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India Bytes Tik-Tok As Markets Flip-Flop

India Bytes Tik-Tok As Markets Flip-Flop



The schizophrenic range trading seen across multiple asset classes in recent times showed no signs of ebbing overnight. The geopolitical front, however, looks to be a busy one today. The details of Hong Kong’s new security law to be enacted into Basic Law by Beijing will be fully unveiled today ahead of the handover holiday tomorrow. In response, the US has withdrawn Hong Kong’s special economic status while China retaliated by announcing visa restrictions on American’s who didn’t like the new law. India, meanwhile, banned a swath of Chinese mobile apps on national security grounds. Most notably, ByteDance’s Tik Tok social app.


Japan is allegedly considering imposing new measures on South Korea goods as part of the two sides mini trade-war dispute. But it is the usual suspects, China, the United States, Hong Kong and to a lesser extent, India, who will hold the market’s attention.


It’s conflicts with China aside, India may have a point. I have until now declined to Tik-Tok with Mrs Halley, mostly because front-row rugby players like myself are not usually gifted with natural “rhythm.” However, I have always had nagging doubts about where Tik Tok’s data is stored. Apart from a select group of countries, it just states it is held by “3rd parties.”


Circling back to schizophrenic markets, the tardiest in taking its medications, the equity markets on Wall Street, of course, continue to suffer aggressive mood swings. Sentiment on Friday approached the end of days levels as the US Sunbelt states reaped the fruits of their incompetent handling of Covid-19 with an explosion of new cases. All was forgiven yesterday though, with Housing Sales coming in above expectations. As anticipated, the certification flight of the Boeing 737-Max with an FAA pilot on board, saw Boeing’s stock jumped 14% yesterday. Who will take delivery off, pay for, or want to fly in them, being conveniently overlooked details, as is the September timeline.


Overall, the impression is of an equity market continuing to lose momentum and falling into the day-traders trap of tail-chasing markets intra-day, driven by flip-flopping sentiment. Readers should keep one eye on the S&P 500 this week, which has been flirting with it’s 200-day moving average, today at 3021.00, over the past few sessions. It will be it’s the second visit to its critical support zone in as many weeks. It has also traced out a triple top around 3155.00 over the same period, a lower high than previously. We have plenty of tier-1 data to keep the tail-chasers busy this week, ahead of the US holiday on Friday. A weekly close below the 200-DMA, though, will be a dangerous technical development for the V-shaped FOMO gnomes of Wall Street, suggesting that a deeper correction may finally be upon markets. By default, that will imply downward revisions to stock markets across the globe.


Lifting the clouds slightly, China has followed up an improved Industrial Profits data release with an equally impressive official PMI release today. Manufacturing PMI for June climbed further into expansionary territory, rising to 50.9. Non-Manufacturing also impressed, rising to 54.4. The unofficial Caixin PMI’s tomorrow will hopefully confirm the story that China is leading Asia in a gentle if unspectacular recovery.


That is tempered though, by Japanese and South Korean Industrial Production data released this morning. Both sets of figures disappointed, highlighting that a global recovery will be uneven, even regionally. Voters in both countries, should perhaps question the wisdom of their respective governments, in escalating the trade dispute between the two parties.


Boosted by China’s data, Asia is in a broadly positive mood today after Wall Street took its happy pills. Hong Kong concerns though, are likely to be top of investors’ minds. It has the potential to deliver some potentially negative headlines later in the session.


Equities are positive in Asia.


Wall Street shrugged off last week’s doom and gloom to post a robust overnight session, lifting Asia stock markets into positive territory today. Nothing in the world has materially changed, but the urge to keep the party going rolls on. US Housing Sales and Boeing boosted US markets overnight. The S&P 500 rose 1.47%, the Nasdaq rose 1.20%, and the Dow Jones jumped 2.32%.


Asia has followed Wall Street higher after China’s official PMI’s outperformed. Japan and South Korea shrugged off trade tensions, the Nikkei 225 has climbed 1.70%, and the Kospi is 1.60% higher. China’s Shanghai Composite is up 0.40%, with the CSI 300 0.90% higher. Singapore has jumped 1.20%, and in Australia, the All Ordinaries and ASX 200 are both 1.40% higher. Regional markets are all reporting much the same story.


