Good Morning,
Press over the weekend should have give the markets some positive sentiment, as China factory output and retail sales came in slightly better, see below:
CPI 2.0% vs expected 2.1%
PPI -2.2% vs expected -2.0%
Industrial production 10.1% vs expected 9.8%
FAI 20.7% vs expected 20.9%
Retail sales 14.9% vs expected 14.6%
Other headlines in the press should also help support Europe, with officials commenting "Greece is close to reaching targets for buying back its existing debt". Current yields continue to fall, currently 13.85% whilst German yields remain unchanged. Expect investors to continue to look a the spread, as further policies continue to support the Southern European states.
The UK continue down a similar route to that of the US, chasing multi-nationals that are avoiding taxes through overseas holding companies and structures. Already we have seen a number of companies publicise they will be reviewing tax procedures, I assume so that the politicians will loosen the noose and potential fines for their existing practices.
Other news, was driven by Friday's data. Greece GDP came in at -6.9% vs expected QoQ unchanged at -7.2%.
The UK industrial production and manufacturing came in surprisingly weak, ind production was -0.8% vs expected +0.8% MoM, Manufacturing -1.3% vs expected -0.2% MoM.
In the US, markets enjoyed some optimism on the back of stronger jobs data. change in non-farm payrolls increased to 146k, vs estimates of 85k in November, helping ease the unemployment rate down to 7.7% vs expected 7.9%. Wages and hourly earnings came in as expected at 34.4 or +1.7%.
The only number to disappoint was the Uni of Michigan confidence indicator which came in at 74.5 vs expected 82.0.
Markets. Despite the optimism and strong data/headlines, the correction in the Euro regardless of bond inflows leaves me nervous that a pull back in equities is due, however, the JPY remains steady, so would could see Asian markets outperform as investors look at improving exports helping to increase growth.
With pull back in EURUSD, gold seems unaffected still trading above the $1700 level, whilst oil sold of $2 back to 86 last week.
Over the last month, I have received a number of requests from clients for physical gold. 2 reasons, 1. Possible regulation on commodity derivatives, 2. Avoiding costly futures rolls and management fees, instead choosing to pay the fees on depository. This trend will continue and should you want to know the codes and different options, please email me.
With oil coming off and the Euro trading at major support levels, I would be looking to buy upstream oil plays, as at currently levels, they look cheap. GDP estimates and forecasts are too aggressive to the downside and I expect upward revision in early 2013.
With China now trading back above 2000, its time to look at A-share premium/discount. I would look at shorting HSCEI vs either the A-share tracker 2823 HK, or CSI 300 2827 HK at these levels.
China property names have also been huge outperforms as the government looks to support prices and possibly look at taking on inventory. The sector however, is benefiting from an artificially market, where large inventories will still exist and growth within the sector will continue to fall.
These policies will help banks improve balance sheets, as current properties on the banks books can be repackages and sold on. But given the recent performance of the sector, this looks priced in.
Data. 08:30 Australia home loan, investment lending
12:30 Japan bankruptcies
13:00 Japan consumer confidence
14:00 Eco watchers current/outlook
15:00 Germany import/export/trade balance
15:45 France BoF business sentiment/Industrial/manufacturing production
16:00 Turkey GDP/industrial production
17:00 Italy industrial production
17:30 EU sentix investor confidence
18:00 Italy GDP
Greece industrial production/CPI
China imports/exports/trade balance
Watch for coal imports and the Australia index.
Events.19:30 EU foreign ministers meet
21:45 US FDIC systemic resolution advisory committee
Obama speaks about US budget
IMF;s Lagarde visits LatAm
Bonds.10:30 S.Korea 5 year auction
13:30 Philippines 3,6,12 month auction
18:30 Netherlands 3,6 month auction
22:00 France 3,6,12 month auction
03:00 US 3,6 month auction
Earnings.Peregrine Pharma(US), Teavana(US), Converse Tech(US), China Sandi(CH), Indika Energy(IJ)
Stoddart
Showing posts with label housing. Show all posts
Showing posts with label housing. Show all posts
Sunday, 9 December 2012
Tuesday, 20 November 2012
Morning note, data, events, bonds and earning 21st November 2012
Good morning,
As the sun breaches the eastern shores of Singapore, and memories of the night before become more vivid, helping explain the plant pot in the middle of the bedroom floor, the US housing data is backing my optimism of US growth beating analysts estimates.
Despite my kind gesture of a tree, the misses remains unimpressed.
Equity markets overnight held quite well, considering such a strong run on Monday, I was looking for some pull back yesterday. Stronger than expected US housing starts and building permits help support equities whilst currencies continued strength against the US$ boosts markets in Europe.
European markets saw a big drop in volume overnight, leaving me a little nervous on the recent strong move. With the Euro at such major technical resistance levels, investors seem to be sitting back and waiting for confirmation that "the world is now ok". Bond markets seems to conform, with Spanish and Italian debt firming 11 and 6 basis points, whilst US treasuries gave back last weeks gains, with the 10yr now trading at 1.67%.
FTSE +0.2% avg volume; O/P: telco, industrial U/P: tech, financial
CAC +0.7% v.low volume; O/P: health, cons.services U/P: tech, telco
DAX +0.7% v.low volume; O/P: basic materials, industrials U/P: utilities, telco
IBEX +0.2% v.low volume; O/P: industrials, cons.services U/P: tech, basic mats
Sector maps show very mixed signals, however, the outperformance of industrials would leave us to believe that there is some short covering out there. This is also reflected with basic materials performing. Huge inventories and slowing China growth has seen prices continue to remain weak, leaving every fundamentalist negative not just in the near term, but as far out as 2015 before we see price recovery. As risk is reduced, so are shorts, helping (finally) to see some rotation of capital back into both industrials and basic materials, I expect this to continue.
The financial sector has been extremely strong over the last 3 months, as the market sees efforts from central banks to boost credit and lending, should see revenues increase. Like 2008, this will come at a cost, quality. The sector is starting to look rich here and yes, they will be the first to benefit from policy, but at these levels, it looks priced in.
US markets were have a rough day early in the session, with a sharp sell off mid-way through as Bernanke warns that the central bank has little power if congress cant agree on the up coming tax cuts and spending policy expiry.
But this was soon reversed, as sentiment remains high on the back of Obama being able to agree with Tea Party representative Paul Ryan, and get new policies through without delay.
Data overnight saw housing starts increase to 894k vs expected 840k, whilst building permits came in at 866k vs expected 864k.
S&P 0.1% low volume; O/P: health, financial U/P: tech, oil & gas
Despite the weaker US$, oil and gas gave back some of Mondays gains with Chevron 0.8% easier. Tech also sold down on the back of HP down 12%, dragging the sector lower, and heavy weight Apple, down 0.9% after a strong run on Monday.
The financial sector was also strong again last night and is starting to look top. A number of private wealth guys were trying to sell the idea of going long the sector but personally, at these levels it looks toppy. REDUCE/SELL
Markets.Asian markets trended easier yesterday, with HK closing at the lows. I expect a bounce on the open but we should see them drift sideways for most of the day. With currencies at major resistance levels, I see limited triggers to push us through those levels.
Bank of England minutes due today at 17:30 singapore time.
At these levels, I continue to like coal and oil, as we see rotation into lagging sectors. China property is starting to look rich here, reduce.
Mitsui OSK, which is suffering from weak dry bulk rates, had a fantastic move yesterday on strong volume, I like this. BUY
Data.16:30 Netherlands house prices
17:30 UK Bank of England minutes, public finances
20:00 US MBA mortgage apps
21:30 US jobless claims
22:55 Uni of Michigan confidence
23:00 US leading indicators
Spain trade balance
Events.08:30 Australia RBA minutes
21:30 Spain Bank of Spain governor speaks in Madrid
22:00 Italy Bank of Italy speaks
Euro finance ministers hold meeting on Greece
Bonds.09:30 China 1,3,5,7,10 year auction
11:00 Thailand 1,3 and 6 month auction
12:30 Taiwan 30 year auction
13:30 Philippines 7year auction
17:30 Spain 364 and 509day auction
18:30 UK 5year auction
00:30 US 1 month auction
Earnings.Deere(US), CareFusion(US), Zodiac Aerospace(FR), Johnson Matthey(UK), China resources Ent(HK), Texwinca(HK), Oriental watch(HK), City telecom(HK), Citic(CH), Airaisa(MK), Ukrnafta oil(RU)
Stoddart
As the sun breaches the eastern shores of Singapore, and memories of the night before become more vivid, helping explain the plant pot in the middle of the bedroom floor, the US housing data is backing my optimism of US growth beating analysts estimates.
Despite my kind gesture of a tree, the misses remains unimpressed.
Equity markets overnight held quite well, considering such a strong run on Monday, I was looking for some pull back yesterday. Stronger than expected US housing starts and building permits help support equities whilst currencies continued strength against the US$ boosts markets in Europe.
