Category: Countries & Regions

Posted on

ASX Market Snapshot

Bull-Bear Market Leading Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Leading Index is at 54, down from 64 four weeks ago, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 in May 2026. One of two Chinese indicators signals risk-off, while the ASX 200 Financials Index respected primary support, removing the bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index carries the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) closed above its 50-week weighted moving average. Respect of primary support at 9000 maintains the risk-on signal. ASX 200 Financials Index

NAB Forward Orders

NAB Forward Orders recovered to zero in May 2026, from -5 in April, but the 3-month moving average fell to -2. The 3-month MA below zero signals risk-off.

NAB Forward Orders

Stock Pricing

ASX stock pricing increased to 77.10 percent, up from 76.54 percent last week. The highest reading was 92.23 percent in August 2025, with a low of 67.85 percent in April 2025. ASX Stock Market Value Indicator

We use z-scores to measure each indicator's current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The Bull-Bear indicator suggests that the Australian economy is slowing. Two more indicators have fallen sharply. While they do not yet signal risk-off, we are on bear alert.

On the other hand, valuations remain high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

Posted on

Xi Has Trump Over a Barrel

Key Points

  • Producer prices jumped by 6.0% over the 12 months to April, warning of higher consumer prices ahead.
  • 10-year Treasury yields responded with a rise to 4.48%.
  • Xi Jinping has the upper hand in negotiations with Donald Trump because of China’s large strategic oil reserves, which they could use to keep prices in check.
  • The S&P 500 reached a new high at 7444, while the Dow is consolidating in a bullish narrow range below 50,000.
  • The Main Street US economy is under the pump, but Semiconductors, Construction, and Heavy Electrical industries are booming due to datacenter spending.
  • Lithium, Copper, and Critical Materials show signs of buying pressure, but Uranium is lagging.

Producer prices jumped by 6.0% for the 12 months to April 2026, driven by rising fuel prices and transportation costs. The cost of rising fuel prices is spreading through the economy, with the core index (excluding food and energy) leaping to 5.2%. The chart below shows the impact of energy shortages on producer prices after Russia’s full-scale invasion of Ukraine in 2022. We expect the impact of the Strait of Hormuz closure to be more severe.

Producer Price Index (PPI)

[Content protected for Premium, Australian Growth, International Growth, Market Analysis members only] ….. If you are already a subscriber, please log in to continue reading:

If you are not a subscriber, to find out more click here

Posted on

CPI Jump to 3.8% Spooks Bond Market

Key Points

  • Headline CPI jumped to 3.8% in April in response to rising energy prices.
  • We expect Food CPI to jump sharply as rising costs pass through the supply chain over the next few months.
  • 10-year Treasury yields jumped to 4.46%, a bearish sign for stocks, but the Dow continues to test resistance at 50,000.
  • The silver breakout above $80 per ounce continues.
  • Surplus Gold and silver inventories in the US have been depleted, which will likely increase upward pressure on prices when the Persian Gulf crisis is resolved.

The headline Consumer Price Index (CPI) jumped to 3.8% for the 12 months to April 2026, up from 3.3% in March. Core CPI (excluding food and energy) increased more gradually to 2.7% in April, up from 2.6% in the previous month.

CPI & Core CPI - Annual

[Content protected for Premium, Australian Growth, International Growth, Market Analysis members only] ….. If you are already a subscriber, please log in to continue reading:

If you are not a subscriber, to find out more click here

Posted on

S&P 500 Rallies on Job Gains, But Peace Deal Hopes Crash

Key Points

  • President Trump rejects Iran’s peace proposal.
  • Iran continued attacks on its Gulf neighbors.
  • Brent crude July futures jump to $104.50 per barrel.
  • Confidential intelligence sources say that Iran can survive a US blockade for at least 3-4 months.
  • The US labor market added 115,000 jobs in April 2026, while unemployment held steady at 4.3%.
  • The S&P 500 reached a new high, while the Dow Jones Industrial Average threatens a breakout.

