Stock market bull run


#1

theatlantic.com/business/ar … up/543249/

What’s behind this?

Yield curve flattening:
cnbc.com/2017/10/18/bond-ma … highs.html


#2

Central Bank money has finally hit the system. Inflation will be next. Money is sloshing around in ETF’s. Shorts have capitulated. Volumes in futures market have dropped off a cliff this year. There is no trading, just a grind upwards of etf flows. Passive & automated strategies buying regardless.

FED openly questioning their understanding of inflation is a huge thing.

At the moment it seems there is nothing that will turn sentiment yet, there are so many potential catalysts out there.


#3

why is it hitting ETFs now in such a big way?


#4

Checks calendar…oh look it’s late October. :smiley:

Stock market bubbles are so 20th century. Coins are where it’s at now…

thereformedbroker.com/2017/10/18 … onderland/


#5

Revered Chinese central banker warns of Minsky moment.

“A Minsky moment is a sudden major collapse of asset values which is part of the credit cycle or business cycle. Such moments occur because long periods of prosperity and increasing value of investments lead to increasing speculation using borrowed money.”


#6

Costs and liquidity are the main reasons sighted. Cheaper to manage than futures, roll costs etc. More room to move a portfolio around for trades i,e, easier to buy high yield bonds in tranches.

Have a read: awealthofcommonsense.com/2016/04 … -use-etfs/


#7

only the usa is expensive right now when it comes to stocks ,never mind emerging markets and japan , much of europe for example is not much higher today than it was in the year 2000 , france , spain and italy are all below where they were nearly twenty years ago and the uk stock market is not up that much , germany is the standout , its stock market has matched the usa since the crash in terms of performance

while europe has never once had a bull market while the u.s was going the other way , the overall european stoxx 600 market is still about 7% below its all time high from spring of 2015 , i think european stocks are in the early stages of a long term bull market , they really have not moved anything worth talking about in twenty years as a whole


#8

I disagree on Europe. Where are the magical returns going to come from? The rally was induced by weak fx and cheap borrowing. Draghi has pleaded for structural reform. It is not happening. Italy got rid of Renzi when he tried to reform, Macron already facing backlash. EU is not integrated enough to boost as so. How can Germany be more competitive? Cheap refugees? Where are. the FANGS?

Inflation is the only “hope”.

As for the US, GE is a prime example of what is wrong with the US. Crap earnings and revised outlook. -8% pre market, trades -3% after an hour of open, finishes positive. Fama and efficient markets can choke on it… that is indexing and passive investment dip buying etfs.

One thing to note is some big blue chips are suffering, IBM aside. Unilever, P&G, Roche, nestle. Banks are bid on yield curve moves.


#9

any predictions?


#10

bears are always eventually right ( until a new bull market begins again )


#11

many of the companies in the stoxx 600 index do more business outside europe than in the EU , the political strife of the past decade kept stocks cheap , the global economy is now improving and investors see that europe is cheap


#12

There is a very relaxed attitude to risk at the moment - probably the most relaxed in the last ten years. So much money being pumped into pretty dubious ventures offering yields (or more shittily prospective yields) that are way too low for the class of investment on a traditional basis (think Irish investment in Bulgarian property).

Good read in the Economist a few weeks ago on the priciness of everything:

economist.com/news/briefing … t-any-fizz

(I do think that Ireland will be ok as it’s in a bit of a space at the moment).


#13

Interesting read from a few weeks back re the markets.

arpinvestments.com/arl/two- … -same-coin

Re attitude to risk, another interesting article from a decade ago by a banking risk manager:

economist.com/node/11897037


#14

In respect to Europe, PMI’s and other metrics have been expanding and at elevated levels for 12months plus. Fx was down at 1.10 area too. The big autos etc had their bumper earnings at these levels.

European indexes had a 7-9% sell off on volume in the Summer due to the euro rally. The “dip” was bought and is relatively stable around 1.18. There is no bear here, one can’t get in the way of this move yet. I will be an active seller on a change in momentum. It will be interesting to see how markets handle a 4/5% sell off over the course of a week. A 10% move would only bring the US back to April levels which were all time highs then.

I struggle to see any excess expansion from here unless inflation kicks in. It is a real possibility, or at least more probable than in the last year. Maybe stocks are predicting this.


#15

Re ixus’ comment on China’s CB

ft.com/content/04c67054-b59 … d59db9e399


#16

#17

Was interesting to see GE hit reality today. Some of the big guns faltered a little. I wonder if ECB and a Yellen retirement confirmation might trigger a little sumtin sumtin…

Media will go nuts on a 2/3% sell off. Been too long and, recency bias.


#18

If coronavirus doesn’t crash the markets then why would they ever !?


#19

This is a brilliant episode from Dr. John Campbell. Well worth watching the whole 11 minutes. He is not sugar coating it. His contacts in Iran tell him that there are 750 cases and many more deaths than the reports of 5 - 13 currently stated and the CFR is much higher than 2%. I still think that they are just saying this because they don’t know how many true cases there are and it could well be in the thousands there. Kind of amazing that Iran seems to have taken off so quickly before many other countries. I don’t know why that could be. Seems bizarre to me.

At Blindj, I think the coronavirus will crash the markets for sure, I have done from the start, but I think we’re going to have to wait until it’s a black-and-blue Swan because the Fed will not let the market go down without a fight.