Monday Morning Markets ...
This is our Monday Morning Markets Update, prices marked Saturday 27th May 2023. Every week we update our analysis of equities, bond yields, exchange rates, commodity prices and crypto. Markets are priced on Friday close.
Oil prices moved higher. Bond yields moved up. Equities were mixed. Dollar rallied. Gold moved slightly lower, closing at $1,963 dollars. Bitcoin moved lower closing at $26,427 from $26,623.
So what does this suggest for current values? Our value index, suggests markets are varying. Our surplus to value is 4.29%, with significant stress still evident in Hang Seng and to a lesser extent Shanghai. European stocks appear overvalued along with the Dow.
Top line, "Cash is 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 … "but that doesn’t mean you can’t make money from it …"
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 higher. Bond yields moved up. Equities were mixed. Dollar rallied. Gold moved slightly lower, closing at $1,963 dollars. Bitcoin moved lower closing at $26,427 from $26,623.
So what does this suggest for current values? Our value index, suggests markets are varying. Our surplus to value is 4.29%, with significant stress still evident in Hang Seng and to a lesser extent Shanghai. European stocks appear overvalued along with the Dow.
Top line, "Cash is 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 … "but that doesn’t mean you can’t make money from it …"
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.
Markets were mixed this week. Our world tracker index moved down by -0.8%. The US markets moved up by 0.6%. European stocks were down by -1.9%. Asian stocks were down by 1.8%. Nasdaq the big winner up by 2.5%.. Hang Seng and Shanghai the big losers.
Our "Empires of the Cloud Fund" was up by 3.3%. Our dynasties fund down by -3.5%, with a move down for Alibaba, Xiaomi and Weibo.
Our premium to value is 4.2%, with significant stress still evident in Hang Seng and Shanghai. The adventurous would appear to benefit from a move into Hang Seng and Shanghai as Europe looks over priced. Value stocks in Nikkei continue 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.
Markets were mixed this week. Our world tracker index moved down by -0.8%. The US markets moved up by 0.6%. European stocks were down by -1.9%. Asian stocks were down by 1.8%. Nasdaq the big winner up by 2.5%.. Hang Seng and Shanghai the big losers.
Our "Empires of the Cloud Fund" was up by 3.3%. Our dynasties fund down by -3.5%, with a move down for Alibaba, Xiaomi and Weibo.
Our premium to value is 4.2%, with significant stress still evident in Hang Seng and Shanghai. The adventurous would appear to benefit from a move into Hang Seng and Shanghai as Europe looks over priced. Value stocks in Nikkei continue to look over played.
Note : Our Valuation Index is weighted towards trend and technical.
Monday Morning Markets ... Currencies
Markets moved this week. The Dollar Index moved to 103.8 from 102.8. The index peaked at 114.0 in September 2022. Sterling traded at $1.23 from $1.24 and was steady against the Euro at €1.15 from €1.15. The Euro traded against the Dollar at $1.07 from $1.08, despite the expected narrowing of rates spread.
Hard to remember, the greenback averaged $1.34 in the first quarter of 2022. The average in Q1 was $1.22
The Dollar still looks better balanced despite the prospect of further Fed moves.
We measure Sterling at Dollar $1.22 and Euro €1.13 in the first quarter, closing at $1.25 in the final quarter of 2023. Our Q4 Euro estimate is €1.15 at close.
Markets moved this week. The Dollar Index moved to 103.8 from 102.8. The index peaked at 114.0 in September 2022. Sterling traded at $1.23 from $1.24 and was steady against the Euro at €1.15 from €1.15. The Euro traded against the Dollar at $1.07 from $1.08, despite the expected narrowing of rates spread.
Hard to remember, the greenback averaged $1.34 in the first quarter of 2022. The average in Q1 was $1.22
The Dollar still looks better balanced despite the prospect of further Fed moves.
We measure Sterling at Dollar $1.22 and Euro €1.13 in the first quarter, closing at $1.25 in the final quarter of 2023. Our Q4 Euro estimate is €1.15 at close.
Monday Morning Markets ... Bond Yields ...
Bond yields moved higher in the U.S. and the U.K. this week. US Ten year Treasury yields moved to 3.80 from 3.68. UK ten year gilts moved to 4.33 from 3.99. In France ten year yields moved to 3.11 from 3.00, German yields offered 2.53 (2.42). UK bond yields bounced as markets reacted to perceived "disappointing inflation figures". U.K. two year yields jumped to 4.5%.
We expect US and U.K. ten year yields to average 4.25 - 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%.
Bond yields moved higher in the U.S. and the U.K. this week. US Ten year Treasury yields moved to 3.80 from 3.68. UK ten year gilts moved to 4.33 from 3.99. In France ten year yields moved to 3.11 from 3.00, German yields offered 2.53 (2.42). UK bond yields bounced as markets reacted to perceived "disappointing inflation figures". U.K. two year yields jumped to 4.5%.
We expect US and U.K. ten year yields to average 4.25 - 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%.
Monday Morning Markets ... Commodities ...
Oil prices Brent Crude basis trade at $776.95 this morning from $75.58. Markets react to recession fears in the U.S. We expect oil prices to average $80 in the second quarter then $82.00 and $85.00 thereafter.
Oil prices Brent Crude basis trade at $776.95 this morning from $75.58. Markets react to recession fears in the U.S. We expect oil prices to average $80 in the second quarter then $82.00 and $85.00 thereafter.
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.