Markets

16

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

5

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

5

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

85

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

23

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

0

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

3

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

21

Why is stock ownership falling?

An interesting divergence is occuring in stock markets as they reach ever higher levels, imbibed by helicopter money and/or century low interest rates, the ownership of those stocks is changing. Aside from the near complete crowding out of the volume – most of which is now done by robo-traders by only a handful of institutions

7

Yuan fix stable as calm returns to markets

The last fix of the week is in and the PBOC has continued its “steady as she goes…under” mood, with the mid-point set at 6.5572, slightly lower than yesterdays 6.5582 Chinese stocks look set to open up 1-2% while its all good in Japan, with the Nikkei up 3% On Australian stocks, the ASX200 is

20

Funds hold most cash since GFC

Is the bottom in? One of the greatest contrarian indicators during bear markets is when the “professionals” move to cash, and the latest Global Fund Managers Survey has current cash levels at their highest since the 2008 top: Early days yet but the ASX200 was up nearly 2% on the open as Yen weakened and Aussie

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Understanding bears, bulls and clowns

Its not the end of the world folks. Headlines regarding market carnage, ridiculous bets between economists aside, you just need to print out this chart, lay it on the floor, stand on your desk and look at it: This is the S&P Composite stock index, taken back to 1900 and deflated by CPI, correctly displayed

2

Volatility is getting volatile

So far in 2016, most stock markets have lost in a few days what they normally gain over a year, highlighting the old adage that stocks go up a flight of stairs, but fall down an elevator shaft. Fear and Greed. Hasn’t changed even with HFT and algo’s. John Kicklighter from DailyFX has an interesting

2

Will buy the dip work in 2016?

Given Friday nights stonking non-farm payroll (NFP)/unemployment print from the US, comes this interesting chart from CLSA showing a correlation between the monthly print and the YoY change in the S&P500: Anyone who has observed markets since the GFC knows how much emphasis is placed on the monthly jobs number, setting the gauge if not

20

Should China stop its stock market crashing?

Yesterday was another short day for Chinese stock traders as trading was halted on the main exchanges less than half an hour after opening with falls in the 7-8% region: Put the falls into perspective though as the Shanghai Composite launched itself from ca. 2000 points to over 5000 points in less than a year:

2

Bitcoin won the 2015 battle of the currencies

But can it win the war? Here’s what happened last year, according to The Money Project: Using the benchmark of the U.S. Dollar Index, a comparison against a basket of major currencies, the dollar gained 8.3% throughout the year. Despite this strength, the best performing currency in 2015 was not the dollar. Bitcoin, a digital

6

Macro Morning (steady as she goes)

 by Chris Becker Calm descended on most risk markets overnight as the fallout from the NY day volatility on Chinese equity markets started to dissipate. A small bounce on stocks in Europe and the US was extended into slight gains on bond markets, but commodities were mixed as oil dropped but precious and industrial metals gained.

40

Apple is starting to smell a bit

News earlier this morning from the Nikkei Review that iPhone 6 production from Apple may be cut up to 30% in the first quarter: Apple is expected to reduce output of its latest iPhone models by around 30% in the January-March quarter compared with its original plans, a measure that will deal a blow to

4

Chinese yuan fix weakens, stocks slump again

The fix is in for the yuan, with the lowest level since April 2011 at 6.5169 against the USD, now 0.21% weaker, with news just in the PBOC is also going to inject 170 billion Yuan: Chinese equity markets have opened, with the Shanghai Composite down 3% at the open. Australian stocks have fallen already

0

Macro Morning (bath of blood)

 by Chris Becker Its going to be an interesting year thats for sure, with Chinese stock markets pummeled yesterday and huge volatility around the Iranian/Saudi diplomatic spit, plus a less than exciting ISM print in the US overnight, all boiling down to a significant loss of confidence in risk markets. Stocks were hammered, down 2-3%

1

How big was the China stock bubble?

by Chris Becker Predictions continue to be hard to make about the future, but there is no doubt that the most recent run up in Chinese equity prices was (is?) a bubble. And here’s another nail in the coffin to the “its all over” thesis. From Research Affiliates, via history squared, comes this chart tracking

5

Stocks not out of the woods

by Chris Becker The Federal Reserve kept its historically low interest rates on hold overnight in one of the most anticipated FOMC meetings in recent years.  The takeaway is pretty simple, while the Fed is relatively happy with the domestic economy, although the inflation outlook has moderated and the labour market remains the key focus,

1

Waiting for the Fed

by Chris Becker If you thought the last couple weeks of market action was benign, get a load of whats coming up this week! The FOMC meeting on Friday morning (Australian time) is the big one that everybody will be watching as markets remain completely spooked by the spectre of a Chinese economic slowdown. Here’s

35

The BRICs are crumbling

by Chris Becker The potential for an emerging markets crisis rolls on as news this morning that Brazil’s rating and outlook have been cut by S&P on the back of its continuing fiscal crisis on plunging oil and commodity prices. From Bloomberg: Brazil’s sovereign rating was cut to junk by Standard & Poor’s, eliminating the

9

The Great Volatility continues

by Chris Becker Going through the archives, it seems whenever I write about volatility it tends to result in a short-term rally in, well everything. It’s not my fault, because I’m usually writing in response to market volatility spiking and/or a guru talking about volatility itself. I might be breaking that record today because overnight

38

ASX at the close

by Angus Nicholson for Chris Weston, IG Japanese markets have been the standout performer in Asia today, seeing a record daily rise off the back of plans to cut corporate tax rates. Having said that, the methods by which theShanghai Composite (SHCOMP) is rising are somewhat concerning. Volumes in China’s futures markets have fallen dramatically

8

All praise Asian shares!

by Chris Becker No news is good news it seems with the very positive US lead overnight turning into a huge rally here in Asia come lunch time. Here’s the basic scoreboard (h/t to Patrick McGee): Nikkei +5.4% Topix +4.4% Shanghai +1.9% Shenzhen +3% Hang Seng +2.7% ASX +1.6% S&P 500 futures: +0.4% Aussie dollar

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QE or not QE is no longer a question

by Chris Becker From the chaps at JPMorgan is a very simple chart with a powerful reality behind it. Via ZH: In the post GFC “Great Volatility” world, stock markets are not a reflection of the economy, but a reflection of the intervention of central banks in the economy. And Australia is not alone, where

7

The bottom is in for Chinese stocks (maybe)

Cross posted from Investing in Chinese Stocks The voices, centrally located and authorative are growing that the “bottom is in” Chinese stocks: Authoritative voices send the bottom signal September may mark a turning point in the market! The risk in the market is mostly exhausted, some blue chips are reasonably priced! Buy Buy Buy! From