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MARKET OUTLOOK - Global & Local, Perspectives & General Market Feeling
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



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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 5 2019, 02:51 PM
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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
 
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
 
nipper
post Posted: Jul 29 2019, 11:30 AM
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What’s impressing analysts, what’s not

- GUD Holdings price target cut 14pc to $10.30 — Credit Suisse
GUD Holdings cut to Neutral, price target cut 28pc to $10.50 — Macquarie
GUD Holdings cut to Sell, price target cut 23pc to $9.50 — UBS

- Karoon Energy raised to Outperform — Macquarie
- Mineral Resources cut to Hold — Morningstar
- NIB Holdings cut to Underweight, price target raised 13pc to $6 — MS
- ResMed raised to Buy, price target raised 15pc to US$140 — UBS
- Spark Infrastructure raised to Neutral, price target raised 9.5pc to $2.30 — Credit Suisse
- Zip price target raised 12pc to $3.70 — Ord Minnett



--------------------
"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

Said 'Thanks' for this post: early birds  
 
early birds
post Posted: Jul 29 2019, 10:02 AM
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https://www.marketwatch.com/story/heres-wha...w_theo_homepage


The moral here is that central banks policy has its limits. Europe and Japan have some very serious structural and demographic issues that central-bank policy alone cannot solve. I am worried that trying to do too much QE will backfire in Europe and Japan as administering more monetary medicine on a sick patient after it has not yet worked is probably not the way to proceed. For the time being, the dollar is likely to remain strong and returns from U.S. financial markets, be it the S&P 500 SPX, +0.74% or the 10-year Treasury, should continue to be better than anything in Europe or Japan.

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

don't where to put this article .........
shhhhsh, all biz school can close down as most of central banks doing the "race to the bottom" thing these days....so sad to see !!! sadsmiley02.gif



 
nipper
post Posted: Jul 28 2019, 01:43 PM
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QUOTE
The week ahead

US Federal Reserve interest rate decision: Wednesday, 31 July

The Federal Reserve kept the target range for the federal funds rate at 2.25% to 2.5% during its June meeting. Markets have priced in a 100.0% chance that the Fed will reduce the cash rate by 25 basis-points and the forward market rate sits at 1.4% by the end of 2020.


- as per usual, this seems to be transfixing markets. Either "misplaced macro pessimism" or "equities v the bush" .
Quite a lot of talk about slowing, or underachieving, growth/ targets not being met/ usual wall of worry stuff.




--------------------
"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

Said 'Thanks' for this post: early birds  
 
 


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