European markets saw a big drop in volume overnight, leaving me a little nervous on the recent strong move. With the Euro at such major technical resistance levels, investors seem to be sitting back and waiting for confirmation that "the world is now ok". Bond markets seems to conform, with Spanish and Italian debt firming 11 and 6 basis points, whilst US treasuries gave back last weeks gains, with the 10yr now trading at 1.67%.
FTSE +0.2% avg volume; O/P: telco, industrial U/P: tech, financial
CAC +0.7% v.low volume; O/P: health, cons.services U/P: tech, telco
DAX +0.7% v.low volume; O/P: basic materials, industrials U/P: utilities, telco
IBEX +0.2% v.low volume; O/P: industrials, cons.services U/P: tech, basic mats
Sector maps show very mixed signals, however, the outperformance of industrials would leave us to believe that there is some short covering out there. This is also reflected with basic materials performing. Huge inventories and slowing China growth has seen prices continue to remain weak, leaving every fundamentalist negative not just in the near term, but as far out as 2015 before we see price recovery. As risk is reduced, so are shorts, helping (finally) to see some rotation of capital back into both industrials and basic materials, I expect this to continue.
The financial sector has been extremely strong over the last 3 months, as the market sees efforts from central banks to boost credit and lending, should see revenues increase. Like 2008, this will come at a cost, quality. The sector is starting to look rich here and yes, they will be the first to benefit from policy, but at these levels, it looks priced in.
US markets were have a rough day early in the session, with a sharp sell off mid-way through as Bernanke warns that the central bank has little power if congress cant agree on the up coming tax cuts and spending policy expiry.
But this was soon reversed, as sentiment remains high on the back of Obama being able to agree with Tea Party representative Paul Ryan, and get new policies through without delay.
Data overnight saw housing starts increase to 894k vs expected 840k, whilst building permits came in at 866k vs expected 864k.
S&P 0.1% low volume; O/P: health, financial U/P: tech, oil & gas
Despite the weaker US$, oil and gas gave back some of Mondays gains with Chevron 0.8% easier. Tech also sold down on the back of HP down 12%, dragging the sector lower, and heavy weight Apple, down 0.9% after a strong run on Monday.
The financial sector was also strong again last night and is starting to look top. A number of private wealth guys were trying to sell the idea of going long the sector but personally, at these levels it looks toppy. REDUCE/SELL
Markets.Asian markets trended easier yesterday, with HK closing at the lows. I expect a bounce on the open but we should see them drift sideways for most of the day. With currencies at major resistance levels, I see limited triggers to push us through those levels.
Bank of England minutes due today at 17:30 singapore time.
At these levels, I continue to like coal and oil, as we see rotation into lagging sectors. China property is starting to look rich here, reduce.
Mitsui OSK, which is suffering from weak dry bulk rates, had a fantastic move yesterday on strong volume, I like this. BUY
Data.16:30 Netherlands house prices
17:30 UK Bank of England minutes, public finances
20:00 US MBA mortgage apps
21:30 US jobless claims
22:55 Uni of Michigan confidence
23:00 US leading indicators
Spain trade balance
Events.08:30 Australia RBA minutes
21:30 Spain Bank of Spain governor speaks in Madrid
22:00 Italy Bank of Italy speaks
Euro finance ministers hold meeting on Greece
Bonds.09:30 China 1,3,5,7,10 year auction
11:00 Thailand 1,3 and 6 month auction
12:30 Taiwan 30 year auction
13:30 Philippines 7year auction
17:30 Spain 364 and 509day auction
18:30 UK 5year auction
00:30 US 1 month auction
Earnings.Deere(US), CareFusion(US), Zodiac Aerospace(FR), Johnson Matthey(UK), China resources Ent(HK), Texwinca(HK), Oriental watch(HK), City telecom(HK), Citic(CH), Airaisa(MK), Ukrnafta oil(RU)
Stoddart
Monday, 19 November 2012
Morning note, data, events, bonds and earnings 20th November 2012
Good morning,
Optimism was lifted overnight as strong debt and headlines now support Obama's plans to reduce the US deficit. As expected, equity markets finally start reacting to the currency markets, where the US$ continues to weaken vs majors. Now with the Euro and Sterling at major technical levels, do they have the momentum to push through resistance levels, or are they setting up to move sideways in the near term?
European markets opened at the lows and trended firmer throughout the session, closing on the highs, however, volumes remained below average.
Spanish bad loans are over the headlines today, mostly on loans and mortgages, equating to 10.7% of total loans or 182.2 billion euros in September.
Overnight we also had a French bond downgrade, loosing the almighty AAA rating, now AA1 by Moody's. Fears will be others are to follow. The downgrade cited 1. worse longer term outlook; 2. uncertainty on economic growth prospects; 3. falling resilience to future euro shocks.
This is mud on the face of Hollande, who was looking for increased spending to boost GDP, and tax revenues to pay for the spending.
FTSE +2.4% avg volume; O/P: tech, financials U/P: health, utilities
CAC +2.9% low volume; O/P: financials, tech U/P: health, telco
DAX +2.5% avg volume; O/P: cons.good, tech U/P: health, utilites
IBEX +2.3% avg volume; O/P: tech, financials U/P: health, industrial
A complete reversal from last weeks defensive move into healthcare. With improving housing markets in the UK, investors brush off the Spanish bad loans data, and European bonds remain relatively unchanged. The Euro is also supporting which rallied nearly 1 big figure overnight, now trading at 1.2780.
European indices are looking rich here with German's DAX trading on 14x earnings, vs the S&P also trading on 14x, however, on book value the DAX is only 1.35, and the S&P is on 2.09.
With such negativity since the US election, equity markets were long overdue a bounce, and with volume remaining around average plus the Euro at major resistance levels, this move has little behind it. The longer term outlook is positive for European equities but with growth set to increase slowly, overnight moves on little data will soon correct.
Data overnight saw Italian industrial production fall -4.0% vs expected -1.0% but this is also impacted by floods in Europe.
Greece current a/c came in at 775m, as exports of services fell from 3965m to 2920m month on month, mostly in travel.
The EU construction output fell -1.4% MoM, due mostly to a large fall in the Czech republic, German and Poland. Spain was actually up 1.4%, whilst Slovenia went from a -19.6% to -0.2% quarter on quarter.
US markets traded similar to that of Europe, opening at the lows and trending firmer throughout the session, closing at day highs. UST's saw yields fall slightly but with the 10year still at 1.61, and AAA rated, there will continue to be demand, especially if we see investors increase cash positions into year end.
S&P +2.0% avg volume; O/P: tech, basic materials U/P; utilities, health
Tech seeing a strong rebound, helped mostly by Apple (AAPL), which rebounded +7.2% last night. Expect this stock to squeeze further given the recent stream of negativity on its growth. I have to agree, the outlook for AAPL is limited due to falling innovation, however, short levels would be nearer $600 again.
With equities finally mirroring currencies, oil and basic materials were both strong last night. The US sectors map highlights Paper +3.7%, industrial materials +.3.1% and mining +1.9%, this sector has more to go as funds move to a more equally weighted position, also expect a short squeeze.
With optimism on the US finding a solution to reduce its deficit whilst spending to encourage growth, investors turn to the financial sector. Credit markets are such, that banks remain nervous on lending, ie tight credit markets, which mean real interest rates remain high and loan growth weak. However, as growth estimates improve and housing markets get support, we should see an increased level of lending. Bad credit ratings will improve but a full blown property market rally is some way off.
Markets.Asian markets already priced in some of this move yesterday, but should have more to go. Expect markets to rally on the open to day highs, and then trade easier as the Euro struggles at resistance levels.
Sectors, still not too late to buy Alu, coal, steel and oil. Top picks, Angang(347), Chalco(2600), Yanzhou(1171) and Petrochina(857), but CNOOC(883) will also benefit from improving crude.
As China property prices increase, banks should also see inflows as will property developers, however, due to government intervention the credit markets will remain tight.
IPP has been a strong sector this year and going into China winter, but is now looking rich. SELL
US building permits/housing starts today... lets see if we get some follow-through on US housing.
Data.10:00 China FDI
12:30 Japan industrial activity
15:00 German PPI
16:30 Netherlands consumer confidence (important due to noise on the Euro)
21:30 US housing starts, building permits
BoJ target rate
Events.02:00 EU Van Rompuy meets ministers on budget talks
07:00 Monti in UAE
08:30 Australia reserve minutes
17:00 EU general affairs minister prep budget summit
22:00 US Fed's Lacker speaks on monetary policy
Bonds.09:30 China 1,3,5,7,10 year auction
11:30 Thailand 1,3/12 month auction
12:30 Taiwan 30 year auction
17:30 Spain 1,2 year auction
18:30 UK 5 year auction
19:00 EFSF 6 month auction
00:30 US 1 month auction
Earnings.Campbell soup(US), HJ Heinz(US), HP(US), Medtronic(US), Best Buy(US), British Land(UK), OPAP(GR), easyjet(UK), Digital China(HK), Lee & Man(HK), Guinness Anchor(MK), SK Chem(SK)
Stoddart
Optimism was lifted overnight as strong debt and headlines now support Obama's plans to reduce the US deficit. As expected, equity markets finally start reacting to the currency markets, where the US$ continues to weaken vs majors. Now with the Euro and Sterling at major technical levels, do they have the momentum to push through resistance levels, or are they setting up to move sideways in the near term?
