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Liontrust Dealer's Roar - 30/03/2012


  • Hopes for a RRR cut in China this weekend spurred a rally on Wall Street after we closed, recovering almost 70bps post our departure
  • Japan traded lower on weak factory output numbers, nonetheless the Nikkei ended Q1 up more than 19%!
  • Property stocks (post arrest of Chairman of Sung Hung Kai) lead Hong Kong lower, but the Hang Seng concluded Q1 higher by about 11.5%
  • UK consumer confidence index falls unexpectedly (survey carried out BEFORE Budget)
  • Spurred by Wall Street, UK and Europe open stronger
  • Ahead of quarter end, program trading desks all report strong flows, generally weighted to the sell tack
  • Euro strong ahead of ECOFIN meeting to approve a firewall of between EUR800bn and EUR900bn
  • Chief Executive of Santander says that Spain will be one of the biggest “positive surprises” (?!)
  • Mid morning, the Austrian Finance Minister said that agreement had been reached on Eurozone firewall above EUR800bn
  • February retail sales data in Germany looked disappointing, but be aware it is a data series prone to big revisions
  • US consumer spending ahead of expectations, whilst income growth was weaker than forecast
  • Chicago Purchasing Managers survey came in a touch light…….
  • ……..but the University of Michigan Confidence survey suggested that the good burghers of the state are in a more positive frame of mind
  • However the purchasers manufacturing index in Milwaukee was extremely weak, coming in at 51.8 against an expected 58.0
  • Spanish budget went beyond the expected savings, which helped their bond market to rally
  • Markets very skittish into the close, FTSE ended up by 0.46%, with most of Europe up about 1%. The S&P was higher by 0.3% as we shuffled off for the weekend

Liontrust Dealer's Roar - 29/03/2012

“The Minister of Transport issued this appeal to motorists: Can anyone give him a lift to Leicester?”- Eric Idle, English comedian, born March 29th 1943


  • Traders bought the dip post our departure, S&P adds 0.05%, still down 0.5% on the day on weak durable goods orders
  • Oil under pressure all session post a bigger than expected weekly oil inventory numbers reflecting concerns over softening demand
  • Jamie Dimon says U.S. housing market near bottom & threat of double-dip gone:
  • S&P say Greece may have to restructure debt again
  • “Quiet” Asian session absorbs yesterdays give-back in performance across risk
  • Morgan Stanley up Chinese GDP forecast to 9% for 2012 (more below)
  • Bank of China Sees Chinese 2Q GDP Growth about 8.4%
  • Bloomberg Asia Pacific World falls 0.82%
  • Traders point out quarter-end switch apparently occurring between bonds (buy) & equities (sell)
  • Europe opens weaker as according to Bloomberg Fin Mins are planning to raise the € firewall to €940bn & Spain undergoes general strike
  • Note from Goldman saying European equities have performed well historically as bond yields have risen (so don’t worry about the latter)
  • UK house price data from Nationwide bit of a shocker, UK Net consumer credit 0.4bn vs 0.2bn forecast, Mortgage approvals 49k vs 57.2k forecast
  • Cable & Wireless (-1.2%) extends takeover code deadline, Intl Power (+5.3%) subject to a 390p bid from GDF Suez for shares they don’t already own
  • Imperial Tobacco (+1.4%) numbers go down well, Tui Travel (-2.6%) fall on theirs
  • Good German unemployment data, Jefferies say net better for the Euro
  • Eurozone confidence data looked worse
  • Italian auction ok, Bid 2 cover 1.65 (up), 10yr auctioned at 5.24%
  • Bank of Portugal downgrades growth expectations to -3.4% from -3.1% in 2012, to 0% from 0.3% in 2013
  • At 9am Eurostoxx is flat, but by 12:30 fallen to down 0.9%
  • Afternoon sees final Q4 US GDP print at 3% in line with expectations
  • Personal consumption (2.1%), GDP Price Index (0.9%), Core PCE (1.3%) all bang in line with expectations
  • Weekly Jobless claims worse than expectations & revised up
  • Continuing claims lower than expected but last month revised up
  • Late in trading an Asian Property ETF is suspended after Co-Chairman arrested on corruption probe hits HSBC/STAN in the UK & may lead to weak Asian session
  • Overall very weak feeling day with FTSE down 1.15%, Eurostoxx down 1.3% & S&P currently down 0.84%
  • Goldman traders wouldn’t be selling stocks here however (more below)
  •  Feels like quarter end can’t come soon enough

