Tuesday, 29 September 2015

A few macro and related thoughts today...

A few macro and related thoughts today...

Markets – remain volatile.  S&P futures have fallen for 3 days in a row, dropping 2.9%. Run has extended to 4 days once in the 129 sessions since 26 March 2015 (stat via Predicted Markets). The S&P 500 is now flat over the last 18 months, closing today within a few points of where it closed at the end of March 2014.


Vol vs the last 3 years...going up 


(h/t @GaveKalCapital)

Q3 vs YTD performance - shabby Shanghai, oil etc. 



Interest rate cuts – overnight the Reserve Bank of India has cut interest rates for the fourth time this year, a move in line with expectations but by a greater degree than was anticipated.
The RBI cut the repo rate to 6.75 per cent, from 7.25 per cent. Most economists had only anticipated a 25 bps cut.


Asia - Japan lost all its YTD gains.  Not a single stock up in the Nikkei 225 today.  Meanwhile an overnight rate to borrow yuan in Hong Kong jumped by a record to an all-time high as the currency’s offshore exchange rate climbed to the strongest level since an Aug. 11 devaluation. The Hong Kong Interbank Offered Rate surged 535 basis points to 8.73 percent, a Treasury Markets Association fixing showed. That’s the highest since the fixings began in June 2013 (stats via Bloomberg). Strange times

Interesting observations on China

Japan Centre for Economic Research (JCER): China Q2 GDP may have been just 5%, well below the reported 7% - Nikkei

From a HK based market observer: ‘There are 14 3rd~4th-tier cities property price may face high risks of collapse!!  First time I saw such reports in major media’

Fascinating #1 
(h/t @Eurofaultlines)


(h/t @lmtdown)

Commodity sentiment – Cargill decided to fold two commodity funds that trade agriculture and energy under another branch of the company and spin off three other funds as independent, employee-owned companies.  The ‘Black River’ business had US$7.4bn AUM as recently as June. 

Meanwhile Morgan Stanley capitulated on their earlier in the year pro-energy sector call

Not a good time to be selling energy assets!


Talking about energy impact –


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