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Liontrust Dealer's Roar – 31/01/2012

“It's not the sentiments of men which make history but their actions.” Norman Mailer, American writer, January 31st 1923 – November 10th 2007

Summary

  • Wall Street almost gets back to flat on the day
  • Far Eastern markets buoyed by stronger than expected Japanese industrial production numbers
  • Europe opens firm
  • According to FT Deutschland, the US, the Eurozone, and the IMF are working towards creating a multi-part rescue umbrella of €1500bn, merging ESM and EFSF
  • Portuguese 2 year government bond yield hits 17.7% intraday, a new Euro era record
  • Decent unemployment numbers in Germany
  • Sign of UK consumer feeling the heat. Lower mortgage approvals than expected and very weak consumer lending
  • Mixed bag of results from US blue chips
  • US housing market weakens further, seasonally adjusted monthly fall of 1.3% month on month
  • Chicago Purchasing Managers Survey and US consumer confidence both weaker than expected
  • A report to the US Congress suggests that Iran is stepping up its support for terrorism
  • S&P traded up about 0.65% in early trading, but all gains erased after the data mentioned above
  • Euro weak, losing 1% against the $ from midday to the close
  • FTSE closed up 0.19%, whilst the S&P500 was lower by 0.3%

Liontrust Dealer's Roar - 30/01/2012

I think we consider too much the good luck of the early bird and not enough the bad luck of the early worm” –Franklin D. Roosevelt, former US President, 30th Jan 1882 – 12 April 1945

Summary

 

  • US up a tad from our departure
  • China opens year of the Dragon in the Red
  • Mitsubishi Electric banned from competitive bidding for Government orders
  • Europe opens down on no Greek resolution
  • Germans want Greece to hand over sovereignty to a ‘Budget Commissioner’
  • French banks hit as Sarkozy proposal -> 0.1% transaction tax
  • Fitch downgrades 5 countries, Belgium in recession according to IMF
  • Ryanair better numbers, Spanair bust 4k more Spanish out of work, ABB buys Thomas Betts
  • Italian Auction ok, Eurozone consumer confidence weak, US consumer spending stalls as do UK house prices
  • Risk off day, winners defensives, losers banks (esp. French)
  • Watch Portuguese debt
  • Markets down about 1% 

Liontrust Dealer's Roar - 27/01/2011

“I pay no attention whatever to anybody's praise or blame. I simply follow my own feelings.” Wolfgang Amadeus Mozart, composer, January 27th 1756 – December 5th 1791

Wall Street ran out of steam after we closed yesterday, falling by about 50bps between our close and theirs. It is still up by close to 5% this year, which rates as one of the better Januarys on record. In fact, if it was to end the month at this level, it would rank as the 19th strongest January since 1928. However, it pales when put alongside the moves seen in other parts of the world so far this year, with Germany up by 10.8% and Hong Kong higher by 11.2% to name but two. 

Liontrust Dealer's Roar - 26/01/2012

“If you're playing a poker game and you look around the table and can't tell who the sucker is, it's you” – Paul Newman, American actor, January 26th 1925 – September 26th 2008

The FOMC meeting and accompanying minutes gave US markets the fuel they needed to push on just shy of 1% post our departure, with the S&P coming to rest up 0.87% at 1326 (next technical resistance at 1350 apparently). The FED said they saw “exceptionally low” rates until at least late 2014 (Gold up 3%!) somewhere further into the distance from the previously mentioned mid-2013, though their growth forecasts for 2012 have somewhat moderated to 2.2% - 2.7% down from the 2.5% - 2.9% in their November forecast (if you recall from Tuesday’s blog you’ll see this is moving in the direction of the OECD 1.8% forecast).

Liontrust Dealer's Roar - 25/01/2012

“Great bodies of people are never responsible for what they do.” Virginia Woolf, English author, January 25th 1882 – March 28th 1941

The major highlight on the other side of the pond after we departed last night was results from Apple, which came out after the S&P had closed at broadly the same level as it was at when we closed. Given the burgeoning popularity of the IPhone and IPad, growth was to be expected, but they shot the lights out! Q1 EPS was more than 35% ahead of expectations, with revenues almost 20% better than consensus, accompanied by significant upward revisions to Q2 forecasts. The shares rose very sharply in after-hours trading. And just after trading started today, Apple became the largest stock in the S&P. superseding ExxonMobil, the previous holder of the distinction. And as our new head of Asian equities, Mark Williams, pointed out, it is larger than the whole of the Indonesian market……………and as Matt pointed out, it has the CASH to buy any company in the FTSE100 up to (and including!) Unilever, the fifteenth largest stock in the UK with a market cap of £62.3 billion!

