Good morning! It’s Wednesday. Let’s start with three exciting words…
1. The boredom cycle. (Stay with me.) One of the big themes in the markets at the moment is how boring everything is. All big markets are in a period of extremely low volatility. One Morgan Stanley analyst even wrote at the weekend that “the in-crowd tells me that boring is the new cool”. It’s not, of course, that traders have gone all hipster. Part of it is the control of central bank policy on the market, but importantly the improving financial conditions with the US recovery have reduced volatility. Perhaps it’s a good time to remember that the phrase “may you live in interesting times” is actually a Chinese curse.
2. As if to underline the point the markets were quiet again in the US session, the Dow up just 0.02%, the S&P 500 losing the same amount in basis points, and the Nasdaq off on its on own, up a wacky 0.04%. Of note: Australian PM Tony Abbott rang the opening bell.
3. In Asia, strong upward revisions to Japanese GDP data took the wind from the Nikkei’s sails with a fall of 0.85% to 14,995. The Hang Seng was up almost the same amount and Shanghai rose a solid 1.11% to 2,053. ASX futures are pointing to a flat open. The Australian dollar was trading at 0.9373 a short time ago – following yesterday’s forecast from Morgan Stanley that the Aussie could reach parity with the US dollar by the end of the year.
4. The Gundlach sermon. Doubleline Capital founder Jeff Gundlach gave his latest epic presentation on the state of the markets overnight, and we’ve got all 66 slides here. One of the big themes is basic currency values, and there’s some fun comparisons of the debasement of ancient Roman coinage with that of the US dollar. Then there’s this, on the periods of various currencies being the world’s reserve:
5. The oracle goes green. Warren Buffett is doubling his investments in solar and wind to at least $30 billion. Why does this matter? Buffett only invests in things that he thinks are long-term prospects. (Note, too, that he has been buying newspapers in recent years too.) He doesn’t get in for the thrill of the short-term trade. Berkshire Hathaway already has $15 billion invested in renewables and he will at least double it, he told a conference in Las Vegas.
6. Post-budget sentiment update. Today in Australia we get the updated monthly Westpac-MI Consumer Sentiment Index. Regular readers will remember that the federal budget smashed the consumer sentiment indexes. Yesterday we got an important update on business sentiment in the monthly NAB survey, which showed sentiment was essentially flat in the post-budget period, a good signal for continuing job creation prospects. Expect a rebound in the Westpac survey today – a really strong number will be an indication that people are starting out that the budget isn’t going to hit them as hard as they initially feared.
7. World Cup build-up. Twitter and Facebook have launched hubs that help users follow the World Cup action. Facebook’s is pretty interesting – it pulls in relevant chatter from friends, stars, and other relevant, interesting people to a dedicated page: Trending World Cup. Twitter has those cute little flags again, so expect to start seeing them all through your feed from today. (To make them appear, just type # and the three-letter abbreviation for the country you’re referring to: so #AUS for the Australian flag.)
9. Australia is the World Cup’s Unluckiest Country. It’s official – boffs at the New York Times crunched the numbers and came up with the real stats on who got the best draw. Mexico was the winner, scoring a 99% luck factor for being lobbed in with Croatia, Cameroon and Brazil. Australia faces the 2010 finalists Spain and the Netherlands, and Chile, which now ranks above the Netherlands in the world tables. Result? Australia, Luck factor: 0%. Zero. Lucky country? Someone forgot to send FIFA the memo.
10. Did Sportsbet kick an own goal? There’s some outrage over the fact that Sportsbet floated a 46m balloon likeness of Christ the Redeemer over Melbourne… dressed in a Socceroos kit. Christ, as we know, was something of a champion for the poor and linking him with gambling doesn’t seem like the smartest of PR stunts. For their part, Sportsbet says the messgae was “for all Aussies to keep the faith in the Socceroos.”
Bonus item: Here’s video of the Christ the Redeemer balloon. Judge (zing!) for yourself.
Have a cracking day. I’m on Twitter: @colgo
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