Global Investing

Investors cutting back on equity buying

October 1, 2009

This month’s Reuters global asset allocation survey shows that investors have cut back on buying equities after an almost non-stop rally since March.

from David Gaffen:

Fed Starts to Remove Candy; Market Demands More

September 24, 2009

The stock market's penchant for emotional reactions that remind one of a roomful of two-year olds can never be underestimated. Major world central banks are pulling back on their efforts to provide liquidity to the financial system, and the U.S. equity market has flipped out, with stocks falling sharply after the news.Volatility has spiked as well, even though the banks' move is largely administrative, with demand for certain borrowing programs already diminished. Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ notes that "demand for dollar liquidity at banks offshore is sharply reduced now that the crisis has blown through. The amount of dollar borrowing in offshore centers is down sharply."

Equities: risky assets or return assets?

September 23, 2009

Are equities risky assets, or return assets? Watch Mark Tinker, Fund manager of the AXA Framlington Global Opportunities Fund, who talks about how the market has more room for an upside now that distressed sellers are gone.

from David Gaffen:

Hair of the Dog Rally

September 17, 2009

The old lore about the best way to cure a hangover is with a few more nips of whatever it was you were imbibing the previous evening, commonly known as "hair of the dog."

from David Gaffen:

Can Stocks and Bonds Celebrate Together?

August 26, 2009

So who is right and who is wrong?The stock market has rallied by more than 50 percent in the last five months. But bond market yields currently hover around 3.4%, and while that's nowhere near close to the crisis-induced record low reached at the end of 2008, a graph of the 10-year note's yield shows that it remains lower than almost any point other than when prices spiked in the wake of the Lehman Brothers collapse.

from David Gaffen:

Citigroup Is the Economy

August 12, 2009

It used to be that Citigroup was one of the market's most important stocks, if not the most important. At the nexus of the banking, securities and lending industries that benefited most from the easy-credit boom of the middle of the decade, its success as a stock mirrored the market and the economy.Somewhere around 2006, when people started to call for a breakup of the company, it was supplanted by a company even more tied to the derivative-fueled mess that masked the holes in the economic landscape - Goldman Sachs.

The Big Five: themes for the week ahead

August 3, 2009

Five things to think about this week:

GOOD RUN 
-  Stocks have managed to extend their rally but potential hurdles, such as this week’s U.S. non-farm payrolls, could prove increasingly hard to leap given valuations — European stocks are trading at their highest multiples of earnings since May 2008 while the multiple for the S&P is the highest since mid-September 2008. If investors are to boost equity holdings — which Reuters polls show already back to pre-Lehman levels — it may require more concrete evidence of economic expansion, rather than just economic stabilisation, and signs that profit margins will be supported by revenue growth, rather than cost cutting. 

Crowing about good earnings

August 3, 2009

Investors have been cock-a-hoop about the latest earnings season — and probably with some reason. There has been positive surprise after positive surprise, particularly in America. Thomson Reuters latest research shows that of the 337 companies in the S&P 500 that had reported through Friday, 74 percent came in above analysts expectations.

Milestone mania

July 27, 2009

The S&P 500 index is approaching 1,000, Nasdaq is nearing 2,000, the Nikkei is above 10,000 and Dow could surpass 10,000 soon.

from David Gaffen:

Earnings Coming Up Roses…Or Not

July 22, 2009

How do those green shoots look now?The market got all a-giddy last week after Intel (INTC.O) and Goldman Sachs (GS.N) (a barometer of nothing other than its own ability to navigate turbulent markets) posted better than expected earnings, but the latest round of earnings reports points mostly to the ability of companies to tighten their belts to anorexic levels.