2008 again?

[odysseus2000]

Samsung issue profits warning:

https://www.cnbc.com/2019/01/08/samsung ... ance-.html

Just maybe the Apple warning did have some relevance to investors.

Regards,

[TheMotorcycleBoy]

Errr........ they're both SmartPhone manufacturers or something......

[odysseus2000]

Errr........ they're both SmartPhone manufacturers or something......

So which is it?

Are Apple purveyors of over price junk whose profits warning was expected as they sell rubbish re your original points?

Or is it that all smart phones are not selling?

Or could it even be that these profits warnings with the ISM survey are indicative of a slowing economy?

Regards,

[PeterGray]

Or is it that all smart phones are not selling?

This one - the smartphone market is increasingly mature. People keep them for longer and longer.

[dspp]

Storm Clouds Are Brewing for the Global Economy
http://www.worldbank.org/en/news/immers ... al-economy

[TheMotorcycleBoy]

Storm Clouds Are Brewing for the Global Economy
http://www.worldbank.org/en/news/immers ... al-economy

Yes I heard this on R4 first thing this morning.....however quoting from Kristalina Georgieva (World Bank Chief Executive Officer):

"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead. As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized. To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies."

at the document's end, however was the UK economy performing in quite the same way as the global one through 2018? And how does the answer to that effect the situation to UK-only investors?

Matt

[TheMotorcycleBoy]

Storm Clouds Are Brewing for the Global Economy
http://www.worldbank.org/en/news/immers ... al-economy

Yes I heard this on R4 first thing this morning.....however quoting from Kristalina Georgieva (World Bank Chief Executive Officer):

"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead. As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized. To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies."

at the document's end, however was the UK economy performing in quite the same way as the global one through 2018? And how does the answer to that effect the situation to UK-only investors?

Matt

Sorry, forgive me! Of course a "global" economy slowdown, effects our (UK) exporters.



I guess my comments would have been directed at the accuracy of Kristalina word's, since instead of "global economy" would not the "US and Chinese economies" been more accurate?

Matt

[tikunetih]

This is probably a cyclical bear market within the context of an overall secular bull market.
...

Those with well-constructed portfolios appropriate to their risk tolerance and goals should be at ease. If skilled or lucky they should benefit from the volatility.

The question I see many (portfolio managers) asking is:

"is this a correction to buy on the dips, akin to 2011 and 2016, in an ongoing bull market, or is it a bear market in which to sell the rallies"

My view is as stated above: w.r.t US markets (which are my focus), I believe we're in a cyclical bear market within the context of an on-going secular bull market (that will likely last for maybe a further decade). cf. 1987.

My central case currently is for the cyclical bear to bottom in Q3 2019. En-route to that bottom, traders may wish to sell rallies, but long term investors with sensibly constructed portfolios and patience should be rewarded with excellent buying opportunities in the months ahead. Here's hoping.

With labour markets remaining tight throughout this slowdown, the expansion following it should prove inflationary, so record profit margins may come under pressure and thus stock selection (seeking inelastic demand curves) may be well rewarded in the bull market to follow...

[TheMotorcycleBoy]

Help me out here mate,

My view is as stated above: w.r.t US markets (which are my focus), I believe we're in a cyclical bear market within the context of an on-going secular bull market (that will likely last for maybe a further decade). cf. 1987.

Do you have a UK market view? Can you share if so?

My central case currently is for the cyclical bear to bottom in Q3 2019. En-route to that bottom, traders may wish to sell rallies, but long term investors with sensibly constructed portfolios and patience should be rewarded with excellent buying opportunities in the months ahead. Here's hoping.

So do you reckon the recent lift in the ftse (i.e. from 6600 late Dec - 6900 now) is short-lived and we will get better buying opportunities in the UK in further months?

With labour markets remaining tight throughout this slowdown, the expansion following it should prove inflationary, so record profit margins may come under pressure and thus stock selection (seeking inelastic demand curves) may be well rewarded in the bull market to follow...

