Permabear Doomster

Thursday, 31 October 2019

October settles

US equity indexes concluded October on a weak note, sp -9pts (0.3%) at 3037. Nasdaq comp' -0.1%. Dow -0.5%. The Transports settled -1.3%.

sp'daily5

VIX'daily3

Summary

The US President made an appearance just six minutes before the market open...

... which was enough to pull equity futures back to broadly flat by the open. However, at 9.45am the Chicago PMI printed 43.2, a deeply recessionary print, with equities turning broadly lower. Seeing equities begin to spiral, Trump resumed...

Lets get this clear, Trump is calling for US rates to be lower than Germany, with the ECB rate currently at -0.5%. Regardless, he has his scapegoat chosen... if the US economy turns ugly into/across 2020.

Further...

Whilst I can accept that impeachment chatter is spooking the market,Trump's morning tweets all reeked of an attempt to improve market sentiment, a mere day after the SPX printed a new historic high of 3050.

The afternoon saw a great deal of chop, ending the day and month on a somewhat weak note at 3037.

Volatility picked up, with the VIX settling +7.2% at 13.22. S/t outlook offers increasing equity weakness, with minimum target of sp'2911, which should equate to VIX near the key 20 threshold.
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Departing the capital of geo-political chaos

Halloween sunset

The crescent moon with Jupiter

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Extra charts in AH (usually around 5pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
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Wednesday, 30 October 2019

Rate cut three

US equity indexes closed mostly positive, sp +9pts (0.3%) at 3046. Nasdaq comp' +0.3%. The Transports settled -1.8%.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, and leaned a little weak ahead of the fed.

Early morning saw ADP jobs of 125k, with Q3 (first print) of 1.9%. Both are indicative of m/t economic weakening from late 2018.

... for historical posterity.
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At 2pm, the fed cut rates for a third time by -25bps to 1.50/1.75%.

Powell danced the fine line, and it was enough for the SPX to break a new historic high for a third consecutive day of 3050. There was some subtle closing hour cooling.

Volatility remained subdued, and with equities leaning mostly upward, settled -6.6% to 12.33.
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Autumn sunshine

Next full moon is Nov'12th

Tuesday, 29 October 2019

Another historic high

US equity indexes closed on a weak note, sp -2pts (0.1%) at 3036. Nasdaq comp' -0.6%. Dow -0.1%. The Transports settled -0.2%.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, but it didn't take long for the SPX to break a new historic high for a second consecutive day of 3047.87.

The morning saw Trump take a swipe at Print Central. The afternoon saw some cooling, to settle fractionally weak at 3036. Volatility remained subdued, with the VIX settling +0.7% at 13.20.

Meanwhile...

Today saw CEO Muilenberg of Boeing face question from the US House...

Mistakes... many.... many mistakes

Long ago, in a different life, I actually did a semester on risk and decision making within government and private corporations. Across the last half century we've seen some truly bizarre and insane decisions. I'd especially highlight the Chernobyl nuclear disaster, and STS-51-L (Space Shuttle Challenger), both in 1986.

Boeing has lost two planes due to the insane decision to try to mitigate an unbalanced plane - the 737MAX, via a software fix.

Lets be clear, whilst an updated MCAS might make the 737MAX a safer plane, it won't resolve the hardware problem that the plane is inherently unbalanced.

The following gives a superb background overview for the 737MAX.

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For the record, I don't care how good the MCAS system/software might be improved. The plane is still inherently unbalanced, and by definition... not safe to fly. I would imagine that Boeing and the FAA will be stupid enough to allow 737MAX to fly in 2020.
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Departing the capital of geo-political chaos

Autumn skies in the London metropolis