Liontrust Dealer's Roar - 24/01/2012

When you're on a merry-go-round, you miss a lot of the scenery”- Neil Diamond, American musician, born January 24th 1941

US markets closed slightly down on where we left them, with the S&P falling a mighty 0.04% to close up 0.05% on the day. There were little headlines of significance with distinct radio silence from the Greek PSI negotiations, though Fox News reported “Mortgage lenders & states have reached draft settlement over deceptive foreclosure practices”, the FT reported “Germany open to increasing the size of Eurozone rescue funds to €750bn” & Pimco’s El-Erian said “Europe’s three-year LTRO has been very successful effective for stabilizing liquidity in the banking system”. Traders were reported to be comfortable waiting for more action later in the week with a possible resolution to the Greek PSI negotiations, the FOMC on Wednesday, US GDP on Friday & more corporate results all to come.

Liontrust Dealer's Roar - 23/01/2012

“Television: A medium. So called because it's neither rare nor well done.” Ernie Kovacs, Hungarian/American comedian and actor, January 23rd 1919 – January 13th 1962.

Suggestions towards the tail end of last week that a deal was imminent to resolve the PSI stalemate proved to be wide of the mark. The issue rumbles on, with Charles Dallara, who represents the private creditors in the talks, saying that their “maximum offer” has been made, leaving it to the EU and the IMF to decided whether or not to accept the deal.

Liontrust Dealer's Roar - 20/01/2012

“Experience is what you get while looking for something else”Frederico Fellini, Italian director, January 20th 1920 – October 31st 1993

Post our departure US markets were pretty much unchanged, with the Dow closing at the day’s high, the S&P near enough, the Nasdaq 100 making a 10-year high & the VIX falling below 20 for the first time since last July. Encouragement came from decent volumes, it was the busiest day of the year so far (7.7bln shares traded), while good corporate results from Morgan Stanley (+5.4%) and Bank of America (+2.5%)  added to the financial euphoria emanating from our session. After hours notable movers included Google who dropped 9% after Q4 earnings missed estimates, Microsoft who rallied 2% after Q2 profit beat estimates, IBM who rallied 1% on good Q4s & Intel who rallied 1% doing similar.

Liontrust Dealer's Roar - 19/01/2012

“We live in a rainbow of chaos”- Paul Cezanne, French artist, January 19th 1839 – October 22nd 1906

US markets continued to push on post our departure, with the S&P putting on a further 0.64% as chatter about a potential ramp up of IMF funding, decent Portuguese/German bond auctions & near-term resolution surrounding the Greek debt-swap negotiations captured the mind. Corporate takeaways were somewhat mixed but results from semiconductor/networking firms provided a boost for the tech sector, while the standout movers were the financials, with Goldman putting on 6.8%. The US National Association of Home Builders/Wells Fargo builder sentiment index (NAHB) hitting its highest level since June 2007 also helped sentiment, while the S&P managing to breach and hold the 1300 level (to close at 1308) is a clear technical bull point. Regarding the above overnight news included some interesting chat from the members of the IMF who aren’t part of Europe, with the key conclusion being it doesn’t appear any of them are that keen to get their wallets open right at the moment.

Liontrust Dealer's Roar - 18/01/2012

“Did you ever stop to think, and forget to start again?” AA Milne, English author (best known for Winnie the Pooh), January 18th 1882 – January 31st 1956

Wall Street was unable to hold the 1300 level yesterday and slipped back in afternoon trading to close up just 0.36% and Chinese shares succumbed to profit taking towards the end of the session, whilst other Far Eastern markets were mixed. An interesting chart appeared today which shows the continued slippage in new home prices in China. We have almost arrived at the point where prices are not going up anywhere.

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Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

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