australian dollar is hovering at the highs this morning even as S&P futures fall: Bonds are firm: XJO has gapped lower at the open: Big Iron is up: Big Gas down with oil’s struggles: Big Gold is warm as DXY softens: The Big Bank bid has run into a big reversal. The whole value

1

Macro Morning

By Chris Becker  The risk edifice continues to push higher, helped along by a reduction in continuing jobless claims in the US even though all the other economic markers show the world’s biggest economy in a deepening recession. Wall Street stumbled at the finish due to some Trump remarks with US Treasury yields rising slightly,

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Macro Afternoon

A busy day in Asia with lots of economic reports confirming the impact the coronavirus is having on world economies, with the RBA all but ruling out negative interest rates as the local appetite for capital expenditure falls sharply. Despite the economic reality, the unrelated share market rally’s continue across the region, save for embattled

16

Mums and Dads drive stock crash up

Via Morgan Stanley: Retail Squeezing Institutions – but Retail Demand May be Slowing Another short squeeze, a new worst day for Growth vs Value (MSZZGRVL) after just setting that record a week ago, the 16th worst day for Momentum (MSZZMOMO), etc. and investors are asking “who’s buying (and does it continue)” and “does the rotation have

8

Too early to celebrate value comeback

Via the excellent Damien Boey at Credit Suisse: Value bounces hard. Over the past few days, we have seen value factors outperform very sharply. Sectorally in Australia, high yielding banks have led the charge, while healthcare stocks have been the laggards. The bid for resources stocks has also unwound, strangely on concerns about US-China tensions on the one hand, but

72

Macro Afternoon

A mixed mood in Asia despite the orgy of buying still going on in the northern hemisphere with only Japanese stocks advancing on the whiff of more stimulus measures. Meanwhile the Chinese Yuan hit a new low versus USD again, with offshore trading pushing through the 7.17 handle as other majors kept firm against USD

3

Macro Morning

By Chris Becker  The return of Wall Street sent risk sentiment higher overnight as stock markets continued their push to return back to normal overinflated bubble like status before the COVID-19 pandemic. The USD took a big hit against the majors with Pound Sterling back to a two week high and the Australian dollar pushing

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Macro Afternoon

A solid up day here in Asia despite the lack of a lead from US and UK markets with a sea of green across stock markets. The USD is weakening against all the majors, save Yen, with gold still asleep on the sidelines. In mainland China, the Shanghai Composite closed 1% higher to 2846 points,

5

Macro Morning

By Chris Becker  Even a closed Wall Street couldn’t keep the bulls away overnight with European markets surging as the prospect of more economies opening up post-COVID19 overshadowed any concerns over the Chinese/US tensions. Currency and bonds were relatively stable, although gold lost further ground while industrial commodities lifted with oil prices hitting another new