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View from the pit
Primary Section
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Crowding gains across stock markets
by Chris Becker Yesterday I highlighted how US stock markets for all the headlines regarding new record highs the broader indices are actually stable, due to the gains centered on only a handful of stocks, as volatility remains spectacularly low: With another record high in the Dow Jones 30 overnight, the broader S&P500 remains stagnant:
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UBS: Department stores at risk as Amazon penetrates
by Chris Becker The ABS June retail sales data recorded a stronger pace in May, up nearly 4% year on year with supermarkets and household goods the main drivers as department stores taper off in sales. UBS puts the word out that its mainly because of Amazon that they’re in trouble and why Woolworths and Harvey
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Can OPEC save itself from OPEC?
by Chris Becker So what’s going on with oil? The West Texas Intermediate (WTI) price finished Friday higher in anticipation of an expected positive (well, negative really) outcome to this weeks OPEC meeting. Combined with a lower drilling rig and a better than expected NFP US employment print, oil markets are slowly turning bullish. But
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US stock markets are vewy vewy quiet
by Chris Becker Quick financial market knowledge – if you hear “the Dow Jones hit a record high today”, that’s NOT an indication that all US stocks lifted. Unlike the broader ASX200, which has…200 stocks in it, the Dow comprises only 30 companies. The broad index to watch is the S&P500 – 500 stocks! And
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BOE holds fire as Brexit worries linger
by Chris Becker The Bank of England (BOE) held its interest rate meeting overnight and disappointed the bullhawks with both a hold, keeping rates steady, but also lowering their growth and inflation forecasts. The Pound dropped on the announcements, sending Cable (GBPUSD) down over 100 pips to the lower range of its current uptrend channel:
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Mueller’s investigation to derail Trump’s agenda
by Chris Becker The most important part of deciphering the circus that is the Trump Administration is not the schadenfreude and daily pointing of fingers and insane tweets (or leaked phone calls), but rather discerning the market and macro risk that it entails. American stock markets have enjoyed lower levels of volatility and make new
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Which way for the BOE?
by Chris Becker Is the Bank of England going to join the Federal Reserve and hike rates this evening, Australian time, when it meets for its monthly meeting? As always with economics, there’s two hands to consider. The bullhawks want Mark Carney to press the hike button. From The Telegraph: former deputy governor Sir John
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Why Dow at 20,000 points is meaningless
Crossposted from The Conversation Jay L. Zagorsky Economist and Research Scientist, The Ohio State University The Dow Jones Industrial Average just broke 20,000 for the first time. Traders and investors cheered this historic high of the world’s most famous stock market index, which is composed of 30 of the biggest and best-performing American companies
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US stocks: only good for the short run
As a new golden American oligarchy begins in the next couple of days, it’s timely to note the huge rise in US stocks since the outcome of the election: And with promises of tremendous fiscal stimulus through increased defence spending and other pork barreling, not including corporate tax cuts and barriers to investment in non-renewable
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The wonderful world of broker conflicts
A reminder today from Reuters on the perils of being a research analyst at a brokerage firm. The guts of the story: JP Morgan equity strategists downgrade Indonesian stocks to underweight The Indonesian finance ministry takes offence and stops using JP Morgan as a primary dealer for its government bonds JP Morgan upgrades Indonesian stocks
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Asset Allocation and the Trump border tax
Here’s some more on border taxes from the FT, following up on my rundown yesterday on Trump’s effect on taxes. The FT are invoking JP Morgan (JPM) to show which countries and stock markets are most exposed: JPM then go on to draw some conclusions based on ETF flows: It is of course almost certain that
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Evaluating Trump’s corporate tax scattershot
There are a number of elements to Trump’s tax plan. Most of it involves cutting taxes on the richest and hoping that “trickle down” will sort everything out. I don’t think there will be a happy ending to that story. However, the tax plan is more complicated than that, especially at the corporate level –
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Pound dumped on hard Brexit
The biggest move in currency markets over the weekend, and this morning as Asia wakes up, is Pound Sterling gapping down nearly 200 pips against USD: And on the crosses, particularly against the Australian dollar: This has been a swift reversal from a recent surge in the once-favoured currency, but watching this as part of
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Can the US stock rally continue?
From Chris Weston at IG, The US financials space will get attention above all other sectors this earning season, not just because the analysts’ consensus is for earnings-per-share growth of 21.5%, but because for those more macro-focused traders, what CEOs say about the potential for a further boost to net interest income (from a steeper
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Will Trumps fiscal boom be a fizzer?
All risk markets have and continue position themselves in preparation of a super fiscal boom emanating from the Republican controlled Congress in the first term of Donald Trumps Presidency. And why not – he has promised the wall, I mean the world in terms of infrastructure spending, repatriation of US industry, and huuge tax cuts
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Markets have priced in rainbows but no rain
There is a lot of sunshine and rainbows in economic stats recently: Morgan Stanley’s leading trade indicator: Consumer confidence is generally up in the US: And in Europe: With US construction still strong: The dark clouds? Not many. Rising interest rates and a rising US dollar choking off any recovery
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Buy US financials on Trumpflation?
by Chris Weston, IG Virtually every research house has a ‘buy’ or ‘outperform’ call on the US financial sector and most feel that if we are genuinely going to see better growth and inflation under a Trump administration then there is no better sector to own than financials. Clearly this view is already playing
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Speech impediments and predicting the unpredictable
My favourite Economist section, The Technology Quarterly recently came out with a focus on voice recognition. The key reason for the focus is that Microsoft Switchboard reached a 5.9% error rate – which is the same error rate as a human transcriber and considerably better than the average offshore call centre operator I’ll bet… There are
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Are the Olympics sucking the volume out of markets?
by Chris Becker. I don’t watch the Olympics, not because I don’t watch commercial TV, but because they raise jingoism and corporatism high above individual achievement, amid rampant corruption and graft – and don’t get me started on those absurd medal tallies! But my minority view aside, it looks like another impact is the lack of trading volume in
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Markets poised as US jobs report looms
by Chris Becker Outside of Australia, markets have been moving sideways and shuffling waiting for the monthly employment stats to be released tonight in the United States – the nonfarm payrolls or NFP. This is the most important event on the economic calendar, as the strength of job creation is critical to the Federal
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US stock boom is running out of puff
Although most will consider this week’s monthly meeting of the Federal Reserve as a non-event, it must be reminded that it coincides with the two year anniversary of the second longest ever bull market in US stocks history. At just over 2600 days, it will surpass the post WW2 to mid fifties boom, but still