Stock markets fell this week as investors pull money out of shares globally and double down on bonds.
It’s Time to Stop Crying About Bonds and Buy Them Instead [Barron's]
Jamie Dimon sells shares in JP Morgan for the first time. You know it's a top when the influential insiders are selling shares in the companies they run. The most important banker in US must have gone through a lot of positioning to be able to do so.
CEO Dimon to sell some of his JPMorgan shares for first time [Reuters]
BUT BUYER BEWARE....
US Treasuries Now Yield The Same As Emerging Market Bonds
Luke Grommen (recommended) on X
Hard Assets outperform
Gold back on US$2,000 and looking to break that triple top.
Silver is messier but looking to break out to. And it's potential upside is better than Gold.
Bitcoin being propelled by the near-certainty of BTC spot ETF finally being approved, it's position in the 4 year halving cycle and it being seen to be the safe crypto investment, SEC etc concentrating on the the obvious charlatans in the marketplace.
It's central bank week again with the FED and BOE expected to do nothing and BoJ maybe easing the YCC controls a bit more. BoJ has seemingly let USD / YEN settle around 150 and has concentrated on yet more "unscheduled" bond buying opportunities. Reserve Bank of Australia meeting is next week.
| Tues 31st Oct | Bank of Japan | |
| Weds 1st Nov | Federal Reserve | |
| Thurs 2nd Nov | Bank of England |
Banks Criticising Central Banks
Apart from selling shares in his own company, this week Jamie Dimon has been critical of central banks.
China
CHINA TO RAISE FISCAL DEFICIT RATIO TO ABOUT 3.8% FROM 3%
Country Garden Default on Dollar Bond Declared for First Time [Bloomberg]
Xi Makes Unprecedented Central Bank Visit in Sign of Focus on Economy [Bloomberg]
Credit Spreads Widen
BTP –Bund spreads
Spreads on BBB CMBS (commercial-mortgage-backed securities) have moved up to 1,409 bps, their widest levels in over a decade. Bond investors are pricing in a wave of defaults to come.Spreads on BBB CMBS (commercial-mortgage-backed securities) have moved up to 1,409 bps, their widest levels in over a decade. Bond investors are pricing in a wave of defaults to come.
https://x.com/charliebilello/status/1716619807443820999?s=20 [X]
More People Are On Strike In The US Than In The Last 15 Years
ECB Pauses
Crypto
Lyn Alden (recommended): A lot of people are caught up with bullishness on a potential bitcoin ETF, meanwhile FinCEN is proposing to apply section 311 of the Patriot Act against basically all types of crypto privacy, including on noncustodial methods.
https://x.com/LynAldenContact/status/1715705832963211504?s=20 [X]
A blockbuster US GDP number failed to move the yield curve or the USD higher. Stock markets, however, did sell off reflecting higher for longer i.e. recession is not about to hit.
US PCE was benign, coming in pretty much as expected.
And Tokyo CPI was distinctly higher than expected. This is not a market mover but does add to the narrative of BoJ ending yield curve control sooner rather than later.
Australian CPI came in a bit hotter than expected adding to the talk of a renewal of interest rate hikes. House prices have solidly bounced back which new RBA Governor Michelle Bullock commented on this week
"The rise in housing prices could also be a signal that the current policy stance was not as restrictive as had been assumed, although there was other evidence that monetary conditions were tight."
The Treasurer, having expelled ex-Governor Lowe, seems to be intent to exercising his influence on monetary policy. The restructure of the RBA seems to be all about doing what suits Chalmers rather than what was actually agreed on.
Will the RBA bow to political pressure? [AFR]
PPI didn't help the no change in interest rates cause earlier
Westpac's Luci Ellis - (Former Assistant RBA Governor) On The Wealth Effect, Interest Rates And Migration "Housing prices are back close to the peaks we saw pre-pandemic. That’s not what you would have expected given the rise in interest rates and weak income growth. Population growth is a large part of the story and it’s telling that the countries which have seen the biggest surges in population are also the ones where housing prices have picked up most noticeably. This matters because positive wealth effects can boost household spending and add some upside risk to domestic demand and so inflation. The RBA has called this out in their minutes. We allow for these effects in our forecasts, but the more this goes on, the more forecasts will have to be scaled up – and the more likely it becomes enough to tip the RBA Board’s hand. " https://westpac.com.au/news/money-matters/2023/10/rba-policy-outlook-three-key-risks-to-watch [Westpac]
Finally the lady herself in her first speech since being elected Governor.