Investment Markets Overview — W/E 27th January 2017

“It’s different this time”…. Is one of the most dangerous four words used within the investment industry. It usually appears when market analysts’ try to justify crazy over-valuations, such as the TMT bubble of the late 1990s, the mortgage bubble of the mid-2000s and possibly house prices now. In fact, the four short words are so famous that a book was published in 2008 showing examples from over 800-years and yet the majority of investors’ still fall for its allure. The phrase appeared once more this week, within a Bloomberg report on the US auto industry and on this occasion I agree with the context of its use! The report was on a topic covered within this column recently, “Big Ticket items,” the auto-sector, with a particular focus on the sheer number of “leased vehicles” that are being returned over the next year or so and which follows the 33% surge of 2016. The fallout from the glut has already started with Ford Motor Co. slashing $US300m from its financial-services arm’s profit forecast for this year. It’s playing havoc with used vehicle prices as well, which has seriously dented the residual values expected with knock-on effects to used car dealerships and hire companies alike. Where those four little words come in is that originally leases were a tool used by luxury automakers, where the likes of BMW and Mercedes relied on leasing for 70% of sales. Its different this time as leasing today has become the auto-sector’s main-stay for mass-market cars and trucks.

 Uncertainly and volatility dominated the markets this week as binned US trade deals and the UK supreme court decision on Brexit led the concerns. Sentiment was further undermined by British Telecom PLC whose share price plunged on accounting irregularities within its Italian arm. Followers of this analyst shouldn’t have been caught out as the 1st December 2016 commentaryBT Blues,gave an emphatic warning as to the likely direction of the companies share price. Despite all of this, the Dow 20,000 hats were donned, dragging global stocks higher….and with them interest rates:

27-jan-2017

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 . . .

 The polarisation within societies took a new turn this week and not only by the increasing coverage of the impending Dutch, French and German elections. California ……

Charts:
1.  Indices Weekly
2. US Existing Home Sales V US Good Time to Sell Survey
3. UK GDP V UK Service Sector Growth
4. Japan Trade Balance V Japan Imports and Exports
5. Commodities Weekly

Table:

13 Indices, 11 columns of detailed information, for accurate analysis

       “State Largesse Knows No Bounds” 

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

 

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