Markets

29

Shanghai opens and crashes…again

by Chris Becker Early indications were an open in the -5 to -6% range and that’s what we’ve got, down 6% to just over 3000 points:   ASX200 is brushing it aside as the buy the dip crowd continue to step in, the banks are all up 2% or more (Westpac up 4%!) Again, this

12

Minack goes full bear for good reason

by Chris Becker Gerard Minack has always been a standout in a sea of permabulls and salesmen dressed up as bank economists. His latest missive considers the full reason behind the selloff and the impact going forward: Corrections happen, (but) bear markets typically require recession. For now, recession doesn’t seem imminent in developed economies. However,

18

ASX at the close

Stan Shamu, IG While China continues its upward trajectory, the rest of the global equities space remains extremely choppy. Some of the recent volatility in bond markets has played a big role in the choppy price action in equities and yesterday it was all about a sell-off in US treasuries. The sell-off in bonds was

9

ASX at the close

by Stan Shamu The selloff in the bond market finally came to a halt despite some early jitters and this played a big role in stabilising equities. While equities have been drifting higher in Asia, perhaps most of the attention was on the UK elections which dictated the pace in the sterling. With the uncertainty

13

Is Europe turning Japanese?

by Chris Becker Are European stocks turning Japanese? The very high correlation between the USDJPY and the Nikkei 225 stock market has long been observed, where a weakening Yen supports higher stock prices (and vice versa, obviously): And now it looks as long positions in USD unwind and QE begins in Europe, which is ultimately

2

Macro Morning: Bear-up

By Chris Becker Friday night’s market action was characterised by two major economic data prints that surprised on the downside and the strike by US oil workers that saw oil prices rebound by nearly 10%. First in Europe the CPI print for core and overall numbers surprised on the downside, with core inflation barely ticking

0

Macro Morning (US roll)

By Chris Becker The closely watched US durable goods order printed a new four month low, contracting 3.4% in December and weighing on confidence, sending US stocks down nearly 2% amid some mixed earnings results. The blizzard in NY was a near no show, but the cold weather extended to risk taking, as the Caterpillar

1

Macro Morning (Greek snow job)

By Chris Becker For all the hyperbole leading up to the recent Greek election, markets have largely brushed off the turmoil, save the Euro (literally) which fell from 1.16 to just below 1.11, but has since recovered somewhat. The bigger news, relatively speaking, is the massive blizzard hitting New York and elsewhere in the north-eastern

8

Macro Morning (fly you fools)

by Chris Becker Another QE cat is let out of the bag with the ECB announcing a 60 billion euro monthly purchase program overnight, as expected. The response on risk markets was one of relative calm, with almost all bourses up 1 to 1.7% across both sides of the Atlantic, the commodity complex including gold

7

2015: The year of the bear?

By Chris Becker Given the huge volatility that has characterised market action so far this year, it’s appropriate to examine if 2015 truly is the “year of the bear”. First a recap of Bill Gross’ view from his latest investment letter, showing how we got here (emphasis added): Each downward spike in the economy and its related

8

Macro Morning (Swiss slap)

by Chris Becker The Swiss Central Bank unpegged its currency from the Euro last night and sent markets reeling, with FX brokers (and highly leveraged customers) and macro hedge funds to the wall. USDCHF fell from 1.01 to 86 cents – yes you read that correctly – almost instantly (thats a daily chart): With the

57

ASX at the close

by Chris Weston, IG Volatility continues to show its hand, although this could be the new normal through Q1, as markets continue to grapple with falling inflation, spiralling commodities, crazy bond yields, political uncertainties and ultimately a market that feels central banks have no juice to meet their mandates. Statistics don’t lie and while we

1

Macro Morning (oil rebounds)

by Chris Becker Volatility is ruling the markets as the long expected rebound in oil outweighed the huge drop in US December retail sales, a significant breakdown in copper and continued speculation of what action, if any lasting, the ECB will take its meeting next week. European stocks fell across the board, the FTSE falling

1

Macro Morning (volatility rules)

by Chris Becker A wild night on markets with oil falling again before spiking, while US stocks followed the positive move in Europe before volatility returned with vengeance and plunged most bourses into the red. SP500 had a massive 3.5% range, surging 20 points on the open and then losing 50, as oil price volatility

