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Liontrust Dealer's Roar - 31/05/2011

“There is definitely going to be another financial crisis around the corner because we haven't solved any of the things that caused the previous crisis” – Marc Mobius, executive chairman of Templeton Asset Management’s emerging markets group, speaking at the Foreign Correspondent’s club of Japan in Tokyo on Monday.

The  headline above was probably the highlight of yesterday’s trading in Europe, a session that saw the Eurostoxx open with small gains and ultimately close round about unchanged, unsurprisingly volumes were dire. Without a US lead Asian markets provided the main tailwind for our open. Japan shrugged off a downgrade from Moody, weaker industrial production numbers, higher unemployment than expected to post a near 2% rise with Oil, Mining, Shipping andAirlines all doing well. The catalyst for the move was laid squarely at the feet of an article in the WSJ saying that Germany would drop its plan to reschedule Greek bonds, potentially allowing new aid. The Hang Seng rose over 2% dragged up by Hutchison Whampoa who rallied as Husky Energy (in which Hutchison has a 35% stake) are planning a Hong Kong listing. China saw its first up day in the last eight as power price hikes led to a gain in power producer shares.

Liontrust Dealer's Roar - 27/05/2010

“Ninety percent of the politicians give the other ten percent a bad reputation” – Henry Kissinger,born 27th May 1923

The tentative bid Richard highlighted yesterday continued post our departure, with solid gains made by US markets in their afternoon session. As we saw,economic news was mixed with Juncker’s comments not proving that popular, an in-line GDP print proving unexciting while initial jobless claims for the prior week surprised to the downside weighing rather on US bond yields. It appears some investors are fretting over the strength of the recovery as an auction of $29bn 7-year notes attracted a yield of 2.42%, the auction was 3.24x oversubscribed, trumping the 2.78x average of the last four auctions (interesting when you consider it’s taken QE2 to end before this has started to happen, rather than happening as a result of QE2 as the theory went). Microsoft rose 2%, helping the tech sector, as David Einhorn (well know hedge-fund manager) called for the board to replace CEO Steve Balmer.

Liontrust Dealer's Roar - 26/05/2011

“Courage is being scared to death……and saddling up anyway”. Marion Robert Morrison, better known as John Wayne, actor, director and producer. May 26th 1907 – June 11th 1979.

Markets have caught a tentative bid around the globe. While closing off the highs, US markets trended positive through the day for the best close of the week for the S&P at just above 1320.  All positive in Asia with Materials sector leading the way as additional broker’s calls for higher commodity prices help drive base prices higher.   

Liontrust Dealer's Blog - 25/05/2011

“Do not go where the path may lead, go instead where there is no path and leave a trail”.  Ralph Waldo Emerson, American essayist and poet, May 25th 1803 – April 27th 1882

A Wall Street Journal article overnight reported that five of the US's largest banks were told by State and Federal officials yesterday that they face a potential liability of at least $17bn in civil lawsuits if a settlement isn't reached to address improper practices. It has been an ongoing issue for the last two months with the banks proposing a $5bn settlement as compensation which was deemed to be insufficient by the officials. This, along with a warning after hours from Applied Materials, saw the S&P future take a smack and helped to knock Far Eastern markets easier.

Liontrust Dealer's Roar - 24/05/2011

 

“In Burma and Thailand people are locked up for joking about their political elites. In the UK we've reached a point where people can be locked up for joking about their footballers” - John Hemming, Lib Dem MP

The S&P held that level I pointed out yesterday (1317), actually moving a tiny bit better post out departure but all US markets closed down over 1% on the same fears that gripped our trading, namely Euro sovereign debt worries (Italy, Spain), the Chinese PMI reading as well as a new ash-cloud heading for European airspace. The US Fed also gave us the first clue in the progression toward tighter monetary policy as James Bullard (St. Louis President) said they will stop reinvesting in maturing assets and mbs, thought there is less of a consensus on them actively selling assets.

Liontrust Dealer's Roar - 23/05/2011

“There is nothing so stable as change”Bob Dylan, born May 23rd 1941

US markets initially rallied post our departure but they couldn’t maintain the bounce and eventually settled a little lower. The big stories came on the corporate side with Barnes & Noble rallying 29% on news a bid may be around the corner while GAP closed down 17.5% as lower sales and higher costs lead to a decline in earnings (biggest 1 day fall in a decade), with the retailer expecting costs to increase by a further 20% over the rest of the year thanks to the increased price of cotton & other commodities.  

Liontrust Dealer's Roar - 20/05/2011

“I'm learning English at the moment. I can say 'Big Ben', 'Hello Rodney', 'Tower Bridge' and 'Loo'.” Cherilyn Sarkisian (better known as Cher), American recording artist and actress, born May 20th 1946.

Wall Street put in a decent performance last night, given the pretty awful macro data (home sales, leading indicators and Philly Fed). It is worth noting that we have had a fair amount of macro data recently in the US that gives cause for concern over the sustainability and durability of the US recovery. Weak Q1 GDP, two disappointing ISM non manufacturing reports, anaemic industrial production numbers and a moribund Empire State manufacturing release spring to mind. But crucially the most recent ISM manufacturing number was solid and, along with supportive labour market data, this remains hugely important to market sentiment.

 

Liontrust Dealer's Roar - 19/05/2011

“The secret of a successful marriage is not to be at home too much”. Colin Chapman, founder of Lotus, May 19th 1928 – December 16th 1982

The Dow rallied 58 points after the European close ending the session up 0.65 % with the S&P500 up 0.88 % and the Nasdaq up 1.1 %. Stocks rose following the release of the Federal Reserve's minutes which showed central-bank officials are in no hurry to tighten monetary policy even as they held detailed exit strategy talks. With U.S. government bond yields at their lows of the year, market participants were seen booking profits, selling Treasuries in favour of higher-yielding assets.  

Liontrust Dealer's Roar - 18/05/2011

 “The place of the father in the modern suburban family is a very small one, particularly if he plays golf.” Bertrand Russell, British philosopher, May 18th 1872 – February 2nd 1970

While US equities managed to recover most of its earlier losses into the close, it is fair to say that the market wasn't adding risk in any aggressive way for most part of the day as investors grappled with a combination of conflicting data, weak company results/commentary and further Greek headlines. The S&P 500 closed virtually unchanged after having reached an intraday low of -0.8% (as we closed). Rises in Far Eastern markets, as well as the gold price and oil price, helped European equities start the day in good heart.

Liontrust Dealer's Roar - 17/05/2011

“The trouble with words is that you never know whose mouths they have been in”.Dennis Potter, English dramatist, May 17th 1935 – June 7th 1994

Having rallied as the European close approached yesterday, Wall Street moved into reverse and the S&P closed lower by 0.62% having been up about 0.3% at one point. Far Eastern markets were generally easier and European markets opened in a similar vein. 

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