Daily Brief
MARKETSCOPE : Too Early to Cut, Too Late to Hike
The US market surged higher on Thursday and Friday, supported by Apple’s massive $110 billion stock buyback program. China and Hong Kong actually bounced back while the rest of the world took a breather. The immediate price action following the Fed meeting does not accurately reflect the market's longer-term direction. This means that the outcome of those events is likely to be seen in the following weeks. Read more...
Sell In May and Go Away ?
It was a turbulent week for the financial markets, torn between rising inflation in the United States, which takes the prospect of a rate cut further away, and mixed quarterly results. Volatility rose sharply, but in the end the indices held firm, with the tech giants once again reassuring the market. Although rates are widely expected to remain unchanged this week, the market will pay close attention to Jerome Powell's comments Read more...
MARKETSCOPE : Don’t Try To Catch a Falling Knife
A couple of weeks ago we signaled a short and a medium term coincident sell signals therefore that a correction process was imminent. Now that we've had our first glimpse of real selling pressure since November, investors have quickly become fearful, or at least much less optimistic. When sentiment normalizes after a prolonged period of extremes, it has historically never resulted in an immediate bear market, or even a correction. Read more...
MARKETSCOPE :The Market is Always Right
Last week we issued a short term sell signal on our weekly chart. The market confirmed that “crack” to this “unstoppable” bullish rally on Friday. Please note crucially, this signal DOES NOT mean to “sell everything and go to cash.” The bearish thesis for the second half of the year is based on the prediction that inflation would start rising as the base effects expire in June, at which point the Fed would be forced to make a hawkish turn - this means the interest rates would start rising again. Read more...
MARKETSCOPE : April's Fool
Nervousness has risen across the stock markets. Several Fed members confirmed that patience was required before interest rates could be lowered, given the strength of the US economy and the slight upturn in inflation. As we await the kick-off of the first-quarter earnings season, volatility could yet intensify, after 5 consecutive months of increases. Read more...
MARKETSCOPE : FED running for [the] President ! ?
Wall Street's bull run was rekindled after Wednesday’s FOMC meeting announcement. Thus far, the market has clearly respected our road book, and has been hitting its head on the 5285 resistance we have been highlighting as well. The problem for investors is that this bullish trend has already lasted much longer than expected and could continue. But monetary policy remains exceptionally loose given one of the fastest rate-hiking cycles seen. Read more...
MARKETSCOPE : Japan : ¥ Blossom Season
Slightly higher-than-expected US inflation does not seem to have dampened risk appetite on European financial markets, which set new records again last week. In the US, on the other hand, technology stocks have shown some signs of weakness in recent sessions. Caution is therefore advised, ahead of next week's meeting of the US Federal Reserve. Read more...
No News Is Good News !
In unison, the financial markets hit new record highs last week, still riding the artificial intelligence momentum and now benefiting from expectations of a rate cut on both sides of the Atlantic in June. Appetite for risky assets therefore remains intact. Read more...
MARKETSCOPE : BULLS STAMPEDE
While the overall market traded higher into the end of the week, setting new all-time highs, the bullish November trend remains intact. What would constitute a powerful breakout ? An ideal situation would be if capital can rotate out of overcrowded sectors into less popular ones. Read more...
MARKETSCOPE : The Greatest Fool
Indices shattered their records this week, thanks to the new market prophet Nvidia. The company unveiled mind-blowing results, boosting investor appetite for all things artificial intelligence. As a result, the tech sector was pulled upwards, lifting the rest of the stock market. Read more...
MARKETSCOPE : What Goes Up, Must Come Down
Stocks ended the week in the negative following a second inflation report that sparked concerns the Federal Reserve may cut interest rates later rather than sooner. Even though that for now the bull trend remains intact, investor sentiment remains bullish, and momentum is strong at this juncture we would prefer not to have the an overexposure in tech now. Read more...
MARKETSCOPE : Don't Fight the Trend
Currently, market trends are bullish with “buy signals” in place, suggesting that allocations should remain equity-biased for now. While Wall-Street set yet another record last week, despite tensions on the bond market, Europe appeared more hesitant. Luxury goods and the automotive sector in particular did well there. Read more...
MARKETSCOPE : FOMO : Chill Out Bozos
Although hopes of a Fed rate cut in March are fading, following Jerome Powell's speech and the monthly US employment report, it was a positive week for Wall Street overall. Earnings reports from big tech were mostly reassuring, propelling US indices to new highs. Europe fared less well, weighed down by the disappointing results of a number of large caps, and ended the week slightly down. Read more...
MARKETSCOPE : The Sum Of All Greed
Despite a few disappointing quarterly results, the week ended on a bullish note for the stock markets. Wall Street continues its record-breaking run, buoyed by a robust US economy and the prospect of imminent rate cuts. Read more...
MARKETSCOPE : A Gravity-Defying Stock Market
At the end of a volatile week, the US market broke out to set a new all-time high for the S&P 500. Other main financial markets lost ground overall, as central bankers sought to dampen the hopes of investors regarding the imminence of rate cuts. The semiconductor sector nonetheless helped the Nasdaq 100 set a new all-time record, as we await the earnings reports of the giants of the stock market. Read more...
MARKETSCOPE : Sell High, Buy Low !
Pending the start of the fourth-quarter earnings season, Wall Street advanced, led by technology stocks, while European stock markets generally stagnated in this latest weekly sequence. Slightly higher-than-expected US inflation did not alter expectations of a first reduction in the cost of borrowing in March. Read more...
2024 New Year, Old Focus !
Looking back on 2023 as it is fading : it turned out to be a banner year for stocks. Even bonds avoided the bout of losses that seemed imminent as investors wrestled with the outlook for the economy and interest rates. Here are the four stories that were top of mind for investors this year, and how those stories will play out in 2024. Read more...
MARKETSCOPE : Goodbye High Rates, Hello Easy Money!
The market has finally reached the Fed's pivot point, the moment when the central bank has passed its rate peak and is heading for its first cut. There is still disagreement over the pace of the decline. Our view is the market is pricing in too many rate cuts , too fast for the next year. We think the experience of this rate cycle is that it pays to listen to the Fed. Read more...
MARKETSCOPE : Good Buy Until It's Good Bye !
Europe has taken the lead for once. Markets worldwide are positioning themselves for rate cuts in the new year, creating sharp falls in yields and a boom for risk assets. But nowhere has that shift been more dramatic than in the eurozone. While the market struggled to advance early in the week, at the end markets climbed to set new closing highs for the year, as shown. However, the combination of overbought conditions and excess bullish sentiment limited gains from weaker-than-expected economic reports that should keep the Federal Reserve at bay next meeting. Read more...
MARKETSCOPE : Endangered Species
Financial markets rose again this week, welcoming the further deceleration in inflation on both sides of the Atlantic, which fuels hopes of a fall in the cost of money by the end of the first quarter of 2024. As the holiday season approaches, risk appetite appears to be intact for the time being. Read more...
MARKETSCOPE : Point Break
In the absence of any major macroeconomic data, and with Wall Street being closed for Thanksgiving, the week was fairly quiet. Nevertheless, financial markets maintained their bullish course, still buoyed by expectations of the end of the monetary tightening cycle on both sides of the Atlantic. Read more...
MARKETSCOPE : Greed Is Good
This week's US inflation data was much better than expected. In other words, decelerating. This has clearly rekindled traders' appetite for risk. As a result, financial markets regained their height, with the Nasdaq100 less than 6% off its all-time high of 2 years ago. Read more...
MARKETSCOPE : Bull Trap or Christmas Rally ?
Risk appetite eased somewhat on the financial markets at the end of the week, following a rather hawkish speech by Jerome Powell. The Fed head hinted that the monetary tightening cycle in the US was not necessarily over. Actually, the Fed faces a tricky balancing act of slowing demand without creating a recession, which, despite recent improvements in economic data, remains a risk in 2024. Read more...
MARKETSCOPE : Bullmania
technically, the S&P500 needs to break the key resistance levels, first the 50dma, and more importantly the 100dma, which would be the “higher-high” and open up the possibility for the S&P500 to reach the year-high point at 4600. The question is whether the soft-landing phase is only the transition to the hard landing phase. In other words, will the slowdown eventually transition into a recession? Read more...
MARKETSCOPE : A Magnificent Decline
It was another highly volatile week for the market, due to poor corporate results, most of which were severely punished. The main driver of Wall Street's retreat last week was a slide in megacap technology stocks. There may also be some macroeconomic concerns that could be weighing on the markets, too. Many economists continue to forecast a recession at some point in the coming quarters, something they have been doing for the better part of a year yet, with the economy still holding up thanks to a resilient job market. Read more...
MARKETSCOPE : The Sum of All Fears
With the latest geopolitical developments, the global situation is very bleak at present. Things are very tense and the situation on the financial markets is unclear. Another tough week as markets tried to get a clearer view. Read more...
MARKETSCOPE : Don't Fight The Tape
The communication exercise from Fed officials to leak to the press that the fall in bonds was the equivalent of a rate hike, leaving little room for doubt as to the Fed’s stance at its next monetary policy meeting, scheduled for early November, led investors to believe that rate hikes were over, paving the way for a rebound in equities after a rather painful August-September session. Read more...
MARKETSCOPE : Breaking Bad
October started with a continuation of the August/September sell-off. While media headlines are flush with concerns about higher interest rates, the selloff remains orderly within the new middle east instability. Read more...
