By Swati
Pandey
SYDNEY (Reuters) - Asian shares were on the
backfoot on Thursday following mixed cues from Wall Street where a sharp
sell-off in the largest bitcoin exchange Coinbase hit tech shares while the
dollar index struggled near one-month lows.
MSCI’s broadest index of
Asia-Pacific shares outside Japan paused after two straight days of gains. It
was last at 690.53, a long way from a record high of 745.89 touched in
February.
Japan’s Nikkei rose 0.2% while South
Korea’s KOSPI index was up a tad.
Australia’s benchmark index slipped
0.4% as miners were dented by weaker prices for iron ore and coal.
Global shares have surged in recent
weeks led by successful rollouts of COVID-19 vaccines around the world, U.S.
stimulus packages and higher U.S. inflation expectations.
“However, the back up in treasury
yields has begun to exert a valuation test on some parts of the global equity
markets with value outperforming growth,” Jefferies analysts wrote in a note.
“Equally, there are fewer stocks
offering decent yields and higher capital gains.”
JPMorgan Asset Management was
trimming its overall Emerging Markets (EM) exposure “mostly driven by a less
sanguine outlook on EM Asia,” its global multi-asset strategist Patrik Schowitz
wrote in a note.
“China has now recovered enough that
policymakers can afford to be more conservative and worry more about containing
debt and property market risks. That will be a headwind to China equities,
despite the solid economy,” Schowitz added.
Chinese shares started in the red on
Thursday with the blue-chip CSI300 index down 0.2%.
JPMorgan Asset Management is less
keen on tech shares, which Schowitz said, should have less upside to earnings
expectations in the near-term and are “very expensive” relative to value.
Overnight, Wall Street ended mixed
with the tech sector the biggest underperformer after Coinbase was sold off on
its listing day, dragging the Nasdaq lower. [.N]
Coinbase’s listing coincided with a
record price for Bitcoin, which rose to just under $65,000 but the euphoria
proved to be short-lived as the stock fell nearly 20% from its opening level to
trade at $328.
“That would be a bit painful if you
bought the stock at its intraday peak of $429.54,” said NAB strategist Rodrigo
Catril.
---- Forex investors are keeping an eye on
Treasury yields for direction with a potential market panic about accelerating
inflation seen as the biggest risk to sentiment.
Major policymakers, including the
U.S. Federal Reserve, have repeatedly said there is still plenty of labour
market slack to keep inflation in check for a several years though there might
be temporary spikes which they are willing to overlook.
More
https://www.reuters.com/article/us-global-markets/asian-shares-defensive-dollar-struggles-near-one-month-lows-idUSKBN2C205H
David
Rosenberg: I haven't been this excited about going against the herd in years These days the economist who called the U.S. housing crash
is getting the same gut check Apr 14, 2021
I was being interviewed on CNBC last
week when I was told that my views were diametrically opposed to the consensus
and how the markets are positioned. To which I exclaimed that it’s been many
years since I was this excited about going against the herd. I had just enough
airtime to work in Bob Farrell’s Rule No. 9: “When all the experts and
forecasts agree, something else is going to happen.”
Of course, this was all about the
debate over runaway growth, inflation and the call on the United States Federal
Reserve and the Treasury market. I didn’t take the bait on the stock market, as
the bubble just gets bigger and bigger, with the cyclically adjusted
price-to-earnings (CAPE) ratio now pressing against 37x, only surpassed
historically by the late 1990s’ tech frenzy.
Yes, I am not positioned the way the
dominant “Roaring Twenties” crowd is, that much is for sure. But I have been
here before. When I turned bearish on tech at the height of the dotcom bubble
back in 2000, my partners at the time thought I was nuts.
In the early months of 2002, when
visions of post-9/11 reconstruction and rebuilding alongside massive monetary
and fiscal stimulus had the bond vigilantes out in full force, the second half
of that year saw a monster Treasury market rally instead, as expectations of
Fed tightening swung around to easing. The economy was far too fragile as it
turned out to withstand the run-up in market rates, though that wasn’t evident
to the consensus during the winter and spring that year when it looked as
though a classic inventory investment cycle appeared to be taking hold a tad
prematurely.
---- But it was during the mania in the mid-2000s that
my resolve was truly tested. All I had to do was sift through the data and the
charts to know we had a U.S. housing bubble of epic proportions on our hands.
