Changes Coming To Global Macro Monitor

Posted on November 7, 2018 by macromon

The Global Macro Monitor (GMM) came into existence in 2010, motivated, mainly, as a way to discipline our trading.  There is nothing like writing and data crunching to create clear, concise thinking and original research to create a framework to view the markets.

After over 5,000 posts at GMM, we have already significantly cut back on our trading and will do even more after year-end.  Thus the opportunity cost of our writing and research, which we have shared with you over the past eight years increases dramatically.

We are reaching out to our readers to get a sense if there is a market for the Global Macro Monitor on a subscription basis.  We are thinking of a pricing point for a basic subscription in the zip code of around the cost of a daily cup of coffee:

Basic Subscription –          $50 per month

We are also considering a premium version, such as a more personalized research/consulting product.  If, say,  a large institutional investor needs specific sovereign analysis on an individual country, or some other market or financial asset, our years of professional experience across a wide swath of markets can help you.

All the products will include actionable trades and investments,  with specific entry, exit, and stop-loss prices.   We are first to admit we don’t get them all right, but believe our analysis is unique and contrarian,  that it is clear, concise, and usually parsimonious.

If you had traded on our recent Treasury market or Apple analysis, for example, you could have already paid for a lifetime subscription and even thrown in a Tesla.

The Gathering Storm In The Treasury Market 2.0

iPhone Inflation Drives Apple Earnings, Again

One of our readers commented on our comprehensive analysis (38 pages) of the Treasury market:

I read the first and second article and have to say that it was the best analysis I ever read on treasuries. Thank you for the macro view and well done.

The free ride is over, folks, and the Global Macro Monitor will become our hobby and is about to go dimmer.

We need a critical mass of potential subscribers before we can move forward.

Come back to us ASAP, if you are interested.

Please contact us at:  macromonitor33@gmail.com

This post will repeat twice per week over the next few months.

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Near collision between US and Chinese warships – SCMP

Posted on November 5, 2018 by macromon

Never-before-seen footage: A near collision between a Chinese and a US warship in the South China Sea.

Read more: https://www.scmp.com/week-asia/geopol…

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Germany’s “Sneaky Left Hook”

Posted on November 5, 2018 by macromon

Interesting feedback from a GMM reader about our recent post on the silent rise of Germany’s Green Party,  As Everyone Looks Right, Germany Is Swinging Left,

“That is interesting. This article alone makes my subscription worth it. Not a WORD of this in the press and Die Grüner is at 24%! That’s a sneaky left hook.” – GMM reader

We like it.  Keep those comments, letters, and emails coming.

 

Germany's Left Hook_2

Check out how the Alternative for Germany (AfD) peaked this summer and have moved back to 13 percent support, while the Greens have doubled their support since the beginning of the year.

 

Germany's Left Hook

We don’t know if this would translate into more Green seats in the Bundestag if federal elections were held today,  as we are not German political analysts.  Nevertheless, it is certainly interesting and worth keeping on your radar.

U.S. Midterms

How you been listening to the American political pundits recently?   We have never seen so many waffles since our last visit to the IHOP.

Even Nate Silver at 538, who has the Dems at an 87 percent probability of taking the House back is hedging.   We’ll take a trade with an 87 percent probability any day, anytime. Of course, nothing is ever certain.

Fat tails?  Yes.

Life is a game of odds.

No doubt the pundits are still shell-shocked from the 2016 election, and the Disrupter in Chief has fattened the tails; that is he is a non-normal president, which may translate into a non-normal distribution, but come on, man!

Lavender Wave

We stand by our prediction of a Lavender Wave.

After looking at the rise of the Greens in Germany, coupled with the surprises that took place in the Democratic primaries, particular the race for the Georgia and Florida governorships, we are beginning to wonder if the U.S. body politic will cold-cock the pundits, once again.   This time with a “sneaky left hook” tomorrow.

