Germany’s DAX recovered above the former support level of 10500, confirming the primary up-trend. A Twiggs Money Flow trough above zero would signal long-term buying pressure. Follow-through above 10800 would complete a bear trap — a bullish signal with a target of 11500*.
* Target calculation: 10500 + ( 10500 – 9500 ) = 11500
Apologies for the sub-titles but this Hard Talk interview has an important message.
Footsie retracement continues to look promising. Twiggs Money Flow high above zero suggests long-term buying pressure. Respect of support at 6400/6500 would establish a solid base for another attempt at 7000/7100*.
* Target calculation: 6500 + ( 6500 – 5900 ) = 7100
Niall Ferguson is the Laurence A. Tisch Professor of History at Harvard University.
I would love to see Ferguson re-visit this 2011 talk every five years. One certainty about the future: it isn’t what we think it’s going to be. China’s economic rise seems to be slowing far more rapidly than was expected. Foreign reserves have declined by $800 billion in the last two years (from a peak of $4 trillion) through PBOC efforts to prevent the collapse of the Yuan in the face of rising interest rates from the Fed. China’s growth-through-infrastructure-investment model seems to have run its course and is now facing diminishing returns. Transition to a consumer society is not going to be easy. And China’s property bubble has created an extremely fragile banking system with massive bad debts.
On the plus side, Ferguson seems to have been right about rising Chinese nationalism — to deflect the population’s attention from enormous inequality in the distribution of wealth — and the CCP’s ability to maintain tight political control. Let’s hope that he is also right about China’s inability to suppress personal and political freedom in the long-term if it wants to maintain stable growth.
From Drew Harwell:
The German chemical company Bayer said it will take over US seed giant Monsanto to become one of the world’s biggest agriculture conglomerates.
The $US66 billion ($88 billion) deal – the largest corporate mega-merger in a year full of them – could reshape the development of seeds and pesticides necessary to fuelling the planet’s food supply…..
Bayer in the US is known largely for its pharmaceuticals, with scientists who developed modern Aspirin and Alka-Seltzer. But the deal would pivot the 117,000-employee company more towards its farm-targeting business in agriculture chemicals, crop supplies and compounds that kill bugs and weeds.
Monsanto is the world’s largest supplier of genetically modified seeds, which now dominate American farming but are still a major source of environmental protests in Europe and abroad. The 20,000-employee company also develops Roundup, the weed-killing herbicide.
This is a merger of two giants in the agricultural and chemicals sectors and could lead to some interesting new developments in the future.
Source: Bayer, Monsanto in $88b deal that could reshape the world’s food supply
Germany’s DAX is holding above its new support level at 10500. Respect, with follow-through above 10800, would confirm the primary up-trend.
* Target calculation: 10500 + ( 10500 – 9500 ) = 11500
France’s CAC-40 Index is consolidating in a narrow band between 4400 and 4500. Upward breakout would suggest a primary up-trend. Follow-through above 4600, completing a broad double bottom, would confirm. Rising Twiggs Money Flow reflects buying pressure.
The Footsie retreated from resistance at 7000 but short candles and strong Twiggs Money Flow, high above zero, suggest long-term buying pressure. Expect strong resistance between 7000 and 7100. Correction to 6500 would establish a more stable base for further advances.
* Target calculation: 6500 + ( 6500 – 5900 ) = 7100
Germany’s DAX respected its new support at 10500. Follow-through above 10800 would confirm the primary up-trend.
* Target calculation: 10500 + ( 10500 – 9500 ) = 11500
Italy’s FTSE MIB (Milano Italia Borsa) Index remains in a primary down-trend. Breakout above 17000 and the descending trendline, however, would suggest that a base is forming. Rising Twiggs Money Flow highlights buying pressure.
The Footsie retreated from resistance at 7000 but short candles and rising Twiggs Money Flow suggest buying pressure. Expect another test of 7000/7100 but resistance is strong. Correction to 6500 would establish a more stable base for further advances.
* Target calculation: 6500 + ( 6500 – 5900 ) = 7100
Great column by Peggy Noonan in the Wall Street Journal on the growing detachment between political and cultural elites and the problems facing ordinary citizens on the lower rungs of society. There is plenty of evidence of out-of-touch elites, including Brexit and Angela Merkel’s unilateral decision to allow 800,000 migrants and refugees from Muslim countries.
Nothing in their lives will get worse. The challenge of integrating different cultures, negotiating daily tensions, dealing with crime and extremism and fearfulness on the street — that was put on those with comparatively little, whom I’ve called the unprotected. They were left to struggle, not gradually and over the years but suddenly and in an air of ongoing crisis that shows no signs of ending — because nobody cares about them enough to stop it.
The powerful show no particular sign of worrying about any of this. When the working and middle class pushed back in shocked indignation, the people on top called them “xenophobic,” “narrow-minded,” “racist.” The detached, who made the decisions and bore none of the costs, got to be called “humanist,” “compassionate,” and “hero of human rights.”
Surprising support for Donald Trump and Bernie Sanders also reflect the disillusionment of the bottom half with leadership by the 1 percent. They feel they have been taken for granted — if not shafted — and their anger will be reflected at the ballot box. Hopefully we can avoid the rise of tyranny as in the 1930s — after the last financial crisis — but these are dangerous times.
Long-term interest rates surged on strong jobs numbers, well above the estimate of 180,000. From the WSJ:
Nonfarm payrolls rose by a seasonally adjusted 255,000 last month, the Labor Department said Friday. Revisions showed U.S. employers added 18,000 more jobs in May and June than previously estimated.
10-Year Treasury yields strengthened to 1.58 percent in response, from a record low of 1.33 percent four weeks ago. Expect a test of the descending trendline at 1.66 percent.
Gold fell to $1335/ounce on expectations of higher interest rates. Penetration of the rising trendline would suggest a correction to test primary support at $1200/ounce. Follow-through below $1300 would confirm.
* Target calculation: 1300 + ( 1300 – 1050 ) = 1550
At present I don’t see much threat to support between $1300 and $1310. Especially with safe-haven demand for gold enhanced by European uncertainty over Brexit, the dilemma of US November elections (a choice between two equally undesirable alternatives), and a declining Yuan encouraging capital flight from China.
Alex White, Head of Country Analysis at The Economist Intelligence Unit: “We see an EEA- deal as highly likely…..we are reasonably optimistic about the breakup.”
