Antipodean Capital Macro Strategy Daily Nov 16 - After 5 days down, stocks find temporary base. Expect a multi-day rebound then further declines. AU & NZ macro data does not in our view warrant current pricing for rate hikes by the RBA or R

Today’s themes: What are other leading indices beyond the ECRI saying for US stocks and growth? Is the USD trying to stall and peak once again? And what of Apple and Banks stocks?

Macro: Oil, inflation, Yields, the Fed, leading indices and the USD: Stocks edged lower last night amidst little new news. This suggests sellers remain in the ascendancy for now anyway. Banks/Apple price action was particularly poor. Against this backdrop, is the USD again trying to put in a peak? (Theme: US equities are at the greatest over valuation extreme in US equity history. The Fed are hiking and policy is now tight given where core inflation is (falling), not easy. Data cycles are probably peaking. EPS/margin trends are still up, but will falling Oil prices impact US energy company EPS? And how will continued leading indicator deceleration impact Fwd EPS perceptions? Despite the 3rd Yr Presidential cycle being very favourable and supportive for new highs, with US data is still at cycle high, how weak US macro data becomes will dictate the degree to which stocks fall via the Fwd EPS transmission channel. Also key, will weakening US data weaken the USD after a year of rising?).

Summary: US stock markets spent a session stabilising, with little in the way of equity market moves and yields opening a touch lower post the Veterans Day holiday. The absence of a bounce is not a market positive. The USD remained near its highs and this continued to be a headwind for commodities and Oil, which fell a further 6% due to demand worries. UK Brexit appears close to agreement, not so the Italian budget.

New trades: Buy Silver at 14.08 risk 13.85 target 14.80+
FX: Short EURSTG at .9010 risk .9150 target .84. Long AUDNZD 1.0750 target 1.12 stop 1.05. Long JPYKRW at 10.035 risk 9.60 target 13. Long GBP 1.2770 risk 1.27 target 1.33. Short AUDJPY at 82.20 risk 83 target 78. Long $CAD at 1.3240 risk 1.3160 target 1.38. Short CADJPY at 85.85 risk 87 target 78.
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s sell NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Long US 2-10 curve flatteners at 26bps/35bps risk 40bps target 10bps.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Short US Homebuilders at 755 add at 800 risk 850 target 650. Short R2K at 1550 risk 1575 target 1450. Long Dec VIX at 17.45%. Short ASX200 at 5845 risk 5945 target 5600.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65.