In today’s briefing:
- Icarus Is Falling! The Markets Are Breaking: More Volatility Is Coming
- The Right and Wrong Way to Throw in the Towel
- The Week That Was in ASEAN@Smartkarma – Astra International, Ace Hardware, and DTAC’s Merger
- The Commodity Report #70
Icarus Is Falling! The Markets Are Breaking: More Volatility Is Coming
- Daily Liquidity has tanked lower, causing bond term premia to worryingly collapse to near all-time lows
- S&P500 (SPX) likely to test 3200 because of skidding Liquidity, but may even drop below 3000 as earnings get crushed.
- Lower term premia are already set-in-stone and have always led to much weaker reported corporate earnings some 15 months later. US S&P500 earnings could skid by over 20% in 2023
The Right and Wrong Way to Throw in the Towel
- Sentiment readings are sufficiently washed out that a relief equity rally can happen at any time.
- However, technical conditions indicate that the intermediate-term direction is still down.
- Prepare for the counter-trend bounce, but don’t forget to sell the rips.
The Week That Was in ASEAN@Smartkarma – Astra International, Ace Hardware, and DTAC’s Merger
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
- The past week saw insights on Astra International,Ace Hardware Indonesia, Total Access Communication, and Genting Bhd (GENT MK).
- We also look at the recent decision in Indonesia to raise interest rates, which we see as a sensible pre-emptive move, which should be positive for the Indonesian banks
The Commodity Report #70
- At the beginning of the week, China was redoubling its efforts to bolster food security by trying to cut the amount of soybeans that get turned into animal feed.
- China is by far the world’s biggest importer of soybeans, which account for the bulk of its consumption.
- A lower ratio would of course mean fewer soybean imports needed as demand would somehow decline a bit.
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