MARKETSCOPE : HAWKISH PAUSE
A resurgence in volatility, as the financial markets have not taken kindly to the Fed's talk of further tightening between now and the end of the year, and the prospect of high interest rates for longer than expected in the USA and Europe. Markets took a hit this week as the Fed projections of “higher for longer” killed the “rate cut hopes.” Read more...
MARKETSCOPE : The Fed: Friend or Foe?
Never the less no one can definitively say whether all of these policies will lead to a soft or hard landing for the U.S. economy; but what we do know is that the Fed’s choices will definitely impact the global economy for the coming years. Waiting for the next Powell move, the market held support at the 50-DMA on Friday, with the overall price conditions remaining neutral. Like a groundhog that sees its shadow, the MACD signal is close to registering a “sell signal.” If the signal triggers, it could signal a couple of additional weeks of sloppy trading action heading into October. Read more...
MARKETSCOPE : MACRO MATTERS
Equity markets suffered a few setbacks after a fairly calm summer period. In particular, there was a pronounced selloff after Fed Chair Powell delivered a hawkish message in his speech at Jackson Hole . In the US, the services sector performed better than expected in August, while weekly jobless claims were lower than expected, fueling fears of higher rates over a longer period. Read more...
MARKETSCOPE : SKY HIGH
Financial markets had a strong rally last week due to positive corporate results and central bank decisions that were in line with expectations. The U.S. Federal Reserve raised interest rates by a quarter-point, as expected, bringing Fed Funds to the range of 5.25% to 5.50%. We still think it unlikely that the United States will be able to avoid a recession, given sharply rising interest rates being applied to an economy burdened with a historic level of debt. I Read more...
MARKETSCOPE : Irrational Exuberances
Amidst the intensifying quarterly earnings season and the pending rate decisions by the Fed and ECB, financial markets traded in a mixed manner throughout the week.U.S. equity indexes advanced on hopes that the tight labor market and moderating inflation would help the economy avoid a hard landing.While the bulls are hopeful that the end of rate hikes will support the bullish rally, the disinflation in both CPI and PPI suggests earnings will be weaker than analysts’ current expectations. Read more...
MARKETSCOPE : The Matrix (Exploded)
Stock markets are coming out of a week that saw an easing of fears about monetary policy. At least in the USA, where inflationary pressure is coming down faster than expected. In other Western countries, the situation is less clear-cut. But one thing is certain: with 40% gains since the start of the year, the Nasdaq's counter-attack is taking everything in its stride. Read more...
MARKETSCOPE : Heads I Win, Tails You Lose !
After the mixed US employement data, equities may be ripe for a pullback following big gains in June and in the second quarter, which could lead to choppiness and consolidation heading into earnings season. Read more...
MARKETSCOPE : What is Obvious is Obviously Wrong !
Combined with the Fed’s comments that more rate hikes are likely coming, continued weak economic data and persistent inflationary pressures weighed on the markets this week. Yield curves around the world are inverting the most in decades. That’s not exactly a harbinger of bullish things to come and they have always announce a recesssion within the next 18 months. Read more...
MARKETSCOPE : RISK ON
FOMO (Fear Of Missing Out) The market is overheated and everyone and their grandmother can see it, but it may take some time before we see a blow off top. A few months ago, most investors feared having too much exposure to equities. Now many are worried they may not have enough. The shift from bearish to bullish sentiment has been steady since the beginning of March. However, recently, there was an apparent capitulation as bearish investors turned bullish. Read more...
MARKETSCOPE : All Eyes on the Fed
Now the question is whether the sentiment toward the market has been taken too far, and there’s a very good argument that’s so. Ahead of a week when investors must brace for US inflation data, and then monetary policy meetings by the Federal Reserve, the Bank of Japan and ECB. Read more...
MARKETSCOPE : Don't Be Fooled !
After a difficult start to the week due to a number of disappointing Chinese statistics and uncertainties over the US debt ceiling, the financial markets quickly rallied, largely reassured by the disappearance of the threat of a US default and growing hopes of a pause in the Fed's monetary tightening cycle in June. As a result, a number of bargain purchases have been made in recent sessions, especially as US technology stocks remain particularly sought-after. Read more...
MARKETSCOPE : The Clock Is Ticking
Investors lack clarity and are looking for the next catalyst. The two 25 basis points rate hikes in the US and Europe have not been met with enthusiasm this week. These announcements, combined with the setbacks of the US regional banks, were not well received, causing the main indices to fall. Read more...
MARKETSCOPE : "FED : we have a problem !"
Mixed quarterly results, weak economic growth and renewed concerns about the banking sector weighed on the trend this week in Europe. Despite Wall Street's resilience thanks to its heavyweights, traders opted for some profit taking following the strong gains of the past few weeks. Read more...
MARKETSCOPE : In the Doldrums
Welcome to a non-binary world. In economics, more than anywhere else, nothing is totally black or totally white. Shades of grey come and go. Economic data, meanwhile, was downright depressing. It’s getting harder to find an economic indicator that’s saying the economy isn’t already in a recession right now let alone on the verge of one. Read more...
MARKETSOPE : The Market Is Always Right !
Over the past two weeks, both bulls and bears have lost. A lot of excitement for bulls and bears, but little net progress… Technically speaking (aka evidence), ‘things’ are starting to look quite bullish, as we will see further down. Fundamentally, (aka emotions), ‘things’ continue to look quite bearish (earnings recession, debt ceiling, no Fed-Pivot, etc…). Read more...
MARKETSCOPE : How Deep Is the Hole ?
The Easter pause serves as a calm before the storm particularly given Friday’s employment report. We take the opportunity of this period to review what moved the past quarter, what and where performances have been, as well as what can be expected in the second quarter -including our monthly "What are the Charts Telling Us?". Read more...
MARKETSCOPE : Come on, baby, let's start anew
The blue sky scenario of the moment? The banking fire has been contained, inflation continues to fall and key interest rates are on the way down in the medium term. But some clouds are darkening this picture as new surge in the oil market. There is no denying that technically the markets have just become a whole lot more constructive and some bottoming processes seem to be in place. Recent interventions to offset the “banking crisis” by providing liquidity was the effective “ringing of the bell.” Read more...
MARKETSCOPE : Banks Are Bleeding
Fears of a domino effect are growing. Even if investors seem rather confident, as shown by the good performance of the markets this week, the banking situation does not look very stable. Only time will tell whether these shocks are temporary or a precursor to a larger crisis. volatility is likely to remain high in the coming sessions, especially with fears of wider contagion and the resurgence of recession fears. Read more...
MARKETSCOPE : No Wedding, Three Funerals and One Burial.
Another wild weekend has seen regulators attempt to stave off a banking crisis that's quickly spreading across global markets. Authorities are working to contain a major banking crisis, after a run on deposits that shut down two U.S. banks and sent a third reeling. Meanwhile, Credit Suisse has been buried (RIP). Read more...
MARKETSCOPE : Bear Bank Run
We’ve been warning about the risks of significant market calamity for some time now. We made that call all the way back in October 2022. The failure of SVB and the Federal Reserve introducing a new type of quantitative easing to backstop the banking sector has traders increasingly betting on a forced FED pause. The bottom line is that the situation is risky, but the Fed can take a bank failure as a sign that its monetary policy is having an effect, so less tightening will be necessary in future. We have been expecting such an unexpected event to happen for a long time !!! Now things will decant and a capitulation process may start developing. Read more...
MARKETSCOPE : Trust in Markets
The economic statistics on employment or inflation are not favorable to a rise in stocks, and yet, it is happening. Should we wait for a pullback, take some gains? There is a permanent and sometimes contradictory gap between the economy and the markets. In the long term, we can say that the two will inevitably come together, but in the short term, it is hard to know what to do. Read more...
MARKETSCOPE : The Law of Gravity
Despite robust corporate results, the week ended on a bearish note, with the latest macroeconomic data confirming the robustness of the US economy, the job market and the resilience of inflationary pressures. Fears of further monetary tightening over an extended period of time prompted some profit taking. Read more...
MARKETSCOPE : Fed Hawks Are Circling
Never happy. The US economy is too strong. Too much consumption, too much confidence, and retail sign of economic resilience came in the past week, when monthly data showed U.S. retail sales increased by the most in nearly two years in January. While markets are rallying short-term, history suggests that equities will not be able to fend off higher rates indefinitely. Read more...
MARKETSCOPE : “Too Far, Too Fast !"
The optimism of the last few weeks, linked to the deceleration of inflation and hopes of a slowdown in monetary tightening, has suddenly faded in the financial markets, while central bankers have reiterated their desire to continue raising rates. Read more...
MARKETSCOPE : Ready... Set...
Waiting for the End…Just Not Yet Though the Fed is close to the end of its rate-hiking cycle, additional increases in the fed funds rate are still likely, albeit less aggressive in magnitude. The interpretation is that the market is free to do what it wants, and if it wants to fight the Fed, good luck. The chairman's message on Wednesday was no different from what it had been for months, and it seems he's more than happy to let the market determine its own fate. Read more...
MARKETSCOPE : Waiting for Jerome ...
Contrary to the main character of Samuel Becket's play, we know that Jerome will meet us next Wednesday. So nothing much to expect before that ! While many market participants are hoping for a “kinder, gentler Fed,” that might not be the case. Read more...
