Posts Tagged ‘Investment Research’

Investment Markets Overview — W/E 19th May 2017

“Bread and circuses” was how the government kept the Roman populace happy by distributing free food and staging huge spectacles, whereas today’s equivalent is the welfare state and to bomb someone as a means of distraction during problematic periods. Well, stock-markets took a hit this week, following the release of a memo by former FBI Director James Comey which alleges an obstruction of justice by President Trump, the man who sacked Comey a week earlier. The airwaves and financial media were full of speculation over possible “impeachment proceedings” against “the Donald,”

when surprise, surprise the US administration decided to bomb Syria. They could have saved themselves and perhaps more importantly the lives of innocents who always end up as “collateral damage” by browsing our mid-week socionomic comment, “Impeachment? Wrong time, wrong mood!” Interestingly, this week also observed the President’s first overseas visit since taking office, to none other than Saudi Arabia, the number one arms buyer from the US, the Brits and the French. The Washington and its tribune “swamp(s)” appear to be getting murkier, albeit that the attack on Syria may have appeased “elite” Republican Trump critics like John McCain who has yet to name a country that he doesn’t wish to bomb.

Adding to the uncertainty this week was Brazil, where the Ibovespa stock-index tumbled by 8.8% and its currency, the real, by 7.3% on Thursday alone, as political crisis returned to the country despite last year’s impeachment process to clear its swamp. To continue reading the main economic and market events of the week, supported by interesting charts, please read on and for a limited time period non-subscriber’s can access the full report via the “at your discretion” pay what you think it’s worth offer:

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 . . .

 Returning to the “bread” analogy to today’s welfare state, this week also saw the release of the UK political parties’ election manifestos ……

Charts:
1.  Indices Weekly
2. US GDP & CPI V US Ave Weekly Wage
3. UK Retail Sales V UK Ave Wages
4. Japan GDP V Japan Deflator
5. Commodities Weekly

Table:

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

                         “What goes up, invariably Falls at a quicker Pace” 

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Investment Markets Overview — W/E 5th May 2017

“793”…… Global merger and acquisition (M&A) deals have been completed this year as of the end of April 2017, according to “dialogic” who collates the data involving publicly traded corporations. This is 20% lower than the comparable period of 2016 and is the lowest number since 1998, which given that stock and bond markets are not far off their all-time highs is a surprise. The hesitancy is muted to be due to Brexit and the uncertainty over US tax-reform, which may have some merit, although a “look under the bonnet” reveals that the “value of deals,” is up by 13.9% YTD, at $US480BN, much due to acquirers’ having to pay a higher multiple of about 6% more than at this time last year. Talking of deals, the “art” of which played so favourably for “the Donald,” when it was candidate Trump, was left wanting during the negotiations and settlement with the US house and Senate over the $US1.1 TR spending bill. Whilst it keeps government open until the end of September,  the Democrats achieved most of their priorities whilst rejecting most of the President’s, including money to begin building a wall along the U.S.-Mexican border and $18 billion in cuts to domestic agencies. Time will tell whether the “Washington swamp,” really is too set in its corrupt ways or if the deal-maker is biding his time within a wider game-plan. Either way, whilst it will unsettle the markets it will be the markets that provide the catalyst to “clear the swamp.”

European stocks led the parade this week, belying any French election concerns, whilst the major US indices were dragged higher by an ever narrower handful of stocks. As shown below, it’s been another brutal week for commodities and in particularly for the “economy bellwethers’,” Copper & Silver.” For more on the week’s main data, supported by interesting charts and comment, please read on and for those who missed our last minute French election socionomic comment, it’s HERE:

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 . . .

