QuiCQ 18/09/2024
"The quickest way to double your money is to fold it in half and put it in your back pocket."
— Will Rogers
Prefer to read today’s QuiCQ in PDF? No prob, download it here, but don’t you dare complain about the formatting!
“The most important issue that concerns markets right now is the CPI number later this week, after that we will have clarification about …”
“The most important issue that concerns markets right now is Nvidia earnings report released Thursday after the closing bell, after that we will have clarification about …”
“The most important issue that concerns markets right now is tonight’s FOMC decision regarding rate cuts, after that we will have clarifications about …”
Wash, Rinse, Repeat.
After 35 years+ of observation (I know, not the fastest learner), I get the sneaky feeling that most financial market events on the calendar are simply hyped by press and pundits to end finally end in an absolute anti-climax. Maybe tonight is different, but probably not. The only thing we need to worry about are Rumsfeld’s “unkown unkowns” and by definition there is little we can worry about ex-ante.
So, after this unusual long rant introduction to what should be a short, daily note about market action, you may already deduct that there was little of that (action) in yesterday’s session.
To prove my point, please scroll back up to “The Quotes” section and check in on the daily variations of the different asset classes and sub-indices.
S&P as flat as the Dutch mountains, German Bund yields up two basis (0.02%) points, EUR/USD a thirty pips trading range, even the Gold rally fell asleep.
So, for once truly without further ado, let’s check back in tomorrow to confirm that the Fed indeed cut by 50 bp ;-)
We take a moment of pride this morning, as the Bloomberg’s great John Authers writes in his daily piece about the “Japanification” of China. This is of course a theme you will remembered we already covered wayyyy back (last Monday) in The Quotedian (click here).
Our argument was that same as in Japan in 1989 a real estate bubble burst in China about three years ago. Same as in Japan, stocks have been sliding since ever then.
Same as in Japan, bond yields have started to converge towards zero.
Mr Authers also goes on to show the following chart (source: Barclays Research) for further parallels:
But for most of us, the Chinese stock market will be the most tangent observation point, so let me repeat from Monday’s Quotedian that Japan’s Topix took 22(!) years to reach the final, absolute bottom in November of 2011:
Stay tuned (but seated)!