I don't get this. What do you mean by "inelastic demand curves" right here?

many thanks
Matt

[dspp]

"COLUMN-Global economy is headed for recession: Kemp - Reuters News
16-Jan-2019 13:10:36
John Kemp is a Reuters market analyst. The views expressed are his own
• Chartbook: https://tmsnrt.rs/2HfQKH5
By John Kemp
LONDON, Jan 16 (Reuters) - Global growth is slowing and the world economy is headed for a recession in 2019 unless something happens to give it renewed momentum.

The OECD’s composite leading indicator fell to just 99.3 points in November, its lowest since October 2012, and down from a peak of 100.5 at the end of 2017.

Growth momentum has been easing for some time in Britain, Canada, France and Italy and there were tentative signs of slackening momentum in the United States and Germany in November.

The composite indicator is likely to fall even further when data for December are published next month, given the weakness already revealed in equity markets and business surveys.

The OECD composite leading indicator has been weakening consistently for the last year and now points unambiguously to a contraction ahead (https://tmsnrt.rs/2HfQKH5)."

I can't reasonably post any more of this, but if you search Reuters you should be able to find the rest, and the chart book is linked.

regards, dspp

[TheMotorcycleBoy]

And drawing on my infinite experience of private investing...

https://www.cnbc.com/2019/01/11/treasur ... lainternal

does this suggest money flow from US economy stocks into "safer" US government debt?

[GoSeigen]

And drawing on my infinite experience of private investing...

https://www.cnbc.com/2019/01/11/treasur ... lainternal

does this suggest money flow from US economy stocks into "safer" US government debt?

No, money can't flow from stocks into debt. Only the holders or value of each can change.


GS

[dspp]

John Kemp Reuters: NEW YORK FED’s yield curve model implies the probability of the United States being in recession by December 2019 has climbed to 21%, which is the highest since Aug 2008:
==

Reuters) - Energy fund managers took heavy losses last year with wrong-way bets on the prices of oil and natural gas, leading to a wave of closures in the volatile fund sector.

“There is a massive decline in the number of funds, and no replacements,” said David Mooney, founder of Casement Capital. “There has been a near ‘extinction event’ in commodities hedge funds.”

Macro hedge funds - those with strategies based on broad global macroeconomic trends, such as a bet that oil prices will rise - were among the hardest hit, falling 3.6 percent in 2018. That’s the weakest annual performance since 2011, when such funds fell 4.2 percent,

https://www.reuters.com/article/us-usa- ... SKCN1PC0EG

[odysseus2000]

John Kemp Reuters: NEW YORK FED’s yield curve model implies the probability of the United States being in recession by December 2019 has climbed to 21%, which is the highest since Aug 2008:
==

Reuters) - Energy fund managers took heavy losses last year with wrong-way bets on the prices of oil and natural gas, leading to a wave of closures in the volatile fund sector.

“There is a massive decline in the number of funds, and no replacements,” said David Mooney, founder of Casement Capital. “There has been a near ‘extinction event’ in commodities hedge funds.”

Macro hedge funds - those with strategies based on broad global macroeconomic trends, such as a bet that oil prices will rise - were among the hardest hit, falling 3.6 percent in 2018. That’s the weakest annual performance since 2011, when such funds fell 4.2 percent,

https://www.reuters.com/article/us-usa- ... SKCN1PC0EG

Yes, but this perhaps more reflects the ability of hedge fund managers who as a class I rate as some of the most stupid over educate folk on the planet.

Sure there are exceptionally good hedge fund managers but most in my experience are highly qualified idiots.

As a general rule imho hedge fund do great when they are in the right direction on a macro theme and then they mostly always fail to adapt when the macro environment changes.

The near extinction event of commodity energy hedge funds is a classic, all of them choosing to ignore the changes in energy usage being brought about by climate change worries and by the emergence of alternative energy.

I would not base any economic view on what is happening to hedge funds, except maybe to take the other side to where ever they are leaning.

