Morning note, data, events, bonds and earnings 4th December 2012

Good morning,

Mixed performances on the first trading day of the month. Equity markets were expected to be slightly weaker, as stocks sold down after some rather aggressive window dressing on month end.

Bond markets saw a HUGE rally in Spanish, Greek and Italian, with 10yr yields currently Spain: 5.216%, Italy: 4.435%, Greece: 14.56%. Greece start the session at 15.8% but due to the bond repurchase announcement, we saw a it fall 128 bps.

Equity volumes remained strong across the southern states of Europe, whilst the rest of the region remained around average. Markets opened slightly firmer, trended higher until the US opened, which saw them sell back down again. Mostly due to the firmer US$, as brief details of new tax policies hit the press.

FTSE +0.1% low volume; O/P:health, industrials U/P:telco, financial
CAC +0.3% avg volume; O/P:utilities, health U/P: financial, telco
DAX +0.4% avg volume; O/P:tech, basic materials U/P: utilities, consumer goods
IBEX -0.6% v.good volume; O/P:basic materials, tech U/P:cons.services, financial

Sectors here showing us very little. The UK is looking at some rather nasty tax policies on high end property, which should make the market nervous.

Desperately chasing down overseas investors and offshore banking, the UK really has to be careful not to discourage inflows. The thought is the tax should help dispersion, where property prices in London are considerably more than that in the north of England.

The finance sector has been very strong over the last 6 months, due to politicians continued work on policies to support the heavily indebted members of the EU. With such a large amount of liquidity in the market, when credit eases, the new loan market will be extremely strong as banks increase lending.

Data overnight and maybe missed was the Spanish PMI data, which came in at 45.3 vs expected 43.9. This number actually means it is still contracting, but I like the fact it is contracting at a lower rate than expected. Stoddart = forever optimistic.

The rest of Europe also saw PMI contract, with German, France, Italy and the region all with a score under 50. Greece however, was very weak, with a PMI of 41.8, which raises questions about its ability to buy back 10 Billion Eur of bonds which it announced yesterday.

Italy came through with a strong budget balance, coming in at -4.3b vs October at -13.1b, however, new car sales were at -20% highlighting austerity is hitting the consumer market at present.

In the US, equity markets trended easier throughout the session, closing at day highs as the US$ continues to firm. Surprisingly, we also saw UST's weaker, whilst gold and crude oil remained relatively unchanged.

S&P -0.5% avg volumes; O/P:telco, tech U/P:basic materials, industrials

Sector maps in the US look very defensive, with telco, tech and health care all outperforming. Apple continues to squeeze, however, it is now approaching major resistance levels, which could weigh on the S&P.

Markets.
Asian markets are all slightly easier, with volumes lower by about 20%. As the US$ and JPY continue to firm against majors, equity markets are turning defensive.

Shanghai continues to sell down, currently 1954, -6pts, where health, consumer goods and services are all dragging the index low. Utilities and Oil & gas remain top performing sectors but are barely flat on the day.
The question on everyones mind is, where is the intervention?

I continue to like upstream oil plays at these levels. We should be looking for US$ hedges at these levels, where crude remains strong and should see a number of countries continue to build inventories.
China property looks rich at these levels, and with talks of the government taking on inventory and supporting prices, the market remains artificially high and doesnt reflect the "real" demand.

Data.11:30 Australia RBA cash target
11:30 Thailand consumer confidence
16:00 Spain unemployment MoM
17:30 UK PMI construction
18:00 Eurozone PPI
22:45 US ISM NY
UK Halifax house prices

Events.16:00 EU finance ministers meet
19:00 ESM's Regling speaks at Think Tank
22:30 US FDIC releases quarterly banking survey
Clinton meets NATO

Bonds.13:30 Philippines 10year auction
19:00 EFSF 3month auction
00:30 US 4week auction

Earnings.Toll brothers(US), Big lots(US), Autozone9US0, Vail resorts(US), Panadora Media(US), Elekta(SS), TUI Travel(UK)

Stoddart

Morning note, data, events, bonds and earnings 3rd December 2012

Good morning,

Some strong volumes going through on Friday, as November comes to an end and window dressing helped US markets close flat on the day.

Press over the weekend was heavily focused again on macro data, with headlines targeting the US debt and spending expirations, and Europe with Merkel looking at Greek debt write offs.

In Asia, headlines focused on a strong manufacturing number, which came in at 50.6 indicating growth, however, it missed estimates of 50.8. There are once again, talks of China GDP estimates under the new leadership, with the survey indicating towards 7.5% growth. With the RMB so strong, exports will continue to ease, causing increasing fears that China will struggle to hit existing estimates. As rising inflation and "real" property prices and transactions continue to stagnate, investors fear that domestic demand will not be able to take up the slack of falling exports.

We are already seeing the high end market being hit, with falling sales of luxury consumer discretionary goods, such as automobiles and watches.

Markets.Expect markets in Asia today to start giving back some of there gains from Friday on the open, but with the Euro still strong at 1.30, we should see equity markets remain buoyant, trending firmer through the session.
Its hard to see the Euro trending much firmer given the overhang in the US and Greek/Spanish/Italian.Portuguese debt, however, I would not be short the Euro at these levels. Major supports are now 1.27, 1.2840 and 1.2980.

Data.08:00 S.Korea HSBC Manufacturing PMI
80:00 UK Hometrack housing
08:30 AU retail sales, invnetories
09:00 China non-manufacturing PMI
09:45 China HSBC manufacturing PMI
12:00 Thailand CPI
12:00 Indonesian trade balance/inflation,CPI
13:00 Japan vehicle sales
13:30 Australia RBA commodity price
16:00 Turkey CPI, PPI
16:15 Spain PMI - number expected very weak, possible upside surprise
16:45 - 55: Italy, France Germany PMI
17:00 EU PMI
17:00 Greek PMI
17:30 UK PMI
23:00 US ISM manufacturing/prices paid/construction spending

Events.08:10 BoJ deputy Gov Nishimura speaks at Panel
12:00 BoJ Shirakawa and ECB Noyer speak at Europlace Forum
17:30 UK's BoE publishes quarterly FLS lending data
US financial stability oversight council meet in Washington
EU area finance ministers meet in Brussels

Bonds.10:30 S.Korea 3 year auction
11:00 Thai 1,3,6,12 month auction
18:00 Netherlands 3,6 month auction
18:30 German 3 month auction
22:00 France 3,6 month auction

Earnings.Elektra(SW), TUI travel(GB), China Sandi(HK), Ito(JP0, Pigeon(JP), Cerebos Pac(SG)

Stoddart

Morning note, data, events, bonds and earnings 23rd November 2012

Good morning,

With the US out last night, European markets saw volumes fall by an average of 25%. The continued run in the Euro and JPY weakness helped push basic material prices high and lifting European equity markets. The were also boosted by the China HSBC PMI, which came in at 50.4, indicating growth.

