ASX thinks it's Wall St, but it looks like Japan

You’ve got to love the lure of QE. AUD is down this morning:

Bond yields are hammered:

XJO has taken off on the sniff of QE:

Big Iron is up despite clearly rising risk in China:

Big Gas is up despite oil being fooked:

Big Gold is up despite DXY threatening:

Big Banks are flying despite their margins being crushed by the move into ZIRP:

XJO is now trading close to its highest ever valuation at 21x NTM with zero profits growth ahead and recent earnings suggesting -20% on 2019 for the year ahead is about right.

Can the ASX become the new QE bubble like the US or will it be the deflated balloon that is Japan?

I wouldn’t bet on the former!

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

ASX thinks it’s Wall St, but it looks like Japan