European markets opened at the lows and trended firmer throughout the session, closing on the highs, however, volumes remained below average.
Spanish bad loans are over the headlines today, mostly on loans and mortgages, equating to 10.7% of total loans or 182.2 billion euros in September.
Overnight we also had a French bond downgrade, loosing the almighty AAA rating, now AA1 by Moody's. Fears will be others are to follow. The downgrade cited 1. worse longer term outlook; 2. uncertainty on economic growth prospects; 3. falling resilience to future euro shocks.
This is mud on the face of Hollande, who was looking for increased spending to boost GDP, and tax revenues to pay for the spending.
FTSE +2.4% avg volume; O/P: tech, financials U/P: health, utilities
CAC +2.9% low volume; O/P: financials, tech U/P: health, telco
DAX +2.5% avg volume; O/P: cons.good, tech U/P: health, utilites
IBEX +2.3% avg volume; O/P: tech, financials U/P: health, industrial
A complete reversal from last weeks defensive move into healthcare. With improving housing markets in the UK, investors brush off the Spanish bad loans data, and European bonds remain relatively unchanged. The Euro is also supporting which rallied nearly 1 big figure overnight, now trading at 1.2780.
European indices are looking rich here with German's DAX trading on 14x earnings, vs the S&P also trading on 14x, however, on book value the DAX is only 1.35, and the S&P is on 2.09.
With such negativity since the US election, equity markets were long overdue a bounce, and with volume remaining around average plus the Euro at major resistance levels, this move has little behind it. The longer term outlook is positive for European equities but with growth set to increase slowly, overnight moves on little data will soon correct.
Data overnight saw Italian industrial production fall -4.0% vs expected -1.0% but this is also impacted by floods in Europe.
Greece current a/c came in at 775m, as exports of services fell from 3965m to 2920m month on month, mostly in travel.
The EU construction output fell -1.4% MoM, due mostly to a large fall in the Czech republic, German and Poland. Spain was actually up 1.4%, whilst Slovenia went from a -19.6% to -0.2% quarter on quarter.
US markets traded similar to that of Europe, opening at the lows and trending firmer throughout the session, closing at day highs. UST's saw yields fall slightly but with the 10year still at 1.61, and AAA rated, there will continue to be demand, especially if we see investors increase cash positions into year end.
S&P +2.0% avg volume; O/P: tech, basic materials U/P; utilities, health
Tech seeing a strong rebound, helped mostly by Apple (AAPL), which rebounded +7.2% last night. Expect this stock to squeeze further given the recent stream of negativity on its growth. I have to agree, the outlook for AAPL is limited due to falling innovation, however, short levels would be nearer $600 again.
With equities finally mirroring currencies, oil and basic materials were both strong last night. The US sectors map highlights Paper +3.7%, industrial materials +.3.1% and mining +1.9%, this sector has more to go as funds move to a more equally weighted position, also expect a short squeeze.
With optimism on the US finding a solution to reduce its deficit whilst spending to encourage growth, investors turn to the financial sector. Credit markets are such, that banks remain nervous on lending, ie tight credit markets, which mean real interest rates remain high and loan growth weak. However, as growth estimates improve and housing markets get support, we should see an increased level of lending. Bad credit ratings will improve but a full blown property market rally is some way off.
Markets.Asian markets already priced in some of this move yesterday, but should have more to go. Expect markets to rally on the open to day highs, and then trade easier as the Euro struggles at resistance levels.
Sectors, still not too late to buy Alu, coal, steel and oil. Top picks, Angang(347), Chalco(2600), Yanzhou(1171) and Petrochina(857), but CNOOC(883) will also benefit from improving crude.
As China property prices increase, banks should also see inflows as will property developers, however, due to government intervention the credit markets will remain tight.
IPP has been a strong sector this year and going into China winter, but is now looking rich. SELL
US building permits/housing starts today... lets see if we get some follow-through on US housing.
Data.10:00 China FDI
12:30 Japan industrial activity
15:00 German PPI
16:30 Netherlands consumer confidence (important due to noise on the Euro)
21:30 US housing starts, building permits
BoJ target rate
Events.02:00 EU Van Rompuy meets ministers on budget talks
07:00 Monti in UAE
08:30 Australia reserve minutes
17:00 EU general affairs minister prep budget summit
22:00 US Fed's Lacker speaks on monetary policy
Bonds.09:30 China 1,3,5,7,10 year auction
11:30 Thailand 1,3/12 month auction
12:30 Taiwan 30 year auction
17:30 Spain 1,2 year auction
18:30 UK 5 year auction
19:00 EFSF 6 month auction
00:30 US 1 month auction
Earnings.Campbell soup(US), HJ Heinz(US), HP(US), Medtronic(US), Best Buy(US), British Land(UK), OPAP(GR), easyjet(UK), Digital China(HK), Lee & Man(HK), Guinness Anchor(MK), SK Chem(SK)
Stoddart
Sunday, 18 November 2012
Morning note, data, events, bonds and earnings 19th November 2012
Good morning,
US markets on Friday gave us brief relief as Obama speaks to the house regarding the every nearing expiration of tax cuts and spending increases.
Its no surprise that as Obama tries to play "Robin Hood", the republicans are already putting conditions out there. They are willing to agree on increasing revenue by taxing top earners, however, this must be met by spending cuts in areas such as defense and Medicare.
Sector performances in the US point towards profit taking once more in technology and telco, whilst investors look at defensives such as utilities and consumer goods.
Interesting to note, we saw good volume pick up in basic materials. Companies like Alcoa(AA) trading at 52week lows are starting to see inflows I suspect on short covering as the fundamentals and outlook is rather bleak. That said, with some much negativity around growth, there is view that this is priced in.
Markets.The weekend press continued to highlight US debt deadlines and European negative growth. US thanks giving is also coming up on Thursday, which will no doubt leave volumes at the lower end of the range. We also have US housing numbers out this week, which will have been effected by Hurricane Sandy. We also have German GDP data, which looks set to remain flat, however, with the recent pressure on Merkel, should this come in weaker we could see pressure on the Euro once more.
Today we should see equity markets rebound after Friday afternoons sell off. Japan looks set to remain strong as US$JPY continues to trade above 81, at 81.40.
The Euro is also sitting on major support levels here, which could see equities start outperforming should we go back to test 1.28, but as mentioned, German GDP data due Thursday.
Equity markets trend firmer in the first hour, then look to flatten off, trading sideways in the afternoon.
Despite demand for defensives, oil, basic materials and industrials remain attractive here. We should see these start to squeeze as investors reduce risk into year end.
Consumer goods should benefit from the recent move in JPY, and with officials aiming for US$JPY to be at 82 by year end, we should see exporters supported. The question is, with global growth struggling, will overseas investors continue or increase purchases of JGB's.
In China, with the Shanghai indices trading around 2000, this is previous intervention levels, so watch for possible comments from government.
Data.08:00 UK Rightmove house prices
10:30 Thailand GDP
13:00 Japan leading index, coincident index, machine tool orders
16:30 HK unemployment
17:00 Italy industrial orders
18:00 EU construction output
23:00 US NHBA housing index, existing home sales
Greek current a/c
Events.16:30 EU foreign defense ministers meet
17:00 WTO dispute settlement body meets
EU's Barnier to discuss FSB with Carney
BOJ policy meeting
Bonds.10:30 S.Korea 10yr auction
11:35 Japan 2month auction
18:00 Netherlands 3,6 month auction
22:00 France 3,6,12 month auction
00:30 US 3,6 month auction
Earnings.Lowes(US), Tyson foods(US), Nuance Comm(US), Gome(HK), CSI Prop(HK), Next media(HK), Huabao(HK), Cerebos pac(SP), Tokio MArine(JP), SK holdings(SK), Korea exchange bank(SK), Korea gas(SK)
Stoddart
US markets on Friday gave us brief relief as Obama speaks to the house regarding the every nearing expiration of tax cuts and spending increases.
Its no surprise that as Obama tries to play "Robin Hood", the republicans are already putting conditions out there. They are willing to agree on increasing revenue by taxing top earners, however, this must be met by spending cuts in areas such as defense and Medicare.
Sector performances in the US point towards profit taking once more in technology and telco, whilst investors look at defensives such as utilities and consumer goods.
Interesting to note, we saw good volume pick up in basic materials. Companies like Alcoa(AA) trading at 52week lows are starting to see inflows I suspect on short covering as the fundamentals and outlook is rather bleak. That said, with some much negativity around growth, there is view that this is priced in.
Markets.The weekend press continued to highlight US debt deadlines and European negative growth. US thanks giving is also coming up on Thursday, which will no doubt leave volumes at the lower end of the range. We also have US housing numbers out this week, which will have been effected by Hurricane Sandy. We also have German GDP data, which looks set to remain flat, however, with the recent pressure on Merkel, should this come in weaker we could see pressure on the Euro once more.