In the bond market, Greece 10yr yields firmed 37bps to 16.06%, whilst strong demand in the Spanish auction, saw 10yr yields fall a further 7bps to 5.62%. Italy's debt also continued to firm, now trading comfortably below 5%, at 4.77%

FTSE +0.7% v.low volume; O/P: cons.goods, cons.services U/P: telco, Oil&gas,
CAC +0.6% v.low volume; O/P: tech, utilities U/P: telco, oil&gas
DAX +0.8% v.low volume; O/P: cons.services, financial U/P: utilities, cons.goods
IBEX +0.9% v.low volume; O/P: cons.services, oil&gas U/P: tech, utilities

Sector charts mixed overnight, however, all markets finally saw basic materials at the upper end. The financial sector also remain strong, despite a very good performance over the last 6 months.
I was expecting more inflows to Oil & Gas, this I still believe to be the next level of rotation, however, it does require some patience.

Data over night saw French PMI manufacturing come in at 44.7 vs expected 44.00, services came in 46.1 vs expected 45.0.
German PMI manu was 46.8 vs expected 46.0, services 48.0 vs expected 48.3.
Both countries help support the European numbers, where manufacturing was 46.2, vs estimates 45.6, and services 45.7, vs expected 46.0.
Eurozone consumer services came in weaker at -26.9, vs the survey -25.9.

Markets.With the US and Japan closed, equity volumes will mirror Europe's reduced levels. With the sectors gearing towards more defensive sectors like consumer goods, Asia will continue to see these names trending firmer.
The recent run in China property is starting to look overdone, its time to reduce.
Whilst oils lack luster performance, despite crude trending higher, should see rotation into the sector. Petrochina(857) looks attractive here. This should also help boost the chemicals industry as well, as stronger than expected PMI in China should see sentiment improve.
Markets open firmer, then trend sideways throughout the session as the Eur continues to hold the 1.29 level. There seems little to push the Euro through resistance levels at present, but should the EU budget talks provide some positive light, we should see flows start moving out of UST's into the higher yielding European debt.

Data. 13:00 Singapore CPI
15:00 German GDP, import/exports, govt spending, consumption
15:45 France production outlook
16:00 Spain producer prices
17:00 Italy retail sales
17:00 German IFO
Thailand customs exports/trade balance

Events.17:30 India Chairman of PM's to discuss direct taxes
21:00 Portugal Bank of Portugal monthly budget
EU leaders summit on 7yr budget

Bonds.19:00 UK 1,3,6 month auction

Earnings.Net dragon(HK), Parkson(HK), Genting Plantations(MK), Genting(MK), Telekom Malaysia(MK), Aeon Malay(MK), Sime darby(MK), Philip morris(CZ)

Stoddart

Morning note, data, events, bonds and earnings 2nd November 2012

Good morning all,

As night turns to day, here in Singapore, I'm kindly reminded of where I live by one of Maersk's finest container ships, ringing his horn in what can only be described as, some kind of African mating call.

Despite this, nothing can dampen the fact its Friday. And with US markets putting through a "stella" (super strong) performance, the container ship to my south full to the brim and freight rates still as high as a 70's teenager, there is a lot to be optimistic about. See picture attached.
Apart from my home country, the UK, European markets saw volumes fall considerably, in part due to All Saints Day, with the average fall around 30%.

FTSE +1.4% v.good volume: O/P: tech, financial  U/P: health, utilities
CAC +1.4% v.low volume: O/P: health, tech  U/P: telco, utilities
DAX +1.0% V.low volume: O/P: cons.services, cons.goods  U/P: health, utilities
IBEX +0.6% v.low volume: O/P: basic mats, cons.services U/P: health, industials

The sector maps clearly share my optimism. The signal here is positive growth, with defensive names under performing in favor of consumer spending. Financial's continue to run, which is no surprise given central banks determination to ease credit markets, encouraging increased lending. I suspect the wonderful people at Banco Santander will be less likely to pass this on to my variable mortgage, increasing their margins, on higher sales.
Basic materials also strong across the board, as the Euro remains firm at the 1.2950 level.
Bond yields were little unchanged in Europe, with Spain stil yielding 5.6%, despite the recent firming of the CDS. NB the EU have recently banned naked short selling of CDS's.... finally. It begs the question, have they not read the book, the big short, or are they just slower than Joey from Friends?

The US markets were boosted by postive earnings by companies like Pfizer, not that surprising given they make Viagra...things are on the up!(sorry, couldnt help that). Despite distrupitions, investors clearly still find time to buy and sell equities, pushing volumes 1 to 12% above daily averages, and leaving equity markets closing at day highs.

SPX +1.1% avg volume: O/P: basic mats, industirals U/P: utilities, oil&gas

Interesting to note on the sector map, that basic materials are strong but oil and gas remains weak. After huricane Sandy not hitting the oil produces in south America, crude has remained unchange, despite cracking spreads in gasoline and diesel starting to rise. After looking at Siemens beautiful new 8000h fan turbine genorator, I'm thinking this is purely due to the demand for inventories on the east coast. Global demand hasnt increased that much, despite my optimism for 2013.
Data overnight saw UK house prices fall less than expected at -0.9% vs survey -1.2%. Whilst US markets also recieved a boost in both jobless claims and non-farm productivity. Jobless claims came in at 363k vs expected 370k, and productivity came in at +1.9% vs expected 1.8%. The US ISM was also strong, at 51.7 vs expected 51.0, anything above 50 indicates growth...waa hey!

