Far East Capital Newsletter
Markets are becoming more skittish
25 Aug 2019

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Markets are becoming more skittish

The markets are in a pullback mode at the moment with the indices that we follow, the All Ords, Energy and Metals & Mining all breaking lower. There is plenty of news flow around, domestic and international, but not enough to cause new buying. It is likely that these indices have seen their highs for 2019, especially if the iron ore price remains soft.

In the US the politicians picked up on the theme of a possible recession, as deduced from the inversion of the yield curve, and this helped the markets to rally early in the the week when the politicians started to talk about what can be done to avert a downturn. (As we said last week, the door is always open to a stimulating policy move to avert a recession). But then the twittering started again.

We continue to see that when Trump Twitters, the market falls, which seems a bit counterproductive. (When I was a kid a twit was another name for an idiot). On Friday his latest twit-spat on China and the trade war breathed renewed upside into the gold price, but the Dow dropped by 2.37% to close at the week’s low. 

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