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MARKET OUTLOOK - Global & Local, Perspectives & General Market Feeling
blacksheep
post Posted: Aug 6 2019, 11:20 AM
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Posts: 6,791
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In Reply To: blacksheep's post @ Aug 6 2019, 10:05 AM

Sector Heat Map - red, red, red!!
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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Aug 6 2019, 10:05 AM
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Posts: 6,791
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QUOTE
Market snapshot at 7:50am (AEST):
ASX SPI futures -1.6pc at 6,460, ASX 200 (Monday's close) -1.9pc at 6,640
AUD: 67.97 US cents, 56.08 British pence, 61.32 euro cents, 72.95 Japanese yen, $NZ1.04
US: Dow Jones -2.9pc at 25,718, S&P 500 -3pc at 2,845, Nasdaq -3.5pc at 7,726
Europe: FTSE 100 -2.5pc at 7,224, DAX -1.8pc at 11,659, CAC -2.2pc at 5,242, Euro Stoxx 500 -1.9pc at 3,311
Commodities: Brent crude -3pc at $US60.05/barrel, spot gold +1.6pc at $US1,464/ounce, iron ore -6.6pc at $US100.56/tonne

US markets panic on on trade war escalation
The Dow Jones Industrial Average closed 2.9 per cent lower at 25,718.

At its worst point, earlier in the day, the Dow had plunged by more than 960 points.

The benchmark S&P 500 dropped 3 per cent to 2,845, while the tech-heavy Nasdaq fell 3.5 per cent to 7,726.

US technology companies and banks were hit hardest, with Apple (-5.2pc) and Bank of America (-4.4pc) posting heavy losses.

It was a similar situation in European markets, with London's FTSE dropping 2.5 per cent and Germany's DAX losing 1.8 per cent

"Recent events suggest a US-China trade deal is unlikely to be reached any time soon and indeed it seems reasonable to expect trade tension to get worse before they get better," said NAB senior foreign exchange strategist Rodrigo Catril.

"Assuming Trump does not row back from new tariffs ... [a] lower Australian and New Zealand dollar forecast is warranted."

ASX to fall sharply, Aussie dollar nears decade lows
The global sell-off will spread to the Australian share market when it opens.

ASX futures indicate the local market is set to fall by a steep 1.5 per cent in early trade.

The Australian dollar, meanwhile, had slipped further (-0.6pc) to 67.57 US cents by 7:30am (AEST), within a whisker of its decade low of 67.41 US cents set in a flash crash earlier this year on January 3.

But its steepest falls were against the European and Japanese currencies — down 1.1 per cent to 71.7 yen, and dropping by a sharper 1.3 per cent to 60.35 euro cents.

On the flipside, the Australian dollar has risen strongly (+1.3pc) against the devalued Chinese currency, and is buying 4.78 yuan.

In local economic news, the Reserve Bank will meet today to discuss the latest risks to the economy.

The RBA is widely expected to keep interest rates on hold at 2.30pm (AEST), having already cut rates to historic lows twice in the last two months.

Trade war hits commodity prices
Worries about a slowdown in global growth due to an extended trade conflict also hurt oil prices.

Brent crude futures dropped by $US1.84, or 3 per cent, to $US60.05 per barrel.

"The escalation in the US-China trade is another negative for the oil demand outlook, as the fallout from the spat continues to greatly impact the Asian economic region, which is key to the oil demand outlook," said John Kilduff, partner at Again Capital Management.


https://www.abc.net.au/news/2019-08-06/dow-...flares/11386148



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
early birds
post Posted: Aug 6 2019, 09:45 AM
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https://www.cnbc.com/2019/08/05/former-fed-...-wsj-op-ed.html

We are united in the conviction that the Fed and its chair must be permitted to act independently and in the best interests of the economy, free of short-term political pressures and, in particular, without the threat of removal or demotion of Fed leaders for political reasons,” stated the piece, signed by Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen.