Hong Kong’s Hang Seng is up 0.90% today, ahead of the full release of Beijing’s new Hong Kong security law, and the handover holiday tomorrow. Ghoulishly, the prospect of no more protests in Hong Kong is being perceived as a market positive. That said, as details are released, and the true scope of the law is apparent, sentiment may wilt somewhat. The response of the international community after that, may also weigh on sentiment.


Hong Kong aside, equity markets continue to range trade globally, albeit near the top of their monthly ranges. Critical to sentiment, will be the ability of the S&P 500 to maintain the 3,000 regions. Until that clarifies, equity markets will continue to wildly chase their tails back and forth depending on the sentiment flavour of the day.


Currency markets continue to be sleepless in Seattle.


Currency markets continue to be almost becalmed, with the US Dollar barely changed against the G-20 currencies overnight. The dollar index edged higher by a minuscule 0.07% to 97.50, reflecting the nadir of late.


With most of the majors sitting mid-range versus the greenback, the lack of trading winds looks set to continue. More than likely, currency markets will await cues from the equity markets, most notably the S&P 500, before strongly reengaging. Geopolitics, and the wait for tier-1 data releases elsewhere in the world this week, also appears to be sapping the willingness of currency traders to position firmly, one way or the other, for now.


Oil markets rally on a state of denial.


Energy markets rose impressively overnight, but in the bigger picture, continue to range trade noisily at the upper end of their monthly ranges. Despite the waves of increasing Covid-19 cases sweeping the US Sunbelt States, energy markets chose to concentrate on US housing data, doing what they do best, ignoring what doesn’t suit the plate of the day narrative.


In fairness, however, there are some underlying signs that oil consumption continues to recover. Brent futures spreads remain tight at the near end of the curve, China’s recovery remains on track, and Europe also appears to be making steady progress. Airline travel is increasing, domestically at least, with Europe preparing to reopen its borders to a select group of countries. Nothing beats intelligence on the ground, and some friends of mine from Denmark, yesterday departed on their family summer holiday in Malaga, Spain. So, there are definitely green shoots around. All of this, for now, appears to be offsetting fears of a double-dip in the United States due to Covid-19.


Brent crude rose 2.40% to $41.70 a barrel and is now comfortably perched in the middle of its monthly $40.00 to $44.00 a barrel range. WTI rose an even more impressive 3.80% to $39.65 a barrel. Its price action being an act of denial that has left even this wizened author shocked. WTI now sits in the middle of its monthly range as well between $39.60, and $41.50 a barrel.


Both contracts have retreated modestly today, driving by profit-taking flows after the robust New York session. Although the ranges overnight were impressive, it is essential to note that oil markets are range trading and not trending.


Gold remains becalmed, supported by negative US real yields.

Much like currency markets, gold traders appear to be content to await further developments from the side-lines; the overnight session producing yet another range-bound day. Given golds sudden intra-day drop on Friday as US stocks tanked, traders may be fearful of being caught out at the highs if equities take another sudden leg lower. That fear is well-founded, as recent stock market selloffs have usually generated profit-taking in gold to raise cash.


Those fears, however, are not yet enough to undermine the bullish thesis, which is supported by two compelling drivers. Negative real yields across the US curve and the consequent weaker US Dollar. An uncertain Covid-19 and geopolitical outlook supporting haven inflows.


Gold finished the New York session unchanged at $1772.00 an ounce. It remains anchored there in Asia today. Resistance lies at $1780.00 an ounce, followed by the multi-week rampart at $1800.00 an ounce. Gold still sits comfortably near 8-year highs, with only a daily close below $1750.00 an ounce likely to provoke a reduction in bullish positioning.




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DAX – PMIs paint a bleak picture for manufacturing but China offers hope

Manufacturing remains in trouble China seeing some growth but unconvincing Bearish confirmation for DE30 index Manufacturing PMIs released throughout the…



  • Manufacturing remains in trouble
  • China seeing some growth but unconvincing
  • Bearish confirmation for DE30 index

Manufacturing PMIs released throughout the day have made for pretty miserable reading and even those in China barely registered any growth after a lengthy period of contraction.

The Chinese data did offer some cause for hope at least, despite ultimately barely sitting in growth territory. The trajectory is positive and boosted by targeted stimulus measures that are seemingly working. External demand remains a problem but a bump in domestic demand is promising.

The sector in Europe is looking particularly grim with demand remaining extremely weak, backlogs falling and layoffs expected to accelerate over the months ahead. That’s unless we can see a rebound in activity which is looking very unlikely at this stage with the global economy struggling for any positive momentum against the backdrop of high interest rates.