Today we should see equity markets rebound after Friday afternoons sell off. Japan looks set to remain strong as US$JPY continues to trade above 81, at 81.40.
The Euro is also sitting on major support levels here, which could see equities start outperforming should we go back to test 1.28, but as mentioned, German GDP data due Thursday.
Equity markets trend firmer in the first hour, then look to flatten off, trading sideways in the afternoon.
Despite demand for defensives, oil, basic materials and industrials remain attractive here. We should see these start to squeeze as investors reduce risk into year end.
Consumer goods should benefit from the recent move in JPY, and with officials aiming for US$JPY to be at 82 by year end, we should see exporters supported. The question is, with global growth struggling, will overseas investors continue or increase purchases of JGB's.
In China, with the Shanghai indices trading around 2000, this is previous intervention levels, so watch for possible comments from government.
Data.08:00 UK Rightmove house prices
10:30 Thailand GDP
13:00 Japan leading index, coincident index, machine tool orders
16:30 HK unemployment
17:00 Italy industrial orders
18:00 EU construction output
23:00 US NHBA housing index, existing home sales
Greek current a/c
Events.16:30 EU foreign defense ministers meet
17:00 WTO dispute settlement body meets
EU's Barnier to discuss FSB with Carney
BOJ policy meeting
Bonds.10:30 S.Korea 10yr auction
11:35 Japan 2month auction
18:00 Netherlands 3,6 month auction
22:00 France 3,6,12 month auction
00:30 US 3,6 month auction
Earnings.Lowes(US), Tyson foods(US), Nuance Comm(US), Gome(HK), CSI Prop(HK), Next media(HK), Huabao(HK), Cerebos pac(SP), Tokio MArine(JP), SK holdings(SK), Korea exchange bank(SK), Korea gas(SK)
Stoddart
Tuesday, 13 November 2012
Morning note, data, events, bonds and earnings 14th November 2012
Good morning,
Equity markets mixed overnight. Strong volumes and rebounds in Europe were overshadowed by a weaker US market.
As Greece avoids default, equity markets receive a boost whilst bond yields in Spain and Italy hold current levels. CDS's in Europe over the last 20 days have been creeping higher into the Greek budget announcement, which took place on Monday. Since then, investors had expected bonds to firm as CDS's eased back to mid September levels, however, we are yet to see this.
Strongest performers overnight were Spain's IBEX and Italy's FTSE MIB, both up around 1.5% on strong volume, despite the Euro remaining unchanged at 1.27.
FTSE +0.3% v.good volume; O/P: financial, cons.goods U/P: telco, utilities
CAC +0.6% avg volume; O/P: financial, tech U/P: utilities, telco
DAX flat v.good volume; O/P: financial, cons.services U/P: utilities, cons.goods
IBEX +1.7% avg volume; O/P: financial, telco U/P: basic materials, tech
Sectors clearly pointing to a more positive stance. Financial's continue to run due to optimism on growth. With the banking union due in Jan 2013, and the date again confirmed by Italy's Monti, the market is expecting 1. credit markets to start improving, 2. banks will now be protected by Trokia, who are looking to encourage lending.
Earnings from Vodafone yesterday saw a GBP 6bn writedown on Italy and Spain, weighting down on the FTSE as the stock sold down 2.5%, despite a huge buyback program. This didnt stop a strong rebound in Telefonica, boosting Spain's IBEX.
Data in Europe saw the UK RPI come in slightly higher at 0.6% vs expected 0.2% MoM, raising possible fears on inflation. Bloomberg headlines highlight a strong UK property market as overseas buyers continue to purchase high end homes.
Germany's Zew survey saw economic sentiment come in at -15.7 vs expected -10.0, whilst current situation was 5.4 vs expected 8.0.
In the US, equity markets opened in negative territory and sharply rose to the positive, where we saw them range for most of the session. Only in the last hour did we see them sell back down, with the S&P ending the day just 3 points off day low.
S&P -0.4% avg volume; O/P: utilities, cons.services U/P: tech, financial
The sector map shows a polar opposite to Europe. The recent run in financials continues to see outflows, as does technology, which is one of the top performing sectors this year. Heavy selling in Microsoft and Intel hitting the sector hard, whilst defensive names like Home Depot outperforming after strong earnings.
Data in the US, we had small business optimism which came in at 93.1, vs expected 93.0
Markets.Given the news coming out of Europe, I mentioned over the last 2 weeks, I would be looking to go long Euro. In addition to this, basic material names are trading at some rather attractive levels, and with the creation of the banking union in January, we should growth estimates increased in medium term.
Equity markets in Asia have come under some pressure of late, this should see us trend firmer today, opening at the lows and getting to day highs in first session. With currencies remaining steady, I suspect we flatten off in the second session, with indices trading in a tight range.
Stock picks to own today, Yangzhou Coal(1171), Natl Australia Bank(NAB AU), Petrochina(857), Angang Steel(347 HK).
Data.08:30 Australia wage cost
14:30 India monthly wholesale prices
15:45 French CPI
16:30 Netherlands retail sales
17:30 UK jobless claims, earnings
18:00 Eurozone industrial production
18:30 UK BoE inflation report
20:00 US MBA mortgage apps
21:30 US PPI, retail sales
23:00 US business inventories (big number)
03:00 US FOMC minutes
China FDI
Events.15:30 EU budget framework
18:00 Bank of Italy public finance supplement
20:45 EU regional aid recipients hold meeting
22:30 Greek finance minister meets EU lawmakers
22:45 Italy's Monti meets UK's Cameron
Bonds.11:00 Thailand 1,3 and 6month auction
11:45 Japan 5 year auction
17:00 Netherlands 10 year auction
18:00 Greece 1,3 year auction
00:30 US 3,6 month auction
Earnings.
Staples(US), Abercrombie & Fitch(US), Williams-sonoma(US), NetApp(US), Spectrum Brands(US), RWE(GE), Infineon(GE), J Sainsbury(UK), Solarworld(GE), Natixis(VX), CSR(HK), OLAM(SP), Global logistic(SP), Vtech(HK), City dev(SP), China pharm(HK), CIMB(MK), Jollibee(PH), San Miguel(PM), Citic SEc(CH), PTT(TH), MOL(HU), Turkiye IS Bank(TR), Dogan Yayin(TR), Bank BPH(PW), Echo Inv(PW)
Stoddart
Equity markets mixed overnight. Strong volumes and rebounds in Europe were overshadowed by a weaker US market.
As Greece avoids default, equity markets receive a boost whilst bond yields in Spain and Italy hold current levels. CDS's in Europe over the last 20 days have been creeping higher into the Greek budget announcement, which took place on Monday. Since then, investors had expected bonds to firm as CDS's eased back to mid September levels, however, we are yet to see this.
Strongest performers overnight were Spain's IBEX and Italy's FTSE MIB, both up around 1.5% on strong volume, despite the Euro remaining unchanged at 1.27.
FTSE +0.3% v.good volume; O/P: financial, cons.goods U/P: telco, utilities
CAC +0.6% avg volume; O/P: financial, tech U/P: utilities, telco
DAX flat v.good volume; O/P: financial, cons.services U/P: utilities, cons.goods
IBEX +1.7% avg volume; O/P: financial, telco U/P: basic materials, tech
Sectors clearly pointing to a more positive stance. Financial's continue to run due to optimism on growth. With the banking union due in Jan 2013, and the date again confirmed by Italy's Monti, the market is expecting 1. credit markets to start improving, 2. banks will now be protected by Trokia, who are looking to encourage lending.
Earnings from Vodafone yesterday saw a GBP 6bn writedown on Italy and Spain, weighting down on the FTSE as the stock sold down 2.5%, despite a huge buyback program. This didnt stop a strong rebound in Telefonica, boosting Spain's IBEX.
Data in Europe saw the UK RPI come in slightly higher at 0.6% vs expected 0.2% MoM, raising possible fears on inflation. Bloomberg headlines highlight a strong UK property market as overseas buyers continue to purchase high end homes.
Germany's Zew survey saw economic sentiment come in at -15.7 vs expected -10.0, whilst current situation was 5.4 vs expected 8.0.
In the US, equity markets opened in negative territory and sharply rose to the positive, where we saw them range for most of the session. Only in the last hour did we see them sell back down, with the S&P ending the day just 3 points off day low.
S&P -0.4% avg volume; O/P: utilities, cons.services U/P: tech, financial
The sector map shows a polar opposite to Europe. The recent run in financials continues to see outflows, as does technology, which is one of the top performing sectors this year. Heavy selling in Microsoft and Intel hitting the sector hard, whilst defensive names like Home Depot outperforming after strong earnings.
Data in the US, we had small business optimism which came in at 93.1, vs expected 93.0
Markets.Given the news coming out of Europe, I mentioned over the last 2 weeks, I would be looking to go long Euro. In addition to this, basic material names are trading at some rather attractive levels, and with the creation of the banking union in January, we should growth estimates increased in medium term.
