New Years resolution: Sell Bitcoin

Not having a good start to 2018 (I prefer 12018, let’s get the Holocene going!) for Bitcoin, with prices down more than 6% on the first day of trading. Having nearly reached $20,000 in mid-December, its now at $13,814 after almost cracking $13,000… Chart from Here’s Bloombergs take on first day of year trading,


Tax cuts are wrapped, waiting on Trump to sign the card

Both branches have now approved the Trump tax cut bill, which is now just waiting on Trump’s signature. His signature didn’t come immediately, with the suggestion that Trump may be holding off to delay some of the spending cuts until 2019. My view continues to be that the tax cuts are a short-term sugar hit for the


Sell the fact?

Buy the rumour, sell the fact is a well-worn truism.  The question is whether the Trump tax cuts will fall into this pattern (i.e. the stock market increases while the potential of tax cuts exist, only to fall once the legislation is actually passed) is a good one and there are many arguments for and


Santa rally continues

With Trump looking increasingly likely to leave tax cuts under the Christmas tree for all the good boys and girls (i.e. anyone who is rich), and lumps of coal for anyone concerned about climate change, the US market powered on again overnight: The US dollar took a breather:   Oil was largely flat overnight, but two


Has Bitcoin jumped the shark?

by Chris Becker The new gold? The future of currencies? The proto-not printable money? However you describe Bitcoin, it seems there’s only one way to describe its trajectory: up! Last night saw Bitcoin move over 6% in a single session to settle above a new record high above $4600USD: Chart via ZH:   With volumes


QE driving stocks to most expensive level ever

by Chris Becker As market watchers fret over every word and detail uttered by the central bank oligarchs in Jackson Hole, Wyoming tonight, it bears (sic) remembering where stock valuations have been driven to due to the largesse of QE. While the bond market bubble pushes to greater heights – so high that we’re running


Draghi drags QE into normalcy

by Chris Becker The central banker elite meet in Jackson Hole, Wyoming for their annual symposium later this week, but ECB President Mario Draghi made traders sit up and notice a day or two early last night with a speech in Germany. What was surprising, particularly in the midst of the anti-QE brigade, was his


Tesla’s enigmatic stock price

by Chris Becker Tesla is impossible to value, so says Matt Debord at Business Insider: The company is fuelled financially by a “story” about the future. It could be a decade before it’s possible to properly value the company. Tesla is easy to value, so says Tim Worstall at Forbes: People might even be misguided


Euro splintering, Italian style

by Chris Becker The union currency experiment – where over 20 sovereign states gave up their ability to enact independent monetary policy in exchange for a single currency is, at face value (sic), a successful attempt at bringing together disparate economies to maximise efficiency. Sound Germanic? Well it should, because its basically a devalued Mark, allowing


Where Trump goes, the USD follows

by Chris Becker Reporting and analysing the demise of the Trump Presidency is not hard work, but it bears well in protecting your portfolio. While a handful of US stocks have benefited since the election, leaving most other markets in limbo, currency-land has been upended as the realisation of a stalemated Congress that cannot enact


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:


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


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


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:


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


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


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


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


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


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


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 –


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


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