Editor, Investment Strategy. Europe, Middle East and Africa, London
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Jan 3, 2013
via Global Investing

Weekly Radar: From fiscal cliff to fiscal tiff…

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The new year starts with a markets ‘whoosh’, thanks to some form of detente in DC — though this one was already motoring in 2012. The New Year’s Eve rally was the biggest final day gain in the S&P500 since 1974, for what it’s worth.  And for investment almanac obsessives, Wednesday’s 2%+ gains are a good start to so-called “five-day-rule”, where net gains in the S&P500 over the first five trading days of the year have led to a positive year for equity year overall on 87 percent of 62 years since 1950.

So do we have a fiscal green light stateside for global investors? Or does it just lead us all to another precipice in two months time? Well, markets seem to have voted loudly for the former so far. And to the extent that at least some bi-partisan progress reduces the risk of policy accident and renewed recession, then that’s justified. And Wall St’s relief went global and viral, with eurostocks up almost 3% and emerging markets up over 2% on Wednesday. Even the febrile bond markets sat up and took notice, with core US and German yields jumping higher while riskier Italian and Spanish yields skidded to their lowest in several months.

Dec 21, 2012

Investment Focus: Destination 2013? China, Japan, BRICs

LONDON (Reuters) – With a whiff of global recovery in the air and central bank liquidity abundant, investors in 2013 are packing their bags for China, fellow ‘BRICs’ Brazil and Russia, long-dormant Japan and even some Mediterranean sun.

Of course, seeking consensus on the top country destinations for the year ahead is hardly an exact science.

Dec 21, 2012

Destination 2013? China, Japan, BRICs and Med

LONDON, Dec 21 (Reuters) – With a whiff of global recovery
in the air and central bank liquidity abundant, investors in
2013 are packing their bags for China, fellow ‘BRICs’ Brazil and
Russia, long-dormant Japan and even some Mediterranean sun.

Of course, seeking consensus on the top country destinations
for the year ahead is hardly an exact science.

Dec 14, 2012

So much uncertainty, so little volatility

LONDON, Dec 14 (Reuters) – Equating economic uncertainty
with financial market volatility this year would have been a
dangerous game.

Perhaps the biggest theme of 2012 for many asset managers
was how waves of monetary policy easing from the world’s big
central banks smothered market volatility – even as everyone
frets about slowing growth and earnings, recession and inflation
threats, and ongoing sovereign debt and banking nightmares.

Dec 13, 2012
via Global Investing

Weekly Radar: Elections and housing in last big week of 2012

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So an extra dose of medicine from the Fed on Wednesday helps smother global market volatility further into the yearend — even though naming an explicit 6.5% unemployment rate could well send Treasury bond volatility soaring as the current 7.7% rate likely approaches that level in 2014 just as the Fed low-rate pledge expires. Not a story for early next year maybe, but…

More nose-against-the-windshield, the busy end to this week – with the EU Summit today and December’s flash PMIs tomorrow – makes it difficult to clear the decks yet for yearend — at least not as much as market pricing and volumes would suggest. Moves to some form of EU banking union are already in the mix from Brussels, however, so another plus at the margins perhaps.

Dec 12, 2012

More pressure on global wages could backfire

LONDON (Reuters) – If rising income gaps are at least partly responsible for the global credit crisis, governments and companies should be wary of squeezing wages yet again to help rebuild their finances.

In the long buildup to the global financial crisis, households took on debt to offset the gradual fall in their incomes and consumption relative to the more wealthy.

Dec 12, 2012

Analysis: More pressure on global wages could backfire

LONDON (Reuters) – If rising income gaps are at least partly responsible for the global credit crisis, governments and companies should be wary of squeezing wages yet again to help rebuild their finances.

In the long buildup to the global financial crisis, households took on debt to offset the gradual fall in their incomes and consumption relative to the more wealthy.

Dec 11, 2012

Templeton’s Mobius still buying Egypt stocks

LONDON (Reuters) – Protests in Egypt have failed to deter veteran emerging market investor Mark Mobius, who said on Tuesday he is holding onto his Egyptian stock position and is looking to add more even as the latest crisis unfolds.

Mobius, executive chairman of Franklin Templeton’s emerging markets group, told Reuters in a telephone interview that while there was an international focus on the protests over Egyptian President Mohamed Mursi’s plans to vote on a new constitution, business continued as usual in many parts of the country.

Dec 6, 2012
via Global Investing

Weekly Radar: China and Fed steal the show

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Even though US cliff talks remain unresolved, many of the edges have been taken off seasonal yearend jitters elsewhere. Euro pressures have been kept under wraps since the Greek deal,  the possibility of yet another Fed QE manoeuvre next Wednesday is back in play and a significant pulse has been recorded in the global economy via the latest PMIs – thanks in large part to China and the US service sector.US payrolls loom again tomorrow, but the picture is one of stabilisation if not full-scale recovery.

All this has kept markets pretty calm with a positive tilt as investors parse 2013. The Greek deal has proved to be a very important juncture for the euro zone, with Italian 10-year yields down yet another 14bp Wednesday-to-Wednesday. The parallel recentr lunge in Spanish yields backed up a few notches after this week’s auction disappointed some traders. Yet even here the relative ease with which a supposedly-cornered Madrid raised more than 4 billion euros for next year’s coffers keeps the financial side of their crisis, if not the economic one, in context for now at least.

Dec 3, 2012

‘Known unknowns’ seem less menacing

LONDON, Nov 30 (Reuters) – The big “known unknowns”, to
borrow from former U.S. defence secretary Donald Rumsfeld, are
now so familiar to most global investors that they have to think
long and hard about risks looming in 2013.

That’s not to say money managers see no big pitfalls for
next year. On the contrary: the world economy has rarely faced
so many threats of political, policy and financial accidents.

    • About Mike

      "Mike Dolan is Reuters' Investment Strategy Editor in Europe. He has been a correspondent and editor for the past 20 years, working for Reuters from London and Washington DC in a variety of roles covering global policymaking, economics and investment trends."
      Joined Reuters:
      1995
      Awards:
      Reuters Editor of the Year, 2009. Reuters multimedia journalist of the year award, 2011
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