Counterparties

World Cup waste

July 9, 2014

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A horrible semi-final loss to Germany isn’t the only depressing result to come out of the World Cup for Brazil. The economy isn’t doing so well, and the international soccer tournament doesn’t seem to be helping much. This wasn’t totally unexpected: a Moody’s report from the spring estimated that the World Cup would have exactly zero impact on Brazilian GDP. The report concludes that “while the event offers a potential reputational benefit, it could be marred by a reprise of the social unrest seen last June or if needed infrastructure was not ready.” So far, there’s not been a ton of unrest, but the infrastructure is incomplete.

MORNING BID – Detangling Ukraine

March 3, 2014

Geopolitical situations are difficult ones to interpret from a markets perspective. For the time being, markets are responding to the escalation of hostilities in Ukraine – where Russia has bloodlessly taken control of the Crimea region and is threatening more action in the eastern part of the country – with a bit of negativity. The action is notable in U.S. equity futures, down more than one percent, and some buying in the safe haven that is U.S. Treasuries, along with bond markets around the globe.

MORNING BID – Making it up on volume

February 4, 2014

Monday was the worst day in the stock market since June. And while you can go through all the machinations and point out that the market is still down just 5 to 6 percent from its record high – and you’d be right – that doesn’t really translate to a strong environment at this time.

MORNING BID – Contagion abounds, and the Super Bowl

January 31, 2014

On Thursday, this column suggested that a bunch of stock markets selling off in tandem did not satisfy the definition of contagion. Central banks dumping U.S. assets, weak auctions of government debt in seemingly less related countries, and big sell offs in less affected currencies? That’s getting closer to the mark.

MORNING BID – The prime directive

January 30, 2014

So, it’s been a few days. Which means the markets have hit that point in the Star Trek episodes when the Klingons were temporarily short of torpedoes, which gave the Enterprise crew time to suss out what was going on.

MORNING BID – Turkey, the Fed, and we all float down here

January 29, 2014

The messy sell-off in emerging markets was stemmed overnight after Turkey surprised everyone by raising rates to 12 percent – but it didn’t last. Major averages in Britain and Germany opened at their highs of the day but have since faded, and even though the big rate increases in Turkey, South Africa and India are meant to stem capital flight, so far the market’s shooting first and asking questions later. S&P futures were up about 20 points after the Turkey rate hike – an odd move for such a localized event – and we’re seeing the reaction now, which, to quote Tom the cat about the ‘white mouse no longer being dangerous,’ “DON’T…YOU…BELIEVE…IT.” So we’re lower, and continue to head lower, and for those of you new to the markets, this is what’s called a selloff.

MORNING BID – Emerging Markets, Apple, Ma Bell, and whatever else one can think of

January 28, 2014

In the words of Inigo Montoya, let me explain. No, there is too much. Let me sum up.

MORNING BID – The selloff continues in emerging markets

January 27, 2014

It takes a lot to overshadow the heart of earnings season and a Federal Reserve meeting but the rout in emerging markets has managed to make that happen. This week is an important one. As my Reuters London colleague Mike Dolan pointed out, it will go a long way toward determining whether this is a rapid hot-money flight that gets stemmed after a brief correction or the start of a prolonged rout.

MORNING BID: The deepening EM selloff

January 24, 2014

The contagion is building. Major world markets are taking it on the chin, U.S. stocks have slumped, and major asset managers in Europe are seeing shares fall, with some citing corporate exposure to emerging markets in general and Spanish exposure to Latin America in particular.

MORNING BID – Only a dream in Rio

January 15, 2014

Among the BRIC nations, Brazil’s the one that’s been repeatedly whacked with a brick in the last couple of years, seeing its currency depreciate and its stock market trashed as it steadily ratchets up interest rates to an expected 10.25 percent this evening (or perhaps even 10.50 percent).