The Smart person Market View

Kyle Bass tweets “There is an easy beginning to negotiations. Chinese theft of US IP is estimated to be $200-$600b annually. They currently own $1.1T of US bonds (book entry).US should begin by cancelling China’s bonds and then look for additional reparation payments”

Bill Blain writes ‘Many of our buy-side clients are telling us their investment committees are telling them to re-focus on top credit ratings and liquidity. Good luck to them as they look for bids on the 50% of the market poised on the edge of sub-investment grade.. (Chortle, Chortle… that’s the sound of stable doors slamming as the horses bolt off down the hill.)’

Kaloyan from Socgen who takes a victory lap with right 2018 market prediction writes  “we Expect another challenging year for global equities, with “downside potential to global equity indices for the next 12 months, with poor performance expected to be concentrated in 2H as investors discount the next US recession” which the French bank expects will hit in mid-2020. The punchline:
Our end-2019 index targets call for an S&P 500 at 2,400pts, the EuroStoxx 50 at 2,800pts and the Nikkei 225 at 21,400pts.

UBS writes “Two days of negative close on the key US markets is forcing a question as to – is this a capitulation. Not so, if you were to listen to our US Derivatives Strategist – Rebecca Cheong. The makeover of a capitulation would need VIX to ( currently 20) go past 30 (need VIX intraday volatility to be extreme vs SPX intraday volatility),need investors to give up buying calls and switching to downside protections. We need a large day of excess selloff. So far, all trading patterns are too orderly for a true market bottom….( thank god I thought why I am the only one not able to make money on long volatility in this fall)

Nepollian (The technical Analyst) writes ……I agree to disagree.CBOE Vix….On the verge of getting bullishly aligned for the first time in weeklies since 2009 which means US markets are finally changing character

Enodo Economics  writes ‘China Quarterly annualised growth was a meagre 0.9% (6.4% according to the official data), the lowest reading since the Enodo series started in 2004. Annual growth slowed to 3.7%, also a new low (6.5% official)’. Enodo further writes China’s middle class has now grasped that they are living in a very different world under Xi Jinping and this is the fundamental reason behind the more pronounced weakening of urban consumption this year.

 

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