MARKETSCOPE : Hopping into the Year of the Rabbit
All told, we encourage investors to be patient. Uncertainty around the economy and markets remain high, and investors should demand a premium for taking risk. Be open to rebalancing portfolios as inflation and interest rates normalize Read more...
MARKETSCOPE : The Trend Is Your Friend
Recession coming see our ABS matrix and Earnings revision Yet with the recessionary clouds darkening and earnings season off to a rocky start and the Fed likely to repeat their hawkish “a long time” mantra at the February 1st meeting…where they are likely to pour cold water on bulls once again. This is why it’s very hard to be bullish at this time.In recessionary periods, as shown in our proprietary ABS Matrix defensive sector are the best positioned. Read more...
MARKETSCOPE : Higher Rates for Longer
With the final trading day of 2022 concluded on December 30, we enter 2023 with strong convictions. Optimists can seek solace with the rarity of a second-year bear market and see the Fed as "nearly done raising rates." In contrast, pessimists see further damage to the global economy. Notably, they expect the Fed to remain hawkish for an extended period, As long as the Federal Reserve continues tightening monetary policy like it has last year, stocks will likely struggle. And without Fed support, we believe this bear market is unlikely to end until stocks become historically cheap once again. Markets will have to reprice for lower sales, margins, and earnings, then we have more work to do. Read more...
MARKETSCOPE : A Year to Forget !
Don't Fight the FED : the Fed will raise rates until financial conditions tighten enough to slow the economy and the labor market. The longer the markets fight against the Fed and conditions do not tighten, the more the Fed is likely to continue its hawkish rhetoric and probably the rate hikes. More importantly, from a market standpoint, the market read the Fed completely wrong. Thinking that slower rate hikes meant the Fed was closer to being finished. The Fed came out pushing back hard, saying not only would they raise rates, but they would raise them above current market pricing. Read more...
MARKETSCOPE : All I Want for Christmas is ... !
Several better-than-expected US statistics already raised doubts that the Fed would slow the pace of rate hikes. All eyes are now on China, the 9% drop in China's annual export growth in November, as well as revolts against the zero-covid policy, have pushed the Chinese government to reopen its economy. Financial markets have paused this week, fearing that monetary tightening will continue and that the world economy will enter a recession next year. Read more...
MARKETSCOPE : Beware of a Schizophrenic Market
Powell’s comments on Wednesday sent the markets screaming above the 200-dma, which excited the bulls. But is the bull market back, or is this another “bearish” setup waiting to maul overly enthusiastic investors? Read more...
MARKETSCOPE : Hanging In There
In what is traditionally a less busy week, with Wall Street closing for Thanksgiving, the financial markets once again recorded a positive weekly performance, following confirmation that the pace of rate hikes could soon ease in the US and Europe. However, central banks warned that there was still some way to go to curb inflation and that further rate hikes would be necessary. Read more...
MARKETSCOPE : Greed and Deception
Central bankers' speeches on the need for further monetary tightening caused some concern this week, resulting in a mixed close for financial markets. Volatility could resurface at any time as the spectre of a global recession still looms and financial markets have risen sharply in recent months. Read more...
MARKETSCOPE : Real ? or Fantasy ?
One piece of good news does not make a bull market. The drop in inflation after the release of the U.S. CPI figures was very well received by markets. The major indexes on Wall Street soared to their best sessions in over two years. However, it would be far too early to say that the 2022 bear market is over or that the much anticipated recession will not happen after all. At the very least, we can hope for an extension of the bear market rally we are currently experiencing. In any case, let's not be overly optimistic. Read more...
MARKETSCOPE : Sailing the Storm
Financial markets were once again volatile last week, initially reacting to the Fed chairman's tougher speech, before ending the week on a high note, on the backdrop of hopes for an easing of health restrictions in China. Read more...
MARKETSCOPE : Suckers Rally
Hopes of a slowdown in the pace of interest rate hikes and a drop in bond yields rekindled risk appetite last week. However, there is turmoil on Wall Street, with American tech stars tumbling following their earnings reports. All eyes will now be on the Fed, which will deliver its verdict on rates on Wednesday. This could once again be a source of volatility for indexes. Read more...
MARKETSCOPE : A Bull Bounce?
Stocks finished the week of October 21, 2022, in a precarious spot. The market was trading sharply lower before the opening of trading, and a headline turned the tide. If the rally from last week is real, the bulls will need to prove it. Read more...
MARKETSCOPE : Fear Is Good
The question remains whether this historic reversal signals a base where bulls can gain further traction. Many proclaiming that 'THE' bottom is in likely have said that many times this year already. From a seasonality standpoint, a (temporary) low today fits the narrative. Read more...
MARKETSCOPE : Blood In The Street
Good economic news is now synonymous with a contraction in equity markets. And if their was hope for a little respite this week, we would advise to stay cautious :Risk aversion and volatility should nevertheless persist, especially since major data on inflation are expected next Wednesday in the United States and especially with quarterly earnings releases. Read more...
MARKETSCOPE : Red October
For financial markets, it’s been a bad week, month, quarter and year. The most notable event was probably the Bank of England's emergency decision to buy back British debt. The month of September once again lives up to its bad reputation on the stock market. Investors remain pessimistic amid soaring prices and hawkish monetary policies. Read more...
MARKETSCOPE : Don't Spit In the Wind
Don't spit in the wind Don't swim against the tide Don't fight the tape Cut your losses, DO NOT DOUBLE DOWN! Remember NOBODY rings a bell at the top or bottom. It will not be easy. And will be hard to do in the moment because we will be buying when everything looks terrible (economy…price action etc). But indeed, with the stock market it is always “darkest before the dawn”. Read more...
MARKETSCOPE : BLOODY TUESDAY
Inflation is more persistent than expected, and the Fed likely has to do much more tightening. Many stocks are still expensive, and valuations remain relatively high. The ultimate bottom for the S&P 500 may come at 3,200 or lower. We are hedging and buying high-quality stocks on big dips. Read more...
Good Luck
The Holy Grail for any central bank at the moment is to keep inflation in check without damaging the economic momentum too much. Some think this is squaring the circle. Others believe that the undermining will eventually pay off. In the meantime, last week's respite is welcome. Read more...
MARKETSCOPE : WINTER IS COMING
As we stated the week before the rise from the July lows was a “bear market rally” and nothing else. Furthermore, the month of September offers little hope. October tends not to be kind, either. As monetary policy becomes more restrictive and high inflation erodes economic growth, the market will have to reprice for lower sales, margins, and earnings. As such, if we are indeed in a “bear market” and not just a “correction,” then we have more work to do. Read more...
MARKETSCOPE : Back to Reality
At the Jackson Hole Symposium Chairman Powell insisted that rate hikes are still required to keep prices in check. We have gone from doing whatever it takes to keep the economy afloat to doing whatever it takes to slow it down, All major averages slumped between 3%-4%, sending risk-off signals to other sectors and asset classes Read more...
Our Multi Time Frame Oscillator System Calls for Caution
Our system conjugates several indicators in a dynamic and multi time frame to identify the frequency of the typical Elliott’s waves characterizing the market evolution. The signals generated the System appear to have supported a bounce several months back, and now are somewhat mixed. This suggests caution is warranted. Read more...
MARKETSCOPE : Pivot or not Pivot
While equity markets have been in fantasyland focused on a make-believe dovish Fed pivot, the bond and currency markets have been anchored in reality. That reality shows there is no pivot, and those who bet on a pivot coming will be proven wrong. Now maybe about when things get interesting, with Jackson Hole this week and a slew of Fed officials pushing back against the markets, concluding with Jay Powell himself on Friday, August 26. Read more...
MARKETSCOPE : The Market is Always Right
All aboard! Just don't be the last one to get off the rocketship. Traders are continuing to buy up tickets to fairyland, sending in fairies to circle the usual darlings. Irrational exuberance may be prompting the latest market rally. Quality is key to selecting stocks, especially following positive news, which is why I emphasize fundamentals and focus on key characteristics like valuation, growth, momentum, profitability, and EPS revisions before selecting stocks for a portfolio. Read more...
MARKETSCOPE : Summer Heat
“The four most dangerous words in investing are ‘this time is different.'” – Sir John Templeton While market bulls are chasing stocks in hopes of a “Fed pivot,” with few signs of financial or credit market stress, the Fed can remain focused on combating inflation. Picking bottoms is a stinky business, particularly when the Macro outlook is as bleak as we think it is. So let’s take a big step back and dissect the current bounce relative to history. Read more...
MARKETSCOPE "Bad News is Good News"
If we had to remember only one thing, it is that the slackening of the US economy was rather well received by investors... because they saw it as a valid reason for the Fed to slow down its rate hikes. We therefore remain in a situation where central banks are seeking to curb inflation without (over)-disturbing the economic dynamic or sinking into stagflation. A real balancing act. Read more...
MARKETSCOPE : Central Bankers of the World : UNITE !
Financial markets have recovered this week, thanks to good corporate results, the resumption of Russian gas deliveries and the ECB's announcement of a 50 basis point increase in key rates to counter inflationary pressures. However, global economic slowdown and a return to recession remain in the minds of market participants Read more...
MARKETSCOPE : This Trend Is Not Your Friend
There was some turmoil on financial markets again last week. The decline in growth prospects in the eurozone and new inflation peaks in the United States (PPI and CPI indexes) led to fears of an even steeper Fed rate hike. Read more...
