Dentalfloss
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Dow in rez/prev supp
Trading with point and figure
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Dentalfloss
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Dentalfloss
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Lookin a tad oversold
Dentalfloss
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sellers need to get it under red
Dentalfloss
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Needs to stay under
Dentalfloss
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Dentalfloss
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Dentalfloss
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Good Morning: The Long & the Short of it and The Bigger Picture - xx May 2020 - ADM ISI
- Digesting Japan, Thai Q1 GDP, Singapore Exports and China Home Prices;
little ahead outside of US NAHB survey, and some BoE/Fed speak, after
renewed downbeat comments from Powell; markets still a triumph of
hope over adversity
- US NAHB survey: dead cat bounce expected, but anecdotal evidence and
sky high unemployment implies downside risks
- Week Ahead: busier week for Japan and UK data, flash PMIs, Asia Trade
data on offer; central bank speakers and govt bond supply plentiful;
China NPC, holidays and key Asia corporate earnings
- Week Ahead: market vs. main street chasm still very striking; central
banks face prisoner's dilemma
- Charts: US M2 velocity, S&P 500 P/E ratios
- Recommended: Samir Madani Twitter thread on activity recovery indicators
across world:
..........................................................................
********************
** EVENTS PREVIEW **
********************
Outside of the Japan and Thai Q1 GDP (both bad, but better than expected, and will be worse in Q2), Singapore Exports (falling relatively modestly, again boosted by skyrocketing pharma exports +174.3% y/y) and China Home Prices, there is little on the data schedule to occupy markets other than the US NAHB Housing Market Index, with the central bank speaker agenda seeing BoE'S Tenreyro and Atlanta Fed's Bostic. Markets continue to ignore the obvious and very clear signals from many officials that their rose tinted Panglossian perspective of a swift recovery as lockdown measures are eased, with Powell's interview on CBS yesterday perhaps even more downbeat than his speech last week. That said, he and other central bankers need to bear in mind that actions (above all flows) speak louder than words, and markets will wilfully ignore the implications of those actions and the accompanying negative narrative, for as long as they believe they are backstopped - for central bankers, this is a variation on prisoner's dilemma.
In terms of the US NAHB Housing Market Index, April's collapse from 72 to 30 was by far the sharpest single month on record since the survey began in 1985, and far worse than anything seen ahead of the GFC. For many that fall was primarily a function of lockdown measures, rather than demand, and that in turn predicates expectations of a tepid rebound to 34 from 30, but with Unemployment skyrocketing, and uncertainty about the overall outlook understandably rife and fears about contracting the virus also sky high, the risks look to be the downside of the consensus, given that even with the easing of lockdown measures buying a house seems unlikely to be at the top of consumers priorities, particularly with anecdotal evidence suggesting banks have tightened all forms of consumer lending standards, and house prices likely to fall above all due to unemployment.
RECAP: Week Ahead
The disconnect between financial market performance (above all equities and credit) and the lived economic and social reality of the populace at large in most countries will doubtless remain the key feature of the week, though there is also a rising sense of public discontent with the political fraternity in many countries, which requires careful monitoring. In part it is a function of very understandable frustration at ongoing restrictions on activity, even with the easing of lockdown restrictions, however the more incendiary elements are a sense that politicians are and have been disingenuous, and/or have mismanaged their responses, and an increasingly deep seated unease about short, medium and long-term employment prospects. It is equally notable that while central banks deny that they are running out of policy ammunition, let alone admit that what they are applying are very blunt instruments, which may mitigate the worst seizures in terms of financial conditions, above all liquidity, but do not make companies or consumers any more solvent, and indeed exacerbate the ugliest aspects of corporate zombification and financial engineering that have been so evident since the GFC. Increasingly they are highlighting that without a Covid-19 vaccine, any rebound will at best be modest, and by extension the risks of long-term economic damage, above all in terms of unemployment potentially large, and hence they are emphasizing the need for even larger (and fairly immediate) fiscal efforts, which are all the more necessary if politicians are not to face major public unrest, even if such measures may engender cultures of entitlement, as well as even greater mountains of debt which above all sap the efficacy of monetary policy, by constricting monetary velocity, which is a key foundation of solid sustainable growth - see attached chart for US M2 velocity.
