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Liontrust Dealer's Roar - 30/04/2012

“If you got the money honey I got the time and when you run out of money honey I run out of time.” Willie Nelson, American country music singer, born April 30th 1933

Summary

  • S&P moved up a touch post our close on Friday
  • Asia enjoyed a strong session (in the absence of the holidaying Japanese and Chinese)……
  • ….led by Hong Kong (+1.7%) on decent earnings numbers
  • European markets  opened flat or slightly lower in pitiful volumes ahead of May Day holiday for most tomorrow
  • Spanish GDP came in at -0.3%, marginally better than had been expected….
  • ….and S&P announced a mass downgrade of Spanish banks, now just three notches above junk
  • European inflation running ahead of expectations
  • US personal income and spending data much in line with expectations
  • Chicago PMI data very poor at 56.2 against an expectation of 62.2
  • Downside on equities was tempered by tightening peripheral European 10 year yields
  • Nonetheless FTSE closed down by 0.68%, rather better than most of Europe (Spain lower by 1.89%)
  • The S&P was down by 0.53% as we headed home for the day

Liontrust Dealer's Roar - 27/04/2012

“Spontaneity has its time and its place.” Arthur Frank Burns, American economist and Chairman of the Federal Reserve, April 27th 1904 – June 6th 1987

Summary

  • Wall Street was strong into the close, gaining a further 50bps form where it was when Europe closed yesterday
  • Bank of Japan expands asset purchase programme by $123bn, but the market was unable to hold onto gains built post this announcement
  • Spain’s credit rating was cut again by S&P to BBB+ from A, with a negative outlook….
  • ….which led to their 10 year yields trading up as high as 5.97%.....
  • …..which led to Europe opening sharply lower
  • Spanish unemployment data reveals 24.4% of the workforce out of a job
  • The latest Italian bond auction went well, both in demand and price terms….
  • …..which sparked a rally in the Euro, equities and bonds
  • …..which held despite comments from S&P’s Kraemer that there are downside risks to almost all Eurozone sovereign credit ratings
  • US GDP number came in below forecast at 2.2% (2.5%)
  • …….but the University of Michigan Confidence survey surpassed expectations
  • FTSE ended the day up by 0.49%, weaker than the rest of Europe (except Switzerland which was down small). Spain and Italy leading the charge up!
  • The S&P was higher by 0.18% as we pulled down the shutters for the weekend
  • A normal weekend for us, but holiday for some markets on Monday (China, Japan, Russia, Holland and half-day in Sweden). Lots of markets closed on Tuesday 

Liontrust Dealer's Roar - 26/04/2012

 “Resting on your laurels is as dangerous as resting when you are walking in the snow. You doze off and die in your sleep.” Ludwig Wittgenstein, Austrian (and latterly British) philosopher, April 26th 1889 – April 29th 1951

Summary

  • Wall Street moved higher post our departure
  • Big day for US corporate earnings, with excellent numbers from Apple (+8.9%), Boeing (+5.5%), Corning (+7.0%), Mosaic (+5.5%), Robert Half (+5.7%)
  • Numbers from Caterpillar (-4.6%), General Dynamics (-3.5%), Sprint (-1.6%) and Rockwell (-2.4%) below par
  • FOMC policy statement was reassuring in tone and content
  •  Asian markets mixed ahead of crucial Bank of Japan meeting tomorrow… will they boost their asset purchasing programme?
  • On the back of US gains, Europe and UK opened modestly stronger
  • German inflation numbers contained no nasty surprises
  • But markets fall on renewed peripheral bond weakness, as well as some disappointing post results conference calls across Europe…
  • Bank shares reporting (Deutsche Bank, Santandar and Barclays) all open higher, but drift off
  • ….and the President of the European Parliament, Martin Schulz, comments that the collapse of the European Union is a “realistic scenario”
  • Overall, today’s raft of US numbers skewed to the negative side (Exxon, Aetna, UPS, Potash
  • Disappointing jobless claim numbers from the US, but may be better than they appear at first glance (see below)…
  • ….and the latest pending home sales number for March comes in comfortably ahead of expectations (but caveat is that the data can be very volatile)
  • Nonetheless, markets rally hard, with London and New York erasing losses
  • FTSE ended the day up by 0.52%, whilst Europe closed mixed (Germany and Switzerland strong, Italy and Spain weak)
  • The S&P was higher by 0.17% 