Markets.
Given the strength in European and US markets overnight, today should see Asian markets continue their strong run. With basic materials outperforming overnight, Australia should see the most of the rewards, and consumer goods in Japan still feel like saying a dirty word in Church. Despite this, I actually still like the sector and believe, problems aside, they have weathered the storm well, with sales due to increase on globl demand at margins set to improve thanks to a weaker Yen.
I really want to own oil producers here. I do beleive that the creation of a banking union in the EU will support the consumer credit market, giving rise to increased borrow, and with a bit of luck, the Euro. Oil is my "postive growth" US$ hedge.
China railways and container ships are starting to look rich here. Stimulus boosted earnings in the railway sector leaves only contracts for management, which is a hugely corrupt and competitive market. Despite the Economists view that China construction plays are and will remain number one, overseas contracts will be given to EU trading partners. Now yes, we have Africa, but with current problems in North East Nigera, plus other countries struggling with bombing and up risings, this will be slow to grow.
Container rates have been strong through 2012, however, lets not forget the new capacity coming online in early 2013. Maersk, those wonderful guys that woke me up this morning, have a considerable amount of new ships being delievered, meaning as supply increases, margins will fall. I doubt new sales in 2013 will make up for the fall in rates, leaving anaylsts forward earnings models looking like a bad transexual at miss world.
Markets open at the highs, push slightly firmer around the first hour, then see profit taking...ADR flippers should do well, if they cover over the day or around the close.

Data.
08:30 Australia PPI
15:30 Thailand reserves
16:45 Italy PPI
17:00 EU PPI
20:30 US payrolls and unemployment
22:00 US factory orders, expected bounce from -5.2 last month, to +4.6% in Sept

Events.
EU competition policy
BoJ minutes

Bonds.
08:00 Austalia 5 year auction
11:00 China 3 month auction
19:10 UK 1, 3 and 6 month auction

Earnings.
Och Ziff(US), Hess(US), McGraw(US), Ralph Lauren(US), WABCO(US), Chevron(US), Alcatel-Lucent(FR), Beiersdorf(GE), RBS(UK), Piraues Bk(GR), Mitsubishi Corp(JP), ITOCHU(JP), Mitsui(JP), JAL(JP), Kubota(JP), Kirin(JP0, Starhub(SP), COSCO Sing(SG), Sing Air(SG), Daewoo ship(KR), Daelim(CH), F&N(SG)

Have a great weekend
Stoddart

Morning note, data, events, bonds and earnings 1st November 2012

Good morning,

Earlier this week, I used the example of an investment banker getting a new telephone, highlighting how no one likes change. I can tell you now, the same goes for changing bus routes on my way to work this morning!

God, I miss the HK bus and train infrastructure!

US markets re-open little changed, however, its good to see that volumes hit averages, despite European volumes still lower.
European markets opened at the highs and trended lower throughout the session, closing at day lows. As mentioned earlier, volumes were lower by an average of 20%. London's oil and commodity heavy bench mark, the FTSE, closed down 1.2%, impacted heavily by BG Group, which plans to sell its stake in an LNG project to CNOOC. This stock alone took 24 points of the index.

FTSE -1.2% strong volume: O/P: cons.services, utilities  U/P: oil&gas, health
CAC -0.9% v.low volume: O/P: utilities, technology  U/P: basic mat, health
DAX -0.3% avg volume: O/P: cons.services, financial U/P: health, cons.goods
IBEX +0.1% v.low volume: O/P: financial, industrial U/P: basic mat, tech

Being all saints day, many of the European markets closed, including France, Italy, Spain and Portugal, was well as the Philippines here in Asia. From the sector charts, defensives were back in favor as the Euro remains unchanged at 1.2960. As the last of the Christmas trees start going, fund managers are reminded to start locking in gains for the year, and the term risk becomes a dirty word, much to the detriment of us humble brokers.
On this note, I would expect some profit taking in sectors like financials, technology and property. Just looking at the performance of Capitamall(CT SP), yields are now considerably lower, whilst retail sales are looking to stagnate.

Markets.Expect markets to open unchanged on the open, despite a strong rally into the close yesterday across most markets in the region. A possible cause being window dressing. This should see us trend flat over the first hour or two, before seeing profit taking pushing the index easier.
At these levels, basic materials are looking cheap as GDP estimates are still looking relatively lack luster 1 year out. Despite this, governments will be looking to boost construction spending, supporting jobs growth. This should also boost other sectors, such as industrial. Oil should also see support here, time to buy Petrochina(857)
Shorts, I am looking at Singapore property names and Australia financials.

Data.07:50 Japan foreign and domestic stock & bond data
08:00 S.Korea trade balance
08:30 Australia import/export data
09:00 China PMI
12:00 Thailand CPI
13:30 RBA commodity price index
15:00 UK Nationwide house prices
16:00 Turkey manufacturing PMI
16:15 Spain manufacturing PMI
17:30 UK PMI
19:30 US challenger job cuts
20:15 US ADP employment change
20:30 US Non farm productivity/jobless claims
22:00 US ISM manufacturing/construction spending

Events.18:00 Italy's Monti meets Germany's Steinbruck
22:30 IMF regular meeting
EU bans naked CDS's

Bonds.11:45 Japan 3 month, 10 year auction

Earnings.Western refining(US), Marathon Petrolum(US), Pfizer(US), Watson Pharma(US), United Therapeutics(US), Exxon Mobil(US), Alliant tech(US), Estee Lauder(US), Visteon(US), Cigna(US), Kellogg9US), Apache(US), Avis Budget(US), Yelp(US), Las Vegas sands(US), Starbucks(US), First solar(US), AIG(US), Onyx Pharma(US), Overseas Shipholding(US), Edison(US), Linkedin(US), RDSA(UK), BSKYB(UK), Smith & Nephew(UK), Lloyds(UK), BT(UK), Eisai(JP), Mitsui Chem(JP), Calbee(JP), Fuji Media(JP), Casio(JP), Nikon(JP), Sony(JP), Sharp(JP), Ibiden(JP), Cosmo oil(JP), Hankook tire(KR), Sumsung heavy(KR), Samsung C&T(KR), Hyundai hysco(KR), S-oil(KR), Woori Fin(KR), Rosneft(RU), Arcelik(TR)

Stoddart

Morning note, data, events, bonds and earnings 25th October 2012

Morning,

Equity markets once again, remain lack luster, as the FED indicates that rates will remain low and asset purchases will continue as far out as 4th Quarter 2013.
European markets, which were closed when the FOMC announced rates, saw a limited rebound, after such a sharp sell off on Tuesday. Volumes, however, did leave a number of concerns, as they continue to fall.

