Trading with point and figure

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

Against the backdrop of a complex array of political and economic uncertainties and as the US Q2 earnings season gets under way, it is remarkable that the 'Desperately Seeking Income' meme should assert itself so impressively. But then again that is perhaps the inevitable consequence of an overextended and unprecedented period of extreme central bank monetary policy largesse. Nevertheless the atavistic accompanying 'stop hunting' and mindless momentum chasing should serve as a warning to central banks that they have perverted markets' reaction function so effectively that this will prove to be the path to the next financial crisis. Today's schedule features Chinese Trade and US Import Price data, the Fed's Beige Book and more Fed speak, the installation of Mrs May as the new British PM, an expected no change but dovishly biased policy decision from the Bank of Canada, as well as govt bond auctions in the US (30 yr), Italy, UK, Portugal and Germany. The latter will see a new 10 yr Bund with a very generous coupon of 0.0% and a price above its 100.00 redemption level, therefore this will guarantee that investors holding the bond to maturity will lose money and get no income - if that is the sort of investing that central banks wish to encourage, then God help us all. In terms of the CNY denominated China Trade data, these were rather mixed with Exports better than expected, but still only expanding modestly at 1.3%, while May's Import jump (5.1% y/) has been swiftly reversed with a larger than expected 2.3% fall. The commodity imports data were rather mixed, with Crude Imports +14.2% y/y, but Oil Product Imports -2.0% y/y; Steel Products -2.1% y/y, but Coal 8.2%, Copper 22.0%, Iron Ore 9.1%; the Oil Product bears some scrutiny given that China is now a net exporter of product. Attention in that sector can now switch to the IEA monthly Petroleum Status Report, as well as the weekly EIA data, following an expected jump in API crude stocks of 2.2 Mln bbls against an expected draw of 3.0 Mln.

** U.S.A. - Import Prices / Beige Book **
- While US economic data has been relegated to a subsidiary role thanks to the Fed's incessant flip-flopping and displays of intense anxiety, it still requires some attention. Import Prices kick off this week's run US inflation data, and are expected to see a 0.5% m/m rise thanks in the main to energy and commodity prices, though it will be worth noting whether it echoes May's report in signalling that prices of finished products are starting to edge up, not in a menacing way, but nevertheless higher. If forecasts are correct, this would see the y/y rate move to -4.6% from May's -5.0%, which would be the 'highest' reading since November 2014, having reached a nadir of -11.6% y/y in September 2015. In terms of the Fed's Beige Book, this will likely signal that the US economy continues to expand at a modest or moderate pace, though rather unevenly across regions and business sectors. It will be interesting to note whether there is any mention of Brexit related risks, though with exports accounting for just 11.0% of US GDP, perspective is required. Particular attention will be required to reports on consumer spending and to outlooks across sectors, which have been generally optimistic outside of the energy, transportation and agricultural sectors. However the key element will be the anecdotal evidence on the labour market, with the early June edition reporting that 'tight labor markets were widely noted in most Districts', with difficulties in filling vacancies due to skills shortages noted in both higher and lesser skilled jobs, which in turn was putting some upward pressure on wages. As an aide memoire, the summary from the 1 June Beige Book are reprised below:

* Information received from the 12 Federal Reserve Districts mostly described modest economic growth since the last Beige Book report.

* Economic activity in April through mid-May increased at a moderate pace in the San Francisco District, while modest growth was reported by Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, and Minneapolis. Chicago noted that the pace of growth slowed, as did Kansas City. Dallas reported that economic activity grew marginally, while New York characterized activity as generally flat since the last report.

* Employment grew modestly since the last report, but tight labor markets were widely noted; wages grew modestly, and price pressure grew slightly in most Districts.

* Several Districts noted that contacts had generally optimistic outlooks, with firms expecting growth either to continue at its current pace or to increase.

* Consumer spending was up modestly on balance in many Districts, though contacts in the Boston, Cleveland, Minneapolis, and Dallas Districts reported mixed or flat activity, and New York reported weakened sales.

* Many Districts reported modest growth in nonfinancial services.

* Manufacturing activity was mixed across Districts.

* Construction and real estate activity generally expanded since the last report, and the overall outlook among contacts in these industries remained positive.

* Overall loan demand was up moderately in all but one of the Districts that reported it, and many Districts reported steady to good credit availability.

* Crop conditions were promising in many Districts, but low commodity prices continued to put pressure on agricultural incomes.

* The energy sector remained weak.
from Marc Ostwald
 
I think all eyes on formation of cabinet.

Names should give some insight on markets. If a name other than the Brexit pack of four is picked markets should rally. If it is one of the pack of four then it will not bode well and we'll see some retreats.

Otherwise steady teddy day (y)
 
Does he know?

55034.jpg


:LOL:
 
You must log in or register to reply here.

Similar threads

Michael Carr
  • Article
Equities Technical Analysis Testing Point & Figure Patterns
Replies
0
Views
3K
T2W Bot
T2W Bot
S
Point&Figure
2
Replies
39
Views
7K
subarashi
S
M
Point and Figure
Replies
2
Views
1K
Dentalfloss
Dentalfloss
A
Point and Figure box size for commodities
Replies
4
Views
4K
TWI
TWI
William Rafter
  • Article
Technical Analysis Point & Figure Gone High Tech
Replies
18
Views
9K
GruntnoWay
G
Top