Dollar Weakness
JPM sees a resumption of Fed easing with hiring in the labour market slowing. “Money markets are pricing in a 90% chance of a cut next month, at September’s meeting, which would be a resumption of easing after a 9-month pause. This setup supports our call to be long duration [and bonds], despite some increased concerns over […]
If it ain’t broke don’t fix it
Influential President of the European Central Bank Christine Lagarde published an opinion piece in the Financial Times this week, which outlined some fairly profound views on the US dollar, but also the euro and the role it could play as an alternative global reserve currency. She said that “we are witnessing a profound shift in […]
TACO Anyone?
TACO anyone? Much of the broader market inertia stemmed from investor uncertainty surrounding the latest round of tariff threats on EU goods until July bought markets some breathing room. On a lighter note, traders have coined this the “TACO trade”, which is an acronym for Trump Always Chickens Out. (I am not so sure TACO is an apt description, […]
The China Bull
China: Reawakening The Hang Seng China Enterprises Index and the MSCI China Index have both surged at least 30% from mid-January lows, which BoA see being akin “to the pace of gains seen in 2015 before the market plummeted. There are quite some fundamental similarities between the current cycle and 10 years ago, with the economic rebalancing cycle and […]
A Minsky Moment
The big development on Tuesday was the breakout in platinum. If Tuesday’s advance above the primary 20yr downtrend is sustained, I believe an important inflection and new bull market will soon be confirmed and have had a high conviction view this would occur for some time. Tuesday’s price action seemed to confirm this. Finally, liftoff! Platinum broke […]
Bank Sector Report
Today, we briefly review our exposure to the majors banks and update our take on the group. The short of it is that we’re moving the HOLD ratings on ANZ and NAB back to a BUY while WBC remains unchanged, also at a BUY. That said, Australia’s banking sector has proven to be resilient over bumpy 2024. The Big Four — Commonwealth […]
The Tipping Point
Playing to your strengths Around 180 S&P 500 companies are set to report earnings this week with tariff impact and guidance a key focus. To date, the March quarter has gone well with consensus earnings forecasts lifting to 10.9%. However, the upcoming June quarter will be more important as investors assess the impact of trade disruption. Amazon, […]
Maintaining Perspective
Good morning, Wall Street got hammered on Friday leading to the S&P 500 having the worst two-day decline since the early days of the pandemic, shedding a massive $5.4 trillion in market value. The S&P500 index fell -5.97% to put in an 11-month low and nearing bear territory, as did the Dow Jones which declined -5.5%. The Nasdaq Composite […]
Does Trump Really Hold the World in the Palm of His Hand?
After President Trump unveiled the most far-reaching anti-trade policies in over 100 years, financial markets came under significant pressure. The tariffs imposed were much worse than feared, which global leaders universally condemned. Wall Street benchmarks lost over 5% with any company exposed to the tariffs taking big hits. The US dollar plunged while bonds rallied as recessionary risks […]
Tesla’s Struggles
Tesla has captured a lot of headlines this year with Elon Musk ensconced as head of DOGE, and charged with reducing excessive government expenditure and improving efficiency. This has not been a great outcome for Tesla shares, with the stock down more than 50% from the record highs at one stage. Sentiment has been further soured […]
China Reawakening: AI, Equities & New Bull Market
China: Reawakening The Hang Seng China Enterprises Index and the MSCI China Index have both surged at least 30% from mid-January lows, which BoA see being akin “to the pace of gains seen in 2015 before the market plummeted. There are quite some fundamental similarities between the current cycle and 10 years ago, with the economic rebalancing cycle and […]
US Markets – Rough Seas Ahead
Market Insights: US Correction The US rebound rally in stocks looks to have further upside potential, but the correction is unlikely over in my view. Morgan Stanley CIO and chief US strategist said in a note yesterday that “major US equity Indices are as oversold as they’ve been since 2022, sentiment/positioning gauges have lightened up […]