FTSE +0.1% avg volume; O/P: tech, cons.goods U/P: telco, utilities
CAC  +0.6% low volume: O/P: tech, industrials U/P: financial, telco
DAX +0.3% avg volume; O/P: tech, cons.goods U/P: utilities, cons.services
IBEX +0.6% low volume; O/P: health, tech U/P: oil&gas, telco

After some rather aggressive selling at the start of the week, yesterday saw strong inflows back into tech with names like SAP, up 4.2%. The tech sector continues to be one of the best performing this year, as demand for consumer electronics remains buoyant. I expect some window dressing into month end for tech stocks, but would use this as an opportunity to reduce, as we enter the US general election.
The financial sector, which over the last month, has been the top performing sector, is finally starting to lose steam. As interbank lending looks set to improve and governments aim to improve the credit market, investors have looked at the banks on improving revenues and margins, where low rates and reduced competition compared to 2006/7, should support the sector. This many be the case but little has actually changed, and the recent strength looks set to correct back, as the market looks for clarity from Spain and the ECB, that a soft bailout will take place, and the terms placed on it.
Data in Europe came in slightly weaker, with the German business climate of 100 vs expectations of 101.6. PMI's in Italy and for the Eurozone came through inline, whilst in the UK, the CBI was weaker with busniess optimism coming in at -12 vs the expected fall of -2.

In the US, I was expecting to see some relative strength, but I was denied this bounce as volumes eased and the market sentiment remained weak. With the S&P breaking the 50 day moving average, technical traders saw this as a signal to not just reduce holdings, but also look at taking a near term short position, as recent sector performers such as technology and financials, are starting to look rich. Despite this, finanacials was one of the better performing sectors, but as mentioned earlier, are starting to lose steam. Time to short.

S&P -0.3% avg volume; O/P: health, financials  U/P: utilities, oil&gas

Data in the US saw a sharp drop in mortgage apps, down -12% vs last week, down -4.2%. Despite this data, September new home sales came in slighlty stronger at 389k vs expected 385k, however this number was over-shaddowed by the FOMC announcement at 2am Singapore time, which although rates remained at 0.25%, they did highlight expectations that asset purchase programs are to last until 4Q 2013, longer than the market was looking for. This triggered some negativity that growth is still slowing, prompting further action required by FED.

Markets.
Asia was relatively strong yesterday, given the sell off's in other regions. I expect some rather aggressive selling on the open. For the short term trades, this should provide a good opportunity to pick up stocks, particularly basic materials, oil & gas and construction materials.
We should also see the JPY firm, which we should look to be shorting into. With Europe close to a resolution for Spain, which should trigger inflows to French, Spanish and Italian debt, the Euro should continue to firm over the next 6-12 months.
Expect markets to open at the lows and trade sideways in the first hour, before trending firmer into the close.

Data.
10:00 China leading index
13:00 Singapore industrial production
15:00 Spain industrial production
16:30 HK import/export data
16:30 UK GDP
17:00 Italian retail sales
20:30 US Chicago fed
20:30 US durable goods, jobless claims
22:00 US pending home sales
23:00 US Kansas fed

Events.
15:30 Portugal weekly cabinet meeting
17:15 UK's FSA at UK parlimentary banking standards
19:00 EU's Van Rompuy meets UK's Cameron

Bonds.
11:00 China 10year auction
17:30 German 10 year auction
01:00 US 5 year auction

Earnings.
Coca-cola(US), Nobel energy(US), ITT ed(US), Sherwin-williams(US), McKesson(US), Biogen(US), Watsco(US), National oilwell(US), P&G(US), Percision castparts(US), Aetna(US), Zimmer holdings(US), Sprint nextel(US), Colgate-palmolive(US), Janus(US), ConocoPhilips(US), Freanklin Resources(US), Apple(US), Amazon(US), Coinstar(US), Chubb(US), Expedia(US), United continental(US), ABB(SW), Credit Suisse(CH), BASF(GE), Novartis(CH), Ranstad(NL), Skandiaviska Enskilda(SW), DNB(NO), Solvay(NL), Astrazeneca(UK), Sandvik(NO), Banco Santander(SP), Debenhams(UK), Shire(UK), Hitachi metals(JP, Advantest(JP), Canon(JP), CapitaMalls(SP), Mapletree Commercial(SP), Neptune orient(SP), Suntec REIT(SP), COSCO (HK), C.Unicom(HK), Korea Air(KR), Taiwan mobile(TT), Samsung Engineering(KR), Korea Zinc(KR), China oilfield services(HK), AU Ops(TT), BBMG (HK), Bank of China(HK), TSMC(TT), Maanshan Iron(HK), CSR(HK), ZTE(HK), DAtang power(HK), Holcim(IJ), Astra agro(IJ),

Stoddart

Morning note, data, events, bonds and earnings 23rd October 2012

Good morning,

Its another dark but warm Tuesday morning on the shores of Singapore. The navy and coast guards warm their boats along the little stretch next to Ports Authority of Singapore's vast container dock, and yet, although this is nothing new, it has a feeling of a great machine firing up for the day ahead.
Given the number of ships docking here lately, including 2 rather massive cruise ships last, it will be a busy day.

Equity markets over night seemed lacking in support. European markets opened easier, but soon moved into positive territory in the first half of the session. This came to end in the later stages of the session, as the US opened, leaving Europe trending easier after lunch and closing at day lows.
Volumes fell by an average of 20%, with little increase going into the close, which is worrying, given I would expect some short covering with this kind of price action.
Despite weakness in equity markets, the Euro rallied against the greenback, whilst European debt markets remained relatively unchanged.

FTSE -0.2% low volume; O/P: cons.goods, financial  U/P: industrial, O&G
CAC -0.6% low volume; O/P: cons.services, financial  U/P: cons.goods, basic mat
DAX -0.7% low volume; O/P: financial, industrial  U/P: tech, cons.services
IBEX -0.5% low volume; O/P: O&G, tech  U/P: telco, basic materials

Despite the market closing lower and volumes easing, the sector performance shows investors looking at higher growth sectors. Financials continue their run, as the outlook for credit growth improves, due to the new banking union, expected on 1st Jan.

US markets, as mentioned earlier, opened unchanged but trended lower throughout the session, before seeing a short bounce into the close, leaving them flat on the day. Yesterdays earnings came in relatively strong, with VF Corp and Caterpillar slightly beating and Peabody Energy beating estimates by 49%. Then after the close Yahoo beat estimates by 37% and Texas Inst by 13%.
All US indices seemed to mirror the US$ index, which given its aims to export its way out of its current debt mountain, the US$ weakness will have an increasing impact on demand for its products.