MARKETSCOPE : A Bit Of A Horror Story
After a relatively quiet start to July that has seen the S&P 500 and other leading indices stage a rally, thanks to bargain buying. Investors are now awaiting the corporate earnings and targets that will start to be published this week. It will give us more clues whether listed companies, which have resisted the inflationary shock remarkably well, are facing lower demand and will examine the effects of commodity price and shipping cost pressures on companies' profit margins. Read more...
MARKETSCOPE : Don't Sell the Bear's Skin Before Killing It
Despite Wall Street rebounded to close sharply higher Friday in light trading ahead of the holiday weekend, the S&P 500 posted its worst performance for the first half of any year since 1970. Weakening statistics confirm the global economic slowdown while inflation remains sky-high and central bankers' action on interest rates is leading to fears that economies are entering a recession. Read more...
MARKETSCOPE : A Dead Cat Bounce ?
Some of the fears about the possible upcoming recession seem to have been partially incorporated into prices. The question now is whether the markets have found a bottom or starting a bear market rally off oversold conditions. Read more...
MARKETSCOPE : Don't Fight the FED
Few years ago I backpacked up Mount Whitney, a 14,505-foot beast and the highest mountain in the contiguous United States. Talk about altitude sickness! The markets already have altitude sickness, and the Fed is barely out of base camp! We don't think the volatility spike this year is because markets have suddenly become more efficient, discounting future rate hikes, for example, as many argue. It's much more complicated. Read more...
MARKETSCOPE : Good news? Bad news! and vice versa.
The good news for the economy is bad news for markets as the Fed looks to raise rates and tighten monetary policy. The bearish case hinges on the Fed remaining aggressive in tightening monetary policy. For now, that certainly appears to be the case, as there is little market stress to deter them from continuing their focus on combatting inflation. Read more...
MARKETSCOPE : No pain no gain
After long weeks full of gloom, investors have finally regained their appetite for risk. The proof is in the pudding, as the market indexes have broken out of their downward spiral by posting a weekly gain. The question now is whether the market has found a bottom ? Read more...
MARKETSCOPE : Blood in the Streets
The markets reprice the excess valuations given to financial assets during the previous expansion. Higher valuations during expansions tend to precede deeper reversions during recessions. As is evident, recessions are coincident with market corrections and bear markets. Since the stock market leads the economy, a recession could already be here. Read more...
MARKETSCOPE : Gravity Lessons
As volatility grips markets, investors are naturally wondering when the selling will abate and the bottom will be put in. According to a number of pundits, the answer is probably not quite yet. Indexes touched important supports and might react on the short term in a bear market rally. Specific indications suggest the market is oversold enough for a tradeable rally. The point today is not to get everyone to sell. The point is to get us to think about what could happen, if the bear case plays out. Read more...
MARKETSCOPE : The Perfect Storm
What a past week ! Elements created a perfect storm of pain for investors with seemingly nowhere to hide and no end in sight. The markets are at a point of no return. The Fed is indeed “removing the punch bowl” from investors at a very late stage of “the party.” This new week should bring its number of surprises. Will the panic selling brings a market bottom ? Also check our review “Bear Market Anatomy” in Highlghts section. Read more...
MARKETSCOPE : The Bear Season ... Episode VI
Another tough week, and month, for the market. Ongoing concerns about inflation, earnings, and economic growth, continue to pressure stocks. Overall, the week ended with a negative result for the financial markets. Read more...
MARKETSCOPE : Earnings Season - Place your Bets
When I was younger I used to play pinball in some bars. One of the trick what to shake the machine without inducing a “Tilt” warning. What does tilt mean in pinball? When the mechanism is triggered, the machine "tilts", ending play for the current ball and usually forfeiting any bonuses earned (if it's the last ball, and the player has no extra balls left, the game is automatically over). Stock market participants have been getting bonuses and free games for a long time, now the party is over and time is to reset the game. Read more...
MARKETSCOPE : Earnings Season
The major indexes moved in a scattered fashion over the past week. Caution is still the order of the day, as the situation in Ukraine remains tense and the start of the earnings season will be closely scrutinized. Read more...
MARKETSCOPE : How Deep Is the Rabbit Hole ?
Equity markets finished lower for the week. Ukrainian situation and the flurry of sanctions against Russia, also the Fed dampened the mood with hawkish comments from Fed Governor Lael Brainard (a “dovish” policymaker) who said the Fed would start to reduce its balance sheet at a rapid pace as soon as May, continued to loom large over sentiment. 2021 might be remembered as the year investors tumbled down a rabbit hole and entered financial wonderland. Today we can wonder how long it might take to get to the hole exit. We try to give some answers in this post, starting with the economic situation and the right sector allocation according to our proprietary ABS Matrix. Read more...
MARKETSCOPE : The Final Season - The Tug-of-War continues
Equity markets are showing great composure, despite the accumulation of macroeconomic clouds. Investors still have great faith in central banks to solve their problems, while they have been overly optimistic in their assessment of inflation trends. This unprecedented tug-of-war in the 21st century has not yet reached a verdict. Investors face a new challenge with an inverted yield curve sending a recession signal that is getting hard to ignore to pile on the inflation and war headlines. In the meantime, caution remains the order of the day. Read more...
MARKETSCOPE : THE FINAL SEASON Dr. Strangelove 2.0
After two weeks of strong gains on hopes of progress in the talks between Russia and Ukraine, the European markets have finally paused in this weekly sequence. Traders are trying to digest the Federal Reserve's first monetary tightening, the continuing clashes, the sanctions against Russia and the new surge in oil prices. Risk appetite has therefore dissipated somewhat, in favor of more defensive sectors, but volatility has been significantly reduced over the month. Read more...
MARKETSCOPE : The Bear Season : Episode V : Bull trap ?
What a difference a week can make. As discussed last week, the market slid and broke support as the Russia/Ukraine conflict continued. However, this week saw a rebound in the world's major stock markets, as they seem to be adjusting to the Ukrainian conflict as the FOMC meeting went off largely as expected. The Fed hiked rates by 0.25% to counter inflationary pressures and maintained its more “dovish” tones during the presser. Read more...
MARKETSCOPE : The Bear Season : Episode IV
Markets are still hanging on to every news in Ukraine, but they are keeping an eye on monetary policy as well. The Fed is about to begin its rate hike cycle to counteract inflation, which is still unbridled. Volatility remains high, as evidenced by Wednesday's rally. Investors are still struggling to assess the long-term consequences of the ongoing economic and political upheaval. Read more...
MARKETSCOPE : The Bear Season : Episode III
US equity markets ended the week sharply lower on Friday and European markets have just recorded their worst week since October 2020, with the intensification of the fighting in Ukraine and the lack of diplomatic progress. The shelling of the Ukrainian nuclear power plant in Zaporozhia, the largest in Europe, crashed hopes of stabilization on Friday, clearly reviving risk aversion. Volatility is expected to continue to rise as new geopolitical announcements are made. Read more...
MARKETSCOPE : The Bear Season : Episode 2
Another turbulent week for financial markets, as mixed signals from Ukraine are putting investors on edge. The major indexes have once again shown volatility, with new declines in oil, financials and technology stocks. As the main source of nervousness for investors this week was the Russian bear and its claws at the Ukrainian border. How far is Vladimir Putin willing to go and what are his real designs? If you have the answer, please contact the nearest Western chancellery as a matter of urgency. Read more...
MARKETSCOPE : The Bear Season
in this Russian Roulette game, equity markets closed the week lower, with the S&P 500 still below its 200 DMA. The Nasdaq underperformed on Friday (-1.2%) despite falling US yields during the session. International equities were mixed on the week and generally performed better than the US. YTD, the divergence is even more pronounced as the only country in our matrix doing worse on a YTD basis than the US is Russia! The greenback edged higher against the Euro and Gold ended close to USD 1,900/oz. Commodities and industrial-related metals also gained in traction. Read more...
MARKETSCOPE : The Big Chill
The cover story of the January 31 Bloomberg Businessweek is titled “The Big Chill: Investors are bracing for more pain as a cold snap descends on the market. Equity markets closed a tumultuous week lower Friday with the S&P 500 accelerating losses into the close on faster tightening expectations following the strong US inflation print as well as concerns over the situation developing around Ukraine. Read more...
MARKETSCOPE : As Goes January...So Goes The Year?
Another very volatile week for financial markets, which are suffering from fears of monetary tightening, while inflation is expected to persist over time, especially with the surge in energy prices. The ECB, although concerned about rising inflation, left rates unchanged while the Bank of England raised rates by 25 basis points. Read more...
MARKETSCOPE : Don’t Try to Catch a Falling Knife
Aren’t bears supposed to be hibernating in Winter? Maybe it’s global warming, but the bears were out in full force this last week across all aspects of the equity market. Markets have had quite a week of turmoil: Rate hikes, slowdown in expected growth, economic statistics at their highest, earnings seasons... Investors don't know which way to turn as the information available is so disparate and contradictory. Read more...
MARKETSCOPE : Stay Calm and Carry On !
The prospect of a rate hike in the United States continues to cause unrest. This is reflected in the sectoral and geographic rotation of equity markets. The negative effect is exacerbated by the sell-off in technology stocks, which is weighing heavily on Wall Street. This cocktail of rising US interest rates and investors moving away from tech stocks is increasing the gap between the US stock market and the rest of the world Read more...
MARKETSCOPE : Dry January
Financial markets suffered further declines last week, rattled by inflation figures in the United States, which strengthen the case for an earlier-than-expected rate hike. I Once again, US technology stocks took the biggest hit, while in Europe luxury goods stocks struggled. However, banking and oil stocks have done well. Read more...
