Get Markets Right

It will take another 10 years before I can use that head line again. It sounds very impressive but it just concerns the last days of this year.

The market activity will, as usual, be lower after the weekend until New Year but during the last days of this decade we have the chance to enjoy a few important numbers.

Here is what I am looking for the coming days:
From Japan, before 28th Dec the Dec business
conditions for small businesses is released. It’s almost a preliminary number, that alone makes it interesting though the survey itself is also worth to notice. Last month it was 43,0. Please note that the big business worsened in the period October to…

I am looking forward to an exciting day today with loads of numbers and then the FOMC meeting as a fine finish.

Just to mention the positive Japanese stocks this morning. The banking sector went up as it seems likely that the tougher capital rules will be delayed. The Japanese banks will probably get 10 years to adopt the new rules. Short term, it of course helps the profitability in the banking sector and give some relief (also the reason for the delay I assume). One of the reasons to tighten the rules was to protect the investor, but to give a 10 years deadline is equal to cancel them. Within the next 10 we will have had another crisis…

Hot Topic – DPJ wins – Deep Pain Jammed LDP

The victory for The Democratic Party of Japan (DPJ) and their party leader Mr. Yukio Hatoyama is not a surprise. Though, after almost 50 years LDP government leadership of the second largest economy in the world, I certainly think the political change in Japan is a Hot Topic. This is a short view on what we can expect of political changes and what to watch out for as an investor and in corporate treasuries.

DPJ will surely try to outlive two headlines from their election campaign. One is to change the export dependent economy into a domestic demand economy. Second is to loosen the tight bands between the government and the large…

Global equities – The bulls are still in the lead – but for how long ?

The uptrend in global equity markets is still intact and some factors will be supportive in September. The very important gold digger mood among private investors, who believe in the V-shape recovery means a lot for the uptrend. This combined with plenty of funds to invest and professional money managers being behind going long stocks all in all creates a natural demand.

I am also behind the curve, as the frequent reader knows, I didn’t believe in the V-shape recovery, and still don’t. The consequence is, that I am forced to recommend to enter the market when it goes up despite I am uncomfortable with the…

Nikkei 225 (9.648) Dax (4.644) FTSE 100 (3.989) Dow Jones (8.325) S&P 500 (898)

I agree with the upbeat market participants, that unemployment is the last number to peak, and also are different expectation indices showing clear improvements. But does it justify the V shape recovery that is priced in the equity market right now? I apologise, it would be most pleasant to say buy! Reality is as usual tougher.

Demand, unemployment and production capacity

Let’s start with the good one first. Demand is there, but it has changed. No secret that in the so-called rich countries demand has changed from “nice to have” to “need to have”. This has created the consumption drop together with a consumption stop due to…

Nikkei 225 (9.290) Topix (880) Dax (4.957) FTSE 100 (4.483) Dow Jones (8.504) S&P 500 (910) Nasdaq Comp (1.733)

No doubt that I am very sceptical about the current rebound in the global equity market, or at least the speed of it, but right now we play the “all happy” game. I continue to believe in the W shape recovery, where the global markets currently are in the first V. I acknowledge that the low of the second V won’t reach the lows we had in the markets earlier this year (or last autumn in the BRIC countries).

I also agree that the world didn’t end in a black hole. We might have seen the worst in Far East, seeing some…

Below you will find my weekly view on the very challenging financial markets.

Read more about all the interesting happenings in the financial markets in the 4 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

I apologise for not having updated with comments the last 3 weeks but I had 1½ weeks holiday on 2 very nice hotel. Very unfortunate did the wifi not work. Then Easter arrivved……

The 4 entries from today are:

Currency markets – Back in the risk aversion / appetite game again

Equities – A new recovery shape has been invented – the W shape recovery.

China…

Equities – A new recovery shape has been invented – the W shape recovery.

Nikkei 225 (8.743)  Topix (835)  Dax (4.542)  FTSE 100 (3.989) Dow Jones (7.920)  S&P 500 (835) Nasdaq Comp (1.626)  

The current uptrend in global equity markets is so persistent that I am very close to revise my view on this asset class. So far, I have for a very long time (since early 2007 or longer) argued to stay away from stocks. If the current upside momentum continues for just another week or two I will adjust my view to be 25% long of the total expected allocation to equities.

The downturn will reassume, the question is just when. With all the stimulus packages a…

Below you will find my weekly view on the very challenging financial markets.

Read more about all the interesting happenings in the financial markets in the 5 entries here below. I hope you find it interesting to read my private view about the consequences for the stock markets, currencies, China and what to expect from the central banks.

The 5 entries from today are:

Currency markets – Finally reacting on different factors

Equities – Another bull go, backed by the US tax payer – PPIP it’s called this time….

China – Reorganizing the car industry

Hot Topic – EUR/USD – Did Fed start a new EUR/USD trend ?

Central bank rates – They did, quantitative easing from Fed…….

Equities – Another bull go, backed by the US tax payer – PPIP it’s called this time….

Nikkei 225 (8.216)  Topix (792)  Dax (4.719)  FTSE 100 (3.974) Dow Jones (7.555)  S&P 500 (792) Nasdaq Comp (1.509)  

It almost feels like history, but I need to touch base on the surprise announcement from Fed last week about buying T-bonds. If you had asked me even 1 minute before the announcement, I wouldn’t have believed it to happen. Mr. Bernanke is truly living the “helicopter speech” (if you need a copy I can provide it).

The bond market intervention from Fed only helped US equities for a few trading hours, so why spend time on the plan? The plan is of serious…