Liontrust Dealer's Roar - 25/04/2012

“Not only strike while the iron is hot, but make it hot by striking” - Oliver Cromwell, English military & political leader, April 25th 1599 – Sep 3th 1658

Summary

  • Wall Street traded a fraction easier post our departure but finished better on the day
  • After hours another great set of numbers from Apple...traded up 7.8% back above $600
  • Driven mainly by shipping 35million iphones in Q2 (estimate 30.5m), 88% growth over last year, EPS $12.3 about a 20% beat
  • Asian markets mixed, Taiwan better as Apple plays Wintek (+2.8%) & HHP (+1.9%) rally, Hong Kong “turnover painfully low again”
  • China’s Wen says economy will maintain robust expansion
  • Europe & UK open firmer as S&P future tracks the Apple move
  • Lots of numbers out & generally they’re pretty good
  • ...Electrolux 7.5% on Q1 sales, Ericsson +2.8% on margin, Peagout +3% on sales, Siemens +1% low qlty beat, Valeo +9% sales, Swedbank  +5% NII
  • ...BBVA: broad-based beat helps Spanish banking sector & the IBEX, plus 10 year yield come in 20bps
  •  Mid-morning UK in technical recession, GDP prints at -0.2% for Q1 vs forecast +0.1%, pound weakens
  • ECB lending survey, better than last month (see below)  
  • All helps Eurostoxx to rally 0.7% by Lunch
  • Glaxo numbers at midday weaker than expected
  • Very weak US durable good order for March at 13:30, -4.2% vs forecast -1.7% but GS raise GDP estimate (see below)
  • All eyes now on FOMC...more easing from Ben? Probably not see Barcap preview below
  • FTSE up 0.2%, Eurostoxx up 1%, S&P currently up 1% 

Liontrust Dealer's Roar - 24/04/2012

“If you resolve to give up smoking, drinking and loving, you don't actually live longer; it just seems longer.” Sir Clement Freud, British politician, writer and broadcaster, April 24th 1924 – April 15th 2009

Summary

  • Wall Street staged a small rally post our close, but the S&P was still lower by 0.84% on the day
  • After hours a mixed bag of earnings reports
  • The Australian dollar weakened and the nation’s 10-year bond yields touched a record low after inflation in the country unexpectedly slowed
  • Declines in Asian financial stocks weighed heavy on markets, with developers also losing in Hong Kong. Japanese exporters suffered on the back of the stronger yen
  • Europe and UK open firmer In very light trading
  • Primary focus this morning were bond auctions in Holland (first time anyone appeared to ever care!)and in Spain
  • Both went smoothly and helped markets (equity, bond and Euro) to rally further, albeit on pitiful volumes (-16% on 20 day average)
  • Markets spooked by reports that an unnamed Greek official suggested that there is still no full agreement on bank recapitalisation terms
  • Some positive signs in the CaseShiller home price data from the US today……..are we finally seeing a solid base in some areas?
  • Market rallied through the afternoon helped by further falls in European bond yields……
  • ……and shrugged off some disappointing US consumer confidence numbers……
  • ……focussing instead on a stronger than expected Richmond  Fed Manufacturing Index
  • FTSE ended the day higher by 0.78%......
  • ……rather less than Europe which saw France (+2.29%), Spain (+2.24%) and Italy (+2.48%) lead the way
  • The S&P was higher by 0.55%, ahead of the FOMC meeting and a raft of results

Liontrust Dealer's Roar - 23/04/2012

“Fortune brings in some boats that are not steered” William Shakespeare, 23rd April 1564 – 23rd April 1616

