Monday Morning Markets ...
This is our Monday Morning Markets Update. Every week we update our analysis of equities, bond yields, exchange rates, commodity prices and crypto.
Prices marked Saturday 16th March 2024.
Oil prices moved higher. Bond yields moved higher. Equities were softer overall. The Dollar rallied, Sterling the main loser. Gold moved slightly lower closing at $2,161 from $2,185 dollars. Bitcoin moved lower closing at $67,354 from $64,583. Bitcoin high in the week of over $72,800 does not bode well.
So what does this suggest for current values? Our value index, surplus to value is 6.8%, with significant stress still evident in Hang Seng to a lesser extent now Shanghai. U.S. stocks appear overvalued by 15.7%. European stocks over by a more modest 7.2%. AsSian stocks offer value.
Top line, "Cash no longer Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon), Most NFTs are junk (John Hargrave)". "Crypto is a ‘hot ball of money’ with very little intrinsic value", says hedge fund Starkiller Capital, a crypto-focused hedge fund.
When it comes to understanding market moves, "Any explanation is better than none" (Nietzsche). Be careful out there ... and remember ...
"To understand the markets, you have to understand the economics" ...
Prices marked Saturday 16th March 2024.
Oil prices moved higher. Bond yields moved higher. Equities were softer overall. The Dollar rallied, Sterling the main loser. Gold moved slightly lower closing at $2,161 from $2,185 dollars. Bitcoin moved lower closing at $67,354 from $64,583. Bitcoin high in the week of over $72,800 does not bode well.
So what does this suggest for current values? Our value index, surplus to value is 6.8%, with significant stress still evident in Hang Seng to a lesser extent now Shanghai. U.S. stocks appear overvalued by 15.7%. European stocks over by a more modest 7.2%. AsSian stocks offer value.
Top line, "Cash no longer Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon), Most NFTs are junk (John Hargrave)". "Crypto is a ‘hot ball of money’ with very little intrinsic value", says hedge fund Starkiller Capital, a crypto-focused hedge fund.
When it comes to understanding market moves, "Any explanation is better than none" (Nietzsche). Be careful out there ... and remember ...
"To understand the markets, you have to understand the economics" ...
Monday Morning Markets ... Equities ...
We track ten markets in our global equities model. The Dow, S&P and NASDAQ in the U.S.A, the FTSE, CAC and Dax in Europe. In Asia, Nikkei, Hang Seng, Shanghai and BSE feature.
In the U.S.A. markets were down by 0.3%, pushed by a 0.7% set back in Nasdaq . In Europe markets were down by 0.9%. In Asia, markets were level by -0.0%, despite by a 2.5% drop in Nikkei following the prior week record high of over 40,000.
We track ten markets in our global equities model. The Dow, S&P and NASDAQ in the U.S.A, the FTSE, CAC and Dax in Europe. In Asia, Nikkei, Hang Seng, Shanghai and BSE feature.
In the U.S.A. markets were down by 0.3%, pushed by a 0.7% set back in Nasdaq . In Europe markets were down by 0.9%. In Asia, markets were level by -0.0%, despite by a 2.5% drop in Nikkei following the prior week record high of over 40,000.
Monday Morning Markets ... Currencies
The Dollar rallied this week. Sterling traded a $1.27 against the Dollar from $1.286. The Euro traded at $1.09 from $1.098. Sterling unchanged at €1.17 against the Euro from €1.17.
We measure Sterling at Dollar $1.26 in the first quarter of 2024. Our Q4 Euro estimate is €1.15. The Euro Dollar cross rate is marked at $1.10 into 2024.
The Dollar rallied this week. Sterling traded a $1.27 against the Dollar from $1.286. The Euro traded at $1.09 from $1.098. Sterling unchanged at €1.17 against the Euro from €1.17.
We measure Sterling at Dollar $1.26 in the first quarter of 2024. Our Q4 Euro estimate is €1.15. The Euro Dollar cross rate is marked at $1.10 into 2024.
Monday Morning Markets ... Bond Yields ...
Bond yields moved higher in the week in the U.S and UK. US Ten year Treasury yields were at 4.31 from 4.07. UK ten year gilts were at 4.10 from 3.97.
We expect U.S. and U.K. ten year yields to average between 4.00 - 4.50 in 2024 but this may be pure nostalgia.
In the UK, prior to the Great Financial Crash [2000 - 2008] the average inflation rate was 2.0%, the average UK bank rate was 4.50%. Ten year gilt yields averaged 4.50%. Thirty year gilts averaged 4.60%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
Bond yields moved higher in the week in the U.S and UK. US Ten year Treasury yields were at 4.31 from 4.07. UK ten year gilts were at 4.10 from 3.97.
We expect U.S. and U.K. ten year yields to average between 4.00 - 4.50 in 2024 but this may be pure nostalgia.
In the UK, prior to the Great Financial Crash [2000 - 2008] the average inflation rate was 2.0%, the average UK bank rate was 4.50%. Ten year gilt yields averaged 4.50%. Thirty year gilts averaged 4.60%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
Monday Morning Markets ... Commodities ...
Oil prices Brent Crude basis moved to $85.348 from $82.08 last week. We score oil prices at $82.53 in Q4 last year modeled at $80.00 to $85.00 dollars in 2024.
Oil market sentiment turned decidedly bearish in Q4 2023 as non-OPEC+ supply strength coincided with slowing global oil demand growth.
The range of oil price forecasts for Brent Crude in 2024 varies among different financial institutions and agencies. Here are some of the key forecasts:
Oil prices Brent Crude basis moved to $85.348 from $82.08 last week. We score oil prices at $82.53 in Q4 last year modeled at $80.00 to $85.00 dollars in 2024.
Oil market sentiment turned decidedly bearish in Q4 2023 as non-OPEC+ supply strength coincided with slowing global oil demand growth.
The range of oil price forecasts for Brent Crude in 2024 varies among different financial institutions and agencies. Here are some of the key forecasts:
- Bank of America predicts Brent prices will average $90 per barrel in 2024.
- Goldman Sachs initially predicted Brent prices to average $94 a barrel in 2024 but later revised its forecast to a range of $70 to $90 per barrel.
- The U.S. Energy Information Administration (EIA) expects the Brent spot price to average $83 per barrel in 2024.
- The five top U.S. banks expect a median Brent price of $85 for 2024
That's all for this week ... "to understand the markets you have to understand the economics" and we do ...
© 2024 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
© 2024 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.