Regards,

[TheMotorcycleBoy]

And drawing on my infinite experience of private investing...

https://www.cnbc.com/2019/01/11/treasur ... lainternal

does this suggest money flow from US economy stocks into "safer" US government debt?

No, money can't flow from stocks into debt. Only the holders or value of each can change.


GS

Yes, I know where you are going with this GS , i.e. the investors require higher or lower yields of various asset classes depending on their current favourability. But what about a day when investors demand a higher yield on AAPL shares? They determine that they are currently yielding too little....so they sell them. Instead all those investors use the $$$ received to purchase 10yr TBonds.

Suppose no other trades occur that day.

At the days close the dealers/brokers/etc. observe the days events and adjust their prices down on AAPL, and their 10yr TBond price up. The next day and next day exactly the same thing happens.

So as the value of TBonds rises and the value of AAPL falls but the transactions in both of those continue, so more physical $$$ are being converted into TBs than the AAPLs. Hence, I claim, that purely by way of the above abstraction that money has flowed from one class to the other.

I could even propose that the $$$ paid for AAPL is held at Lloyds bank, and the $$$ paid for the TBs is at Barclays. The net effect after those few days of trading would be Barclays has more $$$ than Lloyds. The $$$ have moved or "flowed" from one asset/place to another.

Surely my words above pass muster?

Matt

[GoSeigen]

And drawing on my infinite experience of private investing...

https://www.cnbc.com/2019/01/11/treasur ... lainternal

does this suggest money flow from US economy stocks into "safer" US government debt?

No, money can't flow from stocks into debt. Only the holders or value of each can change.


GS

Yes, I know where you are going with this GS , i.e. the investors require higher or lower yields of various asset classes depending on their current favourability. But what about a day when investors demand a higher yield on AAPL shares? They determine that they are currently yielding too little....so they sell them. Instead all those investors use the $$$ received to purchase 10yr TBonds.

Suppose no other trades occur that day.

At the days close the dealers/brokers/etc. observe the days events and adjust their prices down on AAPL, and their 10yr TBond price up. The next day and next day exactly the same thing happens.

So as the value of TBonds rises and the value of AAPL falls but the transactions in both of those continue, so more physical $$$ are being converted into TBs than the AAPLs. Hence, I claim, that purely by way of the above abstraction that money has flowed from one class to the other.

I could even propose that the $$$ paid for AAPL is held at Lloyds bank, and the $$$ paid for the TBs is at Barclays. The net effect after those few days of trading would be Barclays has more $$$ than Lloyds. The $$$ have moved or "flowed" from one asset/place to another.

Surely my words above pass muster?

Matt

Completely mistaken unfortunately.

To understand why, perhaps you could explain to whom the investors [your word] sell their AAPL shares?

GS

[CommissarJones]

I guess my comments would have been directed at the accuracy of Kristalina word's, since instead of "global economy" would not the "US and Chinese economies" been more accurate?

I think it was a reasonable comment on her part. The euro area had a relatively strong run of economic activity in 2017's second half, and Japan's economy had expanded for six quarters in a row as of the end of 2017, so the global picture really was appreciably more positive entering 2018.

[TheMotorcycleBoy]

No, money can't flow from stocks into debt. Only the holders or value of each can change.


GS

Yes, I know where you are going with this GS , i.e. the investors require higher or lower yields of various asset classes depending on their current favourability. But what about a day when investors demand a higher yield on AAPL shares? They determine that they are currently yielding too little....so they sell them. Instead all those investors use the $$$ received to purchase 10yr TBonds.

Suppose no other trades occur that day.

At the days close the dealers/brokers/etc. observe the days events and adjust their prices down on AAPL, and their 10yr TBond price up. The next day and next day exactly the same thing happens.

So as the value of TBonds rises and the value of AAPL falls but the transactions in both of those continue, so more physical $$$ are being converted into TBs than the AAPLs. Hence, I claim, that purely by way of the above abstraction that money has flowed from one class to the other.