DUBAI/WASHINGTON, May 10 (Reuters) – President Donald Trump on Sunday rejected Iran’s response to a US proposal for peace talks, dashing hopes for an imminent end to the 10-week-old conflict….

“I don’t like it — TOTALLY UNACCEPTABLE,” Trump wrote on Truth Social, without giving further detail. Oil prices rose $3 a barrel after the United States and Iran failed to reach agreement.

Iran’s proposal includes a demand for compensation for war damages and an ​emphasis on Iranian sovereignty over the strait, state media said. It also calls on the US to end its naval blockade, guarantee no further attacks, lift sanctions and end a US ban on Iranian oil ​sales, the semi-official Tasnim news agency said.

Brent Crude July’26 (Nymex) futures jumped to $104.50 per barrel while December’26 futures (orange) rallied to $89.25 per barrel. December prices reflect the oil market’s longer-term assessment of crude shortages. Damage to existing production and shipping facilities will take time to repair, even if the Strait of Hormuz is reopened.

Brent Crude Nymex Futures (July'26 & Dec'26)

[Content protected for Premium, Australian Growth, International Growth, Market Analysis members only] ….. If you are already a subscriber, please log in to continue reading:

If you are not a subscriber, to find out more click here

Posted on

US Market Snapshot

Bull/Bear Market Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.

Bull/Bear Market

The yield curve bear signal has now lapsed, and we have taken the opportunity to revise the bull-bear market leading indicator to improve its responsiveness. The Bull-Bear Leading Index is now stripped down to a composite of five separate indicators, which collectively signal a mild bear market:

Bull/Bear Market Indicator

Employment in Cyclical Sectors

Employment in cyclical sectors — Manufacturing, Construction, and Transportation & Warehousing — typically accounts for the majority of job losses during a recession. Rises or falls in employment across these sectors are a leading indicator of the economy. A decline of more than 300K would signal risk-off, while a rise of 500K from the last trough would signal risk-on. Employment declined by 264K from its preceding peak of 27.671 million in September 2024, reaching 27.407 million in December 2025, but has since recovered to 27.501 million.

Employment in Cyclical Sectors

Stock Pricing

US stock pricing increased to 95.96% from 95.09% last week, compared to a recent low of 91.79% five weeks ago.

US Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.

Buffett Indicator

Warren Buffett’s favorite long-term measure of stock market valuation compares stock market capitalization to GDP, providing a stable, long-term ratio unaffected by fluctuating profit margins. The ratio reached a new high of 3.16 this week, more than double its long-term average of 1.2.

Buffett Indicator: Stock Market Capitalization to GDP

Dow Jones Industrials Price-to-Sales

The Price-to-Sales ratio for the Dow Jones Industrial Average has reached a new high of 4.09. We use a 20% trimmed mean of the Price-to-Sales ratio for the 30 stocks in the Dow to remove the most extreme readings that would otherwise distort the ratio.

Dow Jones Industrials Price-to-Sales Ratio

Conclusion

The bull-bear indicator at 60% suggests the US economy is slowing, but is not yet in a recession. Extreme pricing, however, elevates the risk of a significant drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

Posted on

ASX Market Snapshot

Bull/Bear Market Leading Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Leading Index is at 54, down from 64 four weeks ago, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 in May 2026. One of two Chinese indicators signals risk-off, while the ASX 200 Financials Index respected primary support, removing the bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index carries the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) closed above its 50-week weighted moving average. Respect of primary support at 9000 maintains the risk-on signal. ASX 200 Financials Index

China

The OECD Composite Leading Indicator for China eased to 98.57 in June, down from 98.91 in May. Values below 99.0 or a fall of more than 3 points from the preceding peak signal risk-off. China: OECD Composite Leading Indicator China is Australia's largest export market, and the performance of the Chinese economy directly impacts the ASX.

