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MARKET OUTLOOK - Global & Local, Perspectives & General Market Feeling
mullokintyre
post Posted: Jun 13 2019, 01:32 PM
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In Reply To: nipper's post @ Jun 13 2019, 12:26 PM

Nip, the sharp decline in May Job ads may not be quite as bad as first thought.

From the ANZ commentary on the results:

Down but not Out

QUOTE
“Job ads were down sharply in May, which at face value points to a sharp slowing in employment growth. But we think there is a good reason why this decline is not representative of reality. Job ads plunged in the last week of April, which we think was due to the ‘holiday year’ effect that happens when ANZAC Day and Easter are close together. We think the run up to the federal election contributed further to delaying job postings. Consistent with this explanation, postings in the last week of May (ie after the election) were considerably higher than in the previous four weeks. If the last week of May is indicative, then job ads will rebound strongly in June.”


Next months data will confirm the slowdown or show a blip.

Mick



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mullokintyre
post Posted: Jun 13 2019, 01:25 PM
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In Reply To: nipper's post @ Jun 13 2019, 12:26 PM

The labour force stats out this morning provide a mixed result.

from Bloombergs

QUOTE
Australian employment rose more than expected in May as the participation rate rose to a record, driven predominantly by part-time jobs.

Jobs rose 42,300 from April, compared with economists’ forecast of a 16,000 gain; the unemployment rate held at 5.2% versus an estimated 5.1%
Full-time positions climbed 2,400; part-time roles rose 39,800
Participation rate increased to a record-high 66%; est. 65.8%
Key Insights:
The May jobs report could have been impacted by the general election, which returned the center-right government in a shock result, as temporary staff were hired to help with the ballot
Australia’s central bank last week resumed interest-rate cuts -- after an almost three-year hiatus -- as it bids to drive the jobless rate down toward 4.5%, the new estimate of full employment. At that level, policy makers expect the economy to generate faster inflation.
In lowering the full employment estimate, Reserve Bank Governor Philip Lowe is following in the footsteps of other developed-world counterparts, who’ve had to wait for unemployment to fall to very low levels to spur wage growth.
Pushing Australia’s jobless rate down to 4.5% is likely to prove an uphill battle. The nation’s debt-laden households have hunkered down and cut spending as they grapple with stagnant wages and watch falling house prices erode their wealth
Australia’s labor market has held up well even as the economy slowed sharply. One explanation for the resilience is that much of the hiring is coming from government-related programs that are impervious to prevailing economic conditions

The jobs increase was higher than the "experts" expected (do they ever get it right??), but was tempered by the fact that most of the jobs created were part time.

Interestingly, Bloombergs suggest that some of the part time increase may have been due to the election requiring more bods.
As I went to my local polling place, I reckon I knew at least 75% of the employees. Most were either school teachers, or retirees.
Not sure how that fits in with the bloomberg posit.
The AUD fell 25 points after the announcement, so the market agrees that this is no a positive look.

Mick





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nipper
post Posted: Jun 13 2019, 12:26 PM
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QUOTE
The steep decline in the job ads series can give us a bit more certainty that the good times in the unemployment market are behind us. That would confirm a general atmosphere of gloom around the Australian economy. The retail sector is already in recession, according to the NAB business survey. And the positive post-election vibes around the housing market seem to be wearing off too, with clearance rates slumping back down in the most recent weekend.

The RBA was, earlier this year, concerned about the “tension” it saw between everything else in the economy, which was bad, and the labour market, which it thought was good. The latest data shows that tension has gone utterly slack. The labour market is clearly worsening. (To be honest it was never as good as they believed, they just weren’t paying enough attention to wages and underemployment.)

The RBA used that tension as an excuse not to cut rates earlier. The recent developments in the labour market make that decision look rather foolish. You want to make rate cuts in advance of the problems cropping up, not afterwards, because they take time to have their effect. The RBA will probably spend the rest of the year scrambling to catch up by cutting interest rates at least one more time....

- that's the ANZ job ads, which is treated as a forward looking indicator. Not good for what's ahead, methinks.




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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
 
mullokintyre
post Posted: Jun 13 2019, 11:46 AM
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In Reply To: triage's post @ Jun 13 2019, 08:24 AM

Agreed about it being a great read.
Loved this quote

QUOTE
Its yet another example of William Goldman’s truism that “Nobody knows anything.”


