TGIF

TGIF, one of the more annoying buzzwords/phrases out there. The CNBC crew have been banging on all day about wanting to hear viewers' opinions on which are the most annoying buzzwords. This surely must be one of the more ironic requests, given their penchant for green shoots, sugar highs and second derivatives. Perhaps they're just running out of ammo and looking for inspiration. Anyway, TGIF is one of my bugbears.

Well, as expected, yesterday’s market stumble proved to be short lived. After spending most of the session in the red, US stocks edged into the blue by the close. China was not so lucky however and posted another down day on worries of lower August lending. Fear not however, a government official has recently assured us that the Chinese market is over reacting and everything will be ok. Phew.

Despite China faltering, one asset which shows no sign of retracement is copper, making a new high today. Now we’ve heard that Chinese stockpiling is coming to an end, and industry overcapacity is being cut, you would think that would affect the copper price. Copper is seen very much as a leading indicator and China has certainly proved not too shabby a soothsayer either in recent years so it’s a bit confusing to see the two at odds with each other. Especially when you look at their performance this year…
You wonder, if it is speculative “loose” investors who are buying this stuff, what will happen when sentiment turns? Although, to be fair you would think a 17% fall in the index would already have tested sentiment’s resolve.

The negative news in the fertilizer sector continues this morning as ABB Grain in Australia cut its forecast on lower fertilizer prices. K+S, Yara and the usual suspects are proving resilient however and are up in this up market.

Currencies are fairly boring as the $ once again takes to it’s well trodden southward path, crude has been bid since last night when the $ move began and bonds are actually being sold today, something which you would ordinarily expect in a strong equity market but which hadn’t really been the case of late. Still, yields are well below previous levels of mid June when the equity market was c10% lower…and with yields at these levels, despite a trio of issuances this week and a better equity market, they certainly seems to be holding stocks back. We’ve had quite a few better data sets this week, today’s PI and PCE no exception as wages rose for the first time since Oct 08 and the savings rate decreased (surely a boon for Inflationistas, no?). We’ve also had strong releases from Tiffany and Intel, yet we’ve struggled all week to push on and aren’t exactly ripping the tape up today either. If bonds do manage to sell off in the coming days, this could well open the way to take equities higher; if not then I think we’ll continue to struggle on the upside.