Equity markets in Asia have come under some pressure of late, this should see us trend firmer today, opening at the lows and getting to day highs in first session. With currencies remaining steady, I suspect we flatten off in the second session, with indices trading in a tight range.
Stock picks to own today, Yangzhou Coal(1171), Natl Australia Bank(NAB AU), Petrochina(857), Angang Steel(347 HK).
Data.08:30 Australia wage cost
14:30 India monthly wholesale prices
15:45 French CPI
16:30 Netherlands retail sales
17:30 UK jobless claims, earnings
18:00 Eurozone industrial production
18:30 UK BoE inflation report
20:00 US MBA mortgage apps
21:30 US PPI, retail sales
23:00 US business inventories (big number)
03:00 US FOMC minutes
China FDI
Events.15:30 EU budget framework
18:00 Bank of Italy public finance supplement
20:45 EU regional aid recipients hold meeting
22:30 Greek finance minister meets EU lawmakers
22:45 Italy's Monti meets UK's Cameron
Bonds.11:00 Thailand 1,3 and 6month auction
11:45 Japan 5 year auction
17:00 Netherlands 10 year auction
18:00 Greece 1,3 year auction
00:30 US 3,6 month auction
Earnings.
Staples(US), Abercrombie & Fitch(US), Williams-sonoma(US), NetApp(US), Spectrum Brands(US), RWE(GE), Infineon(GE), J Sainsbury(UK), Solarworld(GE), Natixis(VX), CSR(HK), OLAM(SP), Global logistic(SP), Vtech(HK), City dev(SP), China pharm(HK), CIMB(MK), Jollibee(PH), San Miguel(PM), Citic SEc(CH), PTT(TH), MOL(HU), Turkiye IS Bank(TR), Dogan Yayin(TR), Bank BPH(PW), Echo Inv(PW)
Stoddart
Monday, 29 October 2012
Morning note, data, events, bonds and earnings 30th October 2012
Good morning,
With US markets closed, and disruptions across the east coast, equity volumes fall globally. In Europe, average volumes fell by around 40% greater than that of Asia which fell around 25%
FTSE -0.7% v.low volume: O/P; tech, industrials U/P; O&G, basic materials
CAC -0.8% v.low volume: O/P; cons.goods, financials U/P; utilities, telco
DAX -0.4% v.low volume: O/P; tech, basic mat U/P; cons.services, financials
IBEX -0.6% v.low volume: O/P; health, tech U/P; telo, financials
Mixed signals from the sector maps, however, it does feel like there is a more prominent defensive theme. Italy saw the biggest fall in the region, with its main index off 1.5%, after Berlusconi threatens to bring down Monti, due to a recent court case that could see him do 2 years in prison. Once again, we see that instinct of self-survival threaten the Euro, which could cause some heavy setbacks.
With the progress made so far, including a banking union due in January, Monti has held his own against major powers. After tough budget cuts, clamping down on tax evasion and trying to reduce corruption, Monti has also managed to protect many of the state assets, which were long expected to be put up for sale to help with their debt burden.
Where does this leave us? Well, once again, Berlusconi will no doubt be given a "get out of jail free card", which he shall use immediately, unless of course the Italian prisons have "bunga-bunga Tuesdays", Dom Perignon and unlimited conjugal visits.
Under pressure from other European states, Monti will be forced into this position, which should then allow European leaders to concentrate on bailout terms and ways to stimulate growth.
Another major story overnight, was the arrest of a Greek Journalist who published a list of tax evaders. This in itself is a relatively minor event, however, 1. the documents obtained by this reporter, had infact passed the hands of Christine Lagarde and Greek finance minister; 2. Give the upset caused by austerity, the pressure is set to increase.
What is the impact? Despite freedom of the press, this could be dealt with quickly, unlike that of wikileaks. More than likely, is this could be the push needed, with public backing, to take on tax evaders. Lagarde should see this as an opportunity; support the clamp down on tax evasion.
This could, however, trigger a witch hunt, putting further pressure to restrict the use of offshore bank accounts. Already we are seeing headline of Chinese banks moving to Luxembourg to avoid UK regulation. This kind of disruption, could only further alienate EU members.
The answer is, for now, lets deal with the problem at hand. Like a banker with a new telephone, no one likes sudden change.
Markets.
With the US off today, expect volumes to continue to miss recent averages. I am also expecting some negativity which will see indices fall once more.
Honda was a big miss yesterday, Paypal job cuts highlight weak consumer spending whilst Apple management shift, shows just how sales dependent even a great giant can be.
Further noise on Libor could hit HSBC, which has been an extremely strong performer of late, as has the sector globally.
Basic materials look set to fall, again, on growth concerns. Jiangxi Copper(358) saw net income miss estimates by -13%, which given the fall in copper prices was not a surprising as that figure suggests. With the sector having a very lack luster bounce, any sell off does leave stocks looking cheap, which given governments efforts to support growth, I see as a buying opportunity. Spreads between Copper and Jiangxi Coppers share price are now at the lows, leaving the company looking cheap. Yes inventories are high, yes demand and outlook currently look weak, BUT, conditions are improving.
Oil should also see outflows, as crude oil falls. This looks like a short term move in the physical, due to Hurricane Sandy. There are still many drivers that could see oil increase back to the 95 level. BUY
Data.
07:30 Japan jobless rate
12:00 Japan vehicle production
12:30 India cash rate
16:00 Spain CPI/GDP
21:00 US Case Shiller home prices
Spain budget balance
Events.
13:30 India RBI meeting
16:00 Monti speaks at World economic forum
19:00 Portugal reports retail sales//industrial production
Japan BOJ policy meeting
Bonds.
11:00 Thai 1,3, 6 and 12 month auction
11:30 HK 1, 3 and 6 month auction
18:00 Italian 5, 10 year auction
Earnings.
Archer Daniels Midland(US), Johnson controls(US), Ford(US), DaVita(US), Avis(US), Dreamworks(US), Onyx Pharma(US), Ashland(US), US Steel(US), Valero Energy(US), Deutsche Bank(GE), Hugo Boss(GE), UBS(SF), Geberit(SF), Danske Bank(NO), Erste Bank(VI), Bayer(GE), ENI(IT), MAN(SW), BP(UK), Imperial Tobaco(UK), Ferrovial(SP), Tom Tom(NL), Fiat(IT), Seagate tech(UK), Mitsubishi motor(JP, Kobe steel(JP), Tokyo gas(JP, West Japan rail(JP), Hitachi(JP), Komatsu(JP), Japan tobaco(JP), Asahi group(JP), Ricoh(JP), Fuji heavy(JP), SIA Eng(SG), Lai Sun dev(HK), Samsung SDI(KR), KEPCO(KR), Hyundai Marine and fire(KR), Sichuan ecpress(HK), Metallurgical corp(HK), Ping An(China), China rail construction(CH), Mega fin(TT), BoCom(CH), SAIC (CH), C.Minsheng(CH), CSCL(CH), China Rail(CH), COSCO(CH), CCCC(CH), Air China(CH), Guangzhou Auto(CH), C.Shipping development(CH), Huadian power(CH), Dalian port(CH), China Eastern(CH), Quanta comp(TT), Zoomlion(CH), Tsingtao(CH), ICBC(CH), Compal(TT), petrochina(CH), CITIC sec(CH), Asustek(TT), Hon Hai(TT), Foxconn tech(HK), Shanghai Elec(CH), Chalco(CH), Taiwan cement(TT), satyam(IN), Dr Ready's (IN)
Stoddart
With US markets closed, and disruptions across the east coast, equity volumes fall globally. In Europe, average volumes fell by around 40% greater than that of Asia which fell around 25%
FTSE -0.7% v.low volume: O/P; tech, industrials U/P; O&G, basic materials
CAC -0.8% v.low volume: O/P; cons.goods, financials U/P; utilities, telco
DAX -0.4% v.low volume: O/P; tech, basic mat U/P; cons.services, financials
IBEX -0.6% v.low volume: O/P; health, tech U/P; telo, financials
Mixed signals from the sector maps, however, it does feel like there is a more prominent defensive theme. Italy saw the biggest fall in the region, with its main index off 1.5%, after Berlusconi threatens to bring down Monti, due to a recent court case that could see him do 2 years in prison. Once again, we see that instinct of self-survival threaten the Euro, which could cause some heavy setbacks.
With the progress made so far, including a banking union due in January, Monti has held his own against major powers. After tough budget cuts, clamping down on tax evasion and trying to reduce corruption, Monti has also managed to protect many of the state assets, which were long expected to be put up for sale to help with their debt burden.
Where does this leave us? Well, once again, Berlusconi will no doubt be given a "get out of jail free card", which he shall use immediately, unless of course the Italian prisons have "bunga-bunga Tuesdays", Dom Perignon and unlimited conjugal visits.
Under pressure from other European states, Monti will be forced into this position, which should then allow European leaders to concentrate on bailout terms and ways to stimulate growth.