Liontrust Dealer's Roar - 28/03/2012

“I’ve always been famous, it’s just no one knew it yet” Stefani Germanotta, better known as Lady Gaga, American singer & songwriter, born March 28th 1986


  • US moved into negative territory in the last hour of trading
  • Asia weak, led south by a very weak session in China, which hit a 7 week low
  • SocGen report saying Chinese corporate profits will not grow at all this year
  • Copper names hit by two weak earnings reports
  • Europe inevitably opens weak
  • Focus remains on Spain (benchmark index -5% to last night year to date vs Italy +9.4 and Germany +20%!)
  • Paper from Citigroup highlights rising risk in Spain, which Mario Monti appears unaware of, judging his comments that Europe’s problems are “almost over”
  • Italy successfully placed EUR8.5bn in 6 month bills at lowest rate since September 2010
  • UK GDP for Q411 revised down to -0.3% (year-on-year +0.5% v +0.7% initial estimate)
  • US durable goods orders data not as weak as first glance might suggest
  • Belgian bond auction cancelled…….vague market chatter of a possible funding gap?
  • Dow Jones newswire report that the Eurozone firewall solution is not enough for the IMF contributed to an afternoon market slide
  • FT reports that talks are underway on a possible release of strategic oil reserves by the US and Europeans, which added to oil price weakness
  • FTSE ended the day down by 1.03%, in line with most of Europe
  • The S&P was lower by about 0.5%

Liontrust Dealer's Roar - 27/03/2012

“Every ten years a man should give himself a good kick in the pants”Edward Steichen, American Photographer, March 27th 1879 – March 25th 1973


  • S&P up 0.38% post our departure on dovish Bernanke comments/German willingness to up size of bailout firewall
  • Weak pending home sales & Dallas Fed Manufacturing ignored
  • Schaeuble says Greek euro exit more costly than staying, says sovereign debt is a “drug” that must be limited
  • Spanish PM Rajoy says he will pass a “very, very austere budget”
  • All 10 S&P sectors gain
  • Asia strong across the board driven by US move, Japanese exporters rally as Yen weakens, HSBC say expect more China easing and GDP of 8.6% this year
  • ECB President Draghi repeated that he sees "signs of stabilization" in the Eurozone's economy and financial markets at low levels, largely thanks to the ECB's three-year loans, but he stressed that the extra liquidity isn't likely to stoke inflation.
  • IMF's Shinohara Says Global Risks Remain
  • BOE’s Miles says spare capacity will continue to depress inflation
  • Europe opens strong after US/Asia sessions (+0.7% by 09:15)
  • Government looking to sell stake in RBS (+3.3%), PZ Cussons (-10%) profit warning on Nigeria, Total (-6%, French oil firm) Gas Leak
  • French consumer confidence unexpected jump in March
  • But Mixed Spanish/Italian debt auctions (2.58bn vs 3bn max)/(3.82bn vs 4bn max) starts sell off
  • By 12:45 markets have reversed all gains though no obvious large catalyst
  • Case Shiller House Price Index shows signs of Stabilisation
  • US consumer confidence 70.2 vs 70.1 forecast but down from revised 71.6 last time
  • Richmond Fed misses estimates (7 vs 18) but economist say “not terribly worrisome”
  • Market fall continues all of the afternoon, FTSE closes down 0.56%, SXXP down 0.4%, S&P currently flat

Liontrust Dealer's Roar - 26/03/2012

“Logic is the beginning of wisdom, not the end.” Leonard Nimoy, American actor, born March 26th 1931


  • Wall Street rallies by about 0.2% after our close
  • Asian markets mixed
  • Europe opens better on suggestions from Merkel that she is prepared to allow an increase in the debt-crisis firewall
  • Spain continuing to weigh on election/budget concerns, not helped by Mario Monti (PM of Italy) comments that Spain could re-ignite the debt crisis
  • German business confidence numbers slightly better than expected
  • Dovish speech from Bernanke hinting at further QE
  • Equities rise sharply, $ falls, Gold rallies
  • FTSE closes up by 0.82%
  • Most of Europe up at least as much, exception being Spain, lower by 0.69%
  • S&P higher by 0.98%
  • Woeful volumes across European markets

Liontrust Dealer's Roar - 23/03/2012

“I believe in the dollar. Everything I earn, I spend!” Joan Crawford, American actress, March 23rd 1905 – May 10th 1977


