Monday, February 11, 2019
Please find below our latest Weekly Trend Update providing some high-level indication of the trend
status for major asset classes.
We have rejigged the Trend score card to better
reflect the trend status of popular “factor* ETFs and added a volatility column
to juxtapose trend and volatility characteristics.
To avoid having too many pictures in the body of
our email, we linked sector tables.
For last Friday’s Markets Snapshot, click here.
For last Friday’s Global Chartbook, click here.
For last Friday’s Global Tactical Portfolio update,
click here.
For more trend signals, economic releases, choose
your preferences here.
Have a nice evening.
Marc
Trend Status Update
S&P500 closed unchanged (+8.0% YTD) on the week while the Nasdaq gained +0.5%
(+9.2%). This was perhaps a week for nothing on US stocks but confusion reigned
as European and EM shares dropped under the weight of renewed uncertainties
about trade negotiations as another episode of the Art of The Deal came on
display with D. Trump saying he was only planning to have a dinner with Chinese
President Xi only on the last day of a self-imposed deadline. China was closed
for new year, returning this week.
US data triggered little interest. However,
European data did come out weak and weaker than expected for Q4 and the ECB
revised its expectations lower. We know why they were weak and D. Trump as
well. A Sino/US trade deal will come because US stocks (D. Trump) need it too
but besides securing more Chinese soybeans imports in exchange for a banning of
Huawei (coupled to an injunction to US allies to do the same), important
progress need to be made.
In the meantime, Europe started to worry about its
own trade negotiations. Following the President’s state of the Union address
last week, our sense is that D. Trump might go after Europe, perhaps harder
than against China. Europe has been factoring this in with lower business and
consumer confidence. The good faith from last summer led to talks not even
starting with the two sides of the Euro/US trade truce seemingly not even
agreeing on what they agreed. The Commerce Department is also set to report on
national-security implications…. of auto imports that may lead to tariffs on foreign
cars. This added to the gloom of weaker than expected European auto results
last week that are aggravated by significant investments in the electrification
of their fleet… More weakness in European bank shares also impaired sentiment.
In the meantime, Europe is getting tougher on the
issue of taxing Fangs (at least France is) and deploys some efforts on ways for
smaller businesses with no link to the US to deal with Iran. Germany extradited
last week a terrorist back to Turkey, carrying out an extradition request from Turkey,
prior to another one from the US. This did not fly very well with a near
apoplectic US administration. The week before last, Germany had declined
Lockheed Martin's F-35 joint strike fighter to replace aging Tornado warplanes,
taking the American plane out of tender. Neither last nor least but in a
further sign of defiance at the Trump administration, Handeslblatt
reported late last week that - in direct contravention with White House
instructions, the German government wants to avoid excluding products offered
by Huawei which is the build-out of the next generation 5G network in the
country.
Neither good nor bad, evidence is mounting of
rising tensions between Europe (and Germany in particular) and the US. Still, a
freshly accommodative Fed continued to lend support to US stocks last week
despite mostly disappointing earnings/guidance and a dampening sentiment on the
trade war truce. Earnings for the broad US market are now expected to decline
by -1.4% in the quarter from a year earlier vs. expectations from last
September projecting a +7% growth.
The Dollar
index gained +1.1% last week, a small but big enough move, given its very
small recent trading range, to create a “bull trend” signal on the dollar index
and an exit from its Bollinger band! However, and without follow through on the
EM currency index which remained itself in a “bull trend”, supported by
continued investment flows into EM markets, we won’t consider this as an
all-clear signal for the dollar to go up.
Talks between Democrats and Republicans broke down
over the week end, setting the stage for another government shutdown.
Fed officials stumbled on each other last week
expressing their now collegial view about the need for more rather than less
accommodation.
The ongoing ECB succession race sae the odds rise
that the German contender, Bundesbank President J. Weidmann,
could be staging a comeback after Italy’s finance minister confirmed a thawing
in his country’s longstanding opposition, saying to Die Welt that he’s “open to
the prospect and unbiased”. This move likely linked to Italy’s ongoing row with
France ties up up with Germany not having so far submitted a candidate for
retiring ECB Chief Economist Peter Praet. The two
French and one Dutch candidates face the headwind that
the ECB has already been served by a French and Dutch President, leaving
possible alternatives to two or three other candidates. This outcome would be bullish for the euro
but it is too early to bet on…
Russia's long-term foreign debt rating was upgraded
by Moody's to investment grade, late on Friday. We still favour EM currencies
(along with associated stocks and bonds) which now exhibit a volatility
comparable to that of other DM FX pairs.