Home price-to-income, home price-to-rent and residential real estate/household
asset ratios were in the stratosphere. If you’re talking about one-to-two
standard deviation events, you know you are in major excess.
Leverage, speculation, valuation,
sentiment and public participation all fit the classic definition of a bubble,
yet — believe it or not — it reached a stage where I had peeved off so many
people by not being part of the bullish consensus that I was forbidden from
using the “B” word in my published research (we settled for “mania” instead).
---- Look, nobody is right all the time, and nobody is
wrong all the time. More often than not, it really comes down more to timing,
and I am historically early to a fault. But experience goes a long way in this
business and so it is important to identify bubbles — we have two now, in
residential real estate and equities — and then understand that excesses will always
go further than you think (where we are now) and that no bubble ever corrected
by going sideways.
It is fanciful to believe that we
will come out of the first global pandemic in more than a century into a world
of newfound sustainable inflation. Or that a massive surge in public-sector
deficits and debts, producing little more than a short-term sugar high, have
assured us an economic future replete with the Roaring Twenties and
“Goldilocks” economic scenario. The vaccination rollout is impressive, and the
reopening of the U.S. economy is both welcome and impressive. But once this
so-called “pent up” demand is filled in the four per cent of GDP known as the
COVID-19-affected “consumer services” sector, and once these short-term
stimulus checks run out, the economic emperor becomes disrobed, as was the case
in last year’s fourth quarter. By July-August, the markets, both stocks and
bonds, will start to see what I already see around the bend. Why? Because
“something else is going to happen.”
More
https://financialpost.com/investing/david-rosenberg-i-havent-been-this-excited-about-going-against-the-herd-in-years
Finally, did
President Biden just blink? Time will tell if it’s just a ruse or something
more. China will be watching closely to see if this is just words and a ruse.
Biden proposes summit with Putin
after Russia calls U.S. 'adversary' over Ukraine April
13, 2021 3:52 PM By Humeyra Pamuk , Andrew
Osborn
WASHINGTON/MOSCOW (Reuters) -U.S.
President Joe Biden called on Russian President Vladimir Putin on Tuesday to
reduce tensions stirred by a Russian military build-up on Ukraine’s border and
proposed a summit of the estranged leaders to tackle a raft of disputes.
The White House and the Kremlin
reported only the second conversation between the two since Biden took office
in January, after Western officials urged Moscow to end the build-up and
Russia, in words recalling the Cold War, said its “adversary” should keep U.S.
warships well away from the Crimea region.
Russia seized Crimea from Ukraine in
2014 and fighting has increased in recent weeks in eastern Ukraine, where
government forces have battled Russian-backed separatists in a seven-year
conflict that Kyiv says has killed 14,000 people.
In a sign of concern about tensions
spinning out of control in the Ukraine crisis, Biden phoned Putin to propose
they meet in a third country while underlining U.S. commitment to Ukraine’s
sovereignty and territorial integrity.
“President Biden also made clear
that the United States will act firmly in defense of its national interests in
response to Russia’s actions, such as cyber intrusions and election
interference,” the White House said in a statement.
---- In the first public Russian description
of the build-up, Defense Minister Sergei Shoigu said Moscow had moved two
armies and three paratrooper units to its western border as part of a large
snap drill meant to test combat readiness and respond to what he called
threatening military action by NATO.
Shoigu said on state TV that the
three-week exercise, which he called successful, was due to wrap up in the next
two weeks.
Shoigu said NATO was deploying
40,000 troops and 15,000 pieces of military equipment near Russia’s borders,
mainly in the Black Sea and the Baltic regions.
The Western alliance denies any such
plans.
---- Biden also reaffirmed a goal to build
“a stable and predictable relationship” with Russia and said a meeting in the
coming months could address “the full range of issues” facing the two world
powers, the statement said.
The Kremlin said in its account of
the call that Biden told Putin he wanted to normalize relations and to
cooperate on arms control, Iran’s nuclear program, Afghanistan and climate
change. It confirmed Biden had proposed a high level meeting but did not
indicate how the Russian leader responded.
More
https://www.reuters.com/article/us-ukraine-crisis/biden-proposes-summit-with-putin-after-russia-calls-u-s-adversary-over-ukraine-idUSKBN2C0221
Russia, Ukraine hold military
drills, NATO criticises Russian troop build-up
April
14, 2021 5:02 PM By Gabrielle Tétrault-Farber , Robin
Emmott
MOSCOW/BRUSSELS
(Reuters) - Russia and Ukraine held simultaneous military drills on Wednesday
as NATO foreign and defence ministers began emergency discussions on a massing
of Russian troops near the Ukrainian border.