MARKETSCOPE: Think Positive, Stay Negative
It was a turbulent week. While indexes were soaring at the beginning of the year (especially in Europe), the Fed minutes changed the situation. This very probable rate hike, faster and stronger than expected, led to a sector rotation in favor of value stocks, especially banks, insurers and car manufacturers. 2022 looks set to be a volatile year, and just as interesting as 2021. Read more...
MARKETSCOPE : SEASON GREETINGS
After a difficult year as much for the balance of society as for the physical and mental health of individuals we would like to thank our subscribers, customers and friends for their trust and feed back over the year. Come and join us in 2022. We are looking forward to welcoming you on board next year. Read more...
MARKETSCOPE : Don’t Leave the Party Yet ….
Nobody knows the future with certainty, especially regarding markets and the economy. Even Isaac Newton, who believed he could predict markets with the same precision as he did the motion of the planets, lost a boatload in the "South Sea bubble" of 1720. The experience led Newton to conclude, "I can calculate the motions of the heavenly bodies, but not the madness of the people." Markets and the economy are driven by the sum of the preferences of all of its participants, who are sometimes rational and more often than expected, “mad." Markets teach us to remain humble. Read more...
MARKETSCOPE : The Market is Always Right
Volatility remains high, with fears of new restrictive measures, a marked impact on the global economy and expectations of a tightening of central banks' monetary policies. This nervous phase should continue over the next few sessions. If markets do not like uncertainty, this is even more true when they are no longer supported by central banks. Read more...
MARKETSCOPE : The Trend is Your Friend
The widespread concern and worry remain higher, however, which tends to make us bullish. The reason is simple: when everyone is fixated on an issue and it becomes widely discussed, its pricing power concurrently falls, in our view. This is how “walls of worry” get built. Read more...
Marketscope : Don't Fight the FED
Over the past week, the performances appear to be very mixed. The Nasdaq and the S&P500 closed higher on the week Friday. Read more...
MARKETSCOPE : November 15, 2021
After previous week’s tapering announcement, last week attentions were turned to the greatly-anticipated US CPI inflation numbers, markets looking for another steer on the transient-vs-persistent debate (and what it might portend in terms of rate policy). Read more...
MARKETSCOPE as of November 8,2021
Stocks rallied to fresh record highs last Friday following a stronger than expected jobs report that showed 531,000 jobs added in October and a revised gain of 312,000 in September. Read more...
Market Wrap as of May 12 : Take it to the Limit
The outlook may be uncertain, but that does not make it unpredictable. Consistent with a foggy crystal ball, the horizon is likewise variable.The current secular bear could remain in hibernation. The inflation rate could remain low and stable. Read more...
Market Wrap as of May 5
Risk appetites held up this week in spite of a horrible GDP print in the US. Investors were braced for an anemic print, expecting the unusually severe winter to take a big bite out of Q1 growth. Even so, investors don’t seem worried. Read more...
Market Wrap as of April 22 : Happy Easter Crisis
Ukraine’s crisis worsened this week and data confirmed that the Chinese economy is continuing to slow. Together these highlight the further crystallization of two key downside risks to the global economy. Yet risk appetites improved on the week. Read more...
Market Wrap as of April 14: Markets Hanging in Midair
Last week move certainly reflects a fear that once monetary policy makers pull back from their dovish stances, markets will realize they were just hanging there with no fundamental economic strength to support them. But even if the market retreat continues this week, the moment of reckoning isn’t yet upon us. Simply put, the central banks have more tricks up their sleeves, so an uncomfortable rally is set to continue. Read more...
Market Wrap as of April 7: Central Banks Bet
The ECB again left policy unchanged this week, remaining a model of indecision in the face of a weak recovery, massive excess capacity, uncomfortably low inflation and significant downside risks. However, as if to reassure markets that the ECB will “act swiftly if required.” Read more...
Market Wrap as of March 31: New Normal Outlook
The risks to growth remain skewed to the downside, primarily reflecting the possibility of a further growth disappointment in developing economies. Problems in China’s shadow banking system could be a central stress point. Moreover, geopolitical instability remains a source for serious market turbulence Read more...
Market Wrap as of March 24 : The Six Months Time Horizon !
The Fed Doesn’t Surprise, but the Market Reacts Anyway. As expected, quantitative easing (QE) was tapered another $10 billion last week and the Fed dropped its earlier guidance that it might start raising the Fed Funds rate when unemployment is 6.5% (confirming that it will wait longer than that, since we’re almost at 6.5%). Read more...
Market Wrap as of March 17 : The Russian Bear
Do we have more room to the downside here? Possibly; we're going to be watching a key technical level of support once the market opens for business on Monday, knowing that volatility is likely to pick up big time with some key economic numbers being released throughout the week, including manufacturing, inflation and housing data. Toss in the fact that the Fed announces its rate decision on Wednesday and that options expire on Friday, and it's going to be a very busy week. Read more...
Market Wrap as of March 03
After months of increasingly violent confrontations between the Russian-backed government and reformist Western-leaning protestors Ukraine appears at heightened risk of fracturing with reactionary elements reportedly taking over key facilities in the Russian-leaning area of Crimea. Read more...
Ukraine : Geopolitics Take Toll
Lots of incoming calls and emails from clients asking what is the real Russian take on the events in Ukraine, not the stuff that you read in the Western press/media coverage. I decided to put some colour in writing for you. Read more...
Market Wrap as of February 24:
Investors seem jittery. In addition to an increasingly scary situation in Ukraine, they have had to digest yet another week of downbeat US data. It is obvious that growth has slowed. But this begs the more important questions of why activity has weakened so abruptly and where it is headed from here. The answer to these questions will determine if the consensus expectations of a meaningful pick-up in the economy this year is still defensible or not. Read more...
Gold New Trend : the Gold Bugs Revenge
The bears have been in control of gold and the gold miners since 2011. The past year saw an acceleration of the rate of decent in their prices. Sentiment on gold has become extremely bearish. But that trend appears to be changing and the gold charts are showing some breakouts from the downtrend. Read more...
Market Wrap as of February 19
The US activity data have been a bit soft recently—for January, the manufacturing purchasing managers’ index, payroll employment, retail sales, and industrial production have all been weak. Concern over emerging market vulnerabilities appears to have ebbed for now. And the upbeat US policy backdrop is also likely helping to support risk appetites. Read more...
Market Wrap as of January 20
As markets stride toward new all-time highs on valuations that have historically coincided with other market peaks, it would be wise to count your blessings and better still, count your managers and understand their strategies and processes. This is literally the kind of market environment where the tide lifts all boats. But we are on the trajectory of what may become the third asset bubble in twenty years that will inescapably pop. Now is the time to review your positioning and plan accordingly. Read more...
Market Wrap as of January 13 : Looking for Direction
January sets the tone. If stocks finish the month higher, the market generally ends the year in the green. If it slips, we might be in store for a less-than-spectacular year. Think of the market as a sprinter waiting for the gun to fire. A strong first move could make up for fatigue along the home stretch, while a stumble out of the blocks can end the race in the first few steps. Read more...
Weekly Market Wrap as of December 22
Just shy of the new year, financial markets continue to be dominated by the extent of monetary accommodation. Especially in major advanced economies, bonds and stocks have shrugged off the summer sell-off and posted gains on the view that low policy rates and large-scale asset purchases would persist longer. Much attention has been given to the hope of a strengthening in the U.S. economy. Read more...
Weekly Market Wrap as of December 9
As the year draws to a close, investors are searching for clues as to what may be in store for the economy and markets in 2014. What have we learned from the markets in the month of November? Honestly, not very much. The scenario has not changed much in the last 30 days. Read more...
(Short) Weekly Market Comments as of December 2
As we enter the final month of 2013, themes of the last several weeks continue – the capital markets, in general, remain quiet and U.S. economic data, while mixed, shows signs of steady improvement. Read more...
Market Comments as of November 26 : Bitcoin Forever
Monetary policy speculation seemed to drive market price action past week led by the re-intensification of taper talk. Notwithstanding the Fed’s forceful guidance on September 18 and October 30 that the taper decision is data dependent and not on some pre-set schedule, markets continue to scour Fed-speak for signals on when the central bank expects to reduce its pace of asset purchases. Read more...
Market Comments as of November 18 : Printfest
The positive response from the market following the appearance before Congress of Janet Yellen, the nominee for US Federal Reserve chairwoman, has successfully opened the door for a rally through the end of the year. Once again, the flood of momentum-chasing hot-money provided by the world's central banks' printfest is leading investors to push up equities markets to the highest level since 2011 amid optimism that the economy is recovering. Read more...
Market Comments as of November 10 :
For a few brief minutes last Thursday, the world celebrated Mario Draghi's 'surprise' rate cut as just the medicine that an all-time high stock market needs to go even higher. European stocks popped champagne-like (with Italy and Spain jumping 2 to 2.5% on the news), EUR collapsing, and peripheral bond spreads dropping notably. PREMIUM Investment Strategy : How best to preserve your capital Read more...
Market Comments as of November 4 : Ursus Extinctus ?
-Government shutdown? Check. -Spying on citizens and allies? Check. -Bursting stock bubble? That's next. I know you've felt it in the pit of your stomach... that feeling that the market is going up for all the wrong reasons — and will soon come crashing down yet again. The fact of the matter is with $17 trillion in debt, the U.S. government can no longer sustain itself like it has without implementing drastic measures... ones that will make the austerity measures going on in Europe right now look like a springtime walk in the park. Read more...
