David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Copper and Iron Ore Climb as China May Relax Key Property Rules

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Copper and iron ore extended gains on a report that China may ease curbs on borrowings by developers, adding to a raft of measures to bolster real estate which is brightening the outlook for metals.

    Beijing may allow some property firms to add leverage by easing borrowing caps, and pushing back the grace period for meeting debt targets, said people familiar with the matter. The moves would relax the stringent “three red lines” policy that had contributed to worsening the country’s real-estate meltdown and hit demand for steel and copper used in construction.

    Copper rose as much as 1.5% and was 0.8% higher at $8,437 a ton on the London Metal Exchange as of 11:02 a.m. local time. Iron ore futures in Singapore rose 2.1% to $118.60, reversing a earlier decline.

    China’s flurry of stimulus is aiding sentiment, and boosting confidence that the economy is stabilizing, Everbright Futures said in a note. But the optimism is being tempered by a severe wave of Covid-19 across China, which is crimping activity and worsening the seasonal weakness in manufacturing.

    Read entire article

    Wine, Lobsters Could Be Next in China-Australia Trade Thaw

    This article from Bloomberg may be of interest. Here is a section:

    China’s trade restrictions on Australian wine, lobsters and other commodities could be the next to ease amid a warming of diplomatic ties and expectations that Beijing will soon resume imports of coal.

    Curbs on commodity imports will probably be eased gradually and in an unofficial manner, said Hans Hendrischke, professor of Chinese Business and Management at the University of Sydney. While there’s some confidence that restrictions will be lifted, there’s currently no indication of timing, he said.

    “Nobody could tell you whether it will start with barley, wine producers or lobsters for Chinese New Year,” Hendrischke said.

    Read entire article

    Summers Sees 'Tumult' in 2023 With Reckoning for Bond Market

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    “I suspect tumult” for markets in 2023, Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “This is going to be remembered as a ‘V’ year when we recognized that we were headed into a different kind of financial era, with different kinds of interest-rate patterns.” 

    Read entire article

    Byron and Joe's Ten Surprises of 2023

    Thanks to a subscriber for this note which may be of interest. Here is a section:

    2. The Federal Reserve remains in a tug-of-war with inflation, so it puts the word “pivot” on the shelf alongside the word “transitory.” The fed funds rate moves above the Personal Consumption Expenditures price index and real interest rates turn positive, a rare phenomenon relative to the last decade.

    3. While the Fed is successful in dampening inflation, it over-stays its time in restrictive territory. Margins are squeezed in a mild recession.

    4. Despite Fed tightening, the market reaches a bottom by mid-year and begins a recovery comparable to 2009.

    5. Every significant correction in the market has in the past been accompanied by a financial “accident.” Cryptocurrencies had a major correction and that proved not to be a systemic event. This time, Modern Monetary Theory is fully discredited because deficits have proven to be inflationary.

    Read entire article

    Email of the day on cloud computing

    At the risk of representing a bottom, my hat's off to you Eoin for your call on the cloud. A year ago I remember being in a Covid tent with an investor and you had just laid out the case for the cloud glut. Roll tape on all these guys with buys a year ago including Cramer.

    Read entire article

    Eoin's personal portfolio: stock market index positions closed at profit and shorts opened December 6th 2022