Market Intelligence

Global observations – November 6

Author: Aleksandar Adamovic November 6, 2018

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Big U.S. companies spent more money on buying back shares than they did on capital expenditures in the first half of 2018. The last time that happened for two straight quarters was just before the crisis, according to this chart from Deutsche Bank’s Torsten Slok.

VG1 vs JPY….VG1 has been lagging slightly. Last time JPY traded here VG1 was closer to the 3300 level.

DAX below the big 11500 lvl. Reversed on that trend line since early Oct.

Not many looks at the Shanghai Property index, SHPROP, but this index has been spiking hard lately. Note the relative spike versus the CSI 300. Also note the similar spike back in 2016. Back in 2016 the entire Chinese market started going higher and put in approx. 35% gains from the time SHPROP started outperforming the CSI 300.

PMI data for the euro area signals a clear loss of momentum in Germany and Italy. France and Spain sustain solid rates of growth.

SPX term structure reached the “low” (blue) 2 days ago. The curve shifted small higher yday, but compared to “panic” levels a week ago this looks more “normal”.

Nothing more than an observation here, but the Brazilian EWZ has now closed the entire gap vs SPY on the YTD chart.

Oil since October highs vs XLE and Norwegian OBX…slight “dislocation” as oil just continues going down.

SPY, QQQ, IWM since the October 3 sell-off started. IWM and SPY same, down 6.5%, QQQ down almost 10%. Interesting to note the performance of the IWM during the bounce.

Haven´t seen Brazil ETF EWZ gap down in a while. Just a breather post the latest rally but keep a track of it at these levels.

iTraxx down on the day again… a quickly updated chart of credit vs VG1 (Credit is inverted on the chart). A clear picture of how credit has been in relative more risk on mode. VG1 was around the 3300-last time iTraxx traded here, but for now all about the elections.

 

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