Market Comments as of October 28
All sorts of economic data were released last week, but volatility has dropped: rightly or wrongly, market forecasts about the pace of quantitative easing (QE) and earnings growth in the U.S. appear to have coalesced around an outlook for “slow growth with ongoing QE”. Read more...
Market Comments as of October 21: All pain no brain!!!
An eleventh hour deal was reached last week to end the latest US fiscal crisis. Congress called a time-out in the budget/debt fight last week, striking a deal to avoid default and fund the U.S. government through January 15, 2014 and raise the debt limit through February 7, 2014. Read more...
РОССИЯ ЗОВЕТ ! - RUSSIA CALLING !
The “Russia Calling!” Investment Forum provides a platform for developing dialogue between Russian business and the international investment community. Prominent political and business community figures from around the world are taking part in the event. The forum is examining development trends in the Russian and global economies and the state’s role in an investment model for growth. Read more...
Weekly Market Wrap as of October 14 : The Wizards of Ponz
Alarm bells went off: “Yellen props stocks,” the headline read. Somebody needs to. Politicians in Washington are actively contemplating how to most effectively send the largest and brokest debtor in the history of the universe into default. Corporate revenues can’t keep up with inflation. Read more...
Weekly Market Wrap as of October 7
It’s clear to everyone by now that the government of the largest country in the world is careening towards default in just over 200 hours. Yet curiously, even though the US government’s completely ridiculous, untenable fiscal situation is a front page embarrassment for the entire world to see, markets have barely budged. A few very short-term rates have shot up, but for the most part, stocks are very close to where they were before the shutdown. Stocks and bonds haven’t moved because nobody cares what’s happening in the US government anymore. Read more...
Weekly Market Review as of September 29
The budget and debt ceiling fights at putting the economy at risk like of a “Thelma and Louise” moment—the Republicans and Democrats might drive the economy over a fiscal cliff. I’ve decided that that’s not the best movie allusion. We have to go back farther, to “Rebel Without a Cause” where James Dean and Sal Mineo raced their cars toward a cliff: If you jump out first, you’re a loser and a coward. If you don’t jump out in time, you’re dead. Read more...
Weekly Market Review as of September 23 :
The Fed’s policy announcement provided two key lessons. First, although it talks of transparency, the Fed doesn’t mind surprising markets. Second, the Fed is even more dovish than we have been assuming. These lessons have important implications for market volatility in the near term and perhaps even economic and financial stability in the longer term. Read more...
Russia : Are you contrarian enough ?
It’s true that Russia’s economy is slowing down along with other Emerging Markets, and its also true that the authorities don’t have any easy choices: monetary easing will likely spark inflation, and the state’s ability to engage in fiscal pump-priming is highly constrained. Growth over the next few years will be decidedly sub-par when compared to the 2000 boom years and even to the modest 2010-12 bounce back from the Great Recession. Read more...
Weekly Market Review as of September 8 : Forward Guidance
Tapering is not the most important Fed decision this September. Instead, it is how the Fed is able to simultaneously navigate big personnel change, fight its own forecasts, and signal tapering in the context of potentially undermining the value of its thresholds. A CNBC survey found that nearly three-quarters of their survey respondents expect the Fed to taper in the Sept-Oct period (43% and 30% respectively), up from 60% in the July survey. Read more...
Emerging Chronicles : The Final Tweet Of The Global Canary In The Coal Mine
Albert Edwards, the uber-bearish strategist at Societe Generale, is warning clients that the ongoing devastation in the emerging markets is a sign of bad things to come. He links what is happening now to his call at the end of last year that the EMs were heading for a balance of payments crisis and would see a currency debacle similar to 1997 was met with total indifference. We still find the same disregard to our call for a renminbi devaluation. Read more...
Gold Update : A Fun Poker Game Ahead
We remain globally bullish on gold bullion and on some miners. Considering their respective behavior either Gold is moving higher and Miners will move at a greater speed or Gold will move lower and Miners will tend to correct less. The fact that gold is starting to outperform strongly into the September Fed meeting may mean bets are rising that the Fed will not rock the boat, but instead re-adjust crowd mentality away from cutting back on bond buying. Read more...
Weekly Market Review as of August 31
Risk appetites eroded this week, sending investors to the typical safe havens. A number of factors appear to be contributing to the return of the risk-off trade, including some poor US activity data, growing worries about emerging markets, and concerns over potential fallout from a possible Western intervention into the Syrian civil war. Read more...
Is the Story of Emerging Markets Intact ?
"Taper terror" following news the U.S. Federal Reserve is set to begin slowing its asset purchases spurred an en masse stampede of funds from many regional markets and currencies – most notably in Indonesia and India. Emerging markets equity exposure in August fell to its lowest level since November 2001 as fund managers globally fled the segment and piled into developed markets, Read more...
Weekly Market Review as of August 26
The week was dominated by the Fed's minutes. On balance, markets read the Fed’s minutes as mildly hawkish. Specifically, investors appeared to focus on the observation in the minutes that “almost all participants” were comfortable with Chairman Bernanke’s guidance that the Fed would begin tapering the pace of its asset purchase later this year... if the economy improves as expected... Read more...
Weekly Market Review as of August 19
After several weeks of range trading, rates were stretching higher this week. Indeed, the benchmark US 10-year Treasury yield closed above 2.75% for the first time in just over two years. This in turn has ratcheted-up the pressure on the year’s otherwise impressive equity rally. Read more...
Some Fresh Air for the Miners
Does the idea of buy low and sell high still make sense? If so, does a 50% year-to-date decline qualify as low enough to buy? Mining stocks have had a rough year for sure! The Miners ETF was recently down 50% from its January 1 2013 price. Read more...
Weekly Market Review as of August 12
“Keep Calm and Carry On” Central Banks can relay the WW II motto for themselves as there is no other alternative than continuing to provide the global economy with liquidities (even though that they mainly sustain a “financial economy” (virtual) and prepare an hyper inflation environment (which is not yet the case) delaying the bubble explosion- Read more...
Apple : Premium Reco Update
What is it about the present pattern that is important? The Power of the Pattern suggests that Apple could be facing its most important price test since it hit $700 per share! Read more...
Weekly Market Review as of August 5
Risk appetites got a big boost this week from central bank dovishness. The Fed, the ECB, and the BoE each released their latest policy decisions. And while they all left policy rates unchanged, both the Fed and the ECB went out of their way to reassure markets that they anticipate leaving these rates extremely low for a long time yet. Read more...
Thunder Road Report : How are they going to turn this around?
One of the slightly irregular economic publications I look forward to receiving is Paul Mylchreest’s Thunder Road Report. In his new publication PAul reviews the preoccupation of the financial markets with anticipating the next intervention by central banks and offers some telling observations about gold. Read more...
Weekly Market Review as of July 28
Like AMC’s TV series “The Walking Dead,” the bull market in stocks keeps on going despite getting no respect. Data from the Investment Company Institute showing that investors have been net sellers in stocks four out of the five past months. Like a Walker (what zombies are called in the show), the market’s body has been riddled with countless bullets and wounds such as fiscal cliff tax increases and the sequester, along with international headwinds like Europe’s recession and slowing growth in China. But it just keeps on going. Read more...
Weekly Market Review as of July 14
This week, Fed Chairman Bernanke reassured markets that the Fed was in absolutely no rush to tighten policy. Some saw the Chairman striking a decidedly more dovish tone than in his June 19 press conference at which he announced the Fed’s latest thinking that tapering of asset purchases may begin later this year. Read more...
Weekly Market Review as of July 7
Even though this was a slow week, it's still important to get your bearings. If stocks do follow through with another move lower, where will they land? I think we'll see the broad market sneak lower from here. Futures are a little off this morning, upside momentum is gone, and we're entering the summer doldrums. All of this adds up to a sideways or falling market for a little while. Read more...
Q3 Guide to the Market
Investors have a lot of things to consider before they make their next move. To help with this, David Kelly and the market strategy team at J.P. Morgan Asset Management have built the best presentation on the state of the markets and the economy we have seen so far. Read more...
Weekly Market Comments as of June 30
I really struggled with last week's forecast since I absolutely hate the idea of a delayed reaction. In general, I do not like such explanations, and sharp readers could easily find my own words on this subject. We got a lot more than digestion. It was a full-fledged hissy fit. Since the issue has not been settled, the debate continues. Read more...
Weekly Market Wrap as of June 23
Markets are reacting to the Fed's first "tap on the brakes". The fear among market participants is that once the Fed begins to cut its current asset purchase program – which is still a hypothetical development, depending on future economic data – it will be just the first step toward normalized (higher) short-term interest rates. Read more...
Weekly Market Wrap as of June 15
The past few weeks have given us a hint of what might happen when the FED starts to reverse its super-easy monetary policy. Expect turbulence in financial markets, especially for assets that have moved far above normal or reasonable valuations. Both the Fed's "tapering" and ECB's "open mindedness" regarding a negative deposit rate were types of forward guidance. Read more...
Geneva Forum for Sustainable Investment (GFSI)
Genève est la capitale mondiale de la microfinance avec 30% de parts de marché (sur un total de plus de 10 milliards). La finance durable fait partie des trois priorités que s’est fixée l’ASB fin 2012. Si les initiatives privées se développent, le soutient public se fait encore attendre et l'on s’étonne que les autorités suisses ne s’impliquent pas davantage dans le développement de cette industrie. Read more...