Stock Pricing

ASX stock pricing jumped to 76.72 percent, from 73.92 percent last week. The highest reading was 92.23 percent in August 2025, compared with a low of 67.85 percent in April 2025.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The ASX bull-bear indicator at 64% signals a mild bull market, while stock market pricing remains high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

Posted on

Trump Talks “Peace Deal” But Nothing Stops This Train

Key Points

  • President Trump again baits financial markets with the prospect of a peace agreement.
  • Brent Crude (July’26 futures) is testing support at $100 per barrel.
  • However, the crude market faces critical shortages even if a peace deal is signed.
  • The S&P 500 rallied to a new high at 7365, while the Dow threatens a breakout above 50,000.
  • The ISM Services PMI warns that growth is slowing, while soaring prices signal inflationary pressures.
  • Lithium is in a strong uptrend, while Copper, Critical Materials, and Uranium show signs of a recovery.
  • The RBA hiked rates this week and would like to hold for a while, but rising prices may force further hikes.

ISLAMABAD/WASHINGTON/TEL AVIV, May 7 (Reuters) – U.S. President Donald Trump predicted a swift end to the ​war with Iran as Tehran considered a U.S. peace proposal that sources said would formally end the conflict while leaving unresolved key U.S. demands that Iran suspend ‌its nuclear program and reopen the Strait of Hormuz.

An Iranian foreign ministry spokesperson cited by Iran’s ISNA news agency said Tehran would convey its response, while Iranian lawmaker Ebrahim Rezaei, a spokesperson for parliament’s powerful foreign policy and national security committee, described the proposal as “more of an American wish-list than a reality.”

“They want to make a deal. We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make ​a deal,” Trump told reporters in the Oval Office on Wednesday, saying later “it’ll be over quickly.”

Trump has repeatedly played up the prospect of an agreement to end the war ​that started on February 28, so far without success. The two sides remain at odds over a variety of difficult issues, such as Iran’s nuclear ⁠ambitions and its control of the Strait of Hormuz, which before the war handled one-fifth of the world’s oil and gas supply.

A Pakistani source and another source briefed on the mediation ​said an agreement was close on a one-page memorandum that would formally end the conflict. That would kick off discussions to unblock shipping through the strait, lift U.S. sanctions on Iran and set ​curbs on Iran’s nuclear program, the sources said.

A separate senior Pakistani official involved in the talks told Reuters on Thursday that negotiators were hopeful of reaching a deal but noted gaps between the sides remained.

Brent Crude (July futures), buoyed by optimism over a prospective peace deal, is retracing to test support at $100 per barrel.

Brent Crude Futures (ICE July'26)

[Content protected for Premium, Australian Growth, International Growth, Market Analysis members only] ….. If you are already a subscriber, please log in to continue reading:

If you are not a subscriber, to find out more click here

Posted on

S&P 500 Uptrend Against Gold

Key Points

  • The S&P 500 index made a new high at 7230, reversing its long-term downtrend against Gold.
  • However, the Dow is struggling to break resistance at 50,000.
  • The ISM Manufacturing PMI indicates the sector is expanding, but producer prices are soaring.
  • Lithium is in a strong uptrend, while Copper remains rangebound.
  • Japanese intervention to support the Yen underlines the long-term reason for buying Gold.
[Content protected for Premium, Australian Growth, International Growth, Market Analysis members only] ….. If you are already a subscriber, please log in to continue reading:

If you are not a subscriber, to find out more click here

Posted on

Crude Up, Gold Down

Key Points

  • President Trump rejects Iran’s proposal to reopen the Strait and discusses an extended US naval blockade.
  • Brent crude futures (June’26) jump to more than $120 per barrel.
  • The Fed kept interest rates on hold in Jerome Powell’s last FOMC meeting as Fed Chair.
  • Powell says he will stay on as governor for “an undetermined period of time.”