Washington and NATO have been
alarmed by the large build-up of Russian troops near Ukraine and in Crimea, the
peninsula that Moscow annexed from Ukraine in 2014, and two U.S. warships are
due to arrive in the Black Sea this week.
Russia -- which said the U.S. naval
move was an unfriendly provocation and warned Washington to stay far away from
Crimea and its Black Sea coast -- says the build-up is a three-week snap
military drill to test combat readiness in response to what it calls
threatening behaviour from NATO. It has said the exercise is due to wrap up
within two weeks.
Ahead of the arrival of the U.S.
warships, the Russian navy on Wednesday began a drill in the Black Sea that
rehearsed firing at surface and air targets. The drill came a day after NATO
Secretary-General Jens Stoltenberg called on Moscow to end its troop build-up.
In Ukraine, armed forces rehearsed
repelling a tank and infantry attack near the border of Russian-annexed Crimea
while its defence minister, Andrii Taran, told European parliamentarians in
Brussels that Russia was preparing to potentially store nuclear weapons in
Crimea.
Taran provided no evidence for his
assertion but said Russia was massing 110,000 troops on Ukraine’s border in 56
battalion-sized tactical groups, citing Kyiv’s latest intelligence.
Fighting has increased in recent
weeks in eastern Ukraine, where government forces have battled Russian-backed
separatists in a seven-year conflict that Kyiv says has killed 14,000 people.
U.S. Secretary of State Antony
Blinken, who held talks in Brussels with Stoltenberg ahead of a video
conference of all 30 NATO allies, said the alliance would “address Russia’s
aggressive actions in and around Ukraine”, without elaborating.
Russia’s relations with the United
States slumped to a new post-Cold War low last month after U.S. President Joe
Biden said he thought Vladimir Putin was a “killer”.
More
https://www.reuters.com/article/us-ukraine-crisis/russia-ukraine-hold-military-drills-nato-criticises-russian-troop-build-up-idUSKBN2C129L
Beijing's top official in Hong
Kong warns foreign powers not to interfere
April
15, 2021 3:13 AM By Clare Jim ,
Pak Yiu
HONG KONG (Reuters) - Beijing’s top representative in Hong
Kong warned foreign powers on Thursday that they would be taught a lesson if
they tried to use the global financial centre as a “pawn”, as tensions
escalated between China and Western governments over the city.
Luo Huining, the director at China’s
Hong Kong Liaison Office, was speaking at a ceremony to mark an “education day”
for the National Security law, which authorities have organised to promote the
sweeping legislation China imposed last year.
“We will give a lesson to all
foreign forces which intend to use Hong Kong as a pawn,” Luo said.
The new law drew criticism from the
West for curbing rights and freedoms in the former British colony, which was
promised a high degree of autonomy upon its 1997 return to Chinese rule. Its
supporters say the law has restored order following mass anti-government and
anti-China protests in 2019.
China, the United States, Britain
and the European Union have traded sanctions over the past year as the security
law and measures taken to reduce democratic representation in the city’s
institutions exacerbated tensions.
Earlier this week, a letter signed
by more than 100 British politicians asked Boris Johnson’s government to expand
a list of Chinese officials accused of “gross human rights abuses”.
National Security Education Day will
be marked with school activities, games and shows, and a parade by police and
other services performing the Chinese military’s “goose step” march.
---- In February, Hong Kong unveiled
national security education guidelines that include teaching students as young
as six about colluding with foreign forces, terrorism, secession and subversion
- the four main crimes in the new law.
Chinese officials have partly blamed
liberal studies for the restlessness of the city’s youth.
The school curriculum changes and
the promotional campaigns are seen as signs that Beijing’s plans for the city
go beyond quashing dissent and that it aim for a societal overhaul to bring it
more in line with the Communist Party-ruled mainland.
https://www.reuters.com/article/us-hongkong-security/beijings-top-official-in-hong-kong-warns-foreign-powers-not-to-interfere-idUSKBN2C2069
"Anytime
you don't want anything, you get it."
Calvin
Coolidge, 30th President of the United States.
Inflation Watch. Given our Magic Money Tree central banksters and our
spendthrift politicians, inflation now needs an entire section of its own.
Astonishment Reigns Throughout
Industry as Lumber Prices Go Higher April 14, 2021
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