Look at what has turned bullish, plus one hell of a breakout.
COMMODITIES WILL SURGE: Asia Has Turned Bullish
July 7 (King World News) – Peter Boockvar: In my comments yesterday on the China stock move and Asian stocks generally, I made the bull case for them in the coming 10 years because of the growth potential, the poor performance over the past 10 years and attractive valuations. Today I wanted to include a chart of AAXJ, the ISHARES Asia stock index ex Japan and you can see its essentially done nothing over the past decade compared to US stocks. Japan itself is of course still well below where it was in 1989. I also include a chart of the Shanghai comp which is still down almost 50% from its 2007 peak.
Asia Stock Index Surging Strongly
China’s Shanghai Composite Is Breaking Out
Japanese Companies Have The Strongest Balance
Sheets In The World As Nikkei Surges Back
Toward Recent Highs
I’m going to stick in the coming weeks to only talk about June economic data because May still is muddied by some things open but many things still closed. Taiwan exports fell 3.8% y/o/y in June, as expected. As China was open, exports to them grew and also did to the US but fell to the rest of Asia and Europe. Imports fell by 8.6% y/o/y, a bit more than the forecast of down 6.8%. Because of Taiwan’s dominance in tech, it’s an important country to watch in terms of gauging global trade and the data points to still sluggishness and what will be an uneven recovery as long as the virus is still impacting daily life…
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In Central Bank Land
In central bank land, the RBA left rates unchanged at its record low of .25%. Malaysia’s central bank cut its overnight rate by 25 bps as expected to 1.75%. It’s really only in emerging economies that you’ll find a central bank rate over 1%.
In the US, we hear from Fed members Bostic, Quarles, Daly and Barkin today. With the Fed having done so much already, we have to be honest that the direction of the virus spread will be driving economic growth still while the Fed’s actions will be more of an influence on markets.
Regarding China’s Stock Market…
One Hell Of A Breakout
Nautilus Research: Shanghai Composite — Bullish Pattern Echoes 2014 Breakout.
China’s Shanghai Just Experienced An Upside Breakout
Similar To One That Sent Their Stock Market
Parabolic In 2014-2015!
King World News note – All of this will be bullish for commodities, including gold, silver and oil.
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Greyerz – World Monetary System To Collapse
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