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Liontrust Dealer's Roar - 30/03/2012

Summary

  • 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

Summary

  • 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

Summary

  • 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

Summary

  • 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

Summary

  • 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

Summary

  • 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.

Summary

  • 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

Summary  

  • 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.

Summary

  • 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

Summary

  • 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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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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