Australian Shares

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Macro Morning

By Chris Becker  Fear is gripping equity and risk markets with nothing but selling overnight although to put in context, the bubblish S&P500 is now only back to its December 2019 high! Context is not traded on markets however, with the USD sold off again boosting Euro and hurting continental stocks, with Treasury yields also

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Macro Afternoon

Not quite the bath of blood on Asian markets although Japanese shares caught up to the fear over the weekend, while the usual buying of safe havens like gold and Yen abated somewhat as price was way overextended. The Shanghai Composite has fallen 1.6% to break back below the 3000 point barrier, currently at 2980

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Virus of volatility to spread

Via Damien Boey at Credit suisse: In our latest article “The virus in volatility” dated 24 February 2020, we formally increase our style tilt towards quality, and reduce our exposure to value. ASX 100 long ideas that are broadly consistent with Credit Suisse analyst recommendations include: CSL, RMD, FMG, JHX, CHC, A2M, ALL, CAR, SGP,

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Macro Morning

By Chris Becker  A bath of blood on stock markets overnight with both sides of the Atlantic down a whopping 3-4% across the board! Fear is a powerful ally for selling, and fear is spreading faster than the actual coronavirus and its impact on the global economy. For stock markets, its the correction it needs

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Macro Afternoon

Asian markets are not responding well to the weekend news, with non-mainland Chinese stock markets selling off broadly. Korean stocks are down more than 3% while local stocks are off 2%, as the fear surrounding the coronavirus from China spreads. Gold and other currencies gapped wildly on the Monday morning open with the shiny metal

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Magellan: No virus, no bubble

The untouchable Hamish Douglass of Magellan is tempting fate, at the AFR: Magellan’s house view is that there is an 80 per cent probability rates stay low for the rest of this cycle, and central banks will be prepared to let inflation run a bit before considering rate hikes. “It’s very hard to get rates

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Macro Morning

By Chris Becker  Continued unease over the impact of the corona-virus is sending stocks down again, with Wall Street falling on Friday night. This wasn’t helped by a poorly performing US manufacturing PMI, alongside the services PMI implying a real economic impact from the virus. USD dropped against all the majors and gold soared again

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Macro Afternoon

The rumblings of fear are being heard across equity markets here in Asia with more safe haven buying in gold and bonds pushing stocks down across the region. Offshore Yuan is trading another handle higher at over 7.04 while the Aussie dollar has been pummeled to an 11 year low and briefly touched the 65

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MS warns on volatilty spike

From Moargan Stanley today: Investors largely shrugged off the factor rotation on Feb 4th as an isolated event, but it shouldn’t be dismissed – higher factor volatility is structural and is here to stay.  Funds are taking bigger factor bets, positioning is crowded, leverage is high, and factor correlations are getting more unstable – all of which

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Macro Morning

By Chris Becker  Stock markets seem to be rising and falling in line with the pace of the coronavirus, falling again last night as the number of external fatalities rose, prompting more bond and USD buying and a reversal of the previous night’s stock gains. Gold continues to lift ever higher, although Yen is selling

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Macro Afternoon

The main takeaway in Asia is more stimulus planned by China, including another weakening of Yuan, now trading well above the 7.02 level in offshore trading with most stocks putting in positive sessions: The Shanghai Composite looks set to close about 1.5% higher, soaring past the 3000 point barrier as it continues its turnaround, while

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Goldman: Equities gunna pop

Via Goldman today comes a statement of the obvious: Despite posting unusually strong returns in 2019, the equity bull market continues; investors have largely shrugged off the potential economic and earnings hit from the coronavirus. The relentless rise in equities is largely a function of lower bond yields and the hope that the current disruption

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Macro Morning

By Chris Becker  US stock markets followed the positive mood generated in Asia then enhanced in Europe, with the S&P500 again hitting another record high as the release of the latest FOMC minutes gave a “steady as she goes” signal. The deceleration in new cases of coronaviruses on top of continued stimulus plans announced from

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Macro Afternoon

It’s been a bounceback day here in Asia for stock markets at least, as fear swings back to hope, helped by the Chinese propaganda surrounding growth prospects viz. coronavirus, while the ratings agencies continue to downgrade 1Q 2020 growth across the region. The true arbiter is gold, which continues to climb above $1600USD per ounce,

