Macro Dragon: WK#17 Ahead, China -12% e GDP Today?
Summary: Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
Macro Dragon: WK#17 Ahead, CH -12% e GDP Today?
Folks as a pin going forward during this turbulent times, let us please remember:
The Covid-19 crisis with all its challenges, stress, chaos & opportunities will also eventually pass. What defines humanity & ourselves as individuals is how we both individually & collectively act under adversity. Think of how you want to look back over this period, doing your part to keep your family healthy, society healthy & functioning. Keeping a cool head, when others are losing theirs, maintaining an objective list of positive aspects & negative aspects of the policy responses & economic shock the world is / could go through. And lastly gratitude, sympathy & empathy for one another. Parts of Asia got / are getting through this & so too shall the RoW.
The one big positive from all this, is it reminds us we are all One. Plus we are not at the top of the food chain. Covid-19 does not care if you are rich, poor, what your ethnicity & skin color are, what passport/s you hold, nor what you age or profession is. Our greatest achievements are almost always those that we collectively do with others & sometimes as in this case, potentially as species.
Lastly keep your mind open to growth & opportunities.
Top of Mind…
- As we spoke about yest, China GDP today (-12.0%e +1.5% QoQ, -6.0%e +6.0%p YoY) should not be a surprise on likely being the worst contraction on record – what it could spur is a continued focus on the growth hit that will come through in Europe & the US…
- Very HIGH risk-on starting this Fri morning on reports that pharma company Gilead has gotten promising results from its drug remdesivir on treating Covid-19 patients
- Plus also o/n there were Trump talking about a reopening of the US economy, which he has rightfully given back to the individual states & governors – even though technical it was never his to take…
- Again Trump is such a master at this… do you think the average person on the street is aware of the limits of presidential power? Of course they are not…
- So we this Asia Fri Morning, we have S&P Futures up +3% at c. 2870, with Russel 200 futures closer to +5% at 1230, yields are up, oil is not really doing anything (hey fundamentals work! & neither is gold (hey fundamentals don’t work)
- Worth noting on energy, we got 2nd close below $30 on Crude & first close sub $20 on WTI, these are key… & today’s Fri close could be essential…
- Gold has now had 4 days of closing price confirmation above the $1700 lvl, a wkly close there would be a very strong in setting up for the next potential explosive move up (i.e. MMT, debt exploding upwards on both the MP & FP side, etc) – this is going to be not just multi-quarter, but multi-year (potentially decade) in scope
Week 17 has a flash PMI theme, as well as the which country is loosening or tightening up game…
- US: Flash PMIs, Jobless Claims, Existing Home Sales, New Home Sales, Durable Goods
- CH: CB Leading Index
- EZ: GER PPI, Current Account, Trade Balance, GER ZEW, EZ ZEW, Flash PMI, GER IFO
- JP: Trade Balance, Flash PMI, National Core CPI
- UK: Avg. Erns Index, CPI Headline & Core 1.7%p, PPI, House Prices, Retail Sales, Flash PMIs
- AU: RBA Mins, Lowe set to speak Tue @ 13:00, CB & MI Leading Index, Flash PMIs
- NZ: CPI QoQ 0.5%p, Milk Auction, Credit Card Spending, Business NZ Mfg. Index
- CA: Wholesale Sales, Retail Sales, CPI 1.8%p, CORE 2.1%p
We could continue to be in a gang buster period of volatility both to the up & down side until at least mid-Apr to back-end of May. Some, time decay is needed in the system, both from a Covid-19 spread (past peak velocity upwards), even bigger & even better government / fiscal / monetary policy response, to overall heads of governments giving this the 2nd & 3rd order consequences thinking that it needs. This to shall pass. Keep you minds & hearts open.
Key thing that KVP is trying to figure out is, how much of the economic fall-out & massive unemployment is correctly priced in – seems ludicrous to run on a V-shaped economic recovery across all sectors.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.