I agree here. The debt fuelled liquidity through fiscal and bank loans is very strong. From this point of view however it the magnitude has been fine, even going back to al-time highs makes sense. But the speed and lack of doubt indicate panic rather than how measured moves usually occur in that type of environment.
Sure, but the currency only matters in so far as it affects earnings rather than a full conversion on the price. The ASX is primarily held by AUD based investors. Also I would wager foreigners would hold it on a hedged basis as well...
Panic rallies usually look mysterious only if liquidity is ignored.
When yields stabilize and financial conditions stop tightening, positioning unwinds fast.
Systematic exposure rebuilds.
Risk parity re-leverages.
Vol-control adds back equity beta.
Price often moves before the narrative catches up.
The real question is whether liquidity is confirming the move or just allowing it temporarily.
I agree here. The debt fuelled liquidity through fiscal and bank loans is very strong. From this point of view however it the magnitude has been fine, even going back to al-time highs makes sense. But the speed and lack of doubt indicate panic rather than how measured moves usually occur in that type of environment.
𝕎𝕙𝕥𝕤𝕒𝕡𝕡𝗠𝔼➕𝟙⤈3𝟛4⤈𝟠𝟚7⤈8𝟛72
Odd that the currencies of the countries most exposed have largely been strong - AUD has continued to trend up.
AUD tends to correlate with commodity prices & sometimes gold. Iron ore is up strongly from the start of the war
𝕎𝕙𝕥𝕤𝕒𝕡𝕡𝗠𝔼➕𝟙⤈3𝟛4⤈𝟠𝟚7⤈8𝟛72
Share you view on SPX rally... but yet corporate earning keep beating consensus.
Not only that but consensus is being upgraded at the same time. It is very highly concentrated though, but still a big part of the SPX
𝕎𝕙𝕥𝕤𝕒𝕡𝕡𝗠𝔼➕𝟙⤈3𝟛4⤈𝟠𝟚7⤈8𝟛72
Your thesis is that Australia's fuel supply situation explains weakness in its equity index,
but have you looked at the extreme strength of AUD/USD throughout this period?
See this graph of YTD out performance of the ASX200 (XJO) in USD compared to SPX:
https://www.tradingview.com/chart/8MdqfdMq/
Sure, but the currency only matters in so far as it affects earnings rather than a full conversion on the price. The ASX is primarily held by AUD based investors. Also I would wager foreigners would hold it on a hedged basis as well...
𝕎𝕙𝕥𝕤𝕒𝕡𝕡𝗠𝔼➕𝟙⤈3𝟛4⤈𝟠𝟚7⤈8𝟛72