Another major story overnight, was the arrest of a Greek Journalist who published a list of tax evaders. This in itself is a relatively minor event, however, 1. the documents obtained by this reporter, had infact passed the hands of Christine Lagarde and Greek finance minister; 2. Give the upset caused by austerity, the pressure is set to increase.
What is the impact? Despite freedom of the press, this could be dealt with quickly, unlike that of wikileaks. More than likely, is this could be the push needed, with public backing, to take on tax evaders. Lagarde should see this as an opportunity; support the clamp down on tax evasion.
This could, however, trigger a witch hunt, putting further pressure to restrict the use of offshore bank accounts. Already we are seeing headline of Chinese banks moving to Luxembourg to avoid UK regulation. This kind of disruption, could only further alienate EU members.
The answer is, for now, lets deal with the problem at hand. Like a banker with a new telephone, no one likes sudden change.
Markets.
With the US off today, expect volumes to continue to miss recent averages. I am also expecting some negativity which will see indices fall once more.
Honda was a big miss yesterday, Paypal job cuts highlight weak consumer spending whilst Apple management shift, shows just how sales dependent even a great giant can be.
Further noise on Libor could hit HSBC, which has been an extremely strong performer of late, as has the sector globally.
Basic materials look set to fall, again, on growth concerns. Jiangxi Copper(358) saw net income miss estimates by -13%, which given the fall in copper prices was not a surprising as that figure suggests. With the sector having a very lack luster bounce, any sell off does leave stocks looking cheap, which given governments efforts to support growth, I see as a buying opportunity. Spreads between Copper and Jiangxi Coppers share price are now at the lows, leaving the company looking cheap. Yes inventories are high, yes demand and outlook currently look weak, BUT, conditions are improving.
Oil should also see outflows, as crude oil falls. This looks like a short term move in the physical, due to Hurricane Sandy. There are still many drivers that could see oil increase back to the 95 level. BUY
Data.
07:30 Japan jobless rate
12:00 Japan vehicle production
12:30 India cash rate
16:00 Spain CPI/GDP
21:00 US Case Shiller home prices
Spain budget balance
Events.
13:30 India RBI meeting
16:00 Monti speaks at World economic forum
19:00 Portugal reports retail sales//industrial production
Japan BOJ policy meeting
Bonds.
11:00 Thai 1,3, 6 and 12 month auction
11:30 HK 1, 3 and 6 month auction
18:00 Italian 5, 10 year auction
Earnings.
Archer Daniels Midland(US), Johnson controls(US), Ford(US), DaVita(US), Avis(US), Dreamworks(US), Onyx Pharma(US), Ashland(US), US Steel(US), Valero Energy(US), Deutsche Bank(GE), Hugo Boss(GE), UBS(SF), Geberit(SF), Danske Bank(NO), Erste Bank(VI), Bayer(GE), ENI(IT), MAN(SW), BP(UK), Imperial Tobaco(UK), Ferrovial(SP), Tom Tom(NL), Fiat(IT), Seagate tech(UK), Mitsubishi motor(JP, Kobe steel(JP), Tokyo gas(JP, West Japan rail(JP), Hitachi(JP), Komatsu(JP), Japan tobaco(JP), Asahi group(JP), Ricoh(JP), Fuji heavy(JP), SIA Eng(SG), Lai Sun dev(HK), Samsung SDI(KR), KEPCO(KR), Hyundai Marine and fire(KR), Sichuan ecpress(HK), Metallurgical corp(HK), Ping An(China), China rail construction(CH), Mega fin(TT), BoCom(CH), SAIC (CH), C.Minsheng(CH), CSCL(CH), China Rail(CH), COSCO(CH), CCCC(CH), Air China(CH), Guangzhou Auto(CH), C.Shipping development(CH), Huadian power(CH), Dalian port(CH), China Eastern(CH), Quanta comp(TT), Zoomlion(CH), Tsingtao(CH), ICBC(CH), Compal(TT), petrochina(CH), CITIC sec(CH), Asustek(TT), Hon Hai(TT), Foxconn tech(HK), Shanghai Elec(CH), Chalco(CH), Taiwan cement(TT), satyam(IN), Dr Ready's (IN)
Stoddart
Thursday, 18 October 2012
Morning note, data, events, bonds and earnings 19th October 2012
Good morning,
After such a strong bounce on Wednesday, equity markets traded flat to down overnight, however, all put through good volumes.
Spain's bond auction saw the nation increase borrowing more than expected. This had the opposite effect and 10yr yields fell to new lows of 5.3%.
European equity markets saw German and France both stay in positive territory, but both lagged on Wednesday and were playing catch up. Strong earnings from Bankinter and Nokia(!) helped boost the market, as did investors increasing risk, with sectors such as basic mterials and industrials outperforming. Financials continued to hold up we with DB closing at day highs, up over 40% since July!!
FTSE +0.2% good volume; O/P: basic materials, telco U/P: cons.goods, tech
CAC +0.2% v.good volume; O/P: tech, health U/P: cons.goods, cons.services
DAX +0.6% v.good volume; O/P: cons.services, industrial U/P: utilities, telco
IBEX -0.3% v.good volume: O/P: tech, basic mat U/P: industrial, financial
Data yesterday saw Spain's trade balance com in higher than expected, -3145.1m vs expected -2500m. With the aim of seeing Spain reduce its debs by increase exports, we wan to see this number improving to a positive.
UK retail ex fuel sales came in strong at +0.6% vs expected +0.3%, lets hope we see this number continue to improve as UK retailers have been struggling for some time as discretionary spending remains low.
In the US as string of strong earnings from Capital One, SanDisc, Verizon, Keycorp, PPG ind and Morgan Stanley help support equity markets. Google missed its estimated earnings by 15% leaving tech stocks down and the Nasdaq -1%. We have been use to seeing tech outperform over teh last 6 months, its now time to rotate out back into other sectors such as industrials.
S&P -0.2% good volume; O/P: telco, utilities U/P: tech, cons.goods
Sector performanc ehere indicates a more risk off approach, however, basic materials was the 3rd best performing sector, highlighting negativity towards growth is starting to ease and investors expect GDP to start improving.
US data overnight saw jobless claims increase at a fast rate than expected to 388k vs prior month 339k. The market was looking for 365k. With the elections coming up, jobs are a major issues and I think Obama could really have done with that coming out better.
But this data was soon overshadowed by the Phily Fed, which came in at 5.7 vs expected 1.0. Whilst the headline looks strong, we did see the employment index and new orders drop, leaving this number looking seasonal. We did, however, see a small increase in inventories and prices paid, but we need to see this increase further and encourage jobs growth.
Markets.
Equity markets today look set to give up some of the recent gains. I still continue to like the consumer electronics names in Japan, with so much negativity on the sector, we should see a short squeeze, added to th e weaker yen supporting overseas sales.
Basic materials should continue to run, although coal will see outflows due to is recent performance, steel and cements seem to be to hot spot for those flows to head into.
I still want to short financials due to the HUGE run they have had. Yes margins are improving as are deal flows but with the overhang of the Libor claims, I want to short HSBC. Australian banks will also struggle with a rather toppy housing market, and minimal previsions.
I expect markets to open flat for the first hour and trend easier to the close.
Data.
12:30 Japan all industry activity
13:00 Japan leading index
14:00 Germn Producer prices
15:30 Thai reserves
16:00 EU current a/c
16:00 Italian industrial orders
16:30 UK public sector net borrowing
22:00 US existing home sales
also due, China FDI
Events.
16:00 EU leaders conclude summit
Portugal's Coelho attends EU council meeting
Bonds.
18:00 UK 1, 3 and 6 month auction
Earnings.
Schlumberger(US), GE(US), Honeywell(US), McDonalds(US), Shaw grp(US), Ziggo(NL), Elisa(FI), Alpha bank(GR), Capitamall(SG), China State construction(CH), Hana fin(TT), LG Dis(KR), Kumho pet(KR), LG Chem(KR), Bursa Malaysia(MK), Powerchip(TT), DiGi(MK), Bk of Moscow(RU), Turkcell(TU), Bank Forum(RU), Philip morris(CZ)
Happy friday
Stoddart
After such a strong bounce on Wednesday, equity markets traded flat to down overnight, however, all put through good volumes.
Spain's bond auction saw the nation increase borrowing more than expected. This had the opposite effect and 10yr yields fell to new lows of 5.3%.
European equity markets saw German and France both stay in positive territory, but both lagged on Wednesday and were playing catch up. Strong earnings from Bankinter and Nokia(!) helped boost the market, as did investors increasing risk, with sectors such as basic mterials and industrials outperforming. Financials continued to hold up we with DB closing at day highs, up over 40% since July!!
FTSE +0.2% good volume; O/P: basic materials, telco U/P: cons.goods, tech
CAC +0.2% v.good volume; O/P: tech, health U/P: cons.goods, cons.services
DAX +0.6% v.good volume; O/P: cons.services, industrial U/P: utilities, telco
IBEX -0.3% v.good volume: O/P: tech, basic mat U/P: industrial, financial
Data yesterday saw Spain's trade balance com in higher than expected, -3145.1m vs expected -2500m. With the aim of seeing Spain reduce its debs by increase exports, we wan to see this number improving to a positive.