Summary

  • US markets up on better than expected earnings from Microsoft (+4.5%), Travelers (+1.7%) &GE (+1.5%), but fall 0.5% post our departure as Apple retreated 2.5%
  • Hope was IMF may secure up to $500bn of resources to fight the debt crisis
  • But gains held back ahead of the 1st round of the French presidential election
  • Asia trading mixed as French 10 year widens on French round 1 polls & Euro PMI’s out later
  • HSBC preliminary PMI for China at 49.1 for April vs 48.3 in March (but <50 equals contraction)
  • Draghi resists calls for crisis-fighting measures
  • “Highly accommodative monetary policies are fast coming a threat to price stability” BIS
  • IMF only gets $430bn, nothing from US & Canada propose making it harder for Europe to cut aid
  • Britons’ spending power declines most in 13 months, Lloyds says
  • Europe opens weaker & fall continues as...
  • ...French Services PMI 46.4 vs forecast 50.1, German Manufacturing PMI 46.3 vs forecast 49
  • ...EC Services PMI 47.9 vs forcast 49.3, Manufacturing 46 vs forecast 49.3
  • ...Italian consumer confidence at lowest level since series started in 1996
  • Philips (+3.3%) better on numbers, Nestle (-2.8%) buy Pfizer’s (-0.9%) nutrition business
  • Ugly start basically, by midday Eurostoxx -2.2% with Fins, Autos & Materials leading the way
  • 14:00 French auction gets away ok, though yield on 84 day paper shades up to 0.09% from 0.084%
  • Dutch government offer resignation to Queen, Dutch bonds widen
  • Pre-Market US Wal-Mart (-5%) falls on bribery allegations at Mexican subsidiary
  • Kellogg’s (-5%) profit warning, ConocoPhillips (-0.48%) weaker earnings, D.R. Horton better (-0.2%)
  • Afternoon industrials & basic materials continue to get sold (Industrial heavy Swedish market down 4.6% on index selling)
  • Ugly close, FTSE down 1.85%, Eurostoxx -2.34%, S&P currently down -1.15% with no obvious catalyst overnight to buy it 

Liontrust Dealer's Roar – 20/04/2012

“I use emotion for the many and reserve reason for the few” Adolf Hitler, Austrian born German leader of the Nazi party, April 20th 1889 – April 30th 1945

Summary

  • US market weak yesterday post our departure
  • Asia followed the lead, although China rallied on expectations of renewed monetary and fiscal stimuli
  • European markets opened flat, as did the UK
  • Markets receive fillip from German IFO survey
  • UK retail sales considerably stronger than had been anticipated (see below)
  • The rally grew legs on a report on CNBC that China Investment Corp is less pessimistic on Europe than some investors and that it should “easily” account for 20% of equity portfolios
  • ……..and also well received was news that the G20 are set to increase IMF resources by more than the previously announced $400bn benchmark
  • FTSE ended the day up by 0.48%, rather less than the remainder of Europe, whilst the S&P was higher by 0.65%

Liontrust Dealer's Roar – 19/04/2012

“The best car safety device is a rear-view mirror with a cop in it.” Dudley Moore, English actor/comedian, smaller half of Pete & Dud, April 19th 1935 – March 27th 2002

Summary

  • Wall Street staged a rally after our close, but gave almost all of it back in the last hour (closed marginally higher than the level at our close)
  • After hours earnings announcements a mixed bag
  • Asia weak (excluding Hong Kong) on very light volumes, with investors sitting on hands ahead of European bond auction later
  • Europe opens up………with all eyes on Spanish and French auctions
  • Spanish bond auction mixed, but overall probably regarded with relief!
  • French bond auction very strong
  • Markets responded positively…….
  • …….until market chatter of French and Dutch sovereign downgrades started to do the rounds (see below)
  • Equities caught a temporary bid on news from ratings agency Fitch that they reiterated their AAA rating on France
  • ……and good quarterly numbers from Morgan Stanley, Travellers and Bank of America also helped
  • But downward pressure resumed on US jobless claims data was a tad disappointing…..
  • ……as was the Philly Fed survey…..
  • …... and existing home sales numbers
  • FTSE ended the day flat (-0.01%!), whilst Europe was weak, led by France (-2.05%), Spain (-2.42%) and Italy (-2.01%)
  • The S&P was down by less than 0.1%

