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Markets are losing faith in central banks

Bond vigilantes may stop believing the US central bank’s assurances that inflation is under control and take matters into their own hands.

 

https://www.afr.com/policy/economy/markets-...20210514-p57rwl

 

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it's worst thing can happen to central banks-----------lost trust by the markets!! :devilsmiley:

 

 

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yeah Mick

 

but people always say " don't fight the Fed"!! but this time marketers seems gonna go "revolution " they really gonna fight it's way out ....... :lol:

seems a lot of them don't like they've been lied on their face----"no inflation" yeah right!! WTF. EVERYTHING GOES UP BIG TIME!! :lol:

 

 

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https://www.cnbc.com/2021/05/16/stock-marke...ock-market.html

 

 

‘canary in the coalmine

 

while stocks sold off, Fernandez says investment-grade and high-yield credit spreads were not flashing any warning signs.

 

The spread between 2-year Treasury yields and 10-year yields, for example, widened to just 148 basis points by Friday, up from 140 basis points at the lows of the week.

 

“That’s saying the credit market is not concerned right now,†said Fernandez. “We’re sitting in a pretty good spot with a higher VIX [and] a steady bond market. That’s usually positive news for equity markets going forward

 

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Fear is the mind-killer: secular growth stocks are becoming increasingly attractive.

 

Secular growth stocks have been dramatic relative underperformers for the last 11 months. This underperformance was quiet at first, but has become really notable in 2021

 

I have no opinion on the future direction of inflation, but I would note that Warren Buffett’s fantastic article from 1977, “How inflation swindles the equity investor†suggests that high ROE/ROIC businesses should outperform low ROE/ROIC businesses in a high inflation environment as they will suffer less relative compression in their ROEs and ROICs.

 

Relative revisions drive relative performance over short 1 year time frames. Duration of growth and changes in ROIC drive relative performance over longer time frames.

 

 

I think that the relative weakness in secular growth stocks fundamentals exemplified by their terrible relative revisions is nearing an end. For anyone confused who believes that the fundamentals of secular growth stocks have been good — yes, their fundamentals have been good in absolute terms, but the 10 to 20% beats seen in secular growth land this earnings season are actually disappointing relative to what has been happening in the rest of the market.

 

Secular growth stocks are increasingly attractive to me although I will continue to own most of my consumer cyclicals as well given they are still quite cheap.

 

Cleaner positioning, lower relative valuations and stabilizing relative revisions are positive for secular growth. The time to rotate to cheap cyclicals exposed to vaccines, reopening and accelerating GDP was roughly 3 quarters ago, not today. It’s easy to “Be greedy when other are fearful and fearful when others are greedy,†but much harder to actually do this.

 

I would note that I am almost always early, so if history is any guide this is not the bottom for “secular†growth stocks but I do believe secular growth stocks are steadily becoming more attractive.

 

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it is a long wind article, took me 20 minutes to try to nail it down what this guy try to tell us. DYOR as always!!

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Worries about inflation and the sliding cryptocurrency market thanks to Chinese Government intervention will dominate financial markets again this week.

 

While Eurozone shares rose 0.6% on Friday, Wall Street saw the S&P 500 and Nasdaq fall marginally, while the Dow finished in the green.

 

There was further taper talk by hawkish Fed officials in public appearances last week (and in the Fed’s latest minutes). More appearances by Fed officials are due this week while a key inflation measure favoured by the Fed will be issued on Friday and is forecast to show the annual rate hitting 3% in April.

 

Friday’s soft US lead saw ASX 200 futures fall 5 points or 0.1%, pointing to a weakish start to trade for the Australian share market today.

 

Weakness in cryptocurrencies continued after another strong warning from the Chinese government saw Bitcoin lose more ground.

 

Trading continues 24/7 so the price Monday morning could be very different to where it was on Friday night and Saturday – close to or under $US30,000 a token.

 

The ASX 200 added 10.7 points or 0.2% on Friday to close at 7,030.3.

 

The ASX 200 nosed 16.1 points ahead for the week, adding 0.2% across the five days.

 

The weekly rise came after the market recovered on Thursday from Wednesday’s $A41 billion slide.

 

A lowlight of Friday’s trading was online retailer Kogan.com whose shares plunged 14.3% to $8.70 on an earnings downgrade and stock and sales problems.