- Be that as it may, the week's data schedule is certainly not overwhelming, and in any case unlikely to offer much, if anything at all in terms of signalling any major changes to a still rather foggy economic outlook. A busier week for Japan (Q1 GDP, Trade and Machinery Orders) and the UK (CPI, Unemployment, Retail Sales and PSNB) accompanies the G7 flash PMIs for May and a number of other surveys, with the US looking to various housing market indicators, and Canada seeing CPI and Retail Sales. Export data from Singapore, South Korea and Taiwan are also due.
- On the central bank front, Fed and ECB minutes accompany another busy week for G7 central bank speakers. In the EM space, the surprising aspect is that two of the most beleaguered economies (and as a consequence currencies) - South Africa and Turkey - are expected to see further relatively aggressive rate cuts of 50 bps, following in the footsteps of Brazil's BCB, while central banks in Thailand and Indonesia are expected to cut by 25 bps.
- Aside from the increasingly fluid public views of political leaders across much of the world, the heavily delayed China National People's Congress begins on Friday, and will be watched all the more closely, not just in terms of further measures to boost the economy as it attempts to recover from the Coronavirus shock, but also increasingly hostile relations with the US, and deteriorating relations with much of Europe.
- Public holidays via way of Ascension Day (Thursday) in parts of Europe & elsewhere, the Ramadan ending Eid Al-Fitr in the Moslem world (from Friday) and an early close on Friday in the US ahead of the Memorial Day weekend will likely dampen activity.
- Govt and corporate bond issuance will again be plentiful across the developed world, with China needing to absorb in excess of CNY 550 Bln of central govt and municipal issuance. USD IG Corporate issuance is already in excess of $163 Bln month to date, and would thus appear to be on course to beat April's record $288 Bln total, barring a market seizure, which would appear improbable given the level of central banks' overt monetary financing.
- The corporate earnings schedule starts to ease above all in the U.S., though it will be a very busy week for Retailers - Foot Locker, Home Depot, Kohl’s, Lowe’s, Ross Stores, Target & TJX, with agricultural & construction machinery giant Deere & Co also reporting. Asia looks to Alibaba, Baidu, Fujifilm, Mitsubishi Motors, Panasonic & beleaguered Softbank.
========================== ** THE DAY AHEAD ** ===========================
| Inbox | x |
| Ostwald, Marc | Tue, 5 May, 08:38 (13 days ago) |
|
| 08:55 (2 minutes ago) |
|
- Digesting Japan, Thai Q1 GDP, Singapore Exports and China Home Prices;
little ahead outside of US NAHB survey, and some BoE/Fed speak, after
renewed downbeat comments from Powell; markets still a triumph of
hope over adversity
- US NAHB survey: dead cat bounce expected, but anecdotal evidence and
sky high unemployment implies downside risks
- Week Ahead: busier week for Japan and UK data, flash PMIs, Asia Trade
data on offer; central bank speakers and govt bond supply plentiful;
China NPC, holidays and key Asia corporate earnings
- Week Ahead: market vs. main street chasm still very striking; central
banks face prisoner's dilemma
- Charts: US M2 velocity, S&P 500 P/E ratios
- Recommended: Samir Madani Twitter thread on activity recovery indicators
across world:
..........................................................................
********************
** EVENTS PREVIEW **
********************
Outside of the Japan and Thai Q1 GDP (both bad, but better than expected, and will be worse in Q2), Singapore Exports (falling relatively modestly, again boosted by skyrocketing pharma exports +174.3% y/y) and China Home Prices, there is little on the data schedule to occupy markets other than the US NAHB Housing Market Index, with the central bank speaker agenda seeing BoE'S Tenreyro and Atlanta Fed's Bostic. Markets continue to ignore the obvious and very clear signals from many officials that their rose tinted Panglossian perspective of a swift recovery as lockdown measures are eased, with Powell's interview on CBS yesterday perhaps even more downbeat than his speech last week. That said, he and other central bankers need to bear in mind that actions (above all flows) speak louder than words, and markets will wilfully ignore the implications of those actions and the accompanying negative narrative, for as long as they believe they are backstopped - for central bankers, this is a variation on prisoner's dilemma.
