Wednesday, 14 January 2015

Charts and thoughts today

So volatility is back.  I really liked this quote from Chris Weston of IG Index Australia:

These are strange times for global markets. When you see a 425-point reversal on the Dow Jones and a 48-handle move in the S&P 500 on limited news, you know things are not quite right'

Too right.  Other signals of difficulty include updates from the World Bank (via @LiveSquawk)...

'WorldBank cuts 2015 Global growth to 3% vs. 3.4%; Cuts #US to 1.1% vs. 1.8%, #Japan to 1.2% vs. 1.3%. #China to 7.1% vs. 7.2%'  


'World Bank expects Fed to hold off on interest rate hike longer than expected due falling oil prices, stagnant US wages, lower global growth'

I cannot think why...

Also there have been some copper 'excitements':

'Copper for delivery in three months on the London Metal Exchange dropped as much as $506.75 a metric ton to $5,353.25, the lowest intraday price since July 2009. The metal was trading 6.3 percent lower at $5,492.75 a ton at 1:26 p.m. in Hong Kong.

In New York, March futures fell 6.2 percent to $2.4815 a pound. The volume of all contracts traded on the exchange was more than 600 percent higher than the average for this time day. Contracts on the Shanghai Futures Exchange dropped 4 percent to 41,190 yuan ($6,648) a ton, hitting the bourse’s daily trading limit'

I liked this observation...and is it just me or does it feel like a capitulation moment?

'Month still young, but halfway in January 2015 is now Copper's 3rd worst month since Q4 2008 at -10.2% net. 09/11, 05/12 worse'.

So reasons for all of this?  Well as the quote from Chris Weston noted there is not an easy-to-point-to driver...although inevitably some fingers are pointing to China and struggles with their underlying growth model. 

Personally I think this is a little overdone and rather the combination of a realisation that this (developed market) cycle is different and the impact of some imbalances in the global economy are just coming home to roost.  As I talked about in my 2015 macro thoughts, this year is going to be a year of volatility...

Elsewhere, interesting moment for Europe as nicely captured in this chart via @HumbleStudent.  ECJ opinion later today...

A couple of final charts.  Good graphic on the market share of China's top search companies (I must re-review Baidu again when they have their next set of numbers)...

...and interesting on where US businesses put their commentary.  Look at the portfolio manager commentary graphic particularly! 

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