3

Macro Morning (oil blows, gold shines)

by Chris Becker Another collapse in oil prices overnight (I’ll have a closer look later) saw US stocks tumble following a sanguine session for Europe with no significant data releases overnight. Speculation continued regarding the ECBs QE program, with an interesting note out of RBS telling its clients to “buy everything” before the 22nd January meeting

0

Macro Morning (NFP disappoint)

by Chris Becker Friday night saw the most waited release of the economic calendar – the NFP, or non-farm payroll – US monthly unemployment, which sets the tone and risk meters across markets around the globe. The actual print was very solid. More than a quarter million new jobs created in December, above forecasts of

1

Macro Morning (go Europe!)

by Chris Becker Risk markets, particularly in Europe exploded last night even as German factory orders tumbled, European consider confidence weakened further and the BOE held fire on interest rates and its own QE program steady. It was news out of the ECB that stimulus measures are all but certain to be announced at the

0

Macro Morning (stocks and oil rally)

by Chris Becker A generally green board across risk markets overnight as the Fed FOMC minutes took some air out of the USD sails and oversold conditions in stocks attracted the bottom pickers. First in Europe a slate of inflation and unemployment figures – all good if you’re German (more on this later) – pushed

1

Macro Morning (USD still king)

by Chris Becker The bad news continued overnight for long only investors as US stocks slipped following European bourses, with the worst losing streak in over a year. A below expectation release of US service sector activity hampered any attempts at a recovery, with the ISM down significantly on November’s level and factory orders falling

0

Macro Morning (stocks of blood)

by Chris Becker Not quite a bath of blood last night on northern hemisphere markets, but close enough as oil collapsed 6% dragging most US and European bourses down around 2% and USD strengthened once more as the King of Safe Havens. First, in Europe “fears” (love that word) of a contagion following a “Grexit”

41

Chart of the Day: QE equals long stocks

by Chris Becker There’s been one investment trend post-GFC that has been blindingly obvious for all (even including those who just buy and hold) its long US stocks. The broadest index, the S&P500 has tripled since March 2009 in an almost straight line, particularly in the last two years. At the same time, the US

4

Macro Morning (volatility returns!)

by Chris Becker Welcome back to 2015 for Macro Morning – so what’s been happening on the markets over the break? Just a reminder that most markets “suffer” from very thin volume, and hence higher than usual volatility during the Christmas and following NY week, but that didn’t stop a number of new trends emerging

1

Macro Morning: S&Power

By Chris Becker As Asia wakes up Monday morning, the mood is more cautious than ebullient, notwithstanding some solid gains on the US markets on Friday night – up around 0.7% or so across the board. Q4 earnings and a subsiding Ebola panic has sent the S&P500 almost back to its former trend line on

3

Macro Morning: Vol rocket!

By Chris Becker A quite amazing night of volatility on equity and currency markets last night as the Taper Tantrum (well put HnH!), embiggened by continued Ebola scares, Greek wobbles and poorer than expected US data reaching a crescendo before collapsing under its own weight. First, look at the CBOE VIX – there is no

6

Macro Morning (no relief)

by Chris Becker It appeared as the European sessions gap opened down over the weekend and then rallied, as markets did in thin Asian trade yesterday morning, that some relief was in sight. As US stock markets opened that relief was replicated until near the close when everything tanked, with cash markets dropping another 1-1.5%

3

Macro Morning

by Chris Becker Oh what a night! The release of last months FOMC meeting minutes by the Federal Reserve, with their very dovish outlook, crunched the USD and spiked risk all across the board. Daily reversals of this scope and magnitude are rare, but not unusual in markets and for the last five or so

8

Macro Morning

by Chris Becker Maybe I should insert a gloomy cloud picture above, because for markets waking up in Asia this morning, its all dour news overnight. The double whammy of a slowdown in the engineroom of Europe, with German industrial production slumping in August plus an across the board downgrade in global growth by the

6

Macro Morning

by Chris Becker It was an inauspicious start to the trading week last night as US and European stocks faltered following the mad dash on Friday nights NFP print. Bond markets were notably quiet but the action was again in currencies, with King US Dollar slipping off its throne sending all of the crosses higher.

2

Trading Week: Commodities rout

by Chris Becker It only takes one data print to reverse a correction, and the one we all love to hate, the US Non-farm payrolls is the corker! Friday’s print dragged unemployment below the 6% level and dragged stocks up by the coat-tails arresting a very mild, but much talked about dip. But is buy