 So, the Federal Reserve officials left its “target” interest rate on hold this week, within the bounds of 0.75% – 1%, whilst providing little direction  ……

Charts:
1.  Indices Weekly
2. US SPX Index V US Citi Surprise Index
3. UK London Rental Price V EU Rentals
4. OZ Base Rate V OZ 10-year yield
5. Commodities Weekly

Table:

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

                         “Interest rates Fall and then they Rise” 

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Investment Markets Overview — W/E 28th April 2017

 

“3% annualised GDP”…… Is the expectation/hope/dream set out by the new US Treasury Secretary Steve Mnuchin this week, as he and his fellow ex-Goldman Sachs colleague and now White House chief economic advisor Gary Cohn, set out “the biggest tax reform in American history.”  Tax cuts, set to slash corporate rates from 35% to 15% and the current number of federal individual income tax brackets to three from seven, will be funded by a “pick-up” in economic growth says Mnuchin, whereby the increased revenue that he hopes for will pay for the cuts, known as revenue neutral. Aside of it being unclear whether any of Trump’s proposals will pass through Congress unmolested, especially the 2015 Bipartisan Budget Act, which suspended America’s debt ceiling and lapsed on 15 March, there is the little matter of where the 3%+pa economic growth is coming from. Subscribers’ will note from a long-term chart of US GDP, shown within the US economic data section below, that this magic level was last exceeded in 2006 and before that in late 1999. Any analogy between the Reagan era and now is a “dream” and should be quickly discarded by one major difference. Federal debt in the early 1980s was around $2 trillion but is now 10 times that, at $20,000,000,000,000, a massive weight on the economy at 105% of GDP. For a reminder of the other main differences between then and now, and just why 3% annualised GDP is a pipe-dream, you may wish to visit the 1st February knowledge share on “Trumponomics versus Reagonomics.”

Stocks had a decent week despite the anticlimax following the Trump tax-ream’s lack of detail, with Europe leading the charge, buoyed by the usual upbeat “smoke and mirrors” of the ECB press conference and despite the “war-drums” echoing towards North Korea. For more on the week’s main data, supported by interesting charts, read on:

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 . . .

  It isn’t just retail sales and GDP that is slowing down fast in the UK, house price inflation is as well ……

Charts:
1.  Indices Weekly
2. US GDP Reagan V US GDP Now
3. UK Retail Sales V UK GDP
4. Japan CPI V Crude Oil Price
5. Commodities Weekly

Table:

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

                         “Prices go up, and then they come down” 

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Investment Markets Overview — W/E 21st April 2017

“7th May 2020”…… was to be the date of the UK’s next General Election, in line with the fixed-term Parliaments Act 2011. However, the British Prime Minister, Teresa May, called for an 8th June 2017 snap election this week and was backed by the two-thirds majority required from the 650 MPs in the House of Commons. In fact the vote to support the election decision was a unanimous 522 to 13. The early polls and media speculation predict a land-slide win for May and the Conservative party, although my “May’s Mixed Messages” Socionomist view suggests that caution is warranted. Either way it is the first snap election for the UK since 1974 when Ted Heath, ironically the conservative leader who took Britain into the EU, reached out to the electorate following an impasse with the National Union of Mineworkers over their strike intentions and the unstable political position following the 1973 EU referendum. In the event the gamble was lost due to the Ulster Unionists distancing themselves from the Tories and the Liberals, under Jeremy Thorpe, declining Heath’s offer to form a coalition government. Heath wasn’t helped by dire economic news at the time, which had followed a 30% decline in the FTA All-Share Stock-index, or the resignation during the campaign by the outspoken Conservative MP Enoch Powell, who had already announced that he could not stand for re-election on the Conservative manifesto, urging people to vote against Heath, because of the latter’s policy toward the European Economic Community. In a speech in Birmingham on 23 February 1974, Powell claimed the main issue in the campaign was whether Britain was to “remain a democratic nation … or whether it will become one province in a new Europe super-state“; he said it was people’s “national duty” to oppose those who had deprived Parliament of “its sole right to make the laws and impose the taxes of the country.” Fast forward to this week’s snap election call and it’s of interest to note that former conservative Chancellor, George “3-jobs” Osborne announced his intention not to stand.