S&P flat avg volume; O/P: tech, basic materials  U/P: O&G, telco

Once again tech outperforming, in particular hardware, with Apple up 4% trailed by EMC and HP, up +1.9% and +1.6% respectively. With crude oil selling down below the $90 level, it is now at major supports and with the Euro maintaining its strength, I expect the $89 mark to hold as inflows to hedge against the US$ increase.

Worth noting that the S&P actually broke the 200 day moving average last night, which on average volumes will have the technical analysis camp, pushing for a short position. With the US elections coming up, volumes should start easing, so expect a pick up in volatility on both and index and single stock level. Near term short looks to be the position, however, after the election sentiment should be improved. I would not want to be short for long, however, nothing in the fundamentals has changed.
Data over night saw a huge fall in Spanish mortgages on houses, down -28.5%, which to be honest, no one was expecting this number to be good. 2011 Eurozone debt to GDP number came in at 87.3%, which although high, is little changed from the previous year, plus its for 2011!

Markets.HK closed today. Expect other markets to show relative weakness on the open, in line with that of the US. Finanacial stocks seem to want to outperform, I'm looking to short into this strength.
Oil stocks in HK/China still look rich. Longer term play I like as a US$ hedge and improving GDP however, in the near term(3 months) e should see them give back some of the recent gains.
Insurance seems to be a hot sector and will continue, as earnings growth is maintained. Optimism on the A'share market should also support its investments domestically. BUY
Australia, I still want to short the banks as housing markets look increasingly toppy. We could see a push for greater previsions, so watch the transaction data for falling sales.
Markets to open at the lows early session, then trend slightly firmer as the US$ continues to weaken, before leveling off and trading sideways. Expect a drop in volumes.

Data.13:00 Japan small business sentiment
13:00 Singapore CPI
14:45 France production outlook
15:30 Netherlands consumer spending
19:30 Turkey industrial confidence/capacity utilization
22:00 Eurozone confidence
22:00 US Richmond FED

Events.EU parliament Mersch ECB nomination
Spain short sell ban ends
16:00 WTO dispute settlement body meets

Bonds.13:30 Philippines 7yr auction
16:30 Spain 3, 6 month auction
17:00 Indonesian 1, 6, 10, 20 year auction
23:30 US 4 week auction

Earnings.Virgin Media(US), Lexmark(US), RadioShack(US), AK Steel(US), United Tech(US), Whirlpool(US), Coach(US), Harley-Davidson(US), Xerox(US), 3M(US), UPS(US), Aflac(US), Polycom(US), Hanesbrands(US), Illumina(US), Flagstar Bancorp(US), Amgen(US), Norfolk Southern(US), Facebook(US), KPN(NL), Norsk Hydro(NO), Swedbank(US), Mobistar(SP), Schindler(GE), Enagas(SP), Whitbread(UK), ARM(UK), Kone(FI), Stora Enso(FI), STMicro(NL), OSIM(SP)

Stoddart

Morning note, data, events, bonds and earnings 15th October 2012

Morning,

Volumes in the US on Friday remained strong, trading around the recent average, as markets traded around flat. Again, we see a more defensive stance with tech and consumer goods the top performing sectors, however, utilities and telcoms were among the weaker. This leads us to believe there is still some repositioning going on, as we approach the November 6th US presidential election.

With headlines over the weekend, again, questioning growth, sentiment is still relatively weak. Europe has seen a rebound in the Euro, but Spain and Italy continue to drag their feet, causing the Euro rally to grind very quickly to a halt. This is also reflected in the bond market where Spanish and Italian yields have steadily started to rise. We need the EFSF to quickly agree terms with states needing aid.

Another major headline is the individuals claiming against libor manipulation. Many thought this could be a possiblity but now, its reality. This will be a major case for the banks and could see banks ha ve to increase provisions. A large number of banks have been fined, which technically speaking implies they are guilty of malpractice. Should a single homeowner be able to claim damages, this would open the window to nearly everyone with a mortgage. Although total loses would be hard to calculate, and would take considerable time to calculate rates without the fictitious prices in place, mortgages owners will have been impacted by higher interbank rates. This could have the similar repercussion as the mini-bond lawsuit.

Markets.
Australia currently trading flat, with consumer goods and financials outperforming. With global growth concerns increasing, basic materials is the worst performing sector. At these levels, the knock on effect of a slow down will hit the banking sector, especially with house prices still relatively high, leaving the possibility of 1. further rate cuts, 2. increased bad loan provisions, 3. lower credit growth. On this basis, time to short the Australian banks.  
With the issues involving Libor, Standard Chart and HSBC will both come under pressure today, holding the HSI index lower. I expect markets to open up near the day highs and trend easier as investors reduce risk going into the US elections. Defensive names will continue to outperform.

Events.
09:20 Japan BOJ deputy governor speach
15:00 Portugal cabinet meeting
15:30 EU foreign ministers meeting
17:00 Bank of Italy public finance release
Asian and European finance ministers meet in BKK
Portugal budget announcement

Bonds.
09:30 Korea 3,6 month and 10 year auction
13:30 Philippines 3, 6 and 12 month auction
17:30 Dutch 3, 6 month auction
21:00 French 3, 6 and 12 month auction
23:30 US 3 and 6 month auction

Earnings
Gannett(US), Charles Schwab(US), Citi(US), Packaging corp of America(US), Blyth(US), Kuehne + nagel(GE), KREIT(SP), M1(SP), Yuanta(TW)

Stoddart

Morning note, data and earnings 12th October 2012

Morning,

The Euro loves that 200 day moving average, helping it rebound from the mid 1.28's back above the 1.29. Next stop, retest the 1.30. European equity markets had a strong performance overnight, as financial stocks continue to outperform. Volumes were mixed, most inline but easing in Spain after its recent downgrade.

DAX: +1.1% avg volume; O/P financials, cons. services  U/P industrial, health
CAC: +1.4% low volume; O/P financials, cons. goods  U/P industrial, telco
IBEX: +0.9% v.low volume; O/P financials, utilities  U/P health, cons. services
UKX: +0.9% v.low volume; O/P financials, basic mat  U/P health, utilities

European data saw German CPI come through inline at flat/0%, whilst French CPI was slightly weaker, -0.3% vs -0.1%. Spanish CPI 1.0% vs expected 1.1% so little impact from that number.  
Todays data is far more important, with EU and Indian industrial. Worth noting, France industrial productin numbers, out earlier this week, were better than expected and with European trade falling less than expected in the southern region, this number could surprise to the upside as exports improve on the weaker Euro.

