Global markets lack direction… should we be worried?

Good Morning,

A fairly “uneventful” night last night with both US and UK markets closed for public holidays….

Trading volumes have been extremely low (lowest since 2009) and last night, didn’t help with the lack of direction.

Today is the last day of May and all things considered, we’ve held up extremely well……

“Sell in May and go away”…. It hasn’t been as bad as we thought….

In Japan, Abe advised that a sales tax hike is unlikely over the next two years, sending the JPY lower… the risks of deflation in Japan and stimulus which has largely been “ineffective”, isn’t driving growth….

In an interesting report cited by Bloomberg, Chinese equities are once again in the cross hairs of short sellers.

Short interest in one of the largest Hong Kong exchange-traded funds tracking domestic Chinese stocks has surged fivefold this month to its highest level in a year, according to data compiled by Markit and Bloomberg.

The last time bearish bets were so elevated, such pessimism proved well-founded as China’s bull market turned into a $5 trillion rout.

Should we be worried?

What's on today?

Local: April building approvals; First-quarter net exports and government spending (GDP components); Balance of payments current account balance (Q1), ANZ/Roy Morgan weekly consumer confidence

Overseas data: US personal income, spending and PCE deflators, S&P/Case-Shiller 20-city home-price index, Consumer confidence; German CPI, Eurozone unemployment and CPI; Japan jobless rate, household spending, industrial production, and small business confidence; 

The SPI is up 4 points this morning.

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