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 23th September 2023.
Oil prices were steady. Bond yields mixed. Equities were down. Sterling slipped against the Dollar and the Euro once again as the MPC held rates. Gold was steady, closing at $1,946 dollars. Bitcoin moved higher (just) closing at $26,287 from $26,240.
So what does this suggest for current values? Our value index, surplus to value is 5.2%, with significant stress still evident in Hang Seng and Shanghai. European and U.S. stocks appear overvalued. Nasdaq is coming into play.
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", hedge fund Starkiller Capital, a crypto-focused hedge fund says …
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" and we do.
Prices marked Saturday 23th September 2023.
Oil prices were steady. Bond yields mixed. Equities were down. Sterling slipped against the Dollar and the Euro once again as the MPC held rates. Gold was steady, closing at $1,946 dollars. Bitcoin moved higher (just) closing at $26,287 from $26,240.
So what does this suggest for current values? Our value index, surplus to value is 5.2%, with significant stress still evident in Hang Seng and Shanghai. European and U.S. stocks appear overvalued. Nasdaq is coming into play.
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", hedge fund Starkiller Capital, a crypto-focused hedge fund says …
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" and we do.
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.
World stocks slipped this week. Our world tracker index moved down -2.0%. The US markets moved down -2.8%. European stocks were down by -1.7%. Asian stocks were down by -1.2%.
Our "Empires of the Cloud Fund" slipped -3.5%, Apple steady as Amazon, Google and Microsoft fell. Our China dynasties fund was steady down by just -0.2%.
Our premium to value is 5..2%, with significant stress still evident in Hang Seng and Shanghai. The contrarians would appear to benefit from a move into Hang Seng and Shanghai as Europe and U.S. appear over priced. Nasdaq is moving to value. Nikkei continues to look over played.
Note : Our Valuation Index is weighted towards trend and technical.
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.
World stocks slipped this week. Our world tracker index moved down -2.0%. The US markets moved down -2.8%. European stocks were down by -1.7%. Asian stocks were down by -1.2%.
Our "Empires of the Cloud Fund" slipped -3.5%, Apple steady as Amazon, Google and Microsoft fell. Our China dynasties fund was steady down by just -0.2%.
Our premium to value is 5..2%, with significant stress still evident in Hang Seng and Shanghai. The contrarians would appear to benefit from a move into Hang Seng and Shanghai as Europe and U.S. appear over priced. Nasdaq is moving to value. Nikkei continues to look over played.
Note : Our Valuation Index is weighted towards trend and technical.
Monday Morning Markets ... Currencies
Sterling under presssure this week. The Dollar in better shape. The Dollar Index at 105.3 from 105.0. The index peaked at 114.0 in September 2022. Sterling traded at $1.22 from $1.24 and eased against the Euro at €1.15 from 1.16. The Euro was steady against the Dollar at $1.07.
Hard to remember, the greenback averaged $1.34 in the first quarter of 2022. The average in Q1 2023 was $1.22
We measure Sterling at Dollar $1.25 in the second quarter, ($1.27 in Q3) closing at $1.25 in the final quarter of 2023. Our Q4 Euro estimate is €1.16 at close.
Sterling under presssure this week. The Dollar in better shape. The Dollar Index at 105.3 from 105.0. The index peaked at 114.0 in September 2022. Sterling traded at $1.22 from $1.24 and eased against the Euro at €1.15 from 1.16. The Euro was steady against the Dollar at $1.07.
Hard to remember, the greenback averaged $1.34 in the first quarter of 2022. The average in Q1 2023 was $1.22
We measure Sterling at Dollar $1.25 in the second quarter, ($1.27 in Q3) closing at $1.25 in the final quarter of 2023. Our Q4 Euro estimate is €1.16 at close.
Monday Morning Markets ... Bond Yields ...
Bond yields moved up in the U.S. this week. US Ten year Treasury yields were at 4.43 from 4.33. UK ten year gilts were down at 4.24 from 4.35. In France ten year yields moved to 3.28 from 3.22, German yields offered 2.74 from 2.67.
We expect U.K. ten year yields to average 4.50 in the final quarter of 2023. The hard yards now gained in life after Planet ZIRP. There will be no return to the forbidden planet.
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 bond yields averaged 4.50%. The average growth rate was 2.5%. The average unemployment rate was 5.0%. Earnings averaged 3.9%.
Bond yields moved up in the U.S. this week. US Ten year Treasury yields were at 4.43 from 4.33. UK ten year gilts were down at 4.24 from 4.35. In France ten year yields moved to 3.28 from 3.22, German yields offered 2.74 from 2.67.
We expect U.K. ten year yields to average 4.50 in the final quarter of 2023. The hard yards now gained in life after Planet ZIRP. There will be no return to the forbidden planet.
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 bond yields averaged 4.50%. 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 marked at $93.27 this morning from $93.93. Oil is creeping higher toward $95 a barrel, extending a powerful surge driven by growing demand and supply cuts from Saudi Arabia and Russia.
Oil prices averaged $78 in the second quarter. We model oil prices at $86.00 in Q3 and $95.00 in Q4. The latest EIA Short Term Outlook marks Brent Crude at $84 dollars in 2024. Oil markets will face 'serious problems' as demand from China and India ramps up, IEF secretary general warned last month. Prices will be squeezed if Saudi Arabia and Russia determine to maintain output restrictions!
Oil prices Brent Crude basis marked at $93.27 this morning from $93.93. Oil is creeping higher toward $95 a barrel, extending a powerful surge driven by growing demand and supply cuts from Saudi Arabia and Russia.
Oil prices averaged $78 in the second quarter. We model oil prices at $86.00 in Q3 and $95.00 in Q4. The latest EIA Short Term Outlook marks Brent Crude at $84 dollars in 2024. Oil markets will face 'serious problems' as demand from China and India ramps up, IEF secretary general warned last month. Prices will be squeezed if Saudi Arabia and Russia determine to maintain output restrictions!
That's all for this week ... "to understand the markets you have to understand the economics" and we do ...
© 2023 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
© 2023 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.