If Beto, Andrew Gillum, and Stacey Abrams all win tomorrow, a distinct possibility,  begin the KO count.

Please don’t say we didn’t warn you back in February.

Posted in Politics, President Trump, Uncategorized | Tagged , , | 5 Comments

How voters in Germany turned against Angela Merkel – FT

Posted on November 5, 2018 by macromon
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It Could Never Happen Here…But It Is

Posted on November 4, 2018 by macromon

Fareed nails it this morning.   Wake up, AmeriKA!

If the country doesn’t repudiate this on Tuesday, the country and the world goes much darker and is in deep, deep doo-doo.

Soros is the perfect bogeyman for conspiracy theorists. He is rich, powerful, grew up abroad, and has a foreign accent.  Plus, he is Jewish.  Many Republicans now speak openly and often of the dangers of globalists, but for some reason, these globalists all tend to be Jewish financiers:  Llyod Blankfein, Janet Yellen, George Soros,  Gary Cohn. 

Given the ugly historical smears in this regard, one can only conclude that elements of the Republican Party are either clueless about anti-Semitism or actively encouraging it. 

…These forces used to be peripheral, voiced by marginal figures…Today senior Republicans emulate them. 

…The Republican Party is now squarely the party of Joe McCarthy.  – Fareed Zakaria,  GPS, November 3

There you go, folks, about as partisan, or anti-partisan as GMM gets.

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As Everyone Looks Right, Germany Is Swinging Left

Posted on November 3, 2018 by macromon

This is stunning and a shocker.

The support for Germany’s Green Party has doubled since the beginning of the year, while the right-wing Alternative for Germany (AfD), after peaking in the summer, is right back where it was.   The AfD, consisting mainly of nationalists and populists,  has sucked all the oxygen out of the political headlines in Germany over the past few years.

Check out the tracking poll here.

 

Posted in Euro, Germany, Uncategorized | Tagged , | 1 Comment

Trump v. Obama Jobs Market – Midterm Review

Posted on November 2, 2018 by macromon

The Bureau of Labor Statistics (BLS) released its final jobs report before the midterm election on Tuesday.

The pre-midterm final verdict is in.

The Obama economy created 423k more total non farm payroll jobs and 194k more private sector jobs in his administration’s last 21 months in office than did the Trump economy’s first 21 months.   The Obama economy averaged 216k monthly jobs while the Trump economy averaged 193k non farm payrolls.

Context is always good.  President Trump’s economy is impressive when considering it is running up against severe labor constraints as the unemployment rate hovers at multi-decade lows.   There is not a big pool of labor to draw from and wages are beginning to pick up due to these shortages.

Zero-Sum Game

Looking at the table below, we suspect the jobs market will now become a zero-sum game going forward.   For example,  employment growth in the Leisure and Hospitality has slowed under President Trump, while job growth in Mining and Logging sector has increased dramatically due to the rise in oil prices.   Could this be due to oil roughnecks quitting their bartending jobs and moving back to the oil patch?

We also suspect the retiring baby boomers are underfunded in their retirement and will remain in the workforce will beyond traditional retirement ages.

Macro Indicators

President Trump’s economy has generated, on average,  58 bps more wage growth over the similar 21-month periods.   Inflation is running a bit hotter under President Trump and the annual GDP growth rate has almost doubled, which indicates the economic treasures are still accruing disproportionately to capital.

 

Employment_1

 

Employment_2

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iPhone Inflation Drives Apple Earnings, Again

Posted on November 1, 2018 by macromon

Apple continues to rely on iPhone inflation for revenue growth as unit sales quarterly year-on-year growth was flat for the 12th consecutive quarter.   The almost 30 percent increase in iPhone revenue is due to price increases.

Unit sales growth for the iPad and computers were negative year-on-year.

Assuming, for example, iPhone prices rose at the rate of inflation of 3 percent (and, of course, assuming away quality upgrades),  the company revenues would have increased by only 5.7 percent instead of 20 percent.