UK retail ex fuel sales came in strong at +0.6% vs expected +0.3%, lets hope we see this number continue to improve as UK retailers have been struggling for some time as discretionary spending remains low.
In the US as string of strong earnings from Capital One, SanDisc, Verizon, Keycorp, PPG ind and Morgan Stanley help support equity markets. Google missed its estimated earnings by 15% leaving tech stocks down and the Nasdaq -1%. We have been use to seeing tech outperform over teh last 6 months, its now time to rotate out back into other sectors such as industrials.
S&P -0.2% good volume; O/P: telco, utilities U/P: tech, cons.goods
Sector performanc ehere indicates a more risk off approach, however, basic materials was the 3rd best performing sector, highlighting negativity towards growth is starting to ease and investors expect GDP to start improving.
US data overnight saw jobless claims increase at a fast rate than expected to 388k vs prior month 339k. The market was looking for 365k. With the elections coming up, jobs are a major issues and I think Obama could really have done with that coming out better.
But this data was soon overshadowed by the Phily Fed, which came in at 5.7 vs expected 1.0. Whilst the headline looks strong, we did see the employment index and new orders drop, leaving this number looking seasonal. We did, however, see a small increase in inventories and prices paid, but we need to see this increase further and encourage jobs growth.
Markets.
Equity markets today look set to give up some of the recent gains. I still continue to like the consumer electronics names in Japan, with so much negativity on the sector, we should see a short squeeze, added to th e weaker yen supporting overseas sales.
Basic materials should continue to run, although coal will see outflows due to is recent performance, steel and cements seem to be to hot spot for those flows to head into.
I still want to short financials due to the HUGE run they have had. Yes margins are improving as are deal flows but with the overhang of the Libor claims, I want to short HSBC. Australian banks will also struggle with a rather toppy housing market, and minimal previsions.
I expect markets to open flat for the first hour and trend easier to the close.
Data.
12:30 Japan all industry activity
13:00 Japan leading index
14:00 Germn Producer prices
15:30 Thai reserves
16:00 EU current a/c
16:00 Italian industrial orders
16:30 UK public sector net borrowing
22:00 US existing home sales
also due, China FDI
Events.
16:00 EU leaders conclude summit
Portugal's Coelho attends EU council meeting
Bonds.
18:00 UK 1, 3 and 6 month auction
Earnings.
Schlumberger(US), GE(US), Honeywell(US), McDonalds(US), Shaw grp(US), Ziggo(NL), Elisa(FI), Alpha bank(GR), Capitamall(SG), China State construction(CH), Hana fin(TT), LG Dis(KR), Kumho pet(KR), LG Chem(KR), Bursa Malaysia(MK), Powerchip(TT), DiGi(MK), Bk of Moscow(RU), Turkcell(TU), Bank Forum(RU), Philip morris(CZ)
Happy friday
Stoddart
Tuesday, 2 October 2012
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
Tuesday, 25 September 2012
Morning note, events, data and earnings 26th September 2012
Morning,
Volumes are starting to fade in Europe, with an average of 25% reduction. Feels like the run is losing steam as investors look to data to see improvements.
European equity markets up between 0.16 and 0.5% despite the Euro falling to 1.29 against the greenback.
This correlation will correct, giving either a boost to the Euro, or equity markets give back some of the recent gains; I suspect the latter.
DAX: Outperformers: Utilities, basic materials and industrials
Underperformers: Telecom, consumer goods and healthcare
CAC: Outperformers: Consumer goods, telecoms and financials
Underperformers: Utilities, basic materials and O&G
IBEX: Outperformers:Consumer services, utilities and financials
Underperformers: Healthcare, industrials and telecoms
UKX: Outperformers: Tech, consumer services and utilities
Underperformers: Basic materials, industrials and financials
European data saw Italian wages grow, 0.1% MoM or 1.6% YoY. Wage growth should be taken as positive, however, its job creation we need to start seeing coming through in southern Europe.... plus if people are working, they have less time to protest.
European bond yields continued to see spreads between Spain/Italy tighten against France/Germany. Yields of the southern European states continue to fall, which against a falling Euro, suggests this is region re-balancing rather than overseas inflows.
10yr yields: Spain 5.69%, Italy 5.08%, France 2.27%, Germany 1.58%, UK 1.82%
US markets saw volumes remain stable, dropping just 3% on the S&P, despite markets falling 1%. The nasdaq underperforming, which given its outperformance over the last quarter, is not surprising. Feels like risk off again.
S&P: Outperformers: Healthcare, utilities and telcoms
Underperformers: Basic materials, technology and financials
Data out in the US saw some strong positive data. Richmond fed increased 4 vs expected -5, however house prices came in slightly lower at +0.2% vs expected +0.6%. Given the purchasing of mortgage debt by the US government, we could see the competition increase in the loan space, encouraging both transactions and prices to increase.
Today. Japan and Korea both weaker on the open. Tension over China and Japan sees the Nikkei off 1.7% whilst Korea down 1%. Despite basic materials underperforming in the UK, Australia is holding up well, down just 0.5%. Utilities and industrials outperforming there.
I expect HK to come off sharply after the recent strength in the HSI. Old support levels remain at 20400 and 20100 for the HSI, 9650 and 9550 for the HSCEI.
I continue to like some of the short squeeze names as investors reduce risk and take cash off the table.
BUY DF(489), Hengdeli(3389), Maanshan(323), Angang(347), Chalco(2600)
SHORTS SHK(16), China Banks
In Japan, with the re-balances due, I am looking to BUY Japan Airlines(9201 JT) at these levels... I've been called mental, given the current dispute over the islands and China's new anti-Japan uprising. I am not falling in love with an airline, just pure short term play.
Events.17:00 China 20 year auction
17:35, German 10 year auction
17:00 Indonesian 5 year auction
EU's Van Rompuy speaks to the UN general assembly
Data.14:45 France consumer confidence
16:00 Italian retail sales
19:00 US MBA mortgage apps
20:00 German CPI
22:00 US New home sales
00:00 France Jobs
Earnings:
Providence Res(ID), Esprit(330), Nitori(JP), New World Dev(HK), Boshiwa(HK), Polo Res(UK), CD Projekt red(PW), Echo Inv(PW)
Volumes are starting to fade in Europe, with an average of 25% reduction. Feels like the run is losing steam as investors look to data to see improvements.
European equity markets up between 0.16 and 0.5% despite the Euro falling to 1.29 against the greenback.
This correlation will correct, giving either a boost to the Euro, or equity markets give back some of the recent gains; I suspect the latter.
DAX: Outperformers: Utilities, basic materials and industrials
Underperformers: Telecom, consumer goods and healthcare
CAC: Outperformers: Consumer goods, telecoms and financials
Underperformers: Utilities, basic materials and O&G
IBEX: Outperformers:Consumer services, utilities and financials
Underperformers: Healthcare, industrials and telecoms
UKX: Outperformers: Tech, consumer services and utilities
Underperformers: Basic materials, industrials and financials
European data saw Italian wages grow, 0.1% MoM or 1.6% YoY. Wage growth should be taken as positive, however, its job creation we need to start seeing coming through in southern Europe.... plus if people are working, they have less time to protest.
European bond yields continued to see spreads between Spain/Italy tighten against France/Germany. Yields of the southern European states continue to fall, which against a falling Euro, suggests this is region re-balancing rather than overseas inflows.
10yr yields: Spain 5.69%, Italy 5.08%, France 2.27%, Germany 1.58%, UK 1.82%
US markets saw volumes remain stable, dropping just 3% on the S&P, despite markets falling 1%. The nasdaq underperforming, which given its outperformance over the last quarter, is not surprising. Feels like risk off again.
S&P: Outperformers: Healthcare, utilities and telcoms
Underperformers: Basic materials, technology and financials
Data out in the US saw some strong positive data. Richmond fed increased 4 vs expected -5, however house prices came in slightly lower at +0.2% vs expected +0.6%. Given the purchasing of mortgage debt by the US government, we could see the competition increase in the loan space, encouraging both transactions and prices to increase.
Today. Japan and Korea both weaker on the open. Tension over China and Japan sees the Nikkei off 1.7% whilst Korea down 1%. Despite basic materials underperforming in the UK, Australia is holding up well, down just 0.5%. Utilities and industrials outperforming there.
I expect HK to come off sharply after the recent strength in the HSI. Old support levels remain at 20400 and 20100 for the HSI, 9650 and 9550 for the HSCEI.
I continue to like some of the short squeeze names as investors reduce risk and take cash off the table.
BUY DF(489), Hengdeli(3389), Maanshan(323), Angang(347), Chalco(2600)
SHORTS SHK(16), China Banks
In Japan, with the re-balances due, I am looking to BUY Japan Airlines(9201 JT) at these levels... I've been called mental, given the current dispute over the islands and China's new anti-Japan uprising. I am not falling in love with an airline, just pure short term play.
