Lowest reading in about 3 years. Yes, the reading is now reflecting the impact of trade wars on the sentiment of the consumer, at least.
Trading the Indices on Fundamentals
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Lowest reading in about 3 years. Yes, the reading is now reflecting the impact of trade wars on the sentiment of the consumer, at least.
US Futures opened lower in Asia indicating that the new tariffs are being factored into player's calculations. In my view, the tariff itself affects Asian markets but it's not a big deal for the US, what is effecting US companies is the uncertainty of Trump's impulse logic. When he announced tariffs on Mexico, the game changed as US business were put on notice that even if they move the supply chain out of China, they might be caught out with tariffs elsewhere, as Trump could use tariffs for political any reason on Vietnam, India, Japan, etc... all have been threatened at some time. The conclusion is that most US multinationals are in paralysis in their expansion plans.. why move out of China, spend $$b setting up factories elsewhere to be hit by tariffs anyway... consequently most are doing nothing, awaiting a trade resolution or Trump's departure, either way, Trump, with his unpredictability, lack of a master plan and brags of being "the tariff man", has negated all other efforts to stimulate the economy. Trump needs to seriously look inwards... achieving patriotic goals needs different methods to the ones he's using. Good intentions with bad methods could open the way for a Warren or Sanders socialist administration and end the US super-power status.
Wake-up Kudlow, force Trump to put forward a master plan, good or bad, industry need a road-plan to follow so as to get out of stagnation. America's future depends on Kudlow now.
Wake-up Kudlow, force Trump to put forward a master plan, good or bad, industry need a road-plan to follow so as to get out of stagnation. America's future depends on Kudlow now.
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EU open: Jhonson strategy to dissolve parliament seemed to have backfired and he might be out as PM, Italy is heading towards new elections, UK PMI is 47, Germany PMI is 43, the whole of EU is in contraction with PMIs under 50, and, Europe markets are up. US futures pushed down by Asia remain down in the European session.
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I said before, it's obvious to everybody except Trump that China will not capitulate based on tariffs. China's plan was to agree to everything then do nothing, other administrations always fell for it, Trump didn't, so now China is digging-in, lowering it's currency to offset the discounts, and, business as usual for them, it's time Trump saw this and changed tact. Was a good plan had it worked within the 1st 3 months or so but dragging this our this long is creating uncertainty that's hurting America more than China (just goes to show how much profit China manufacturers were making, even discounting 30% has unphased their resolve). Not buying at all from China would have a very different result... hope Kudlow can shine the light on this (Kudlow was against tariffs from the start) and convince Trump to change the strategy, time is running out for Trump.
Trade news have been flogged to death, I'm surprize markets still react to such news, or perhaps not... maybe it's a convenient factor that triggers selling that would have occurred anyway on any other news.
Trade news have been flogged to death, I'm surprize markets still react to such news, or perhaps not... maybe it's a convenient factor that triggers selling that would have occurred anyway on any other news.
NY Open: The 4 US Indecices are out of sync, looks like some repositioning is happening... maybe someone knows what I don't. All the Europeans are up. Looking good for me though as I'm short US, Long EU. Also, got out of LAM Friday, today it's down with all the big tech names.
China large caps are up, is a trade deal happening that insiders know about?
China large caps are up, is a trade deal happening that insiders know about?
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Quite a ride in the US over the last 3 days, the last 24 hours were particularly crazy with markets surging on trade rumours that put the market a hair away from a records but then not dropping when the rumours were denied, IMO, these levels are unjustified, not supported by earnings and bordering on bubble territory. Europe also is acting crazy, the ECB no doubt is introducing stimulus but Draghi made it crystal clear that forward outlook is bleak and even with the stimulus, growth will be down, despite the outlook, EU rallied. Asia seems to be more in line with reality.
Performance year to date:
ASIA AVR +6.18%
EU AVR +16.84%
US AVR +19.56%
I took-out all my US longs during the rally, also closed some EU longs and did not trade Asia. This leaves me heavily short the US, net long EU and neutral in Asia. I got no buy orders for the US till -3% from current levels.
Performance year to date:
ASIA AVR +6.18%
EU AVR +16.84%
US AVR +19.56%
I took-out all my US longs during the rally, also closed some EU longs and did not trade Asia. This leaves me heavily short the US, net long EU and neutral in Asia. I got no buy orders for the US till -3% from current levels.
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It is to be noted that the Oct VIX is 2 units higher that the Sep futures, an indication that playes belive the longer term view of the SPX is down, at least below 2,960 short term
Expect a spike in Oil prices on Monday. Whether this will be the catalyst that causes a correction will depend on how long markets think oil will remain elevated. We might see some wild fluxuations in the Indices while the Saudi situation gets analysed and whether this will initiate US retaliation against Iran (the suspected instigator of the attack).
Brent oil up 20% and US futures gapped down on pre-market. 50% of Saudi's supply (5% of world output) has been taken off the market. Best play at the moment is to watch and see until EU opens, for now it's all bots induced, need to see how the human players read the situation (prolonged high oil prices directly impact earnings... all sectors of industry are effected by energy costs, even if it's just cost of transport).
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The Fed delivered but the market yawned, then when Powell did not commit to further cuts, the DOW fell only to recover at the close pushe-up by the financials. In contrast, the Russell fell close to 1% and the NDAQ was flat. Small caps are a good indicator on the economy and these are lagging the S&P by 4% YtoD.
Here's a CNBC graph telling the story of rates since 2005, it shows, once again, that the Fed's "data-dependent" policy is reactive rather than proactive, i.e. the Fed serves no useful purpose in keeping the economy levelled & stable. With Powell at the helm, one can be sure that more of the same applies.
All considered, I'm not changing my strategy at this point, IMO the risk remains for a sell-off rather than exceeding the highs.
Here's a CNBC graph telling the story of rates since 2005, it shows, once again, that the Fed's "data-dependent" policy is reactive rather than proactive, i.e. the Fed serves no useful purpose in keeping the economy levelled & stable. With Powell at the helm, one can be sure that more of the same applies.
All considered, I'm not changing my strategy at this point, IMO the risk remains for a sell-off rather than exceeding the highs.
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