==========================================

lmaosmiley.gif , is it useful??

 
blacksheep
post Posted: Aug 5 2019, 03:23 PM
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Asia stocks hit six-month low as investors flee to safety, yuan slumps
Swati Pandey, Wayne Cole
5 MIN READ

QUOTE
SYDNEY (Reuters) - Asian shares suffered their steepest daily drop in nine months on Monday, as Sino-U.S. trade friction sent the yuan slumping to a more than decade trough and stampeded investors into safe harbors including the yen, bonds and gold.


QUOTE
Asian share markets were a sea of red with Japan's Nikkei .N225 shedding 2.3% to the lowest since early June. It was the sharpest daily drop since March and led Japanese officials to call a special meeting to discuss market turmoil.

Australian shares slipped about 1.5% to spend their fourth straight session in the red, and South Korea's KOSPI .KS11 tumbled 2.1% to hit its lowest since December 2016.

MSCI's broadest index of Asia-Pacific shares outside Japan sank 2.2% to depths not seen since late January.In China, the blue-chip index .CSI300 fell 1% while the troubled Hong Kong market .HSI hit a seven-month trough.

The pain was quick to spread, with futures for the S&P500 ESc1, the FTSE FFIc1 and EUROSTOXX STXEc1 all down more than 1%.

Oil prices were dragged down on demand worries, while gold climbed 0.8% to $1,452.17 an ounce.

https://www.reuters.com/article/us-global-m...s-idUSKCN1UV028



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Aug 5 2019, 02:51 PM
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Posts: 6,791
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Bond Market Anomaly Creeping Into Japan as Curve Set to Invert
By Masaki Kondo and Chikafumi Hodo
August 5, 2019, 8:11 AM GMT+10

QUOTE
The country’s benchmark 10-year yield is on track to fall below its two-year equivalent for the first time since the collapse of the Japanese economic bubble in 1991. Known as an inverted yield curve, longer-term yields below shorter ones are unusual in developed markets and often interpreted as a harbinger of recession.

https://www.bloomberg.com/news/articles/201...e-set-to-invert?
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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Aug 1 2019, 08:17 PM
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In Reply To: mullokintyre's post @ Aug 1 2019, 06:41 PM

Mick, the entire current situation seems a "little odd". All assumptions are out the window.

"Manage the risk and the returns will look after themselves."



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 

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mullokintyre
post Posted: Aug 1 2019, 06:41 PM
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In Reply To: nipper's post @ Aug 1 2019, 04:39 PM

Yeah, so if investors tank the dow, the USD rises, inflation is still happening at 2.00% plus, why the heck did gold and silver get crunched along with all my precious metal stocks?.
Seems a fraction odd.
Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: Aug 1 2019, 04:39 PM
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In Reply To: early birds's post @ Aug 1 2019, 03:01 PM

Am still trying to figure this (and everything else, for that matter) out. The Fin Review had a good take, which I'll copy in:

Powell in knots trying to explain the inexplicable
by Jacob Greber
https://www.afr.com/world/north-america/pow...20190801-p52cps
QUOTE
Well, that didn't really go according plan.

When Jerome Powell took over as Fed chairman early last year, he was lauded for bringing a refreshing style to the central bank's communications. It was noted for its openness and clarity.

The US Federal Reserve delivers its first rate cut in over a decade, but Fed Chief Jerome Powell declined whether to say the cut is one and done or if there are more cuts to come.

After Wednesday's press conference, some of that gloss has worn off.

The reason? Powell had to justify a rate cut that by its very nature defies open and clear explanation.

Not only is the decision heavily coloured by the image of a Fed crumbling in the face of months of White House pressure, the argument that it's "insurance" seems spurious at best.

No wonder some on Wall Street are now hankering for a return to old-fashioned Alan Greenspan-style constructive ambiguity. At least that would have helped obscure the rickety rationale underpinning this rate cut.

