Markets Morning Newsletters

Bond yields and stocks are lower, gold higher, after trade tensions resurface – Macro Markets Morning 1 November 2019

on November 1, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • There are two ways to think about the market’s reaction to the not entirely unexpected trade news from Bloomberg that China doubts they’ll be able to do a long term trade deal with President Trump. The first is that stocks aren’t off too much all things considered so the market must have been sceptical about the deal all along anyway – the moves in gold and bonds though belie that.
  • The second way to look at it is that we’ve now seen both the S&P 500 and US 10’s back away from significant resistance – so the move higher in yields and stock prices may have run into the wall that will hold for a while. Either way, today’s deluge of manufacturing PMI’s and then US non-farms tonight will be an important factor in where markets head next – at least in the immediate term.
  • Elsewhere forex traders too respected overhead resistance with USDJPY down 0.8% to 107.98 while copper dipped 1.8% and oil lost 1.9% in WTI terms to $54.03. So it’s been a bit of a risk off day.         

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaBond yields and stocks are lower, gold higher, after trade tensions resurface – Macro Markets Morning 1 November 2019

Fed delivers a cut to the Goldilocks US economy and markets – Macro Markets Morning 31 October 2019

on October 31, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • The Fed cut rates again Wednesday in what some are calling a hawkish cut but which I think was an entirely appropriate move to tell traders and the Joes and Josephines of main Street that things aren’t too bad in the US right now so they probably don’t need to cut. But if they do, they will. Bonds still managed to rally a few points with the 10’s now down at 1.77%, stocks are up with the S&P 500 at 3046, and the USD came under a little pressure once more. 
  • So it seems the market took the action, statement, and Chair Powell’s press conference more as Goldilocks than a Hawk. Of course, when the economy is doing okay and inflation is still contained then realistically that is exactly where things are – neither too hot or cold, just about right.
  • Naturally with bonds down gold is up off the mat at $1495, the DXY is at 97.48, the Euro 1.1149, the Aussie breaking out at 69 cents and the CAD under pressure from a Dovish BoC. Oil dipped with WTI at $54.89, down 1.17%but copper recovered to be $2.68.      

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaFed delivers a cut to the Goldilocks US economy and markets – Macro Markets Morning 31 October 2019

Waiting on the Fed, even dodgy trade news matters less – Macro Markets Morning 30 October 2019

on October 30, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • When I looked at the action from Tuesday and what it might mean I didn’t think I’d write much. But then I thought about what US consumer confidence might mean for GDP growth which is out tonight in the US. And I thought about what the US Administration is doing by signalling perhaps no signing at APEC and that sent me off on a couple of tangents including that US and German markets are trading in lockstep right now so trade is probably more important than the Fed?
  • Maybe, gold’s continued non-participation in the correlated daily moves suggests that is the case but it would be a strange day if the Fed doesn’t dominate when I sit down to write this note in 20 hours time. So to that end and taking all of the above into account the S&P 500 dipped 2.5 points to 3037, the DAX was flat, gold is at $1488 down 0.25%, and US 10’s are at 1.835% just below the break out level. So we are poised for a big run into week’s end.
  • Also running are Pommie Pollies as PM Johnson got his election for December 12. SO far Sterling is fine with that, which makes sense at this point.     

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaWaiting on the Fed, even dodgy trade news matters less – Macro Markets Morning 30 October 2019

Stocks and bond yields higher as the melt up continues – Macro Markets Morning 29 October 2019

on October 29, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Use the force Luke. Those words from Obi-Wan have been seared into my brain since I first saw Star Wars at the Roxy Theatre in Parramatta back in the 70’s. And in trusting the force that is the JimmyR trend indicator and my own MACD systems that I have been able to position against what is a rhetorical wall of worry.
  • That’s good news because stocks in Europe and the US were higher again Monday with the DAX at 12941 up 0.4% while the S&P 500 was half a per cent higher at 3038. Us 10’s too are on the march at 1.845% and threatening to break out of the trend since last years highs above 3%…Mmmm.
  • Gold naturally got hammered and is at $1493, Silver too, while AUDJPY is up 0.6% at 74.56 as both AUDUSD and USDJPY push a little higher. Risk awnnn, melt up, but it’s only Tuesday morning. Much wood to chop this week.     

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaStocks and bond yields higher as the melt up continues – Macro Markets Morning 29 October 2019

Risk is a little better bid, but cautiously so – Macro Markets Morning 28 October 2019

on October 28, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • We kick off what is likely to be a huge week for markets with US stocks up near record highs after the S&P 500 closed Friday at 3022.55, US 10’s are rising too ending the week at 1.80%, while the 2’s are at 1.6260% which is starting to look high given where markets think the Fed should go. Oil was sharply higher last week, copper did better, and while there is an air of distrust and disquiet about the outlook the reality is risk is a little better bid.
  • But can that last through the week with so many big events including the Fed, BoJ, global manufacturing PMI’s, US and Euro-Area Q3 GDP, and of course US non-farms to close out the week on Friday? If nothing else it means the VIX at 12.65 might look a snip this time next week.
  • Time is going to tell and investors are still voting with their feet as money exits US stock funds and heads to cash. It has to be fear of the Fed as much as the levels up here near records, doesn’t it? All my systems are long stocks or have orders to buy and I confess to be rhetorically as nervous about these levels as anyone. But is that because I have a hedge on against my cash position or that my systems are long…frankly I’m betwixt and between.     

