Oil/mrkts...16 Aug 2018 06:05
Panic over....for now the Dow pulled back from the brink of a 400+ fall at one time but failed to move out of 'Correction' territory (10% above closing low). The Dow has been mired here for c.130 sessions the longest period since the early 60's and to close above 'correction' territory it needs to be at 25868 some 726 points above today's close.
Usual worries prompted initial falls but bottom feeders jumped in late afternoon pushing the Dow to 25162 down just 138, the S&P off 22 and Nsdq -97. Investor confidence remains resilient in the face of Turkish crisis spreading elsewhere. Merck & Co was main gainer, Boeing & Chevron topped the losers board.
In a survey of 180 US Fund Managers by Bank of America Meryl Lynch (conducted just before the Turkey crisis) saw Trade wars as the bigest risk facing investors for the 3rd straight month. QE was no 2 (15%), China slowdown (14%), Credit crunch (5%) & Others (3%).
Meanwhile investors cont to pile into US stocks making it the top equity region for the first time in 5 years.
At the same time the av cash level has gone up to 5% from 4.7% and in terms of rotation investors are underweight in EM and buying Banks, US stocks, stashing cash while selling commodities, energy, UK shares and defensives.
Earlier the ftse closed just off days low (7477) the 5th straight drop pulled lower by oils and miners. The £ bought $1.269 and the Lira the cause of recent mrkt wobbles gained c.6% but still 20% lower on the month.
Inflation nos came in at 2.3% (little impact) & House price inflation rose just 0.4% mom while yoy slowed to 3%.
Only bright spots on the ftse were GSK & Admiral. The All was down 66, the 100 off 134, the 250 tanked 220, S/caps off 51 & Aim -7.
Late morning Asian stocks have recovered from early losses the Nikkei futures called 400 down saw TK hit a days low of 21870
down 330 but by midday is up 30
on consideration that falls have been overdone. Sellers reappear in late afternoon taking the Nikkei down 90, HK -190 & SH off 24. Nevertheless it shows how prone mrkts are to sudden shocks and how fearful investors have become that the old bull is planning retirement.
On Aug 22 the current bull mrkt might become the longest ever (this is debatable) that's from March 9th 2009 the Dow fell 80 to 6547 (ftse 3542) and rose rapidly thereafter to close 2009 at 10428
(ftse 5413). Whatever bull mrkts don't die of old age do they?
The nos: Oil $71.12. Gold $ 1170.
£$ 1.271. £€ 1.118. Bcoin $6267
Vix 14.6. FF +45 & DF +100.
Morning all.
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