Investment Markets Overview — W/E 25th March 2016

It was a holiday-shortened week for most of the western part of the world and market trading volumes were at their lowest for the year to date. So, for a change this week, our market overview will be brief and let three charts do the talking:

24 Mar 16 .

First up is the year-to-date return for the main geographical stock-indices. The US has been the obvious “relative” out-performer, but that may be about to change as the investors’ absorb the final Q415 US GDP numbers, released on the “Good-Friday” holiday when the markets were closed. Whilst growth was revised to a 1.4% annualised pace from the previously estimated 1%, it’s a marked slow-down from 2.2% pace of the first three quarters of 2015 and of equal concern is the 11.5% plunge in corporate profits seen in Q4, the largest fall in 7-years, when they collapsed by 31% at the height of the financial crisis.

A Socionomic fact is that events lead news, not the perceived other way round. As such it’s interesting to note that one measure of burgeoning “il-liquidity” is hinting at the Dow’s next move:

24 Mar 16 2 .

Turning east the focus remains on China, where market volatility remains, aided and abetted by policy-makers who think they are assisting. Whilst the month-to-date return for the bench mark Shanghai Composite exceeds 10%, the YTD return is at -16%, the out-performer on the downside against the first chart worthies shown above. Two reports attract attention this week, one on the China real-estate bubbles, inflated ever larger of late, and one on the scale of overall economy-wide leverage, including the said real-estate and stocks. The former notes that the average apartment in China now costs 1.3m Yuan, or about $US198,000 whilst the average urban disposable income is 31,000 Yuan, giving a price/income multiple of 42 X, whilst it is an interesting reminder, thanks to Bloomberg, of China’s leverage versus the average reached before other notable crisis:

24 Mar 16 3 .

Subscribe to the Full Investment Markets Overview Newsletter which contains the following:-

Additional Commentaries:
•US economic data . . .
•Euro-Zone . . .
•The UK . . .
•Out East . . .
•The $US index . . .
•Within the commodities complex . . .
•Economic data due next week includes . . .

           “Stepping back often shows Clarity.

Click Here to view Details of the full version of this Newsletter which includes full text and detailed



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