It's been a somewhat slow start to the week, which in many ways reflects the slow start to the year. Perhaps in this world of bonus limits, bank supertaxes, and the like, punters don't feel like getting stuck in until after MLK day? Perhaps, but it's dubious. The relative inaction is rather more likely a product of uncertainty an the imperfect information with which punters are armed.
Earnings season will kick off in earnest this week (Macro Man counts 65 companies), but market reaction to last week's ostensibly solid numbers was curious, to say the least. After what seems like eons of markets reacting with a positive spin to datapoints of all description, the abject performance of equities in the face of ostensibly solid INTC and JPM reports was curious, to say the least. (Perhaps they are sctaching their heads how these big guys can notch up effective tax rates of 12% and 15%, respectively, when Joe Twelvepack pays a helluva lot more?)
Regardless, Friday was one of the highest non-expiry volume days of the past few months, which could suggest that if markets rouse from their lethargy, it will be to fall. A break of the recent uptrend line could encourage the fast-money crowd to help it on its way.
Then again, maybe the relatively slow start to the year is simply a Western phenomenon. The news has been flying out of China fast and thick, whether it be surging trade values, a suprising RRR hike (which evidently is not a sign of monetary tightening), or a rumoured increase of the stamp duty on equity trading.
Regardless, the volume in China-linked trading has been substantially higher (on a relative basis) to that of developed markets; observe how the recent fall in the Hang Seng, for example, has been accompanied by one of the highest concentrations of trading volume in the last six months.
Will all of this be sufficient to rouse macro punters from their lethargy? Maybe, but more clarity on the Fed (and more attractive pricing on trades that people would like to have, but don't) would have a more obvious impact on trading volumes and the general interest level. Judging from Friday's London afternoon, where many macro punters (your author included, sadly) were giggling Beavis and Butthead-style over a rather amusing name in the Bloomberg people directory, the slow start to the year has a bit further to go yet.
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