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Where's the surprise?

⊰ 2022-08-30 by ShaunO ⊱

Upside stock market gains Jun-Aug were profit take opportunities, no more.

Anybody who thought the downward trend had finished wasn't looking at the data - inflation has not eased, PE ratios are still high historically, bond and borrowing yields continued to trend up, commodity prices have only eased a bit..

Anecdotally (with some data support):

  • consumer savings are falling, short borrows (credit cards) are rising, some mortgage rate impacts (with bulk to happen 23-24 as fixed terms end).
  • real corporate costs are rising which seems mostly due to effects in the most expensive component - staff. Staff absences, covid or otherwise, are now serious enough to be seen in the bottom line in most recent earnings calls over past few weeks.
  • short and long term bond yield data presage only one direction, up.

Returning to the very basics, trend puts ASX200 currently 100 or 200 points above its linear regression line which lands around 6850 (picture), suggesting it has at least that much to give back..

ASX200 + Linear Regression

buggered if I know, and buggered if I much care 😛

neither do you probably 🙂

Neel Kashkari Says the Quiet Part Out Loud on Markets


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