In terms of the US NAHB Housing Market Index, April's collapse from 72 to 30 was by far the sharpest single month on record since the survey began in 1985, and far worse than anything seen ahead of the GFC. For many that fall was primarily a function of lockdown measures, rather than demand, and that in turn predicates expectations of a tepid rebound to 34 from 30, but with Unemployment skyrocketing, and uncertainty about the overall outlook understandably rife and fears about contracting the virus also sky high, the risks look to be the downside of the consensus, given that even with the easing of lockdown measures buying a house seems unlikely to be at the top of consumers priorities, particularly with anecdotal evidence suggesting banks have tightened all forms of consumer lending standards, and house prices likely to fall above all due to unemployment.
RECAP: Week Ahead
The disconnect between financial market performance (above all equities and credit) and the lived economic and social reality of the populace at large in most countries will doubtless remain the key feature of the week, though there is also a rising sense of public discontent with the political fraternity in many countries, which requires careful monitoring. In part it is a function of very understandable frustration at ongoing restrictions on activity, even with the easing of lockdown restrictions, however the more incendiary elements are a sense that politicians are and have been disingenuous, and/or have mismanaged their responses, and an increasingly deep seated unease about short, medium and long-term employment prospects. It is equally notable that while central banks deny that they are running out of policy ammunition, let alone admit that what they are applying are very blunt instruments, which may mitigate the worst seizures in terms of financial conditions, above all liquidity, but do not make companies or consumers any more solvent, and indeed exacerbate the ugliest aspects of corporate zombification and financial engineering that have been so evident since the GFC. Increasingly they are highlighting that without a Covid-19 vaccine, any rebound will at best be modest, and by extension the risks of long-term economic damage, above all in terms of unemployment potentially large, and hence they are emphasizing the need for even larger (and fairly immediate) fiscal efforts, which are all the more necessary if politicians are not to face major public unrest, even if such measures may engender cultures of entitlement, as well as even greater mountains of debt which above all sap the efficacy of monetary policy, by constricting monetary velocity, which is a key foundation of solid sustainable growth - see attached chart for US M2 velocity.
- Be that as it may, the week's data schedule is certainly not overwhelming, and in any case unlikely to offer much, if anything at all in terms of signalling any major changes to a still rather foggy economic outlook. A busier week for Japan (Q1 GDP, Trade and Machinery Orders) and the UK (CPI, Unemployment, Retail Sales and PSNB) accompanies the G7 flash PMIs for May and a number of other surveys, with the US looking to various housing market indicators, and Canada seeing CPI and Retail Sales. Export data from Singapore, South Korea and Taiwan are also due.
- On the central bank front, Fed and ECB minutes accompany another busy week for G7 central bank speakers. In the EM space, the surprising aspect is that two of the most beleaguered economies (and as a consequence currencies) - South Africa and Turkey - are expected to see further relatively aggressive rate cuts of 50 bps, following in the footsteps of Brazil's BCB, while central banks in Thailand and Indonesia are expected to cut by 25 bps.
- Aside from the increasingly fluid public views of political leaders across much of the world, the heavily delayed China National People's Congress begins on Friday, and will be watched all the more closely, not just in terms of further measures to boost the economy as it attempts to recover from the Coronavirus shock, but also increasingly hostile relations with the US, and deteriorating relations with much of Europe.
- Public holidays via way of Ascension Day (Thursday) in parts of Europe & elsewhere, the Ramadan ending Eid Al-Fitr in the Moslem world (from Friday) and an early close on Friday in the US ahead of the Memorial Day weekend will likely dampen activity.
- Govt and corporate bond issuance will again be plentiful across the developed world, with China needing to absorb in excess of CNY 550 Bln of central govt and municipal issuance. USD IG Corporate issuance is already in excess of $163 Bln month to date, and would thus appear to be on course to beat April's record $288 Bln total, barring a market seizure, which would appear improbable given the level of central banks' overt monetary financing.
- The corporate earnings schedule starts to ease above all in the U.S., though it will be a very busy week for Retailers - Foot Locker, Home Depot, Kohl’s, Lowe’s, Ross Stores, Target & TJX, with agricultural & construction machinery giant Deere & Co also reporting. Asia looks to Alibaba, Baidu, Fujifilm, Mitsubishi Motors, Panasonic & beleaguered Softbank.
========================== ** THE DAY AHEAD ** ===========================
Dentalfloss
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Tricky
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10800 area support
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Oversold unwound
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Mornin folks 😷 😷 😷 😷 😷 🤪 🤪 🤪 🤪 
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Updated
excellent stuff
excellent stuff
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stops tight
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Into the open
