Last quote by Chris Weston
Chris Weston quotes
The market likes what they have heard from Trump and his administration… where the rhetoric and actions highlighted a sheer urgency, purpose and drive to push the US economy forward and this has traders putting risk back on the table.
The story in Australia is clearly around the moves in commodities and the materials sector.
The Fed, like everyone else in the market, have full focus on the execution of Trump's fiscal program and see upside risks to their forecasts if it comes off. That is a sizeable 'if' because ... much needs to go right.
The key will then be whether they increase their 2017 and more likely 2018 GDP forecasts from 2% respectively.
Traders want to be hedged against this situation, so people are buying financials globally. Everyone wants to benefit from a reflation trade, and financials are generally your natural hedge against that.
We've had a strong run this week. We're up about 2 percent and are headed towards 5,600, the top end of this year's trading range. However, we're missing a bit of a catalyst today.
You've got great yield in the banks, you've got very stable earnings. We still have very low volatitity in financial stocks, which is great for income trade.
The Q3 Australian business investment plans are expected to fall 3 percent and this could have implications for next week's Q3 GDP print, but one should also look out for the fourth estimate of business investment plans for 2016/17.
We have a number of really bullish set-ups in global indices at present, obviously, we've seen this front and center in all four main US indices, the Nikkei 225 and also the Chinese CSI 300, which is near the year's highs. However, we can now add the ASX 200, which, after pushing through 5,500 is eyeing the year's highs of 5,611 itself.
If you want to hedge or profit from a 'make America normal again' trade the best way is through the Japanese equity market, and specifically the banks.
This market looks like it wants to go up to 5500....I think being long and staying long seems to be the trend for now.
If the Fed were to assess financial conditions in the wake of a potential rate hike they would be wholly enthused.
The bulls have got control here and that U.S. equity and many other developed markets are going higher, at least in the short-term.
U.S. equity and many other developed markets are going higher, at least in the short-term.
In terms of event risk, I suspect today's NAB business confidence print will do little to alter market sentiment [and the] same could be said for China's October trade data.
We are not quite at the point where we need to think about canned food and underground wood bunkers, but we are being schooled in understanding the dynamics politics plays on financial markets. Despite all the thoughts about central bank policy changes, improving inflation trends and ever-changing economics, politics dominates markets above all else.
People are looking to mitigate the risks around their portfolios as the clarity of the investment landscape is deteriorating as Donald Trump picks up (vote) share.
The market gave us a reasonable idea about how it plans to react to a Trump victory, with politics dominating Friday's U.S. trading session. The interesting dynamic here is that despite a strong headline U.S. Q3 GDP report of 2.9 percent, the interest rate market couldn't really care less and the increased chance of Trump in the White House has actually seen the chance of a December rate hike fall to 70 percent.
Apple's numbers after-market look quite uninspiring and we are seeing shares down 2.5 percent in after-hours trade.
The US dollar strength is the big story for me overnight, predominantly driven by Euro weakness more than anything else.
U.S. markets have provided Asia with a healthy platform from which to progress. We've also seen a slew of earnings reports (including Goldman Sachs) and once again whether one is looking at the underlying earnings or the sales lines, companies are beating the analysts' estimates.
No one really expected to hear a categorical statement that we are going to see the Saudis curbing oil production.
If you are an international fund manager, you can look much more positively at the Australian market because the income that you are buying is actually appreciating in Australian dollar terms. So we got that kind of perfect storm in the Australian market to outperform.
Initial USD weakness was met with some better buying as the session grew and this seems to have taken some of the heat out of further risk sentiment.
As one can imagine, no one is prepared to take on too much risk.
One suspects that there will be an air of relief and many will be pleased that the technical glitch happened on a day where corporate news flow was limited and the leads from Wall Street were as flat as you will ever see.
The bulls have wrestled some sort of control back in U.S. equity indices, but ... there is still a good amount of technical work to be done for the bulls to fully be in control.
Anyone still left calling for a September hike next week from the Federal Reserve must be feeling a bit hot under the collar after further signs of economic vulnerabilities. It's no surprise to see reasonable buying in the short- to medium-duration U.S. Treasuries, while the longer end of the curve hardly moved.
The VIX (U.S. volatility index) had the biggest move since the U.K. referendum, gaining 39.9 percent.
Oil has been at the heart of the move, helping high yield credit spreads to narrow relative to U.S. treasuries and put real backbone behind the feel good factor.
Financials are driving the losses today. The Australian economy is slowing and there are concerns about the future of Australia's financials.
The composition of the result was a little bit disappointing.
Hotter than forecast average workweek hours, hourly earnings and participation rate suggests this report was of genuinely quality.
All-in-all, it should be a quieter week for event risk with the markets having had time to digest central bank initiatives and commentary from the Bank of England, Reserve Bank of Australia, Bank of Japan and Federal Reserve.
Of course, if the crunch came and they needed power quickly we would respond.
The fact we've only seen a modest recovery in the [currency] pair suggests trader see very little appetite for this uber-unconventional policy change and we should see the Nikkei open on the back foot today.
If we went off this report alone, then the Federal Reserve would be putting rates up today, but that is clearly not the case with the May trade balance and dovish (yet largely redundant) set of FOMC minutes keeping the growth bulls in check.
Calmer heads seem to have prevailed in the U.S. and we are once again seeing a situation where the U.S. economy is seemingly looking OK, while the U.K. and Europe are showing increasing signs of fragility.
The polls were not supposed to influence as much as they have. Overnight, we have seen a rampant position adjustment and an unwind of 'Brexit' hedges.
It just doesn't feel right, but I was always taught that an asset at all-time highs, or even 52-week highs, is outright bullish and should be traded as such - but no one believes we are here. many in the market are clinging to the first-quarter macro concerns (China yuan devaluation, low oil, low growth/recession, negative interest rate policy concerns and deflation fears) that they have missed the move higher.
The feeling on the floors is that the move higher in risk assets still has legs, but there is a healthy degree of skepticism and there are a number of longs waiting to reverse to short or increase cash allocations should prices show even the slightest hint of rolling over.
We have not yet reached the point where the market internals are highly suggestive of contrarian short positions. But the market is in need of some injection of new news to provide an injection of inspiration and cause a new leg higher. It seems unlikely this inspiration comes from today's U.S. payrolls.
Asian stocks have flown out of the gate and there almost feels like we could be seeing the start of FOMO (Fear of Missing Out) trading. To many, losing money is only moderately worse than missing an opportunity and the flows today have been reminiscent of this phenomenon.
The noise around potential production cuts is hugely elevated; if we don't see a cohesive response in a month or so, the speculators will no doubt start to ramp up short positions again.
These markets need a strong shake up and sharp downside move, followed by a wave of buying to settle things down. But until that comes there will be no clarity, absolutely no confidence and a bucket load of concern. There's concern the volatility will feed through into real economics and central banks will be pretty much powerless to stop it.
For those who have traded the overnight move, it almost feels like something big is brewing, similar to 24 August and the quasi-flash crash capitulation move we saw.
Despite talk last year that the so-called National Team were not going to directly intervene in stocks, this idea seems to have reversed.