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 30th November 2024.
Oil prices moved lower Brent Crude at $72.38 from £75.17. Bond yields moved lower in the week in the U.S, UK, andJapan. Markets moved across the board. Currencies : Dollar reversal this week as Sterling and the Euro moved higher. Sterling at $1.27 from $1.256 against the Dollar. Sterling steady against the Euro at €1.20. Against the Dollar, the Euro moved at $1.06 from $1.045.
Gold moved lower at $2,651 from $2716. Bitcoin moved lower to $ 96,350 from $98.566. The price is expected by many investors to continue making fresh records on its way up to $100,000. A sure sign of an imminent set back.
So what does this suggest for equity values? Our value index, premium to value is 17.0 %, with some stress remaining in Hong Kong. U.S. stocks appear overvalued by 36.5%. European stocks over by 11.0%, Asia now overvalued by 3.5%. Hang Seng stocks still offer value, Shanghai looks value for money compared to U.S. stocks. Nikkei looks over played along with U.S. stocks.
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.
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" ...
Oil prices moved lower Brent Crude at $72.38 from £75.17. Bond yields moved lower in the week in the U.S, UK, andJapan. Markets moved across the board. Currencies : Dollar reversal this week as Sterling and the Euro moved higher. Sterling at $1.27 from $1.256 against the Dollar. Sterling steady against the Euro at €1.20. Against the Dollar, the Euro moved at $1.06 from $1.045.
Gold moved lower at $2,651 from $2716. Bitcoin moved lower to $ 96,350 from $98.566. The price is expected by many investors to continue making fresh records on its way up to $100,000. A sure sign of an imminent set back.
So what does this suggest for equity values? Our value index, premium to value is 17.0 %, with some stress remaining in Hong Kong. U.S. stocks appear overvalued by 36.5%. European stocks over by 11.0%, Asia now overvalued by 3.5%. Hang Seng stocks still offer value, Shanghai looks value for money compared to U.S. stocks. Nikkei looks over played along with U.S. stocks.
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.
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.
U.S. rallied this week up almost 1.0% across the board. In Europe weakness in France offset by DAx gains and a steady FTSe performance. Asian stocks up 0.9% with a strong performance in Shanghai.
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.
U.S. rallied this week up almost 1.0% across the board. In Europe weakness in France offset by DAx gains and a steady FTSe performance. Asian stocks up 0.9% with a strong performance in Shanghai.
Monday Morning Markets ... Currencies
Dollar reversal this week, dollar Index at 105.5 from 107.2. Sterling at $1.27 from $1.56 against the Dollar and steady at €1.20 against the Euro. The Euro at $1.06 against the dollar from $1.04, dollar parity comes into play? Not in this round !
We measure Sterling at Dollar $1.26 in the second quarter of 2024. Our Q2 Euro value is €1.17. The Euro Dollar cross rate is marked at $1.08. We consider $1.25 and €1.17 as par values for end 2024. but recent over shoot may push this into Q1 2025.
Dollar reversal this week, dollar Index at 105.5 from 107.2. Sterling at $1.27 from $1.56 against the Dollar and steady at €1.20 against the Euro. The Euro at $1.06 against the dollar from $1.04, dollar parity comes into play? Not in this round !
We measure Sterling at Dollar $1.26 in the second quarter of 2024. Our Q2 Euro value is €1.17. The Euro Dollar cross rate is marked at $1.08. We consider $1.25 and €1.17 as par values for end 2024. but recent over shoot may push this into Q1 2025.
Monday Morning Markets ... Bond Yields ...
Bond yields moved lower in the week in the U.S, UK, and Japan. US Ten year Treasury yields were at 4.17 from 4.40. UK ten year gilts were at 4.24 from 4.38. Japanese yields were down 4 basis points at 1.03 from 1.07.
We expect U.S. and U.K. ten year yields to average between 4.00 - 4.50 in 2024/25.
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 lower in the week in the U.S, UK, and Japan. US Ten year Treasury yields were at 4.17 from 4.40. UK ten year gilts were at 4.24 from 4.38. Japanese yields were down 4 basis points at 1.03 from 1.07.
We expect U.S. and U.K. ten year yields to average between 4.00 - 4.50 in 2024/25.
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 $72.38 from $75.17 last week. Q3 average was $79.84. We assume an average $75 dollar level in the final quarter.
Goldman’s bullish outlook for gold ($3,000 by end of 2025) extends to other commodities. Brent crude is projected to trade between $70 and $85 a barrel in 2025, marked at $75 with upside risks tied to US sanctions on Iran.
The U.S. Energy Information Administration (EIA) has recently lowered its Brent crude oil price forecast for 2025. In its October Short-Term Energy Outlook (STEO), the EIA predicts, an average Brent price of $78/bbl in 2025, which is $7/bbl less than their previous month's forecast. This reduction is largely due to lower expectations for global oil demand growth in 2025 ...
The EIA's quarterly breakdown for 2025 shows:
Oil prices Brent Crude basis moved to $72.38 from $75.17 last week. Q3 average was $79.84. We assume an average $75 dollar level in the final quarter.
Goldman’s bullish outlook for gold ($3,000 by end of 2025) extends to other commodities. Brent crude is projected to trade between $70 and $85 a barrel in 2025, marked at $75 with upside risks tied to US sanctions on Iran.
The U.S. Energy Information Administration (EIA) has recently lowered its Brent crude oil price forecast for 2025. In its October Short-Term Energy Outlook (STEO), the EIA predicts, an average Brent price of $78/bbl in 2025, which is $7/bbl less than their previous month's forecast. This reduction is largely due to lower expectations for global oil demand growth in 2025 ...
The EIA's quarterly breakdown for 2025 shows:
- Q1 2025: $78.0
- Q2 2025: $79.0
- Q3 2025: $77.7
- Q4 2025: $75.7
We mark Bitcoin at $96,350 Saturday from $98,566 last week. will we see $100,000?
“Bitcoin is now in price discovery mode after breaking through all-time highs when it was officially declared that Trump won the election,” said Mike Colonnese, an analyst at H.C. Wainwright. “Strong positive sentiment is likely to persist through the balance of 2024 and [we] see bitcoin prices potentially reaching the six-figure mark by the end of this year.”
“Bitcoin is now in price discovery mode after breaking through all-time highs when it was officially declared that Trump won the election,” said Mike Colonnese, an analyst at H.C. Wainwright. “Strong positive sentiment is likely to persist through the balance of 2024 and [we] see bitcoin prices potentially reaching the six-figure mark by the end of this year.”
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.