US price action last night was weak, opening around the highs and trending easier, despite the fact the S&P is trading at a major technical support. I would have liked to see volumes increase at this support level, especially given the US$ weakened against major currencies, leaving me with some concerns over the strength of the support level.

US data was stronger than expected. Import prices were slightly higher at at 1.1% vs the survey of 0.7%, the trade balance roughly inline at -$44.2b vs expect -$44.0... whats $200m between friends? 
The jobs data was the most talked about, with continued claims of 339k vs expected 370k. With politicians and central banks worried about job creation and the unemployment rate above 8%, this will ease some concerns. Its certainly caught the attention of the press, with every headline and note today making it the top subject. We need to see follow-through.

S&P: flat avg volume; O/P basic material, financials  U/P telco, cons. services

Markets
Asian markets open higher as the US$ remains weaker against the Euro and AU$. Jpy weaker against the greenback which should provide some much needed relief for the exporters, I have started to look at Sony(6758) at these levels.
Expect markets to open around the highs and trend easier throughout the day. After a strong performance in Europe, I expect some profit taking into the weekend, despite the possible upside surprise in the industrial production numbers.
HK was strong into the close, with stocks like Foxconn(2038) seeing heavy buying into the close. Oils also seeing inflows, which I expect to see investors increase shorts over the next week. All this should leave HK weaker by close of business today, I expect down around 50bps.

Data.
09:30 AU credit card balances
13:30 Indian industrial production
14:45 French current a/c
15:30 Dutch trade balance
16:00 Italian CPI
17:00 EU industrial production
20:30 US PPI
21:00 Mexican industrial prodution
21:55 U. of Michigan confidence

Earnings: JPM and w.fargo
Stoddart

Morning note, data, events, bonds and earnings 11th October 2012

Morning,

Once again, we see investors moving to a defensive stance. Over the last few weeks, headlines have pointed towards possible hiccups including Spain and Italy dragging its feet, talks of a 2013 US recession, conflicts in Japan/China, Turkey/Syria and Iraqi domestic disputes.

Last night, the Fed highlighted modest growth, as housing and auto sales improved, despite little change in the labor market. This is in keeping with the Economist report, which shows a 11.4% raise in F-series Ford trucks YoY.

Consumer spending remained flat, which could be attributed to tight credit markets, as well as weaker jobs and sentiment. Manufacturing shows that the market is improving, but we are yet to see this in wholesales building out inventory, mainly again due to tight credit markets.

Markets remain nervous on these numbers, as well as the MBA mortgage applications falling 1.2%, leaving US equities trending easier all session. Jobs growth will be of the highest concern with unemployment rates around 8%. I'm sure the republicans will be highlighting this into the presidential elections on the 6th November.

S&P: -0.6% avg volume, O/P: Financials, cons. services; U/P: O&G, basic mat

A strong performance in the financial sector, helps support the S&P. With JP Morgan and Wells Fargo due to report strong numbers on Friday, the sector continues to outperform the broader index. Given the announcement that the Fed will start buying mortgage based securities, balance sheets will certainly be improved. Earnings are also supported by improved margins, as banks keep "real interest rates" high, whilst interbank rates remain low.

After market, Fitch maintain ratings on a number of the financials, including BoAML, Barclays, BNP, Citi, CS, GS, RBS, DB, MS, SG and UBS.

European markets had a similar session, closing just off the lows. The price action however, did not reflect the European data. Both Greece and France showed strong industrial production numbers, growing at 2.5% and 1.5% respectively. Italy was weaker, with production falling -5.2%, this was better than the -9% expected. I think this highlights sentiment perfectly, the market is far to bearish on southern European growth. The jobs market will start improving.

DAX:-0.4% low volume; O/P: health, financials  U/P: tech, cons. services
FTSE: -0.6% avg volume; O/P: utilities, financials  U/P: tech, industrials
CAC: -0.5% avg volume; O/P: telco, industrials  U/P: tech, basic materials
IBEX: -1.0% avg volume; O/P: utilities, tech  U/P: financials, telco

After S&P cut Spain's debt rating to BBB-, just one level above junk. 10 year yields moved very little, currently at 5.76%, after a sharp rise back in early September. The Euro, however, did weaken 1 figure, from 1.2980 to 1.2880 vs the greenback. Now trading at major technical supports, I expect the Euro to remain steady here, before retesting the 1.30 level into the US presidential election, which should also coincide with Spain agreeing terms for borrowing funds from the EFSF.

Asian markets have opened all weaker. Volumes are mixed but both Japan and HK have seen sharp increases, whilst Australia is looking slightly weaker. Given the strong performance of its banks, I expect some short selling in this sector which should see the ASX200 underperform the region.

Bank of Korea cut rates 25bps, as expected, which had little effect on the Korea Won, currently at 1115. The Won has been strengthening since May, from 1180 to 1109 low just 3days ago, now we are seeing it starting to weaken, which will only be a blessing to exporters, who have been struggling with slowing global consumer discretionary spending over the last quarter.

NKY: -0.2% strong volume; O/P: O&G, tech   U/P: cons. services, financials
HSI: +0.1% v.strong volume: O&G, basic mat  U/P: utilites, tech
KOSPI: -0.34% weak volume: O/P: financials, telco  U/P: tech, health
TAIEX: -1.57% avg volume: O/P: utilites, teclo  U/P: industrials, O&G
SHCOMP: -0.5% strong volume: O/P: O&G, utilites  U/P: tech, cons. goods

For the second day, oil continues to outperform. With tensions in oil producing states, crude prices have seen a strong rebound over the last week. After weak numbers from HTC, the tech sector continues to come under pressure as heavy weight Hon Hai sells down -2.8%.

HK flat, as heavy weights include HSBC, China financials and oil stocks. Oils will continue to run in the near term, but with investors looking to reduce risk, mid-cap and basic materials will give up some of Septembers gains. We should also see short covering in alu and steel, as outflows from coal and cement rotate.
With the S&P looking to test major technical trading levels, I suspect markets will remain weak and we should see volumes fall. I see little inflows and sentiment is that, we can can wait until after the US election. This will throw up some opportunities as volatility increases, so watch for short, sharp moves on low volume as a time to buy, I would avoid shorting on strength as we will see aggressive window dressing into month end.

