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Liontrust Dealer's Roar - 31.10.2011

“Do you not see how necessary a world of pains and troubles is to school an intelligence and make it a soul?” John Keats, English poet, October 31st 1795 – February 23rd 1821

October has what one might describe as previous form when it comes to thrills and spills in global stock markets and it has certainly lived up to its billing this time around. Rather unusually, my final paragraph of my blog from Tuesday last week pre the big decision in Brussels last week appears (at this stage!) to look a reasonable shout:

Liontrust Dealer's Roar - 28/10/2011

“Your actions, and your action alone, determines your worth” – Evelyn Waugh, English author, born 28th October 1903 – died 10 April 1966.

If actions do indeed determine one’s worth then the leaders of the Eurozone are still someway short of the €500 note, however given it took so long to get this far perhaps to expect a definitive plan at this stage is asking too much.  

Liontrust Dealer's Roar - 27/10/2011

“I have a number of alternatives, and each one gives me something different” – Glen Hoddle, former England manager and footballer, born 27th October 1957

Thanks for the insight Glen andhappy birthday. Very early this morning (4am) Eurozone leaders finally unveiled their grand plan to save the Eurozone from the current quagmire it’s been wading through. Unlike our hero Glen,the number of alternatives available were actually pretty limited at this stage andas such nothing that was announced came as a surprise. For most commentators I’ve read the fact thatsomething which moves in the right direction has been announced finally must be taken as positive, especially given the uncertainty that was with us right up until last night’s close.

Liontrust Dealer's Roar - 26/10/2011

“If we had had more time for discussion we should probably have made a great many more mistakes.” Leon Trotsky, Russian revolutionary, born 26th October 1879 died 21st August 1940.

As mentioned yesterday markets took a breather as some lacklustre US data hit the tapes & confusion in the Eurozone continued unabated. In addition to this United Parcel Service (UPS -3%) disappointed the markets as although their numbers looked fine, exports from Asia to the US have decelerated & after hours Amazon took a bit of a knock (-14%) as they’ve been investing money in new products such as the recently announced Kindle Fire. On the whole, however, numbers continue to beat expectations.  

Liontrust Dealer's Roar - 25/10/2011

“I am always doing that which I cannot do, in order that I may learn how to do it.” Pablo Picasso, co-founder of the Cubist movement, October 25th 1881 – April 8th 1973

Positive sentiment spreading from the signs of life in Chinese manufacturing and a rather more optimistic hue in Europe, coupled with a very positive outlook from Caterpillar helped the US market to close near its highs for the day. With the market current (and perfectly understandable) obsession with global debt, the progress of the Q3 reporting season has generally been rather overlooked. It is very interesting to note the divergence between results in the US and Europe...

Liontrust Dealer's Roar - 24/10/2011

“I don't make any money.” Bill Wyman (born William George Perks), bass guitarist for The Rolling Stones, born October 24th 1936.

The above quote seems almost as unrealistic as many of the sound bites from European politicians over the weekend! Progress continues to be painfully slow on the three main issues confronting politicians and central bankers, but at least there does appear to be a degree of consensus with regard to bank recapitalisations and Greek haircuts.

Liontrust Dealer's Roar - 21/10/2011

“A man may devote himself to death and destruction to save a nation; but no nation will devote itself to death and destruction to save mankind” – Samuel Taylor Coleridge, English Poet, born 21st October 1772 died 25th July 1834

Yesterday was reported as being “pretty dull” in the US however post our departure the S&P managed to add a further 0.89% to close at 1215, still firmly clinging to the top of the range set over the last three months. Commentators pinned the bounce on a story that European governments may unleash as much at €940bn by combing the ESM (current rescue fund) with the EFSF (new rescue fund) and removing the upper limits on bailouts, however as per normal nothing is confirmed.

Liontrust Dealer's Roar - 20/10/2011

“Nations have no permanent friends or allies, they only have permanent interests.” Henry John Temple, 3rd Viscount Palmerston, British Prime minister, October 20th 1784 – October 18th 1865

The closer we get to Sunday, the more the uncertainty builds...

There was a real feeling towards the tail end of last week and the early part of this that European politicians and central bankers were going to get their act together and cobble a deal together. That is now being unwound, partly as a result of various newspaper articles and partly because of quotes attributed to some of the key players in the game. Since yesterday we have felt the chill of the following buckets of icy water being thrown on the thought that a deal is near at hand

Liontrust Dealer's Roar - 19/10/2011

“History keeps her secrets longer than most of us. But she has one secret that I will reveal to you tonight in the greatest confidence. Sometimes there are no winners at all. And sometimes nobody needs to lose”-John Le Carre, English writer, born 19th October 1931

Of the two situations described by John Le Carre above one has to think we’re currently living through the former rather than the latter. Overnight markets were cheered in the last hour or so of trading as a story appearing on the Guardian website suggested that France and Germany had agreed a “comprehensive plan” to boost the EFSF to €2trln using leverage, “The leaders of France and Germany hope to agree a deal that will assuage market uncertainties or, worse, volatility, in the run-up to the G20 summit in Cannes early next month”. The fact that the story was denied a later on Dow Jones newswire seemed to matter not

Liontrust Dealer's Roar - 18/10/2011

“Luck, that's when preparation and opportunity meet.” Pierre Trudeau, 15th Prime Minister of Canada, October 18th 1919 – September 28th 2000

As Sunday’s EU summit looms large this weekend, market concerns are returning. With a fair bit of damping down of market expectations, most notably from German finance minister Schaeuble, a dose of reality is being taken on board. Post yesterday’s close, Moody’s reaffirmed France’s rating, but they did highlight that France has the weakest debt metrics among its AAA rated peers, as well as stressing that there is less “wiggle room” from a balance sheet standpoint than was the case in 2008. 

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