Mick



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nipper
post Posted: Jun 13 2019, 09:53 AM
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In Reply To: triage's post @ Jun 13 2019, 08:24 AM

too true, triage.(great link, by the way)
QUOTE
As the chart shows, the markets are almost always wrong about future Fed action. This is not an outlier; markets are frequently wrong about all manner of embedded predictions as to future actions of all kinds, be they economic, profit-related, inflation, interest rate, etc.
So much for the wisdom of crowds.
- Newspolls and a recent election, maybe?



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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
 
triage
post Posted: Jun 13 2019, 08:24 AM
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A good visualisation of why attempting to predict future events based on recent events can be a mug's game.


The way I read that graphic is not a single analyst was within a bull's roar of getting the end of June yield right and that the article also seems to make a false assumption that by the end of December some of those analyst predictions will not end up close to the mark. It may well be that yields recover from here (?).


Actually there is one analyst who totally broke from the pack but guessed the wrong way (if they'd got lucky and guessed the right way they'd be able to live off that lucky pick for years to come as the only analyst who got the yield call right in 2019).

https://ritholtz.com/2019/06/surprise-treasury-yield/




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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

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nipper
post Posted: Jun 6 2019, 09:05 AM
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In Reply To: mullokintyre's post @ Jun 5 2019, 11:16 PM

QUOTE
... why AUD still so high, but must be due to falling USD.


- Fed Reserve is seen as factoring in four, that's 4, interest rate reductions .... it's a race to the bottom
QUOTE
"In isolation we would expect an interest rate cut from the Reserve Bank to have a negative effect on the currency," said Alex Joiner, chief economist at IFM Investors.

"But the Federal Reserve has become a lot more dovish. There are now four rate cuts from the Fed priced into markets," he said. "The Federal Reserve has really thrown a spanner in the works for other central banks.

"The Reserve Bank want to inflate the Australian economy through the exchange rate but is being frustrated by global markets."




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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: Jun 5 2019, 11:16 PM
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From Kitco

QUOTE
Gold prices are up 1% on the day and near session highs following significantly weaker growth in private sector employment, according to the latest report from private payrolls company ADP.

Wednesday, ADP said that 27,000 jobs were created in May, missing expectations; consensus forecasts were calling for job growth of 185,000.

Gold prices were in positive territory ahead of the report and have jumped higher in initial reaction. August gold futures last traded at $1,342.10 an ounce, up 1.02% on the day.

According to reports, this is the slowest growth rate in the private sector since March 2010. Small businesses and the manufacturing sector were the hardest hit with jobless in all major sectors.

Along with gold prices pushing to session highs, the U.S. dollar is trading at session lows; the U.S. dollar index last traded at 96.99 points.

Although the ADP data is not a consistent predictor ahead of Friday's report, some economists have said that it does provide some downside risk to the official government numbers. The labor market has been a significant bright spot for the U.S. Economy and the latest employment data could add jitters to a marketplace that is already concerned about rising recession risks, said some economists.

"Even when considering the average absolute difference between this series and private non-farm payrolls on first release, this adds to the downside risk to Friday's report," said Katherine Judge, senior economist at CIBC Capital Markets.


Be interesting to see what happens after the "real" jobs report comes out Friday.
Still puzzling as to why AUD still so high, but must be due to falling USD.

Mick



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early birds
post Posted: Jun 5 2019, 10:15 AM
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https://www.cnbc.com/2019/06/04/stan-drucke...hina-tweet.html

When the Trump tweet went out, I went from 93% invested to net flat and bought a bunch of Treasurys,” Druckenmiller said. “Not because I’m trying to make money, I just I don’t want to play in this environment.”

Trump “wants to run on tariffs. He thinks they are a winning formula in the swing states and the belligerent, sort of verbose pressure he’s putting — and the braggadocio toward China — he’s giving Xi Jinping no off-ramp to make a deal, ” the hedge fund manager added

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we all know Soros have a good eye sigh . lmaosmiley.gif




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mullokintyre
post Posted: May 29 2019, 10:19 AM
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In Reply To: early birds's post @ May 29 2019, 02:21 AM

"The Market" (meaning the big banks, hedge funds etc,), certainly already knew that. They were just suckering the bit players to get the bit players to buy the stocks "the market" wanted to dump.
Rule no 1: Always shift the losses to someone else.

Mick in cynic mode again.



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