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaRisk is a little better bid, but cautiously so – Macro Markets Morning 28 October 2019

Two months till Christmas and global PMI’s are still weak – Macro Markets Morning 25 October 2019

on October 25, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Gold was bid at the same time the USD did a little better, stocks in the US rose, and rates didn’t do too much wrong. That’s interesting. But in truth, while the correlations are rising across a number of markets to level and in frequency that I find troubling, gold is doing its own thing. 
  • On the correlations, the thing is when I see the kind of Christmas tree of asset correlations tending toward +1 or -1 there is usually something going on beneath the surface of markets that bodes negatively. So we need to be alert to that even if overall we’ve had a calm week lacking significant catalysts.
  • So as we start the final day of the week gold is at $1503, the S&P 500 finished at 3010, US 10’s are at 1.77%, the DXY is at 97.63, the Euro at 1.1104 and BoJo is pushing – again – for a general election to settle Brexit — or not as may be the case. . 

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaTwo months till Christmas and global PMI’s are still weak – Macro Markets Morning 25 October 2019

Now for the fun part of the week, “flash” PMI’s, the ECB, and Durable goods – Macro Markets Morning 24 October 2019

on October 24, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Stocks a little better bid, bonds back from a rally, and the USD not able to kick on. It’s an interesting day’s trade as we head into Thursday and Friday when we get some meaty data and events markets can take a lead from.
  • Till then it’s the S&P up 0.3% to 3004, the DXY at 97.46, and gold at $1491. Correlations are increasing again too so that tells us things are getting primed for a decent reaction.
  • Kind of just like oil overnight which rose 2.5% on a draw instead of a build in the EIA data. . 

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaNow for the fun part of the week, “flash” PMI’s, the ECB, and Durable goods – Macro Markets Morning 24 October 2019

BoJo pushes on and wins a vote, remarkable really – Macro Markets Morning 23 October 2019

on October 23, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Nothing like the headline “no longer agnostic” to get the market reversing. I knew I was tempting fate yesterday with that one and it proved so Tuesday with the S&P off about 10 points to close at 2996 – but that was off a high of 3014.5 or thereabouts. So the back end of the day wasn’t so flash.
  • Not flash for stocks, but Boris Johnson did something remarkable, he managed to get the British Parliament to agree to his deal with the EU through the Parliament baulked at the prospect of accelerated passage. So an extension it is to delay Brexit till 2020 but Brexit it is – even if Northern Ireland is kind of cut adrift.
  • Elsewhere the tooing and froing continued – the Euro reversal we presaged yesterday got underway and that saw the USD a little stronger across the board, oil was up, gold a little too, and bonds dipped a few points. 

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaBoJo pushes on and wins a vote, remarkable really – Macro Markets Morning 23 October 2019

No longer agnostic, S&P 500 closes above 3000, US and German bond yields breakout – Macro Markets Morning 22 October 2019

on October 22, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • It could prove ephemeral, moves above 3000 have in the past for the S&P 500. But in rallying 20 points to close at 3006 on the back of positivity about the Trade War from both sides of the argument US stocks are looking better than they have in a while.
  • Sure there are still residual concerns about the outlook as we head toward Christmas with memories of last years price capitulation still fresh. But earnings so far aren’t as bad – or should I say much worse – then thought. And there is still much cash on the sidelines. And, and in a strange way, the increase in bond yields is mildly supportive of stocks but not of gold and silver which will suffer if bond rates keep rising – as they might.
  • On forex markets, there wasn’t much action but the Euro joined USDJPY in stalling below the 200 day moving average while the Pound had a kind of rocky day as it was buffeted first by fear, then hope to close kind of unchanged. Much water to flow under Bojo’s Brexit Bridge though it does seem like he’s in the ascendancy.  

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaNo longer agnostic, S&P 500 closes above 3000, US and German bond yields breakout – Macro Markets Morning 22 October 2019

Brexit still up in the air, fiscal stimulus flagging, just like the USD – Macro Markets Morning 21 October 2019

on October 21, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Not the worst start to the week for the Pound even though Pommie Pollies did what Pommie Pollies do and delayed again with a vote to postpone the vote being served up as the Saturday fare in the Commons. Ugh, what’s next? The EU says it’s waiting to hear from the UK government. But a delay seems the most likely outcome and forex traders have only marketed Sterling down 0.3% to 1.2933.
  • Elsewhere the S&P’s inability to hold gains last week will have eyes raised, but it still did okay all things considered. Not so the USD which has taken a pounding the last few week’s – you can look to changing the expectation of EU rates in the years ahead as a big part of that. But the Germans signalled Sunday they aren’t keen to actually open the fiscal spigot. 
  • So it’s a mixed start to a light week where nothing really concrete pops up till Thursday’s “flash” PMI’s. Besides news flow of course. Won’t that be fun, clickbait headlines driving markets.     

Now,  let’s dive into this morning’s newsletter.  

And for non-subscribers, If you want to have a trial of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaBrexit still up in the air, fiscal stimulus flagging, just like the USD – Macro Markets Morning 21 October 2019