Comment of the Day
Video commentary for November 16th 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: yield curves continue to contract putting pressure on liquidity plays, Wall Street pauses, bonds advance, Vietnam government support, China pauses, India steady, Brazil in danger of rolling over.
How Conditions Today Compare to Past Equity Market Bottoms
Thanks to a subscriber for this report from Bridgewater which may be of interest. Here is a section:
Eoin Treacy's view - A link to the full report is posted in the Subscriber's Area.
The yield curve spread is about the easiest way to monitor the progression of the bearish cycle. Whether one looks at the 10-year-2-year or the 10-year – 3-month is less important than the fact that contracting yields curves imply liquidity is becoming progressively less accommodative.
Vietnam strengthens local stock market following strong fluctuations
This article from Xinhua may be of interest to subscribers. Here it is in full:
Vietnam's State Securities Commission (SSC) has carried out measures to strengthen the local stock market following strong fluctuations triggered by investors' cautious sentiment and global stock market, local media reported on Wednesday.
The recent market corrections were caused by investors' cautious sentiment while facing uncertainties and less positive prospects in the world economy and politics, local newspaper Vietnam News reported.
As part of an effort to ensure a stable, sustainable and transparent development of the Vietnamese stock market, the SSC has strengthened inspection and supervision to address violations on the stock market, the newspaper said.
It has also proposed amending regulations regarding private offering and trading of corporate bonds in the domestic and international markets to improve the management mechanism for the private placement of corporate bonds.
In the short term, domestic investor sentiment is still strongly influenced by information, wrong handling of enterprises, and fluctuation in the corporate bonds market.
However, given Vietnam's long-term macroeconomic growth and the profit gains of listed companies, long-term investment opportunities will appear quite clearly, investment strategist Thai Huu Cong told local newspaper Saigon Investment.
Eoin Treacy's view - The Dong tends to be the Vietnamese government’s first recourse in attempting to stimulate the economy. The currency has been falling all year and only began to steady over the last couple of weeks.
Investor-Darling Brazil Faces Key Test as Lula Optimism Dims
This article from Bloomberg may be of interest to subscribers. Here is a section:
Lula said that he won’t give any details on his cabinet before returning from an international trip to attend COP27 in Egypt.
“The stakes are high in terms of fiscal uncertainty, in terms of cabinet composition, in terms of key appointments in the economic team,” said Joel Virgen Rojano, director for Latin America strategy at TD Securities. “All of that for now has a really big question mark and the markets are becoming impatient.”
Emerging-market investors from Neuberger Berman LLC to Franklin Templeton had bet on the South American nation ahead of the election as they saw little distinction between Lula and President Jair Bolsonaro’s fiscal agenda. Neuberger wasn’t immediately available to comment on its current recommendations in Brazil.
“Markets tend to hate uncertainty,” Dina Ting, head of global index portfolio management for Franklin Templeton exchange-traded funds, wrote in an emailed response to questions. “From a long-term perspective, the fundamentals and macro factors have not changed. Brazil is still trading at a discount to historical averages and helped by both elevated commodity prices and favorable demographics, including its young workforce.”
Eoin Treacy's view - Brazil faces many of the same issues as everywhere else. There is a clear need to enact some type of fiscal control but the population are already impatient with the pace of economic recovery. Those are two opposing perspectives and the new administration will need to tread very carefully if the currency is to remain stable.
Eoin's personal portfolio: hedge short profits taken, trading short losses taken, investment positions initiated November 10th 2022
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary daily until there is a change.
The Chart Seminar London November 21st and 22nd 2022
We are living through fast moving markets so the next venue for The Chart Seminar will be November 21st and 22nd this year in London.
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