Weekly Market Review as of June 8
We're Hiring ! Here are new opening at the NSA. Business is booming, good salaries are paid, and multiple passports are issued. No names are required, references hit, and you can never be fired. You can be terminated however, and the retirement program is by Smith and Wesson. Read more...
Japan : Plan 'jg' B
"Je doute d’une part que l’on ait vraiment expliqué à la population japonaise qu’elle allait être non seulement le dindon de la farce, mais aussi le cobaye. D’autre part, les épargnants et retraités tant européens qu’américains seraient bien inspirés de regarder du côté du Japon. C’est là-bas que s’expérimente leur avenir." -Andreas Höfert -UBS Read more...
A Second Thought : What Could Go Wrong?
I spend the week in New York City where I have been having conversations with advisors, fund managers, investors, about looking at things from the standpoint of what could go wrong. As interest rates stay low it is also natural for people to search for places they can get yield- also what could go right. I have no problem with upside but you need to first focus on what could go wrong. Read more...
Weekly Market Review as of May 31
May was a rough month for Treasuries. Specifically, the yield on the benchmark 10-year note jumped roughly 50 basis points, the steepest rise in a month since December 2010. To be sure, much of the move merely reversed the impressive rates rally of March and April. The glass-half full commentators will point out that the S&P 500 rose 2.08% for the month. Read more...
WEEKLY MARKET REVIEW AS OF MAY 24
Markets made a sharp shift into “risk-off” mode this week. Given that the risk rally had come so far, so fast, investors were perhaps due for some reassessment of risk appetites. Interestingly, the triggers for this reassessment appear to be a curious mix of concerns about global growth prospects and fears that monetary policy could perhaps be tightened sooner than expected. In any case, this nasty combination sent both equities and government bonds lower. Read more...
Emerging Chronicles : China Rebound ?
The world’s second largest economy is still growing at a slower pace than in recent years. Investors, however, might be getting used to it. Investment growth still holds the key to sustaining the growth recovery. We expect Beijing to keep policy relatively accommodative to strengthen growth momentum and avoid a further deterioration of labour market conditions. A reversal could happen, a technical analysis Read more...
WEEKLY MARKET REVIEW AS OF MAY 18
The S&P 500 and the Dow Jones Industrials both closed at all time highs again in US trading overnight. America’s blue chip indices are up 18.28% and 18.07% year to date, respectively. But the US has nothing to envy to Japan when it comes to boosting stock prices with money printing. Japan’s Nikkei 300 is up 46.6% so far this year. And it’s not even June. Read more...
Special Premium Reco
From its all-time high on 21 September 2012 of $693.21, Apple’s stock declined by 44.8%, eventually reaching a low of $382.57 on 19 April this year. Having encountered major support (buying), the stock rallied until late last week when it encountered minor resistance (selling) at around $463. Read more...
WEEKLY MARKET REVIEW AS OF MAY 10
A hot topic among many investors right now is when monetary policy will begin tightening. There is no doubt that this is an important question because tightening has the potential to impose substantial stress on markets and the economy in the best of circumstances, let alone in the current environment where such extreme policy accommodation must be withdrawn. Read more...
Tax Efficiency : Catch Me If You Can
Seeing more than 250 people gathered in a large luxurious hotel in Geneva early in the morning is quite impressive and it tells more than any polls how anxious are asset managers and private bankers (not to mention their clients) on the latest regulatory process and tax treaties accepted by the Swiss Administration. Ironically, it also showed how dynamic and imaginative is the financial engineering to achieve "tax efficiency". Read more...
WEEKLY MARKET REVIEW AS OF MAY 4
In a world where government deficits are rising, interest rates are at record lows, central banks are printing money, unemployment remains stubbornly high, and bank deposits are being raided to rescue insolvent banks, it is hard to believe that he financial and other markets do not seem to reflect the reality of subdued growth. Stock prices are high, or at least back to levels reached more than a decade ago, and bond yields contain a significant inflationary expectations premium. Read more...
Investment Outlook
Sell in May and Go Away...When investors are fearful, they look to hedge their portfolios by buying “insurance” that will protect them if the market falls. Ironically,markets are at their very best when everyone is scared out of their minds. Is fear is a better reason than fundamentals to own stocks right now ? We give you our latest Asset Allocation Read more...
WEEKLY MARKETS REVIEW AS OF APRIL 27
The financial and other markets do not seem to reflect the reality of subdued growth. Stock prices are high, or at least back to levels reached more than a decade ago, and bond yields contain a significant inflationary expectations premium. Stock and commodity prices have risen in concert with the announcement of QE1, QE2 and QE3. Read more...
Gold and Mining – Trapped Investors? (Update)
“We have always had a position in gold. When you think about the largest central banks in the world, they have all moved to unlimited printing ideology. Monetary policy happens to be the only game in town. I am perplexed as to why gold is as low as it is. I don't have a great answer for you other then you should maintain a position.” Kyle Bass Read more...
WEEKLY MARKETS REVIEW AS OF APRIL 19
Risk aversion ruled this week. There are some worries about earnings, with revenues looking a little squishy. With the giddiness of new all-time highs, however, comes a note of caution. The giddiness may be short-lived. Read more...
Don’t Forget Your Golden Parachute
In a highly emotional market, even just one or two days can make a big difference in terms of where prices end up. Still, there were certainly a few noteworthy developments, all of which are not surprisingly conveying that sheer panic broke out in the gold market last week. We endured the 1980 gold peak and we learned that merely being “oversold” will not lead to a massive rally that magically pulls gold out of its slide. Read more...
WEEKLY MARKETS REVIEW AS OF APRIL 13
It’s becoming increasingly difficult to extract market signals as the massive of flood of Bank of Japan money printing begins to flow into the global tributary, which also includes the Fed’s quantitative easing. Markets, in our opinion, are going to become incredibly gummed up and exhibit unprecedented and unpredictable behavior throughout the rest of the year. Read more...
« Offshore leaks» or the end of bank confidentiality ?
On my way to one fashionable spot in the Swiss Alps, one favorite of international wealthy people, I wonder what « offshore leaks » consequences can have for our clients, as well as for their lawyers, tax specialists, trustees and bankers. But also for governments, tax authorities, for Swiss citizens and for myself. My job of private banker and as well as swiss investment specialist does not become easier, however more interesting with new challenges to be raised! Read more...
Gold : A Reason to Trust Central Banks?
It’s clear that central banks around the world are buying gold in record quantities. It almost makes you wonder... do they know something we don’t? Read more...
Emerging Chronicles : Turkey, A promising Grand Baazar
All developing countries rose last year, but stocks in Turkey climbed an astounding 56 percent. Istanbul has been in the midst of a fantastic transformation from an impoverished population to one of affluence. Popping up among the beautiful Ottoman mosques, Byzantine churches, palaces and bazaars are ultra-contemporary art sculptures, shopping malls and lush landscaping. Read more...
Diesel, Dust and Dreams : The Triple "D" New Frontier Markets
Following our previous mail "Loosen Your Seatbelts" many people have asked me what are frontier markets? In summary, they are the next emerging markets and include the likes of Kazakhstan, Romania, Nigeria and Vietnam. The key characteristics are the fact that they are overlooked by investors and have offered fewer investment opportunities. Read more...
Socially Responsible Investment returns in periods of crisis
Last Tuesday, the first “Geneva Summit On Sustainable Finance” was held. From what I could hear and discuss, it was largely encouraging. Suffice to say, I caught up on updates with many researchers and practitioners who presented the tendencies of the market. I met with public and private socially responsible finance managers and heard plenty of fine stories. Where’s this discipline heading? Let’s discuss… Read more...
The price of silver could absolutely skyrocket.
ALERT : SEE OUR BLOG FOR Gold Market Update as of Monday 18, 2013 One of the slightly irregular economic publications I look forward to receiving is Paul Mylchreest’s Thunder Road Report. On this latest occasion he has restricted his comments to silver and the report is much shortert. Paul predicts a sharp rise in the silver price within the next six months based on historic cyclical data. Read more...
Gold and Mining - Trapped Investors?
Like an old gold panner I keep standing straight in my boots ! Some readers may question if gold stocks really have snapped out of their funk. We could discuss this topic for many pages, but the bottom line for us is simple: if you believe gold and silver prices are going higher, then equity prices will follow. In the process of updating our Gold Report, here is a Technical Analysis preview. Read more...
Time to sell bonds?
If bonds are topping, what kind of world would that look like? Despite the current optimism about stock prices that’s a question you don’t want answered. Bonds are facing headwinds, but a number of indicators are suggesting that they may be stiffer than previously thought. Read more...
The Pitfalls Of Buying Alternative Investments
“The first thing to ask yourself is, ‘Do I really have the sophistication to understand what’s going on here?’’’ The reality? Alternatives are tricky to find and understand. That means most investors rely on private banks, brokers or other financial pros as intermediaries, raising the risk they will be steered into products that generate tons of fees for the advisors and not much for the investor. Read more...
'Loosen your seatbelts' in emerging markets
Loosen your seat belts is HSBC strategists advice to investors. Following a return for the risk appetite this year is one in which investors should take more risk in emerging markets, especially in equities. Read more...
