Global Macro Perspectives
Natural Gas in the worst performing commodity this year. It has come down 66.2% this year and 77.6% from the top. Reduced industrial demand combined with absence of hot weather which has reduced electricity demand and consequently natural gas demand has weighted heavily on the natural gas price.
The market has come down slightly in last few days. Again, major theme was health of world banking sector.
Shanghai Composite down -6.7% today. No comment needed.
Same as the day before, yesterday we saw mostly “better than expected” data from the US. Most notably new home sales were up 9.6% in July. Durable goods orders came 4.9% higher in July vs. 3% consensus and -2.5% the month before. Better than expected orders were mostly result of US government “cash for clunkers” program from which, by the way, mostly benefited Japanese auto makers. Durable goods ex transportation came at 0.8% vs. 0.9% consensus and 2.5% the month before.
Despite better than consensus data on US housing suggesting recovery in housing prices and better than consensus consumer confidence the market failed to rally.
We have had some spectacular runs from the recent lows both in the equity arena and among commodities. As I am writing this introductory post markets are hitting new highs for the year. Common to these diverse markets is that we have seen little or no material improvement in underlying fundamentals only consolidation at initially depressed levels.