It was another 4-day trading week for Europe, OZ and Hong Kong but not so for Wall St which led an increase in volatility for global markets. The trend for stocks was lower until options expiration Thursday when the bears took it on the Mnu-chin as the new Treasury Secretary turned up with comments on tax-breaks for companies and individuals, subsequently confirmed by “the Donald” and to be announced next week.

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 . . .

 This Sunday sees the first round of the French general election against a backdrop of yet another violent attack on the streets of Paris. The polls reflect considerable uncertainty with four very diverse candidates, Le Pen, Macron, Jean-Luc Mélenchon and François Fillon as front-runners  ……

Charts:
1.  Indices Weekly
2. US Housing Starts V US Existing Home Sales
3. E-Z Household Consumption V E-Z Consumer Confidence
4. China Retail SalesV China GDP
5. Commodities Weekly

Table:

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

                     “History may not repeat exactly, but it sure does rhyme” 

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Investment Markets Overview — W/E 14th April 2017

 

“Liquidity”…… is defined as a measure or extent to which a person or organisation has cash to meet immediate and short-term obligations, or assets that can be quickly converted to cash to do this. Put another way, it’s the life-blood of the markets without which they cease-up. There are numerous clues to assist in identifying early warning signs of impending liquidity problems, such as the amount of cash held within mutual funds and/or looking for “carry-trade” excess. A carry trade is when investors borrow in a low-yielding currency, such as the yen or the euro, to fund investments in higher-yielding assets elsewhere. A weakening currency is central to the carry trade since it means that investors have less to repay when they cash out of the trade and the problem of late is that whilst the Yen carry-trade is showing excess, the yen has been strengthening thereby ill-liquidity and capital loss if unwound. Our latest “knowledge share, Yen’s Up” expands on this, with the implications for various asset classes. Meanwhile it is interesting to note that cash levels held within US stock-market funds have recently hit a historical low of 3.1%.

It was a 4-day trading week for the majority of markets so this week’s overview will be brief, returning to the usual service next week:

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Increased geo-political tension between the United States and the North Korea – China alliance plus the US led push against the Russia-Syria arrangement unsettled stocks.

Meanwhile, the $US index was unchanged at 100.5, with risers including the Yen and the Russian Ruble, higher by 2.3% and 1.6%, whilst losers included the South Korean Won and the Colombian Peso, lower by a respective 0.5% and 0.3%. Sovereign bond yields were lower in general as Japan’s JGB 10-year yield turned negative, at -0.005%, the UK 10 year yield gave up 10bps, at 1.04% whilst the German yield fell by 0.14bps, at 0.18%. Spain’s 10-year yield rose by 3bps, at 1.67% with Italy’s unchanged at 2.3%, whilst the Irish 10-year yield moved lower by 7bps at 0.9%. Portugal’s 10-year ended lower by 8bps at 3.85% whilst the Greek yield was lower by 30bps at 6.5%. US 5 and 10-year yields fell to 5-month lows, with the 5 at 1.76% and the ten at 2.2%.

Commodities were higher in the main, as the Oil price added 2.9% to $53.2 a barrel, the CRB rose by 0.5% whilst the economic sensitive Copper price fell by 3.3%. The precious metals saw $Gold higher by 2.8% at $1289, $Silver by 1.5% to $18.5oz, whilst in the paper market, the North American XAU gold-share index gained 3.6%.

Economic data due for release next week includes more on housing for the US, the UK and for Japan, plus the latest on trade for Japan and the Euro-Zone. The Euro-Zone also updates on CPI and new car registrations, whilst Japan and the UK release their latest on retail sales. It’s a very quite week for US data but does include a peek at manufacturing.