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Macro Morning

By Chris Becker  US stock markets returned from their long weekend and went on the defensive straight away, absorbing the Apple guidance cut with some mild falls on Wall Street after European bourses fell in response to a rout in Asia. The USD is up against all the majors – save gold which has zoomed

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Macro Afternoon

Its a risk off mood here in Asia today with the fallout from the Apple revenue guidance striking a little bit of fear in stock markets. The release of the RBA minutes sent the Aussie dollar down, while gold and Yen advanced on the safe haven bid. The Shanghai Composite is stumbling around after its

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Macro Morning

By Chris Becker  Risk markets traded thinly overnight due to the closure of Wall Street for a holiday, although stocks on both sides of the Atlantic did inch up slightly. While the USD Index was unchanged, mainly due to a flat lining Euro, commodity currencies like the Aussie and Loonie slipped despite a small lift

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Apple warns

Just out: Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. Work is starting to resume around the country, but we are

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Macro Afternoon

Today’s session in Asia was marked (sic) with a lot of markdowns to GDP growth across the region in the wake of the coronavirus, with Japanese and Australian economies expected to feel the brunt the most in the first quarter. Asian stocks however are quite mixed with Chinese markets rallying on potential stimulus from the

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Can the ASX keep defying the risk?

Via the excellent Damien Boey at Credit Suisse: Globally, equities have very much been a momentum and quality story in early 2020. Value factors have badly underperformed, having bounced hard in late 2019. We have seen a very sharp risk-off rotation in alpha terms, even as the market has gained. Having said this, the momentum

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Macro Morning

By Chris Becker  Friday night saw risk markets wobble slightly as the latest US industrial production numbers fall slightly while inflation expectations also pared back, although retail sales were upbeat as expected. Treasury yields fell slightly and are still signalling almost no change for the Fed come March, while the USD continued its flex against

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Macro Afternoon

A mixed day here in Asia with some stock markets following Wall Street down, some advancing particularly in China and its Australian satellite.  Currency markets are equally quiet with gold almost unchanged with the major investment houses still wracking their brains over what to do with Chinese GDP expectations in the wake of the coronavirus

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Macro Morning

By Chris Becker  Risk markets continue to be rattled by fear over the coronavirus with the big jump in Chinese cases sending Wall Street send slightly overnight which should provide a minor headwind to end the risk taking here in Asia going into the weekend. Euro continued its post Brexit plunge with a near three

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Macro Afternoon

A spike in new cases of coronavirus shook markets up a bit here in Asia today depsite the good run on Wall Street overnight. Gold and other safe havens have lifted, with Bitcoin accelerating after its recent breach above the $10K mark. The Shanghai Composite is down the most, off by 0.6% after the long

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Macro Afternoon

The return of Japanese traders and a still upbeat Wall Street saw most Asian stock markets advance, with the major macro event being the RBNZ holding their cash rate and the New Hampshire primary in the USA. Gold is slipping while Bitcoin breached $10K again, with Yen buying moderating and helping buoy the re-opening of

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Blackmores is the dead Australian canary

Profit warning! After the downgrade, trading on 60x PE. This is Australia. In equal parts massively overvalued and overexposed to the Chinese shutdown. If Blackmores is right, and it takes three months to resume any kind of normalcy in China (let alone longer), then Australia will be sunk into deep recession mid-year as an income

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Macro Afternoon

It’s all engines ahead for risk as Chinese shares breakout, pushed along by a higher Aussie dollar and lower Yen as risk appetite comes back again here in Asia. Other safe havens like gold and Bitcoin are slipping while Japanese markets are closed for yet another holiday. The Shanghai Composite is up 0.5% after the

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Transurban feasts on population ponzi

Transurban continues to feast on the ‘Big Australia’ mass immigration policy, delivering more strong growth on its toll road network: Transurban’s half-year profit rose by 11 per cent amid higher traffic on its toll roads in Australia… Net profit totalled $162m in the six months through December, rising from $145m a year ago. Proportional earnings

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Macro Morning

By Chris Becker  Risk markets are oscillating between hope and fear with a swing to the former overnight on Wall Street overshadowing the fear in Asia yesterday. Commodities and undollar assets continued to fall however, with oil falling 2% to a new weekly low with only gold holding fast. Looking at Asian share markets performance