Trading with point and figure

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pullback to our trendline...re entry and go

 

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stops tight

 

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stopped out
excellent stuff

 

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excellent stuff

 

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Good Morning: The Long & the Short of it and The Bigger Picture - 10 March 2020 - ADM ISI

Inbox

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Ostwald, Marc

08:58 (36 minutes ago)

to Marc

- Data again little more than roadkill, China inflation, UK BRC Sales and
IOD survey, disappointing bounce in French production to digest; awaiting
Italy Production and US NFIB survey, smattering of central bank speakers
and bond auctions in Netherlands, UK and USA; coronavirus news still front
and centre

- US NFIB: employment components suggest upside risks relative to
consensus for modest setback

- Oil wars: Saudi & Russia motives unclear; prism of breakeven oil price
levels for budgets well worth considering

- Audio preview
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-10-march-2020/

- Charts / Tables:
Italy vs Germany / France coronavirus spread; US equity Put/Call ratio;
WTI Oil future; GS Commodity Price Index; World Market Implied Policy
rates; S&P 500 index vs USD HY Credit spread; S&P 500 future vs. VIX

..........................................................................

********************
** EVENTS PREVIEW **
********************

It remains the case that the economic data schedule is an irrelevance that will get no traction in terms of market reaction, though for the record there are China inflation, UK BRC Retail Sales, Norwegian CPI and French & Italian Industrial Production to digest, with final Eurozone Q4 GDP and the US NFIB Small Business Optimism ahead, along with the UK IoD survey, unsurprisingly giving back all of the post-election spike in business optimism, due to the Coronavirus spread. The NFIB survey accompanies the array of Q2 Manpower Employment Intentions surveys, and is of interest from the aspect that, as ever, the NFIB Employment components were published on Monday, and were at or around the cyclical highs (Plans to Hire 21 vs 19, Positions Not Able to Fill 38 vs 37, and Net Compensation Plans unchanged at 36). The latter suggests that there are upside risks relative to projections of a 103.0 from January's 104.3 would appear to be to the upside. In event terms some RBA, RBNZ & Riksbank speakers are accompanied by the latest USDA World Agricultural Supply and Demand (WASDE) report, though given the risk of further economic and plenty of weather and legacy natural disaster disruptions, these will be treated with a large pinch of proverbial salt. In market terms, a degree of calm appears to have returned to equity, bond and commodity markets, rather more a reflection of the excesses of yesterday's slide in equity and commodity prices and govt bond yields, rather than genuine relief at the prospect of fiscal and other govt policy measures. In the latter respect, and as previously observed on infrastructure spending --- it is not the amount of money that matters, it is about planning and execution, even if it is clearly better that govts take on the debt to cover lost tax revenue, and to provide the tax breaks and credits, rather than lumbering already vulnerable sectors with more debt that they will struggle to repay even in better times. That said, a degree of catharsis in credit markets via way of restructurings and indeed outright defaults would probably be a painful, but not bad thing from a longer term perspective for a world mired in debt.

On the Coronavirus spread front, the focus remains on the US, along with Germany & France, and the attached graphic offers a perspective offers on how the spread in Germany & France would appear to be mirroring Italy (with a lag in terms of the first reported cases), the latter having taken the dramatic decision to effectively close down most of its economy as part of its containment efforts. The key questions remain two-fold: when will the spread peak internationally, and what and for how long in terms of disruptions to economic activity. However the oil price war introduces a further level of complication above all as it brings home what has been clear for some time, the US shale oil sector's finances were in very bad shape, this price slide will bring forward the inevitable day of reckoning. As for Saudi Arabia and Russia's motivations in igniting this price war, this remains a key issue to consider: the breakeven level of oil prices required to finance sovereign budgets.

(US$ per barrel)

Saudi Arabia: 83.6
Russia: 42.4
Iraq: 60.3
Iran: 194.6
UAE: 70.0
Kuwait: 54.7
Qatar: 45.7
Libya: 99.7
Algeria: 109.0

For further thoughts on central bank policy and govt measures to combat the spread of the coronavirus, please listen into the daily audio podcast tagged in the headlines.

 

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Mornin folks

 

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Day surgery unit at The Royal Surrey
Great fun
Out at lunchtime

 

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All.have a great day

 

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Good coffee here....better than Pret
Need to come here more often....lol

 

[swissy]

Good coffee here....better than Pret
Need to come here more often....lol

Good luck, hope all goes well ( good job you got in before the tsunami of COVIDites currently massing on the borders)

 

[cantagril]

Good coffee here....better than Pret
Need to come here more often....lol

Don't worry, you probably will

...and btw, a very good morning to you Sir!

 

[cantagril]

I haven't bothered posting anything late as I've basically just been doing the same dip buying trade on the Stoxx...now on my 5th

 

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Great fun...

 

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Mornin folks 😜 😜 😜 😍 😍 😍 🥰 🥰 🥰 💋 💋 🤪🤪🤪🤪

 

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A quick look at the Dax