During a Tuesday meeting with oil executives, President Trump rejected Iran’s proposal to reopen the Strait and discussed extending the US naval blockade. (GroundNews)

WASHINGTON, April 29 (Reuters) – U.S. President Donald Trump met with top officials from Chevron (CVX.N) and other energy companies on Tuesday to talk about possible steps to calm oil markets if the blockade of Iranian ports continues for months, a White House official said on Wednesday.

The talks focused on U.S. oil production, oil futures, ​shipping and natural gas, the official said.

“They discussed the steps President Trump has taken to alleviate global oil markets ​and steps we could take to continue the current blockade for months if needed and minimize ⁠impact on American consumers,” the White House official said.

Talk of an extended blockade and a sharp fall in US inventories drove June’26 Brent crude futures to above $120 per barrel.

Brent Crude Futures (ICE June'26)

The EIA report for the week ended April 26 showed an accelerating decline in crude inventories, including the Strategic Petroleum Reserve (SPR).

EIA Crude Inventory (incl. SPR)

The inventory chart above includes the SPR, shown separately below.

EIA Crude Inventory (incl. SPR)

No Change at the Fed

The Fed left its target range for the funds rate unchanged at 3.5%-3.75% for the third consecutive meeting. There were four dissenting votes on the FOMC, with three opposing language that signaled possible future rate cuts, while Trump appointee Stephen Miran called for an immediate reduction. (AP/EuroNews)

Jerome Powell’s term as Chair ends on May 15, with his nominated successor, Kevin Warsh, likely to be sworn in before the next meeting, following approval by the Senate Banking Committee.

Powell indicated that he intends to remain on the Federal Reserve’s governing board for “an undetermined period of time”, citing concerns about what he described as “unprecedented” legal attacks by the Trump administration on the central bank.

Mr Powell said he would wait for the conclusion of an investigation into the Fed’s building renovations before stepping down fully.

“I’m waiting for the investigation to be well and truly over, with finality and transparency,” he said. “I will leave when I think it appropriate to do so.” His term as governor expires in January 2028.

Powell’s decision to stay on forces the resignation of Stephen Miran, a temporary Trump appointee, to make way for the appointment of Warsh as governor. The move denies President Trump the opportunity to nominate a replacement, which would give him greater influence over Fed monetary policy.

Long-term Treasury yields are rising in response to higher oil prices and the improved prospect of an independent Fed. 10-Year yields are expected to test resistance at 4.5%.

10-Year Treasury Yield

We expect the S&P 500 to retrace to test new support at 7000 as a looming global oil shortage overshadows robust quarterly earnings.

S&P 500

The Dow Jones Industrial Average retreated below short-term support at 49K, suggesting another correction.

Dow Jones Industrial Average

Gold found support at $4,500 per ounce, but the rally may be short-lived if oil prices keep rising.

Spot Gold

Conclusion

An early reopening of the Strait of Hormuz is unlikely. We expect a prolonged closure, with shortages driving crude oil prices to between $140 and $150 per barrel by the end of May.

Higher crude prices increase upward pressure on long-term Treasury yields, which would be bearish for stocks.

We also expect Gold to test support at $4,000 per ounce as Gulf states and major oil importers draw on their reserves.

Acknowledgments

Posted on

Australian Bear Alert

Key Points

  • Headline CPI jumped by 1.1% in the month of March, lifting the annual increase to 4.6%.
  • Australian business and consumer confidence are falling.

Australia’s headline consumer price index jumped by 1.1% in March 2026. Automotive fuel was the main contributor, rising 32.8 percent in March, the strongest monthly increase since the series began in 2017. The annual CPI increase lifted to 4.6%, below the expected 4.7%, but March is too early for pass-through effects to be felt in other sectors of the economy.

Australian CPI - Monthly & Annual

[Content protected for Premium, Australian Growth, International Growth, Market Analysis members only] ….. If you are already a subscriber, please login to continue reading:

If you are not a subscriber, to find out more click here

Powered by WordPress / WordPress Maintenance Service By Website Helper