I could even propose that the $$$ paid for AAPL is held at Lloyds bank, and the $$$ paid for the TBs is at Barclays. The net effect after those few days of trading would be Barclays has more $$$ than Lloyds. The $$$ have moved or "flowed" from one asset/place to another.

Surely my words above pass muster?

Matt

Completely mistaken unfortunately.

To understand why, perhaps you could explain to whom the investors [your word] sell their AAPL shares?

GS

Don't worry about it! It's starting to feel like too much of a tautology to me. I'm more interested on what folk on here reckon to the article I posted originally, for example:

Bond bulls take note: Treasury yields are moving lower, and according to one technical indicator, the slide may only just be getting started.

On Friday the 10-year yield entered the death cross, when the 50-day moving average crosses below the 200-day moving average. This technical indicator is typically viewed as a sign of further weakness.

Contrary to what the chart may be saying, Newton Advisors' Mark Newton believes investors should sell Treasurys now because the economy continues to look strong.

"It's very difficult to think that … yields should continue to fall in this case, " he said Friday on CNBC's "Trading Nation." "Yields have pulled back about 50 basis points in the last three to four months. It's been a fairly dramatic move. Sentiment now has been cut in half. We had very negative sentiment on Treasurys last October. … We're getting near oversold in yields."

Bond yields move inversely to prices, which means that when the U.S. 10-year note is high in demand and prices are going up, the yield moves lower. A leg lower in yields on the all-important benchmark can suggest jitters in the overall market, since investors are fleeing to safe-haven assets.

A key level that Newton is watching is 2.5 percent, which he believes is a floor off of which yields will bounce.

"I think the percentage of people that believe the economy is dropping off a cliff is certainly pretty widespread right now. And if anything, I think that's probably not as imminent. So I see a downside for yields right near 2.50, so very, very close to a bottom I think in yields. And we should start to turn back higher over the next three to five months. So I would be looking to sell into Treasurys, and think that this death cross actually could prove to be the opposite of what historically people say could happen."

The U.S. 10-year note was yielding roughly 2.69 percent during Friday's trading session, down from its 52-week high of 3.26 percent on Oct. 9. Early Monday, the yield was down further, at 2.67 percent.

On the flip side, Washington Crossing Advisors' Chad Morganlander thinks a global growth slowdown could mean rates have further to fall.

"We think there's a global declaration of growth and that that markdown is going to be much more than expectations," he said on the show Friday. "There's an inversion, modest albeit, in the belly of the curve. … So we think that of course there's going to be a markdown on GDP far in excess of where traditional economists are."

Morganlander believes global fears will prompt investors to buy safe-haven assets like US Treasurys to protect their portfolio. As the asset becomes more in demand, this will put additional downside pressure on yields.

"We wouldn't be surprised to see a 2.25 handle on the 10-year over the course of the next six to nine months," he said.

with reference of the subject of the OP. I'm also curious about the term which I've emboldened.

Matt

[TUK020]

On Friday the 10-year yield entered the death cross, when the 50-day moving average crosses below the 200-day moving average. This technical indicator is typically viewed as a sign of further weakness.

Oh calamity, this is serious.
The conjunction of the Death Cross and Capricorn means that a tall dark expert will offer you independent financial advice for a small percentage fee. We're all doomed.

I think it was Melonfool who put it rather well: Technical Analysis is like having your bumps felt

[TheMotorcycleBoy]

On Friday the 10-year yield entered the death cross, when the 50-day moving average crosses below the 200-day moving average. This technical indicator is typically viewed as a sign of further weakness.

Oh calamity, this is serious.
The conjunction of the Death Cross and Capricorn means that a tall dark expert will offer you independent financial advice for a small percentage fee. We're all doomed.

I think it was Melonfool who put it rather well: Technical Analysis is like having your bumps felt

Excellent!!

The Four Horsemen of Apocalypse aside, I guess it means US investors are gradually starting to favour T-bonds over stocks. And that DJT's tax cut driven equity boom has run outta steam...