10y US Treasury yields dropped -5bps last week to 2.64% whilst German 10y Bunds sank -8bps (to
+0.09%) on global growth fears and
all-round reduced normalisation expectations from Central Banks.
Credit markets (HY) underperformed last week with US HY spreads widening +16bps (-96bps
YTD) to 370bps and IG spread +4bps (-21bps YTD) to 70bps.
Gold closed the week unchanged (+2.5% YTD) while silver dropped -0.8% (+1.7%
YTD), supported by expectations for more accommodation. With the exception of
platinum, the entire precious metals remains in bull
trend.
The Goldman Sachs Commodities index dropped -1.3% (+9% YTD) last week despite copper gaining +1.4%
(+7% YTD).
Trend Score Card
Click here for technical annotations.
US & International Equities
Check out US and
International Stocks’ Technical Trend Status.
Fixed Income
Check out 10Y US Treasury
and Bund yields, their trend, expected Fed rate moves and speculative
positioning in 10-year Treasury Futures.
US Recession Risk Radar
A comprehensive list of economic indicators to
compare the current situation with previous recessions.
The Dollar
Check out where the Dollar
stands Trendwise
and Breakoutwise
vs. G7 and EM counterparts.
Precious
Metals
Check out where precious metals stand Trendwise and Breakoutwise. Get
a sense of options (cumulative open interests on calls and puts) and futures traders’
sentiment (non-commercials open positions).
Why
Trend Following Matters and How It Can Help You?
The last months of 2018 have shown how hard and
fast markets can fall. Trend following offers guidance as to when to get in and
when to get out of an asset class with changing trend characteristics. A
disciplined and rule-based trend following investment approach can serve as an
effective portfolio insurance technique. Our purpose, beyond tracking economic,
political and monetary developments is to assist readers investing in global
markets with a view on trend formation in all important asset classes.
To receive a Daily Trend Status Update and much
more, join a free trial of our
premium research (no credit card required). If you are already a free trailer or
subscriber, feel free to set up/update your preferences here. From then on, you will
never miss a beat of global markets… and their trend. You will be better
informed than ever with technical breaches on a wide range of assets and/or
with economic releases within seconds of their release and by email. The best
way to escape a lion is not by running faster than the lion…just faster than
its nearest prey.
To learn more about our
premium research:
https://www.bentinpartners.ch/research
Feel free to join our free
trial and choose your delivery preferences:
https://www.bentinpartners.ch/subscribe
Please visit our web site or call us at +41615444310. We’d love to hear
from you and see how we can further assist you.
Join us on Linked In
To be removed from the list, please send us an
email by clicking here, mentioning “unsubscribe” in the title.
To ensure that our emails reach your inbox and not
your spam folder, please consider adding Marc.Bentin@BentinPartner.ch,
Marc.Bentin@BentinPartners.ch and our alternate address Bentinpartner@gmail.com
to your safe address book. If you are using Microsoft Outlook, simply right
click on our email address, choose "add to Outlook contacts" and then
"save".
Important Disclaimer
© Copyright by BentinPartner llc.
This communication is provided for information purposes only and for the recipient's
sole use. Please do not forward it without prior authorization. It is not
intended as a recommendation, an offer or solicitation for the purchase or sale
of any security or underlying asset referenced herein or investment advice.
Investors should seek financial advice regarding the suitability of any investment
strategy based on their objectives, financial situation, investment horizon and
particular needs. This report does not include information tailored to any
particular investor. It has been prepared without any regard to the specific
investment objectives, financial situation or particular needs of any person
who receives this report. Accordingly, the opinions discussed in this
Report may not be suitable for all investors. You should not consider any of
the content in this report as legal, tax or financial advice. The data and analysis
contained herein are provided "as is" and without warranty of any
kind. BentinPartner llc, its
employees, or any third party shall not have any liability for any loss
sustained by anyone who has relied on the information contained in any
publication published by BentinPartner llc. The content and views expressed in this report
represents the opinions of Marc Bentin and
should not be construed as guarantee of performance with respect to any
referenced sector. We remind you that past performance is not necessarily
indicative of future results. Although BentinPartner llc believes the information and content included in
this report have been obtained from sources considered reliable,
no representation or warranty, express or implied, is provided in relation to
the accuracy, completeness or reliability of such information. This Report is
also not intended to be a complete statement or summary of the industries,
markets or developments referred to in the Report.
#fx
#forex #investing #markets #riskmanagement #bankingindustry #finances #money #traders #quants