Decoding the 'Signals' From Davos
In turbulent times, the glass can be seen as half full or half empty. In Davos, you hear passionate advocacy of both. Personally, I believe the rewards will not be spread evenly and will need open-minded, trusted, and responsible people- those who will change the game. We must embrace the uncertainty and try to shape the future rather than letting it shape us. Read more...
The Thunder Road Report : The End Game
The turbocharged, debt-driven over-consumption of past decades must be undone. We are on the brink of a tsunami of new money/credit creation to delay its failure. This will be the final run to the summit of the Ponzi scheme. All Ponzi schemes end and there will have to be a system reboot. This is a “Crisis of the Ages” And you thought we were bearish. More – if you can take it - in December Thunder Road Report... Read more...
Reco for the next ten years...
The New Normal will “take you down” and lower your expectation of future asset returns. It may not last “forever” but it will be with us for a long, long time. So instead of guessing what's going to happen in 2013, let's talk about what the world will look like in 2023... Here's my one prediction for 2013 that should carry through the next 10 years: Read more...
Emerging Chronicle
The “year of the dragon” in 2012 certainly didn’t disappoint, as the global markets battled one financial dragon after another. From the Eurozone’s sovereign debt crisis to persistently high unemployment in the U.S. and a mayday call from many who worried that China’s growth rate was headed for a “hard landing,” 2012 certainly was interesting. What the "year of the Snake" will bring us ? Read more...
Surprise, Surprise...
In 2012 some investment ideas succeeded well beyond expectations, while others failed miserably. In all cases, with surprises lurking around virtually every corner, investors certainly had their fill of high drama. By nature surprises are unexpected, but this doesn't mean that they have to be unanticipated (contrary to a black swan). On the contrary, successful investors are always ready for change, while others, it seems, are perpetually blindsided. Read more...
2013 Macro Predictions : Boom or Gloom
The most hopeful thing in my mind is that the Status Quo is devolving from its internal contradictions and excesses. It is a perverse, intensely destructive system with horrific incentives for predation, exploitation, fraud and complicity and few disincentives. A more human world lies just beyond the edge of the Status Quo. Read more...
Investment Strategy Q1-2013
To favor an exposure to the Asian currencies or to be interested in companies exposed to emerging countries. That is the question facing every investor to cope with the process of reindustrialization underway due to the Central Banks accommodative policies and the drop of their currencies, undermining the "mature" emerging economies. Read more...
What Do We Believe For 2013 ?
Whoever considers the past and the present will readily observe that all cities and all peoples... ever have been animated by the same desires and the same passions; so that it is easy, by diligent study of the past, to foresee what is likely to happen in the future in any republic, and to apply those remedies that were used by the ancients, or not finding any that were employed by them, to devise new ones from the similarity of events. ( Machiavelli in his Discorsi ) Read more...
Commodities still enjoy their Y2K
Among investors these days, a fellow commodity bull is about as rare as finding a positive story in the media, especially when you look at the results of metals and natural resources during the most of 2012. Today we have a chance to play this shift in long-term resource prices. I have rarely been more excited to talk positively about how investors can take advantage of the anomalies and trends in the market. Read more...
Market Themes for 2013
Agree or disagree, one thing is for sure - these ten 'themes' will impact us all one way or another and for each theme, Goldman discusses the wider implications for markets, and the potential issues and options for investing around them. Read more...
Environmental Analysis and Sovereign Bonds
While the classic rating agencies continue to focus on the financial debts, some investors want to integrate environmental and social criteria into the notation of Sovereign debt. A way of going out of the ”all financial”? Read more...
"We don't command the winds, but we can adjust the sails !"
A recent study by Boston Consulting Group, estimated that Swiss banks could see a decline of as much as 28 percent by 2014 if currently proposed laws change in banking secrecy in Switzerland. Singapore (and Hong Kong) would each benefit from this power shift in money. Read more...
Gold Mines : Muddy Boots
I spent the first half of last week at the Geneva Gold Mining Investment Conference, talking with investors, mining companies and analysts about the state of the gold industry. The annual conference falls at an interesting time of the year, as the price of gold typically corrects in October. I present you some researches and a summary on the Gold industry and the gold miners. Read more...
2013 Emerging Markets Forecasts:
The IMF’s World Economic Outlook projects an emerging markets forecast with growth at 5.6% in 2013. That’s down slightly from 2011 but far ahead of the measly 1.5% growth projected in the “advanced” economies. That means investors need to focus heavily their investments in emerging markets. Read more...
Appetite grows for Russian IPOs
Russian IPOs are back on the menu after Russia’s biggest bank, Sberbank, broke a four-year lean spell with a secondary public offering that raised $5.3 billion. As a slew of companies dust off plans for listings, investors will be keeping an eye out for the next big sale, from No. 2 mobile operator Megafon, to gauge the appetite for Russian risk. Read more...
GOLD – From the Situation Room
Gold has an uncanny ability to resemble tangible wealth. When the monetary powers that be finally come to the realization that printing dollars isn’t going to fix the problem – the world monetary system will fall to the golden common denominator. Read more...
РОССИЯ ЗОВЕТ ! - RUSSIA CALLING !
Here some of our thoughts and comments after discussions and meetings with international investors and domestic players of developing Russia at the VTB Capital Investment Forum. Here are general topics but we believe to invest into one country and participate to its growth you have to understand its culture and soul as to be able to grow with the country Read more...
Q4 Economic Forecasts 2 : Emerging
We have been in a tradable countertrend rally, and we are participating, while keeping a wary eye on the door. The crisis that began in 2008 is – at best – only half done, and it should be a priority to survive the remainder of the bad years, so as to be able to enjoy the next bull-phase – surely to occur sometime during the coming century or two. Patience is a great virtue, we are told. We hope to attain it – preferably RIGHT NOW! Read more...
Notation des Etats : évaluer les pays au-delà de leurs finances
Alors que les agences de notation classiques continuent de se focaliser sur les dettes financières, des investisseurs veulent intégrer des critères environnementaux et sociaux dans la notation des Etats. Une manière de sortir du tout financier ? Read more...
Emerging Markets Investment Themes
The following ETFs provide access to the growth potential of emerging markets, along with the added benefits of diversification, liquidity and cost effectiveness Read more...
Gold : from the Situation Room
We don’t see how U.S. “monetary technology” — the dollar — can hold its value over the long haul. Our fallback position is to keep building a precious metal portfolio based on physical metal and investing in well-run miners. Along with gold, every portfolio should have exposure to silver. Read more...
Chronique des marchés émergents : Wild West....China
Si John Wayne était né dans les années 2000, il serait chinois. D’abord l’esprit aventurier. Ne comptez pas sur des routes de bonnes qualités si vous voulez quitter l’est, et encore moins sur un train qui parte à l’heure. Il serait également précieux pour approcher les populations locales. Read more...
GEOPOLITICAL ANALYSIS
There are plenty of forecasts out there, but today Stratfor, a geopolitical analysis company, has one of the most rigorous methodologies out there, and their forecasts provide excellent insight into the outcome of world events in the coming quarter. Europe, Syria, and China are the big three to watch the next three to six months. Read more...
Scouting The Triple D (Diesel, Dust, Dreams) Markets
Things do not seem very joyful on many fronts: crisis of the European Union, budgetary and monetary madness in the United States and problems of debt which threaten Japan - to name only three. For many investors who concentrate only on these markets, the morning waking must be difficult. But the world changes. Here is an update on some Frontier Markets we recently explored. Read more...
Strategy Update : From Extreme Greed to Extreme Fear
We must face the truth as we wanted to offer some paths under the premise that mankind could save from itself. That the folly, the misconceptions, the constant repetition of the same errors expecting that somehow, radically different results would be attained, was susceptible to change. NO! Mankind simply does not desire to be saved – and we rants in vain. Read more...
Au Chevet de la Planète : Changez le logiciel
Aucune percée n'est attendue à Rio. Les débats sur l'économie verte et les Objectifs du développement durable peuvent être utiles. Mais c'est surtout sur la gouvernance de l'environnement et la feuille de route qu'il faudra en juger les résultats. Voir un point de situation sur notre blog Read more...
La finance responsable, une force d'innovation recherchée par la clientèle
La finance responsable est perçue comme une voie d'avenir pour une industrie mise à mal par les différentes crises financières et pour satisfaire aux exigences nouvelles de la clientèle. Selon l'enquête menée en 2011 par l'institution Genève Place Financière, la finance durable constitue un axe de développement pour les cinq à dix prochaines années. Read more...
Emerging Market Review :Russia's Competitive Advantage
Russia’s Investment Climate Shines Among Other High Growth Economies Despite the prevailing bleak economic outlook, there is a silver lining for investors willing to brave the odds to do business in Russia, a new report found. Read more...
The Adjusted Gold/XAU Ratio as an Indicator of Forward Returns for Gold Stocks
The latest data have a clear message for investors: gold stocks are attractively priced. That’s the current finding of the model for evaluating stock prices of gold mining concerns, updating historic data to incorporate information as of April 30, 2012. See blog http://claude-investlogic.blogspot.com/ and note >> Read more...
Gold The Most Volatile Year: Buy The Dips, Sell The Rips
Although the yellow metal has been on a spectacular 11-year bull run, recent strength in the economy–or at least the rising likelihood that the Fed will not be as loose in its creation of liquidity–has some investors thinking gold’s heyday is over. Throughout gold’s decade-long rise, price action over the short-term has gone both ways. http://bit.ly/Il41ET Read more...