Events.17:00 China 20 year auction
17:35, German 10 year auction
17:00 Indonesian 5 year auction
EU's Van Rompuy speaks to the UN general assembly
Data.14:45 France consumer confidence
16:00 Italian retail sales
19:00 US MBA mortgage apps
20:00 German CPI
22:00 US New home sales
00:00 France Jobs
Earnings:
Providence Res(ID), Esprit(330), Nitori(JP), New World Dev(HK), Boshiwa(HK), Polo Res(UK), CD Projekt red(PW), Echo Inv(PW)
Sunday, 16 September 2012
The weak ahead, data, events, bonds and earnings
Please see attached for PDF print out.
Highlights: Data is a lot lighter this week.
Tuesday China property prices (although discount without total sales data), US NAHB index also.
Wednesday BOJ rates, BoE minutes and US housing data.
Thursday US jobs data, and on Friday we have Spanish Housing and trade balance.
Bond auctions this week look light. Worth watching Spain and Greek short dated
auctions for possible weakness. Also the EFSF 6m auction on Tuesday.
Stoddart
Stoddart's Week Ahead 17th-21st September
Highlights: Data is a lot lighter this week.
Tuesday China property prices (although discount without total sales data), US NAHB index also.
Wednesday BOJ rates, BoE minutes and US housing data.
Thursday US jobs data, and on Friday we have Spanish Housing and trade balance.
Bond auctions this week look light. Worth watching Spain and Greek short dated
auctions for possible weakness. Also the EFSF 6m auction on Tuesday.
Stoddart
Stoddart's Week Ahead 17th-21st September
Thursday, 13 September 2012
Morning note, events and data 14th September 2012
Good morning,
Wont ramble on too much about the FOMC, you've read the headlines and that tells the story. My 3 main thoughts:
1. Buying housing or Asset Backed Securities (ABS) does not increase jobs, it just reduces the burden on banks
2. The US will make an absolute fortune in 2014 - 2017 when they "job these out"
3. Get ready to short the hell out of US 10yrs in 2013/14
This whole exercise was about making nice happy numbers and headlines. The FOMC wanted to highlight that stimulus is unlimited, and it will stop at nothing to encourage growth, in this case, using near zero interest rates till mid 2015.
How did the markets react?
Europe closed before the announcement, with equity markets mixed.
CAC -1.2%, DAX -0.45%, IBEX -0.7%, UKX +0.7% all on roughly average volumes.
Sector performance saw defensives stronger and profit taking in materials and financial, not surprising after such a strong run.
Markets have rallied on the headlines and now, as reality sets in and Greece unemployment higher, fears start to creep back in. However, the market is hugely short the European region, inflows will continue as investors take a more neutral weighting. There is also more short squeeze to come, when the markets take the next leg up. Technicals out early next week will show this.
Greece unemployment came in at 23.6% vs last quarter 22.6%
US markets rallied aggressively on the FOMC meeting, with the S+P up 1.6% and market volumes up 20-70% across all indices. The weaker jobs data, with initial claims of 382k vs expected 370k was explained by the recent tropical storm - I think is just another excuse used to justify a weaker number.
Sector performance highlights aggressive inflows to growth names, out of defensive.
Outerperformers: Basic materials, financials and oil & gas
Underperformers: Health, industrials and telecoms
The NASDAQ also underperformed the S+P and industrials for the first time in quite a while.
Expect further inflows to growth. The market has rather large positions weighted in government debt and defensive equities. Outflows will now be looking at improving growth and corporate credit/high yield.
Markets today:
Going gang busters for the laggeds. With the US$ weakening, physical metal prices have stabilised, some have even started to rebound. This looks like it has more to go but please note, inventories are huge and we have yet to see a pick up in demand... this will run out of steam. Oil, now 98.75 WTI, finally seeing inflows, which although the US$ had moved, up until last night, oil hadnt reacted and was trading around the $95 level. This has more to go and is an alternative hedge to gold, with the kicker of improving growth.
Trading.
I am looking for a pull back in the defensives. This throws up huge opportunities to pick up quality assets, on improving yields. It might take a month to get to these levels, but they are now being watched closely.
Basic materials are all at breakout levels, which I will highlight in next weeks technicals. They still have room to run, but I would not be paying up just yet, we will see fast money outflows next week as the hype dies down and everyone goes back to looking at the data.
We could see China over the weekend, following in the footsteps of the US giving the markets a "triple macro boost". Some plans have already been realised but am watching for support on the industrial side. We already have infrastructure in road and rail projects.
Events:
SEC meeting on price stability, G27 finance ministers meeting and announcement of Greek stimulus measures.
Data: In Singapore time (GMT +7 hours)
12.30 Japan industrial production and capacity utilisation.
14:30 India whole sale prices
15:00 Spain labor costs and house prices - some negativity expected
15:30 Thai foreign reserves
17:00 Eurozone CPI and employment
17:00 Italian current accounts
20:30 US CPI and retail sales
21:15 US industrial production and capacity utilisation
21:55 U. of Michigan confidence
22:00 US business inventories - watch for follow through from the wholesale inventories strong number earlier this week.
Earnings - top securities
Suntor(US), Nexus(AU), Kagara(AU), Norilsk Nickel(RU), JD weatherspoon(GB), Swisher Hygiene(US), Virco Manu(US), Marcus(US)
Have a great weekend.... expect some heavy news papers over the weekend, with all the data this past week.
Stoddart
Wont ramble on too much about the FOMC, you've read the headlines and that tells the story. My 3 main thoughts:
1. Buying housing or Asset Backed Securities (ABS) does not increase jobs, it just reduces the burden on banks
2. The US will make an absolute fortune in 2014 - 2017 when they "job these out"
3. Get ready to short the hell out of US 10yrs in 2013/14
This whole exercise was about making nice happy numbers and headlines. The FOMC wanted to highlight that stimulus is unlimited, and it will stop at nothing to encourage growth, in this case, using near zero interest rates till mid 2015.
How did the markets react?
Europe closed before the announcement, with equity markets mixed.
CAC -1.2%, DAX -0.45%, IBEX -0.7%, UKX +0.7% all on roughly average volumes.
Sector performance saw defensives stronger and profit taking in materials and financial, not surprising after such a strong run.
Markets have rallied on the headlines and now, as reality sets in and Greece unemployment higher, fears start to creep back in. However, the market is hugely short the European region, inflows will continue as investors take a more neutral weighting. There is also more short squeeze to come, when the markets take the next leg up. Technicals out early next week will show this.
Greece unemployment came in at 23.6% vs last quarter 22.6%
US markets rallied aggressively on the FOMC meeting, with the S+P up 1.6% and market volumes up 20-70% across all indices. The weaker jobs data, with initial claims of 382k vs expected 370k was explained by the recent tropical storm - I think is just another excuse used to justify a weaker number.
Sector performance highlights aggressive inflows to growth names, out of defensive.
Outerperformers: Basic materials, financials and oil & gas
Underperformers: Health, industrials and telecoms
The NASDAQ also underperformed the S+P and industrials for the first time in quite a while.
Expect further inflows to growth. The market has rather large positions weighted in government debt and defensive equities. Outflows will now be looking at improving growth and corporate credit/high yield.
Markets today:
Going gang busters for the laggeds. With the US$ weakening, physical metal prices have stabilised, some have even started to rebound. This looks like it has more to go but please note, inventories are huge and we have yet to see a pick up in demand... this will run out of steam. Oil, now 98.75 WTI, finally seeing inflows, which although the US$ had moved, up until last night, oil hadnt reacted and was trading around the $95 level. This has more to go and is an alternative hedge to gold, with the kicker of improving growth.
Trading.
I am looking for a pull back in the defensives. This throws up huge opportunities to pick up quality assets, on improving yields. It might take a month to get to these levels, but they are now being watched closely.
Basic materials are all at breakout levels, which I will highlight in next weeks technicals. They still have room to run, but I would not be paying up just yet, we will see fast money outflows next week as the hype dies down and everyone goes back to looking at the data.
We could see China over the weekend, following in the footsteps of the US giving the markets a "triple macro boost". Some plans have already been realised but am watching for support on the industrial side. We already have infrastructure in road and rail projects.
Events:
SEC meeting on price stability, G27 finance ministers meeting and announcement of Greek stimulus measures.
Data: In Singapore time (GMT +7 hours)
12.30 Japan industrial production and capacity utilisation.
14:30 India whole sale prices
15:00 Spain labor costs and house prices - some negativity expected
15:30 Thai foreign reserves
17:00 Eurozone CPI and employment
17:00 Italian current accounts
20:30 US CPI and retail sales
21:15 US industrial production and capacity utilisation
21:55 U. of Michigan confidence
22:00 US business inventories - watch for follow through from the wholesale inventories strong number earlier this week.
Earnings - top securities
Suntor(US), Nexus(AU), Kagara(AU), Norilsk Nickel(RU), JD weatherspoon(GB), Swisher Hygiene(US), Virco Manu(US), Marcus(US)
Have a great weekend.... expect some heavy news papers over the weekend, with all the data this past week.
Stoddart
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