[stock-ticker]

MACRO MORNING NOTE DECEMBER 07, 2017

SBA’s Alastair Williamson concludes the Macro Morning Note from Baltimore, Maryland

What you need to know:

  • Tech stocks rebound as investors buy into the sector’s recent dip
  • Rally’s momentum fades in Europe, as the sector’s initial outperformance wanes
  • China’s stock fall as worries about leverage linger
  • Dollar buoyed by agreement on US tax cuts Australian dollar dips on disappointing trade data
  • Oil prices find support after slipping over the previous session
  • Bitcoin scales $14,500

Global stock markets are mixed this morning with Europe firm, Asia mixed, and the United States flat. UST yields in the United States remain flat, as the dollar probes to the highpoint of the 93-handle on tax reform sentiment.

Neil MacKinnon at VTB Capital, “Can a ‘buy the dip’ mentality persist? G4 central bank liquidity does not peak until first quarter next year though any drawdown in liquidity will be gradual.”

Further, he said, “A Chinese liquidity squeeze [remains a factor] as the authorities turn the deleveraging screws.” 

Considering what MacKinnon said, there is minor risk-on sentiment globally around technology stocks as traders hunt for bargains. Tech-sector bargain hunting in the Asia session wasn’t enough to lift all indexes, where a concern about regulatory crackdowns kept leverage low. Asian stocks were mostly mixed on Thursday, as the Hang Seng Index and Nikkei225 recovered some losses from Wednesday’s slide. Japan’s Nikkei225 closed higher +1.45% at 22,498 after nearly falling 2% prior sessions. Gains were seen in autos, tech, and trading houses. Across the Korea Strait, the KOSPI declined .50% to close at 2,461. Gains in tech were offset by losses in manufacturing and energy. Down under, Australia’s ASX200 gained +.54% to close at 5,977 Financials in the region gained, which helped overall index

(Markets seem to be ignoring the latest military drills on the Korean Peninsula) 

On to China, where Hong Kong’s Hang Seng Index advanced +.30%, after the largest fall in more than a year prior session. The Shanghai Composite declined .67% to close at 3,272, along with declines in blue-chip CSI 300 down -1.1%. Commodities were rocked overnight as per Yuan Talks above. Copper’s decline is a major warning sign that the commodity up-cycle is running out of steam, which could jeopardize the global synchronized growth narrative.

US Economic Calendar

CME Futures ‘Most Active’  6:30am est.

Where the weakness prior session as per sectors?

Per CNBC,

  President Donald Trump on Wednesday announced the U.S. would recognize Jerusalem as the capital of Israel. The move provoked sharp words from leaders in the Arab world, with a statement from Saudi Arabia calling the decision “irresponsible and unwarranted.” Tax reform was also high on the agenda after the U.S. Senate voted on Wednesday to go to a conference committee with the House to negotiate a plan to reform the tax system after both chambers passed separate bills earlier this quarter.

Is the up-commodity-cycle running out of steam?

Biotech double top?

Where WTI could correct to…

Gundlach’s Copper/Gold Ratio misfire?

Central Bankers (globally) spent trillions to avoid <FAW> death cross

EEM/SPY Ratio

Copper death cross (monthly) pending

1987/2008 demand line transitioning into resistance

2s10s S1 .33 projection