Data. (in Singapore time, GMT+7)
13:00 Japan confidence
14:00 German CPI
14:45 French CPI
15:00 Spain CPI
15:00 Turkey current a/c
16:00 ECB monthly report
20:30 US import prices, trade balance, jobless claims
Greece unemployment - possible upside surprise here after a strong industrial production number yesterday.
China foreign reserves, new loans and money supply.
US monthly budget statement

Evernts.
13:45 Financial stability board meets
22:00 Merkel meets EU commission
G7 meeting in Tokyo - China still not present.

Bonds.
11:35 Japan 3 month + 30 year auction
01:00 US 30 year auction

Earnings.
Fastenal(US), JB Hunt Transport(US), Safeway(US), WH Smith(UK), LaCie(FR), Medicrea Intl(FR), Wilex(GE), Fast retailing(JP), Taiwan Mobile(TT), Top Glove(MK), Tisco Fin(Thai)

Stoddart

Morning note, data, events, bonds and earnings 3rd October 2012

Good morning

I start the morning run down on a sad note. ING closed the last of the old Baring's equity business yesterday. It is certainly the end of an era.

Markets overnight saw volumes ease as investor sentiment weakens, despite stronger New York ISM and Eurozone PMI.

In bonds markets, we saw Spanish yields continue to fall, now at 5.60% and Italy looking to break the 5% level. These are still running after the Spanish bank stress test showed the 100m Euro set aside by the EFSF is enough to cover its current short fall. Spain will take the capital injection, it has to. But there could be some delay over terms. The ECB will move quickly to ease these fears.  

Equity markets again saw defensives outperform. The recent run in basic materials came to an end, despite the Euro holding above 1.29 against the green back. Again, this is in keeping with an increasing equity exposure, but with a defensive stance.

I would like to turn your attention to a news story out of Nigeria. Late last night, tensions started to raise in the north east, where extremists(suspected to come from Niger), started attacking a local town. This might seem far way from most of us over the world, but the impact quite certainly escalate. The group, called Boko Haram, have been attacking communication masts also, which is strange, given many like to get the word out. This is picking up pace and could impact business in not just Nigeria, but also Africa.

Current oil reserves are estimated at between 16-22 billion barrels, with production levels of 2.4m per day targeted by the government. A large concentration of that coming from Niger delta. Given these possible threats, and the US$ weakening, I would be looking to reduce exposure to oil companies in the region, and long crude at these levels.

Markets.

Asian markets mixed as markets such as HK and India re-open. Japan sold off early open, but has since recovered and is trading up on the day. I was a little keen yesterday, wanting to buy the AU$ after the RBA cut rates 25bps, its now trading at 1.023 and I still want to buy it. 

Outperforming sectors are defensives such as utilities. The financial sector is looking extremely rich here with NAB not far off a 52week high. I would be looking to short here, as the over supply of basic materials will see earnings in Australia slow, and the housing sales stagnate.

Data   (BST+7hours)

15:00 Turkey CPI, PPI

15:15 Spain PMI

15:45 Italy PMI

15:50 France PMI

15:55 German PMI

16:00 EU PMI

16:30 UK PMI

17:00 Eurozone retail sales

20:15 ADP employment change

22:00 US ISM

Events - WTO council meeting

Bonds

11:35 Japan 3 month auction

17:30 India 3+12 month auction

Earnings

Tecso(UK), Monsanto(US), Sportingbet(UK), Family Dollar Stores(US), OCZ Tech(US), Centrotherm Photovoltaics(GE), Sareum(UK), Gold Oil(UK), Gemfields(UK), Avanti Comm(UK), Lawson(JP), Sollers(RU), RiTe Uglihevik(RU)

Stoddart

Morning note, data, events and earnings 2nd October 2012

Good Morning,

Firstly, a big hats off to the rescue services in HK, who risk their lives in very aggressive under-currents of the HK habour, and saved so many.

Equity markets saw a strong rebound overnight, on relatively stable volumes.
European markets moved aggressively higher as the Euro rallies back above the 1.2940 level, now trading slightly easier at 1.2895.

France:+2.4% avg volume, o/perform Health,Utilities; u/perform O&G,Con.Service
Spain: +1% volume +32%, o/perform health,basic mat; u/perform O&G,Telco
Germany:+1.5% volume -22%, o/perform basic mat,financial; u/perform telco,tech
UK: +1.4% avg volume, o/perform financial,basic mat; u/perform teclo,heath

Defensive outperforming as investors increase weightings in Europe, but with the correct level of caution. The financial sector seeing inflows as the European debt situation improves. Spain got a strong boost as stress test showed banks needed considerably less than the Eur 100b set aside by the EFSF.
With Spanish 10 year bonds trading at 5.83%, its not the lowest they have traded recently, but possible delays in Spain taking funds from the ECB have seen CDS's increase of late, expect yields to fall as Spain negotiates terms for the use of the EFSF.
With the US$ weakening, basic materials are seeing inflows. With prices making or trading near multi year lows, inflows are 1. bottom fishing 2. US$ expectations helping support prices. I doubt, with current inventory levels, that anyone can expect demand driven price increases for the next 6/12 months.
US markets traded small up, however, tech under pressure as heavy weight Apple continues to ease. Given were is has come from, and the hype, I would still be happy to short this name.
S&P: +0.3% avg volume, o/perform health, cons.goods; u/perform utilities,telco
NASDAX flat, volumes -5%

US markets followed Europe with demand for defensive names. Factory orders data last night showed orders growing (a number over 50), which is a very strong performance, but we are going into a high demand period. That said, the market will be more optimistic with future data. Sentiment right now is "wait and see" if the data improves ahead of stimulus working its way through. After being burnt before, I still little interest from interestors in rushing to get long growth.
Bernanke plays to sentiment by highlighting that low rates until 2Q 2015 does not mean low growth... this will certainly be true, and given comments, I expect rates will not be considered until will see GDP above 3%, the last thing they want is to spook the market, enjoying high to hyper inflation over a deflationary enviroment.

Markets.
Korea, Australia and Japan all trading firmer, but the do feel like they are running out of steam... in line with the Euro.
I expect Europe to give up some of yesterdays gains on the open so Asia should start to trend easier from current levels.
Defensive will continue to see inflows, basic materials also, as short sellers are quick to cover.