That this was a hard sell was soon evident at Powell's post-meeting press conference, which was something of a mess.

The problems started when Powell portrayed the reduction as a "mid-cycle adjustment" that would help support the economy and stoke inflation. There was nothing to be overly concerned by, in other words; just a mere tweaking of the levers, he appeared to be suggesting.

But when pressed on what that meant, Powell went further, strongly implying that Wednesday's cut shouldn't be seen as flagging a series of cuts. This is unusual for the Fed, which rarely lowers rates as a one-off.

"I'm contrasting it there with the beginning of a lengthy cutting cycle," he said. "That is not what we're seeing now, that's not our perspective now."

Investors (and President Donald Trump) were not happy. The Dow Jones Industrial Average tanked, falling at one point by as much as 1.8 per cent. The dollar rose. Trump hit Twitter.

The damage done, Powell then back-tracked by suggesting that didn't mean he wouldn't cut rates again, pushing stocks back up from their lows.

If Wednesday's press conference was designed to clarify and soothe, it was an abject failure.

Part of Powell's problem is that he just doesn't sound all that convincing when arguing in favour of rate cuts. Whenever he lays out the arguments, he always talks about how strong the US economy is.

And it was only seven months ago that he was running a hawkish line about the need to get policy back to "neutral". But since January, Powell has become trapped in a difficult dynamic, forced by political pressure to play the go-to saviour whenever Trump's erratic trade policy adventurism upends markets. The more Trump disrupts, the more pressure falls on Powell to cut rates and keep markets humming.

So now we have the strange scenario unfolding in which the Fed cut its benchmark rate for the first time since 2008 despite a US economy still expanding faster than 2 per cent; with unemployment at a half-century low and inflation showing signs of picking up as wages begin to awaken from a decade-long slumber.

Sure, the bond market implies that's not happening, that inflation is dead, and that there's no immediate downside risk in easing rates.

But can investors really be sure they're getting a clean signal from the bond market in a world of aging yield zombies and bloated central bank balance sheets?

It's significant that Powell spent much of his press conference rationalising the rate cut by pointing to weakness abroad, particularly in Europe.

But how cutting Fed rates will offset that is not entirely clear. For one thing, there's a risk Europe's policy makers respond to ensure the euro stays soft against the US dollar, countering any benefits that might accrue to US exporters.

As the world's strongest economy, it doesn't make much sense for the US to join a race to the bottom, despite what the President wants for his short-term re-election prospects.

Another inconsistency is that Powell has had to burn a lot of oxygen explaining why this cut isn't politically motivated. "This action is to protect from downside risks . . . we never take into account political considerations," he claimed.

And nobody serious actually believes this.

Powell has reportedly been wearing out the carpets on Capitol Hill explaining the Fed's role to members of Congress.

You know, just in case the president carries out his threat to fire the chairman.

So Powell is probably right to call this an insurance cut.
!!

((Trump is becoming a serial pest))



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Aug 1 2019, 03:01 PM
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https://www.bloomberg.com/news/articles/201...ni-easing-cycle

hope you guys lisren to Powell talk...... tongue.gif





Said 'Thanks' for this post: blacksheep  
 
blacksheep
post Posted: Aug 1 2019, 10:28 AM
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A US recession is coming (eventually). Here’s where you’ll see it first.
Economists don’t know when the decade-long expansion, now the longest in American history, will end. But here are the indicators they will be watching to figure it out.
QUOTE
One caveat: Economists are notoriously terrible at forecasting recessions, especially more than a few months in advance. In fact, it’s possible (though unlikely) that a recession has already begun, and we just don’t know it yet.

“Historically, the best that forecasters have been able to do consistently is recognize that we’re in a recession once we’re in one,” said Tara Sinclair, an economist at George Washington University. “The dream of an early warning system is still a dream that we’re working on.”


read more - https://www.irishtimes.com/business/economy...first-1.3970804



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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