The PMIs from the US were a little better, particularly the ISM reading which significantly beat expectations but even here, it remains below 50 and therefore in contraction territory. With interest rates set to remain “higher for longer”, things aren’t likely to dramatically improve for the sector.

A very bearish signal for the DAX

The DE30 turned lower again today after staging a mild recovery in recent sessions and the move could reinforce bearish views on the index.

DE30 Daily

Source – OANDA on Trading View

The reason is that the move lower came after a retest of the 200/233-day simple moving average band, following the breakout last week. The rotation lower now could be viewed as confirmation of the breakout and therefore a bearish signal.

The next potential area of support could be seen around 15,000 where prior support and resistance falls around the bottom of the descending channel.

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Can An ‘Independent’ Kennedy Destroy “The Whole Left-Right Demon-Driven Pyschodrama”

Can An ‘Independent’ Kennedy Destroy "The Whole Left-Right Demon-Driven Pyschodrama"

Authored by James Howard Kunstler via,





Can An 'Independent' Kennedy Destroy "The Whole Left-Right Demon-Driven Pyschodrama"

Authored by James Howard Kunstler via,


“Intents have been overtaken by events.”

- Jacob Dreizin

You have to wonder what took Bobby Kennedy, Jr. so long to recognize that the Democratic Party was a home that he had long ago been turned out of, like a dog that has peed on the carpet too many times.

At the end of last week, Mr. Kennedy intimated that he might run for president on an independent line.

If he manages to get that line on the state ballots - and you can easily imagine New York and California trying to thwart him - it will change all the current calculations about the 2024 election.

As of right now, the Party of Chaos is living up to its name. They continue to present an obviously false and ridiculous consensus among themselves that “Joe Biden” is running for reelection. In fact, “the Big Guy” is about to get run through a wringer of the most abject public disgrace as his already-well-known crimes of bribery and treason get conscientiously laid out for all to see with cold and implacable decorum. Even the mind-fucked spawn of the Ivy League, toiling away on their CIA-owned newspapers and cable news networks, might find themselves forced to spin their narrative in a new direction.

“Joe Biden” is now a monumental embarrassment and a liability to our country, let alone to the degenerate party that owns him. Sub rosa efforts must be in motion to persuade him to resign before the impeachment inquiry spotlights all those telltale bank records, but they will fail to overcome his demented pride. He’ll ride this thing out to the bitter end, when he can use the last tool at his disposal to officially pardon everyone involved in his family’s racketeering operation. The longer the party pretends to support him, the closer the party itself skates toward self-destruction. Also consider: if allowed to play out, the impeachment inquiry will implicate the DOJ and the FBI in obstruction of justice — exposing many Deep State blob players to danger of prosecution.

Gov Gavin Newsom dangles himself above the fray as the deus ex machina who can touch down in DC and make all the Democrat’s problems go away. Such an attractive fellow! Great teeth and hair! Tall as a sequoia! And such a smooth talker! The woked-up suburban ladies who comprise the party’s main voting bloc grow moist in anticipation of Gov. Newsom landing on-stage like a demigod out of a Mozart opera.

But how do you think he’ll make out in an election when the airwaves are filled with oppo ads showing his toothy and hairy visage inset against scenes of homeless junkies and looting flash mobs? Try blaming that on climate change.

What else does he stand for? Censorship? Forced vaccinations? Child sex mutilations? Open borders? News-flash: these are increasingly unpopular, except among an easily-identified depraved elite.

Indeed, the whole Left-Right demon-driven psychodrama is proving impossible to live in as it throbs and pulsates toward something like civil war. And it has obscured the truly potent idea that the nation might actually be capable of solving its problems by facing up to them and changing how we act. That potent idea might be what voters will see in Bobby Kennedy if he can get their attention. Mr. Kennedy would dismantle the heinous partnerships between private corporations and the US government that loosed the Covid-19 op on the world and asset-strips the middle-class. He favors closing the border and a reevalution of immigration policy. He aims to negotiate an end to the ignoble Ukraine war project. He’s determined to disassemble the security state apparatus that’s destroying the US Constitution and citizens natural rights with it.