  • Wall Street almost flat after we closed
  • Far Eastern markets weak, not helped by poor number from China’s third largest bank
  • HK ended down 3.1% on the week, Shenzen -3.1%, Shanghai -2.3% and Tokyo -1.1%
  • UK and Europe up in early trading…….
  • UK ignores weak consumer confidence number
  • …….but gains soon dissipate
  • Moves being exacerbated by anaemic volume
  • Poor US home sales data further knocks markets
  • Oil price up sharply
  • Markets rally during the late afternoon
  • FTSE closed up by 0.16%, with European markets mixed
  • The S&P was higher by about 0.15% 

Liontrust Dealer's Roar - 22/03/2012

"One of the advantages of being a captain is being able to ask for advice without necessarily having to take it.”  William Shatner, Canadian actor (Captain Kirk, Star Trek), born March 22nd 1931.


  • US soft in the final half hour of trading
  • Asian markets generally better…….
  • …..despite weak Chinese PMI number
  • Europe/UK equities open lower…….
  • ……before getting hit by awful PMI numbers across Europe…..
  • ……and weak retail sales numbers from the UK
  • Meanwhile Spanish bond 10 yields climb above 5.5%....
  • ……and their Italian counterparts jump to above 5%
  • US macro data (jobless claims) broadly in line
  • FTSE ended the day lower by 0.79%, whilst Europe was typically lower by about 1.5%
  • Wall street was down by about 0.7% as  we headed for the exit

Liontrust Dealer's Roar - 21/03/2012

“A friendship founded on business is better than a business founded on friendship.” John Rockefeller, American industrialist, March 21st 1839 - May 23rd 1937


  • Wall Street rallied post our close
  • Bernanke warned of perils of raising rates too early
  • Far East generally weaker again
  • Talk of a further cut in bank RRR in China
  • Budget seemingly pre-announced in the press this morning!
  • Get a hurry on if you are buying a £2m+ house…..7% stamp duty on the way!
  • UK & Europe open higher
  • Poor Public Sector Borrowing numbers, but market not bothered seemingly, ahead of Budget
  • Markets give up gains by lunchtime
  • Budget as expected
  • US home sales data in live overall with expectations (weak Feb, but Jan revised up)
  • Focus returning to Spanish debt worries
  • FTSE closed flat, European generally weaker, though Germany up 0.23%, all on thin volume
  • S&P also flat on the day as we drew stumps 

Liontrust Dealer's Roar - 20/03/2012

“The behaviour is followed by a consequence, and the nature of the consequence modifies the organisms tendency to repeat the behaviour in the future” – Burrhus Frederick Skinner, American behavioural psychologist, 20 March 1904 – August 18, 1990.


  • US down a tad on lower volumes
  • Made highs around 18:00 UK time on the Apple news but sold off as rumours of a BAC secondary offering
  • Oil drops as US asks Saudi to boost output
  • Fed’s Dudley doesn’t exactly cool bond investors nerves
  • NAHB index looked like a small uptick
  • Asia weaker on comments from Rio/BHP regarding China cooling
  • Aus hike tax on Iron Ore/Coal, China hike petrol prices
  • Chinese Association of Auto Manufactures warn of lower growth
  • Above weights on European Autos & Miners
  • Vodafone nice rally on Morgan Stanley upgrade
  • High oil prices may cause inflation say ECB member (really?)
  • UK inflation a tad higher
  • US housing data mixed
  • Few warning signs over the market
  • FTSE down 1.16%, Eurostoxx down 1.15%, S&P currently down 0.45%.

Liontrust Dealer's Roar - 19/03/2012

“The road to hell is paved with works-in-progress” – Philip Roth, American novelist, born 19th March 1933


  • US pretty directionless Friday, closed small down from UK
  • Vols good on expiry
  • Fed’s Evans calls for low rates until unemployment <7% or inflation >3%
  • Energy names rally on fuel price inflation, consumer names fall
  • Barron’s talking about rebound in US house prices
  • Asia generally fine, some headlines from Christine Lagarde in Beijing
  • UNTIL last 30 mins of trade, Hong Kong got smacked for no obvious reason
  • Europe opens weaker, headlines generally around M&A
  • Apple to return cash via a dividend & buyback – in line with expectations
  • Greece CDS settled at 21.5
  • Pretty quiet Monday, markets dribble off a bit

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