Data:09:30 Japan earnings
12:30 Australia RBA rate announcement, expect no change but talks of possible rate cuts if the market continues to ease. Limited inflationary pressure currently.
14:00 UK house prices
14:30 RBA commodity price index
15:00 Spain unemployment, big jump expected to 57k MoM, but upside surprise last time round
16:30 UK PMI construction
17:00 EU PMI
21:45 US ISM New York

Bonds.10:30 S.Korea 3yr auction
11:00 Tahi 1/3/6/12 month auction
17:30 UK 10yr auction
23:30 US 4 week auction

Earnings.Wolsely(UK), Mosaic(US), Mechel(RU), Xyratex(US), Bonduelle(FR), St Ives(UK), HALS Development(RU), Tatneft(RU)
All times British Summer Time(BST) +7 hours

Stoddart

Morning note, events, data and earnings 1st October 2012

Good Morning

Mixed feeling in the press this weekend. As expected, after the recent run, investors are now looking for clarity in the data... which will take time. Having been burnt by other stimulus packages, running out of steam, fears are that improved liquidity in the interbank market in Spain and Italy, will not be passed on to consumers. Similar to that of the US back in 2009.
The correction in the currency markets, with the US$ firming, was to be expected and with noise of a possible Spanish ratings cut by Moody's, outflows of European debt are expected once again.
Equity market volumes have remained strong, but are destined to ease given sentiment is now turning negative again, as Spain drag their feet, and others follow suit. After watching "To big to fail" at the weekend, it looks and feels very similar to Dick Fuld's position.
US markets outperforming on Friday, which will continue, until we start seeing some of these plans for growth coming out from the European leaders.
France's new wealth tax will not be well received. With Hollande's appointment over Sarkozy, it was not mentioned how he planned to reduce the deficient... now we know. This will certainly raise concerns that manufacturing, industrial and R&D will either be reduced or move overseas.
Spain's budget is targeting cuts rather than tax hikes. Initial cuts will hit the unemployment data, however, with France making it harder to do business and Germany coming up for an election next year, we could see investment move to the South.

Markets. Lots of holidays this week in Asia. Australia, Korea, HK and China off today.
Japan is easier 80bps and volumes look 22% lighter vs avg volumes at this time. We should equity markets continue to ease inline with currencies. Once again, defensive inflows will pick up but to a lesser extent than back in May.
With the European banks now having access to liquidity, the environment has improved. Budget releases are causing quite a stir, with riots in Madrid, but this will come to pass as the easing debt burden will promote reconstruction plans of Southern Spain after some heavy floods.
With some aggressive moves and volumes easing/expected to ease, I would be looking to pick up some of the distressed names. In particular, basic materials which although the firming US$ will hurt spot prices in the near term, a low rate environment, and China's new infrastructure stimulus talks, should help ease over supply.
Like many stimulus packages, the pressure will be put on the banks. Especially in China, where funding will be needed to pursue these government projects. Credit and liquidity both remain tight. Banks do not want to lend at a risk of raising Non Performing Loans(NPL'S). But given the governments control, and nervousness of the housing market, banks will be encouraged. This does not look good for the sector.

Events.Japan to appoint new finance minister
13:30 Philippines 3,6+12 month auction
17:30 Netherlands 3+9 month auction
21:00 France 3,6+12 month auction
23:30 US 3+6 month auction

Data.12:00 Indonesia inflation, trade balance
12:00 Thai CPI
13:00 India PMI
15:15 Spain PMI
15:45 Italy PMI
15:50 France PMI
15:55 German PMI
16:00 Greece PMI
16:00 Italian unemployment
16:00 EU PMI
16:30 UK PMI, mortgage approvals, consumer credit, money supply
17:00 EU unemployment
22:00 US ISM, construction spending

Earnings.Eurobank Ergasias(GR), Shimamura(JP), Neo Group(SG), Central Euro Dist Corp(US), Razgulay(RU), U10(FR), FFP(FR), Weborama(FR)

Stoddart

Morning Note, events and data 24th September 2012

Morning,

Weekend press is skewed to the negative this weekend. The FT highlights Greece needing more time raising fears that the austerity measures imposed will need be met.

Its not just Greece that gives cause for concern. Now the terms of a bailout are being questioned by Spain, and to a lesser degree, Italy. This will only increase tension with voters in German.
The outcome of the EFSF and German court announcement clearly gave the markets the much needed support, triggering a fresh round of short covering and inflows to Europe. The data, however, remains weak and investors now want to see the impact of this "unlimited" European program. The proof is in the pudding.
Markets this week are poised to give back some of the recent gains. With such a strong run in basic materials, industrials and the Euro, fast money or sort term traders will lock in recent gains.

With GDP estimates yet to factor in the German court results and the US announcing rates on hold til 2015, I expect analysts to come out with an improved outlook for GDP recovery. We might even start hearing talks of possible hyper-inflation given the aggression of recent plans. As mentioned before, with the main aim being growth and inflation, US long term debt will see some heavy shorting.... a possible increase of operation Twist, is highly likely.

Markets today.Volumes have been extremely strong across equities. I would expect this to start to slow. As mentioned, all eyes on the data, with Chicago FED tonight and the US durable goods on the 27th.

Inflows back into defensives, such as, telcos and utilities. We should also see some rotation in the basic materials space, with coals getting sold down whilst Alu and Steel see inflows. On a technical analysis level, 323, 347 and 2600 both have broken the downward channel, confirmed support and look set to start moving higher. Borrow rates still cheap but short sellers have limited upside at these levels.

China banks have ran hard lately. With talks of Europe and the US pushing for growth, talks are the China might not need additional rate cuts to support its economy, leaving investors positive banks. This is a poor excuse to buy the sector. Margins are irrelevant, if the loans are bad. With China's property sales still struggling, as the government aims to fix prices, credit and ABS have the potential to be miss priced, adding to NPL's.

Data.15:30 Netherlands GDP
16:00 German IFO
16:30 HK Balance of payments
19:30 Turkey industrial confidence, capacity utilization
20:30 US Chicago Fed
22:30 US Dallas Fed

Events.15:30 Italy's Monti talks about competition
16:30 UK's BoE financial polity statement
20:00 German hearing on German-Swiss tax
21:00 EU hearing on Libor

Earnings.Prada(HK), Lennar(US), Norilsk Nickel