                           “Complacency, a feeling of quiet pleasure or security” 

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Investment Markets Overview — W/E 31st March 2017

“Rock On”…… is a song written by British singer/songwriter David Essex and recorded in 1973 shortly before a UK referendum took the nation into the European Union. In the week when “Article 50,” the process by which member states may withdraw from the EU, was triggered by the British Prime Minister,  “Rock,” hit the news once again, in the guise of Gibraltar and says much about the likely discord to expect as the protracted divorce evolves. Despite both parties providing assurances that expatriates living across the union would not be used as “bargaining chips,” documents were published by the European council within two-days of article 50 stating that decisions affecting Gibraltar, the small territory of 30,000 in southern Spain and which has been British for more than 300 years, would be referred to the Spanish government.

Meanwhile, an interesting article by Sarah Marley at Select Statistical Services shines a light on how EU migrants are represented across the UK workforce, observing that 6.8% of the 31.5m people aged 16 or over in employment within the UK are EU nationals from across the continent. Whilst that may not sound much, the percentage has grown from 1.7% over the past 20-years and makes up a dis-proportionate bias towards the UK public sector, particularly the National Health Service, the largest employer by headcount across the EU and the fifth largest in the world according to a mid-2015 Forbes report.

Market-wise the closely watched S&P 500 stock-index enjoyed a decent first quarter, albeit that March’s 0% change removed some of the shine, whilst the cost of debt, by way of the 10-year treasury yield, was also virtually unchanged over Q1 thanks to the second half of March. For the main economic data of the week, supported by informative charts, please read on:

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 European civil service, aka the European Commission, allegedly employs about 25,000 individuals’ plus “approximately” a further 10,000 “external staff” who are employees on time-limited contracts, but   ……

Charts:
1.  Indices Weekly
2. US Personal Incomes V US Personal Spending
3. UK Consumer Credit V UK GDP
4. Japan Housing Starts V Japan CPI
5. Commodities Weekly

Table:

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

                     “Dick Turpin was a Paragon of Virtue versus the EC” 

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Investment Markets Overview — W/E 24th March 2017

Italy……the birthplace of the “Treaties of Rome,” which ushered in the European Economic Community, also labelled as the “Common Market,” is a fitting place for the great and the good of the now “European Bureaucratic Monster” to celebrate its 60th anniversary this weekend. Originally attended in Rome on the 25th March 1957 by representatives from Belgium, France, Italy, Luxembourg, the Netherlands and West Germany, its initial objectives were to integrate trade and strengthen economies, but its main underlying political objective was for a political union of the member states, ruled by the unelected bureaucracy with the subservient parliaments and institutions kow-towing to it, only they forgot to tell its citizens of this political objective. They actually managed to achieve great strides towards their political plan, expanding from six to 28 member states along the way, partially due to deceit, bribes and lies about the true objectives, but more to do with the positive collective social mood which coincided with the huge member expansion and introduction of the €uro in the late 1990s. Unfortunately for the master-planners, the collective social mood turned negative in early 2000, as evidenced by the “blocs” Eurostoxx stock-index, since when tensions have risen between north and south and more latterly between east and west. The leaders will put on a united front at the celebrations, despite the deep divisions among many EU member states including the host country which is struggling under a huge debt load.

Market-wise it was an uncertain week for financial assets, as the closely watched S&P 500 stock-index ended a 110-day streak of ultra low volatility of no losses exceeding 1%. The financial media “talking-heads” blamed it on the Obamacare reversal vote and/or the London terror attack whilst in reality it was nothing to do with these as our mid-week knowledge-share article explained. Follow the link to read, it’s free and is informative:

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 EU elite may have allowed themselves a few brief days of relief following the Dutch elections but that will have ended this week as the anti-EU and anti-€uro Marine Le Pen  ……

Charts:
1.  Indices Weekly
2. US New Home Sales V US Existing Home Sales
3. UK House Price Index V UK House Price Annualised % Perf
4. OZ House Prices Y on Y V OZ House Prices Q on Q
5. Commodities Weekly

Table:

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

                     “Uncertainty, the Bain of the markets” 

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