Liontrust Dealer's Roar – 18/04/2012

“The law does not pretend to punish everything that is dishonest. That would seriously interfere with business” – Clarence Darrow, American lawyer, 18th March 1857 – 13th March 1938

Summary

  • Wall Street traded pretty much sideways past our departure on several positive catalysts...
  • ...Spanish auction, Japan putting more money into IMF followed by Sweden, Denmark, Norway (though none from US)
  •  Apple bouncing 5% reversing all of Tuesdays fall + good numbers from Citi +3% & Coca Cola +2%
  • Asian markets track US rally, BOJ deputy governor fuels expectations of further easing
  • Large jump in China (+1.96%) as home prices drop in 37 of 80 cities signalling more ability to cut the RRR
  • UK BOE supported case for no more QE May meeting, a more hawkish tone
  • But labour market data today showed a fall in UK unemployment...GS say no more QE
  • Large deal in Spain as ACS (-6%, 1.5% of IBEX) sell stake in Iberdrola (-7%, 7% of the IBEX) to cut debt...weighs on general market
  • ...as does: Spanish February bad loans came in a 8.16% vs 7.91% in Jan, (trend worsening) & Q1 house prices falling 3% QoQ
  • Results mixed, BHP Billiton, Tesco, Heineken go down well, LVMH, ASML, Electrolux, Michelin disappoint
  • Lots of action in the Falkland Oil explorers as rumours circulate regarding Borders & Southern upcoming drilling results
  • US opened down 0.5% after yesterday’s rally on Intel (-2%), IBM (-2.5%) reporting slower growth numbers
  • US mortgage applications rebounded last week as the average 30-year loan rate dropped to 4.05% record low
  • All in all reported by the street to be a very dull day, Spain down 4% in the end, UK down 0.4%, Eurostoxx down 0.7%
  • A pause yes, but didn’t feel like any harm done

Liontrust Dealer's Roar – 17/04/2012

“A man generally has two reasons for doing a thing. One that sounds good and a real one”. John Pierpoint (JP) Morgan, American banker, April 17th 1837 – March 31st 1931

Summary

  • Wall Street finished slightly higher than trading level when we closed yesterday…….
  • …….despite Apple shares off sharply again
  • Asian markets weak on news that foreign direct investment in China dropped for the fifth month in succession
  • European markets open up small
  • UK inflation data worse than expected
  • Spanish bond auction reassuringly solid and very strong German ZEW economic sentiment data
  • …….which contributed to a rally in the euro and in Government bonds
  • Rumours of the ECB buying bonds (tho’ that seems an odd concept just before an auction…….)
  • By lunchtime, Spanish 10 year yield in from 6.02% to 5.84% and Italy in from 5.56% to 5.43%
  • ……..and, as a consequence, equities were in fine fettle, although Spain was underperforming……
  • …….as a consequence of a sharp fall in the Repsol price as a result of Argentina’s decision to nationalise YPF
  • Big day for earnings in the US, with decent numbers from Goldman Sachs, Johnson & Johnson, Coca-Cola and Omnicom
  • Further boost for risk assets from the IMF, which today upgraded their 2012 global GDP forecast from 3.3% to 3.5%
  • Mixed data from US housing market, with new starts weaker than expected, but new building permits stronger!
  • Rally continued to gather momentum throughout the afternoon…….
  • ……..traders reporting decent program buying and momentum buyers as primary drivers
  • ……..although futures traders reported net sellers into the close at the end of a very feisty session
  •  FTSE ended the day up by 1.78%, with European markets stronger and the S&P higher by 1.27%

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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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