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Economic Indicators Released Overnight
Canadian economy leading the world into recession, as jobs break with economy propped up by Government spending. See below for more on Canada. Japanese household spending declines highlighting that the consumer has had enough but Bank of Japan still talking hiking because of persistent food price inflation.
The big news was Putin meeting Trump in Alaska to supposedly discuss peace if Eastern Ukraine is given to Russia. Seemingly good news, though it will pose many significant questions should it eventuate,
Trump Announces He’ll Meet With Putin in Alaska Next Friday [Bloomberg]
Aside from this, equities made new highs pretty much globally.
US Equities
Nasdaq posts record closing high with tech gains, rate cut optimism [Reuters]
Gold Futures Soar on Report 1-Kilo Bars Will Face US Tariffs [Bloomberg]
Stock markets in the US, UK, Canada, Australia, Europe and Japan are at all time highs. China being the exception.
Bitcoin and Gold too. Silver making it's way there. Oil and bonds definitely not.
Experts are predicting significant pullbacks as valuations get stretched, markets are overbought and indicators flash red. And they have been saying that since COVID. But still there seems to be plenty of liquidity for retail investors to push price higher and higher.
Stock markets are meant to be forward looking but the charts tell us a different story. Since World War 2 the S&P 500 has gone up until a recession is triggered and then resets. The business cycle now is different form that before 1980. No longer is there a regular recalibration. We must be now in the longest period of stock market growth ever and, even with every expert calling for a recession, there still doesn't appear to be one on the horizon.
The real economy seems to be tanking if all the anecdotal evidence were to be believed, house prices falling, record auto loan debt and arrears, record education debt, high BNPL usage and all the CRE stuff. But markets don't care because financial markets are not the economy and the economy is not the financial markets.
So are we at the top for markets, or merely at base camp?
S&P 500 Monthly Logchart vs US Recessions in green
Gold trying to break resistance for the 4th time, the highest ever daily close at $3,450 within $50.
Silver looks to test that $39 mark again, as like Gold, it tries to consolidate above the secular uptrend.
Take geopolitics out of the oil price, add OPEC pumping, baby pumping and we have 8 negative days in a row.
BTC trying to break higher but meeting significant selling pressure. Ethereum, too, reaching for the all time high just below $5,000.
More talk globally around CRE vacancy rates, working from home legislation and contaminated bank balance sheets. Some landmark office buildings now appearing in firesales, helping get the word out.
Trump pushes ahead with plans to take Fannie and Freddie public [FT]
Collapse in Value of Denver Office Tower to Hit Bond Investors [Bloomberg]
US Economic Indicators
A week light of US data but full of Treasury Auctions that didn't go well. Housing is now taking centre stage as the CRE rout pushes out into residential. Canada and NZ suffering the worst. US joining the action, and having been locked by rapid increase in interest rates keeping sellers from refinancing, those sellers are being forced to find where the liquidity is.
Number of US cities with falling house prices hits alarming milestone as crash fears escalate [Daily Mail]
In stock markets the eternal grind higher keeps on going with every pullback being bought strongly.
China Economic Indicators
More cheap goods headed Europe's way by the look of it, and even China's beleaguered stock markets are looking better.
China tests out stablecoins amid fears of capital outflows [FT]
Country Garden liquidation hearing delayed to January 5, court website shows [Reuters]
China Budget Gap Hits Record in Spending Blitz to Offset Tariffs [Bloomberg]
HANG SENG Monthly
Japan Economic Indicators
Bank of Japan's eternal rate hike discussions haven't stopped the Nikkei from attempting all time highs.
NIKKEI 225 Daily
EU Economic Indicators
German Industrial Production tanking was the surprise of the week. The Trump/Putin summit will drive a lot of price action in the EURO as the ramifications for Ukraine/EU defence/NATO become clearer. Nevertheless DAX is at, you guessed it, the all time high.
Spain rules out buying F-35, choosing between Eurofighter or FCAS [Reuters]
UK Economic Indicators
A rate cut from the Old Lady of Threadneedle Street, and a very good and clear monetary policy statement. Completely unexpected, the transparency that is. UK now following Europe in looking forward and not in the rear mirror. Good to see.
And....the FTSE hits the all time high.
FTSE Daily
Canada Economic Indicators
You know your economy is tanking when you have been accepting massive numbers of immigrants for many years and your housing and rental markets fall apart.
Like Australia, Canada is becoming a banana republic. Canada has 4.5 million public servants whose wages are being paid by only 13.7 million private sector workers.
Canada Rental Trends
And yes the stock market is at it's all time high.
TSX Daily
Australia Economic Indicators
Why office vacancy rates have spiked to a 30-year high in Australia's major cities [9 News]
Andrew Forrest captivated politicians in 2022, when he outlined plans to turn Queensland into an exporter of hydrogen energy. Three years on, a $1bn pipeline is set to be completed with not a single customer.
How gullible politicians got taxpayers lost in Forrest’s hydrogen hype [The Australian]
Analysis of labour-market data shows that 82 per cent of all jobs created over the past two years were government-funded, with the private sector adding only 53,000 jobs in 2024.
Collapse in private-sector job creation as public sector surges [The Australian]
Tasmania’s finances have reached their ‘worst position’ ever, with Treasury warning it’s ‘mathematically impossible’ to grow out of the mounting crisis.
Dumped treasurer a fall guy, Abetz called in amid ‘generational’ debt disaster [The Australian]
The politics behind Victoria's shock WFH push [AFR]
Despite Government rhetoric immigration still at full throttle as a way of propping up a state-led economy. In Australia property is dominating GDP, and the politicians can't afford to let house prices fall so they keep kicking the can down the road, until the road runs out... and the ASX hits the all time high.
ASX Daily
RBA should cut but doubt that the highest salaried central bank has the nerve to. But US CPI/PPI will take all the market focus. Powell will be watching.