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from Global Markets Forum Dashboard:

Aberdeen asset manager focuses on value amid market turmoil

Volatility has cooled for the moment, even as the U.S. Federal Reserve lifted its quantitative easing program on Wednesday, but Europe, China and Brazil are still concerns for financial markets, according to a veteran investment manager.

On Wednesday, the World Bank urged China to cut its growth forecast next year. Brazil’s stock market is still recovering from a sharp post-election sell off on Monday, and Europe’s financial sector needs some fine tuning.

Martin Connaghan. Senior Investment Manager, Aberdeen Asset Management

Martin Connaghan. Senior Investment Manager, Aberdeen Asset Management

Aberdeen Asset Management will stay its investment course and continue to pick stocks in core sectors amid the turmoil, Martin Connaghan, senior investment manager on the global equity team of Aberdeen told the Global Markets Forum on Wednesday.

“The economic environment has obviously been taking a turn for the worse,” Connaghan said. “That being said we are seeing some opportunity with regards to some industrial type stocks where recurring revenues as a result of service contracts give some degree of comfort.”

from Global Markets Forum Dashboard:

Sinking mortgage rates disguise investor fear – economist

A dip in 30-year mortgage rates to their lowest level in more than a year and stronger U.S. housing data on Friday appeared to be the green shoots of the next phase of U.S. economic recovery, that being the housing market.

U.S. housing starts were up a whopping 6.3 percent in September. Together, the mortgage and housing data seemed to suggest a housing recovery. That, in turn, fits neatly into the U.S. Federal Reserve’s initial timeline for ending its asset buying program this month, even as the number of sales of previously owned homes disappointed on Monday.

from Global Markets Forum Dashboard:

GMF @HedgeWorld West, World Bank/IMF and Financial & Risk Summit Toronto 2014

(Updates with guest photos and new links).

Join our special coverage Oct. 6-10 in the Global Markets Forum as we hit the road, from the West Coast to Washington to the Great White North.

GMF will be live next week from the HedgeWorld West conference in Half Moon Bay, California, where we’ll be blogging insight from speakers including Peter Thiel, former San Francisco 49ers great Steve Young and other panelists' viewpoints on the most important investment themes, allocation strategies, reputation risk management ideas and more.

from Anatole Kaletsky:

Here’s what it will take to trigger the next stock market correction

Traders work on the floor of the New York Stock Exchange shortly after the market's opening in New York

As Wall Street hit another new record Thursday, it is worth considering what could cause a serious setback in stock market prices around the world. Since I started writing this column in 2012, I have repeatedly argued that the rebound in stock market prices from their nadir in the 2008-09 global financial crisis was turning into a structural bull market that could continue into the next decade.

Asset prices, however, never move in a straight line. It has been more than two years without even a 10 percent correction and five years without a 20 percent setback. This cannot go on.

from Anatole Kaletsky:

Can central bankers succeed in getting global economy back on track?

Stanley Fischer, the former chief of the Bank of Israel, testifies before the Senate Banking Committee confirmation hearing on his nomination in Washington

Why is the world economy still so weak and can anything more be done to accelerate growth? Six years after the near-collapse of the global financial system and more than five years into one of the strongest bull markets in history, the answer still baffles policymakers, investors and business leaders.

This week brought another slew of disappointing figures from Europe and Japan, the weakest links in the world economy since the collapse of Lehman Brothers, despite the fact that the financial crisis originated in the United States. But even in the United States, Britain and China, where growth appeared to be accelerating before the summer, the latest statistics -- disappointing retail sales in the United States, the weakest wage figures on record in Britain and the biggest decline in credit in China since 2009 -- suggested that the recovery may be running out of steam.

from The Great Debate:

Are too-big-to-fail banks being cut down to size?

Financial institution representatives are sworn in before testifying at the Financial Crisis Inquiry Commission hearing on Capitol Hill in Washington

The massive $16-billion mortgage fraud settlement agreement just reached by Bank of America and federal authorities -- only the latest in a string of such settlements -- makes it easy to lose sight of what good shape banks are in.

Banks are now far better capitalized, with tighter credit processes and better risk accounting. The bigger Wall Street houses have also jettisoned many of their most volatile trading operations. Yet most have still managed to turn in decent earnings. That is a tribute to the steady and generally thoughtful imposition of the new Dodd-Frank and Basel III regulations, the rules on “stress-testing” balance sheets and the controversial Volcker Rule that limits speculative proprietary trading operations.

from Global Markets Forum Dashboard:

The money’s in the bank: What financial institutions are not telling investors

The largest Wall Street investment banks reported good earnings this week, many beating analysts’ expectations, but the devil remains in the details.

Banks are in the middle of implementing global regulations designed to create a safer framework under which they operate and avoid an encore of 2008. Still, these financial institutions are not as forthcoming as they should be in disclosing key elements that would help measure their resilience, Mayra Rodríguez Valladares, managing principal of MRV Associates and a bank regulation expert told the Reuters Global Markets Forum during a LiveChat this week.

from Counterparties:

MORNING BID – What’s all the Yellen about?

Rants from TV commentators aside, the market’s going to be keenly focused on Janet Yellen’s congressional testimony today, with a specific eye toward whether the Fed chair moderates her concerns about joblessness, under-employment and the overall dynamism of the labor force that has been left somewhat wanting in this recovery. The June jobs report, where payrolls grew by 288,000, was welcome news even as the economy continues to suffer due to low labor-force participation and weak wage growth.

Inflation figures are starting to show some sense of firming in various areas, for sure, but still not at a point that argues for a sharp move in Fed rates just yet. Overall, a look at Eurodollar futures still suggests the market sees a gradual, very slow uptick in overall rates – the current difference between the June 2015 futures and June 2016 futures are less than a full percentage point – not as low as it was in May of this year, but still lower than peaks seen in March and April 2014 and in the third quarter of 2013, before a run of weak economic figures and comments from Fed officials themselves scared people again into thinking that the markets would never end up seeing another rate hike, like, ever again.

from Anatole Kaletsky:

Yellen’s remarkably unremarkable news conference – and why it’s a good thing

Yellen holds a news conference following two-day Federal Open Market Committee meeting at the Federal Reserve in WashingtonJohn Maynard Keynes famously said that his highest ambition was to make economic policy as boring as dentistry. In this respect, as in so many others, Federal Reserve Chair Janet Yellen is proving to be a loyal Keynesian.

Yellen’s second news conference as Fed chair conveyed no new information about the timing of future interest rate moves. She gave no hints about an “exit strategy” for the Fed to return the $3 trillion of bonds it has acquired to the private sector. She told us nothing about the Fed’s expectations on inflation, employment and economic growth -- not even about the board’s views on financial volatility, regulation, asset prices or bank credit policies.

from Anatole Kaletsky:

No reason for these stock market jitters

anatole -- unhappy trader

“Sell in May and go away.”

This stock market adage has served investors well four years in a row. Every year since 2010, stock markets around the world have suffered significant corrections between a high reached in May and a low in the summer or early autumn: by 15 percent in 2010, 19 percent in 2011, 9 percent in 2012 and 5 percent in 2013, as gauged by the Standard & Poor’s 500.

Given that the Dow Jones Industrial Average hit its highest level ever on April 30, while the S&P 500 peaked less than 1 percent shy of its all-time record, it may seem sensible to follow the seasonal adage. Regardless of one’s views about the long-term prospects for the world economy.

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