Mr. Kennedy says he can bring divided Americans together on these dire matters. It’s conceivable that his message might go over with enough rancor-weary voters to pull off a tour-de-force plurality in a three-way race, where nobody wins enough electoral votes to settle the contest, which then moves to the House, like in the old days of Jefferson and Burr. The rest is election mechanics, some of it very sinister when you consider all the election-rigging booby-traps already in-place such as mass mail-in ballot harvesting, no voter ID requirements, and the still-mysterious hookups of vote-counting machines to the Internet. But, at least, Mr. Kennedy running on an independent line will be a hard whap upside the Democratic Party’s thick skull, maybe even a death-blow to the party. They made a big mistake trying to un-person him. He’s on a hero’s journey at a moment in history when America dearly needs a hero.

*  *  *

Support his blog by visiting Jim’s Patreon Page

Tyler Durden Mon, 10/02/2023 - 16:20

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Small Business Bankruptcies Surge In 2023, Five Reasons Why

Small Business Bankruptcies Surge In 2023, Five Reasons Why

Authored by Mike Shedlock via,

Small business bankruptcies are at…



Small Business Bankruptcies Surge In 2023, Five Reasons Why

Authored by Mike Shedlock via,

Small business bankruptcies are at a much higher pace than any year since the Covid pandemic...

Small business bankruptcies from the American Bankruptcy Institute via the Wall Street Journal

The Wall Street Journal reports There’s No Soft Landing for These Businesses

Nearly 1,500 small businesses filed for Subchapter V bankruptcy this year through Sept. 28, nearly as many as in all of 2022, according to the American Bankruptcy Institute.

Bankruptcy petitions are just one sign of financial stress. Small-business loan delinquencies and defaults have edged upward since June 2022 and are now above prepandemic averages, according to Equifax.

An index tracking small-business owners’ confidence ticked down slightly in September, driven by heightened concerns about the economy, according to a survey of more than 750 small businesses. Fifty-two percent of respondents believed that the country is approaching or in a recession, said the survey by Vistage Worldwide, a business-coaching and peer-advisory firm.

Robert Gonzales, a bankruptcy attorney in Nashville, said he’s now getting four times as many calls as he did a year ago from small businesses considering a bankruptcy filing.

“We are just at the front end of the impact of these dramatically higher interest rates,” Gonzales said. “There are going to be plenty of small businesses that are overleveraged.”

Five Reasons for Surge in Bankruptcies

  • Rising Interest Rates

  • Surging Wages

  • Tighter Bank Credit

  • Overleverage

  • Work-at-Home Curtailing Demand

Fed Rate Interest Rate Hike Expectations Are Still Higher for Even Longer

The Fed has hiked interest rates to 5.25% to 5.50%. It’s the highest in 22 years.

And Fed Rate Interest Rate Hike Expectations Are Still Higher for Even Longer

Surge in Wages

Minimum wages have surged. Unions are piling on. Small businesses have to offer prevailing wages or they cannot get workers.

In California, Minimum Wage for Fast Food Workers Jumps 30% to $20 Per Hour. Governor Gavib Newsom called it a “big deal”, I responded:

A Big Deal Indeed, Expect More Inflation

Yes, governor, this is very big deal. It will increase the cost of eating out everywhere.

The bill Newsom signed only applies to restaurants that have at least 60 locations nationwide — with an exception for restaurants that make and sell their own bread, like Panera Bread (what’s that exception all about?)

Nonetheless, the bill will force many small restaurants out of business or they will pony up too.

30 Percent Raise Coming Up!

If McDonalds pays $20, why take $15.50 elsewhere?

The $4.50 hike from $15.50 to $20 is a massive 30 percent jump.

Expect prices at all restaurant to rise. Then think ahead. This extra money is certain to increase demands for all goods and services, so guess what.

Other states will follow California.

Biden Newsome Tag Team

Biden’s energy policies have made the US less secure on oil, more dependent on China for materials needed to make batteries, fueled a surge in inflation, and ironically did not do a damn thing for the environment, arguably making matters worse.

See  The Shocking Truth About Biden’s Proposed Energy Fuel Standards for discussion of the administration’s admitted impacts of Biden’s mileage mandates.

Newsom is doing everything he can to make things even worse.

The tag team of Biden and Newsom is an inflationary sight to behold.

Bank Credit and Over-Leverage

In the wake of the failure of Silicon Valley Bank, across the board small regional banks are curtailing credit.

The regional banks over-leveraged on interest rate bets. And businesses overleveraged too, getting caught up in work-from-home environments that curtailed demand for some goods and services.

The bankruptcies will fall hard on the regional banks.

Add it all up and things rate to get worse.

Tyler Durden Mon, 10/02/2023 - 15:40

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