Relying on price increases is not sustainable and may be why the stock is taking a beatdown after the close.

I have a friend who works in retail smartphone who swears the Google smartphone is a superior product to the iPhone at the fraction of the price,   If consumers become a smidgen more cost conscious, Apple’s “annuity” revenue stream comes under pressure.

Moreover,  Apple shrank their shares outstanding by about 6 1/2 percent over the past year.   The market will eventually prioritize electrical engineering over financial engineering.

How long will the market stick with the stock?  Your guess is as good as ours.

Don’t get us wrong, Apple is a great company with great products.

We loved it pre-2016 and have missed the last 30 percent.

We suspect if unit sales do not increase this holiday season,  the stock could be in trouble. Just our calculated guess.

Apple is also so huge, the company has to wake up every January 1st and generate annual revenues larger than the size of Portugal or Peru’s GDP,  that is more than 77 percent of the world economies monitored by the International Monetary Fund.   That’s a big, big nut, folks!

Tim Cook is running out of time.

Update:  November 1 @ 6.25 pm eastern

Apple will stop reporting how many iPhones, Macs and iPads it sells each quarter, beginning with the December quarter, Apple CFO Luca Maestri said on the company’s earnings call Thursday.  – CNBC

Do you wonder why?

 

Apple_Earnings_3

 

Apple_Earnings_2

 

Apple_Earnings_1

 

 

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Key S&P500 Fibonacci Retracement Levels

Posted on November 1, 2018 by macromon

Watch this space.   The battle taking place right now at 2,732.42.

No sense to even think about getting long for a swing until it clears and closes through the .500 at  2772.   Mr. Market desperately needs to close above 2732.42 today.   Baby steps.

Oh yes,  watch bond yields.

 

Fibos

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The Taylor Swift Boating Of The Midterms

Posted on October 31, 2018 by macromon

The term swiftboating (also swift-boating or swift boating) is a pejorative American neologism used to describe an unfair or untrue political attack. The term is derived from the name of the organization “Swift Boat Veterans for Truth” (SBVT, later the Swift Vets and POWs for Truth) because of their widely publicized—and later discredited—campaign against 2004 U.S. presidential candidate John Kerry –  Wikipedia

But this (Taylor) Swift Boating is kinder and gentler, an exercise in decency, fairness, good citizenship, and the best of democracy — getting the young people out to vote.

 

Swift

 

Taylor Swift’s Savvy, Smiley Instagram Voter Drive

Please, please educate yourself on the candidates … and vote based on who most closely represents your values,” she [Taylor Swift] wrote in an Instagram post that likely contributed to a surge of more than 100,000 young adults registering at vote.org. Some might have guessed that this awokening would be a one-and-done affair before she returned to mere tour promotion. But instead, Swift has doubled down on her campaigning—though within clear and careful parameters. – Atlantic

So far, looking effective and generating results.   Ms. Swift’s instagram account has more than double the twitter followers of President Trump — 112 million versus 55.5 million, respectively.   Polls show the youth vote is set to almost double its highest turn out ever.

Youth Voter Turnout in the Midterm Elections Could Be Historic

Young voters could turn out to vote at record-breaking levels in the midterm elections next month, according to a new poll.

The poll, released Monday by the Institute of Politics at Harvard’s Kennedy School of Government, found 40% of 18 to 29-year-olds say they will “definitely vote” in the midterm elections on Nov. 6.

Youth voter turnout has historically been dismal in midterm elections, which tend to draw fewer voters overall than presidential election years. The highest rate of youth voter turnout in past midterm elections was 21% in both 1986 and 1994, according to the Harvard report, which cited U.S. Census data. – Time

These young people don’t like the “politics of mean.”   I know first hand, I have two.

We sense a political earthquake coming Tuesday.   Female, young, and left.   Brace yourself, folks. 

 

 

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