 

Share markets had a bit of a rough ride last week with inflation fears continuing to impact along with taper talk in the US and perhaps some impact from the fall in crypto currencies forcing speculators in them to sell shares to help cover margin calls on their crypto losses, according to the AMP’s Shane Oliver.

 

This left US shares down 0.4% for the week, but Eurozone shares were up 0.3%, Japanese shares rose 0.8% and Chinese shares gained 0.5%.

 

Bond yields actually fell, and commodity prices were soft with metal and iron ore prices down and oil prices down on reports of progress in US/Iranian talks to return to the nuclear deal and end sanctions on Iran. That would see more oil appear in global markets.

 

The Aussie dollar fell despite a further fall in the greenback.

 

On Wall Street, the S&P 500 lost earlier gains and finished Friday nearly flat as the tech sector came under pressure again amid another drop in bitcoin price.

 

The index closed down less than 0.1% to 4,155.86 after rising as much as 0.7% earlier in the day. The Dow added 123.69 points, or 0.4%, to 34,207.84, thanks to a jump in Boeing shares. The Nasdaq Composite lost 0.5% to 13,470.99.

 

For the week, the S&P 500 fell 0.4% to register for its first back-to-back weekly losses since February. The Dow eased 0.5% on the week, while the Nasdaq saw a rise of 0.3%, breaking a four-week losing streak.

 

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from our own sharecafe!!

 

 

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https://www.fool.com.au/free-stock-report/a...kMoxc73oOin9IYn

 

It’s been a heck of a run — but what I’m most proud of is our ability to consistently lead investors like you to some of the most life-changing investment returns the market has ever seen. I’m talking, of course, about companies like:

 

ResMed (up 484%) since recommended 24/05/13

Corporate Travel Management (up 831%) since recommended 23/08/12

Cochlear (up 266%) since recommended 26/04/13

Seek (up 425%) since recommended 27/09/12

 

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here is my question

how many losers they have been recommended to their members during this 10 plus year?????? ;) no mention at all???

 

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Is China’s A50 ready to bust higher?

 

China’s economy has slowly been grinding higher. Unlike other countries, which faced a steep contraction of economic activity and then a quick spike in activity, China’s recovery has been moving slowly and steadily higher. Manufacturing PMI has been steady between 50.6 and 52.1 over the past year, however intense input and output price increases have dulled the data series lately. China’s inflation data is due out next week. Traders will be watching to see if CPI is able to uptick from April’s reading of 0.9%. Current expectations are for 1%. With the slow but steady growth, current low headline CPI data, and increased demand from abroad, one may think China’s stocks are flying. However, China is a having raw material input issues of its own, which may be holding stocks back. They are rising, but not soaring.

 

The China A50 Index gives investors access to the China domestic A shares. The main stock index grinded higher into mid-February of this year, near 20603, before pulling back as the RSI was in overbought territory and diverging from price. The A50 Index pulled back and held support at the spike high from July 6, 2021 (dark green line), near 16486. As price began to move higher, it broke above a downward sloping trendline from early March and is currently forming a flag pattern.

 

Notice how price moved to the 50% retracement level from the February 18th highs to the April 15th lows, near 18544, before consolidating in its current pattern. The lower shadows on the candlesticks over the last 5 sessions indicate that although there was selling early in each day, buyers entered the market and took control each session towards the closes. The lows of the flag are holding support at the 100-day moving average just above 17943. If price breaks above 18400, it will break out of the top of the flag. The target of a flag pattern is the length of the flagpole added to the breakout point of the flag. In this case it’s near 19260. However, if price is to reach its target, it must first pass through the previously mentioned 50% retracement level at 18544 and the 61.8% Fibonacci retracement level from the same timeframe near 19030. In the event price can’t hold the 100 Day Moving Average at the bottom of the flag, horizontal support is just below at 17791, ahead of what would be a retest of the downward sloping trendline from early March, near 17200.

 

If China is to continue with its recovery and stock market indices are to continue to move higher, the China A50 Index must first break out of its flag formation. The target is near 19260. If price does reach the target, it may well continue its way to the February all-time highs!

 

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been told to be aggressive with A50!!!

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U.S. unemployment rate drops to 5.8% as economy generates 559,000 new jobs in May — pointing to widespread labor shortages

 

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labor shortages??? means boss gonna pay more---leads to inflation!! am i right??> :P

 

 

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