Get Markets Right

To the receivers of Lundgreen’s Magazine:

The magazine includes the following articles this month:

Global Equities: Ouch! – What now?

China: Not time to get nervous – yet

India: Stimulus is running out, can growth compensate?

Foreign Exchange: Investment flows or economic data?

Hot Topic: Inflation or deflation – Do I hear deflation?

I hope you will enjoy reading the magazine.

Peter

We had Alcoa diappointing but I expect corporate earnings will be good, at least on the surface. The Q4 results in 2008 were poor so the comparisons with Q4 in 2009 will be easy. The numbers will once more be helped by layoffs and other cost reductions. The sensible investor forget the headline numbers and look for information about a real pick up in sales. Then we of course need to listen to the guidance for this year, these comments will be of extreme importance.

The results I have noted in my dairy to watch out for in January are:

Date Corporation

19th IBM
25th Royal Philips Electronics
26th Catarpiller Inc.
        DuPont
        Johnson & Johnson
        Novartis AG
        Siemens…

One of the US earnings I always watch is from Alcoa because it’s the first. They are in a difficult sector which should be in mind.
The result is not satisfactory if the investor is looking for a reason to buy stocks. The net result improved (less negative) but sales was lower. It’s the sales reports investors should watch during the coming weeks, not the net result.
No surprise that the aerospace sector underperformed but there were no improvement signs from the construction section either, this should be noted.
Peter

Dear Reader,

The new issue is getting distributed right now.

This month is it includes the following subjects:

Global Equities with ”Unemployment – lower numbers needed”, “Hello Japan – are you awake ?” and “The most important Q4 earnings this month”

China with ”Cooling down the housing market”, ”confusion about the stimulus package” and ”Renminbi – Explosion ahead”

Foreign Exchange covering the major currencies and FX volatility.

India covering the rising inflation, the capital inflow and the risks for stock market.

The Hot Topic this month is global debt – Hopefully not a Japanese headache.

I hope you will find a few minutes to look at the magazine

Best regards

Peter

The Chinese National Bureau of Statistics today revised the growth up for 2008. Originally was reported 9,0% but the final result was 9,6%. The reason was higher production in the service sector than anticipated. The service sector accounted for 41,8% of the GDP instead of 40,1% reported earlier (To compare do the service sector account for more 70% in old economies).
We are with high speed moving towards the end of 2009, so why bother about historical numbers ? Basically right, but Peng Zhilong from the National Bureau of Statistics also hinted some expectations for 2009.

The first 9 month GDP growth this year is so far reported as 7,7% (year on year) but will most be revised up. It…

The Christmas gift for investors is a positive market today, particularly in Asia. The comment from China about keeping the loose monetary policy is mentioned by some to be the reason. Surely a trigger to find a reason to buy more stocks. It underlines the current positive sentiment, more than anything else.

The Chinese monetary policy is important but the US numbers we had yesterday are more important. How should we judge them ? Both personal income and spending went up but not as much as expected. Again a sign for me that the world is finding a new level of activity but not the fast rebound that is priced in the equity markets.

The housing data was more worrisome…

Ok, Thursday and Friday was extreme busy here in the office due to the official launch of my new advisory company, but that’s only good.
Just to return briefly on Mr. Bernanke and the US housing data as promised. As expected is a rate hike not even on the drawing board yet. Fed says that it pledge to keep rates “exceptionally low” for an “extended period”. The discussion about a possible rate hike at a future data among some economists seems very theoretical to me. No need to focus on this right now.
The US housing data from November showed the expected month on month rebound, exactly back to 574k in new home constructions (the drop in October was due…

Apologize for being late as the last 24 hours market activity have been very interesting indeed. The reason is that I officially opened my own company today Lundgreen’s Capital. The press releases went out here in Denmark today and the marketing started at the same time. It has been a very busy day as more people than expected reacted on the opening. The broadcasts outside Denmark is tomorrow Friday.
But we had Mr. Bernanke yesterday, mainly as expected and the housing numbers higher. I will revert to those two things briefly again tomorrow. Market participant are still reducing short USD positions ahead of the year end, seriously hurting my idea about a short term move towards 1,4750. The stocks are…

Let’s take the good numbers first. The November industrial production came out better than expected, but honestly, mainly due to domestic demand. Normally it’s a healthy sign if the import is rising as well, and it did above expectations. All in all, taken as positive by the market.

Some say that the rebound is on track, I judge it more like stability, like mentioned several times. The domestic demand is pushed and forced higher by the public stimulus package. That the domestic Chinese demand is growing stable will not help the rest of the world, as the outside world cannot produce as cheap as the Chinese companies can. There is no “save the world effect” in these numbers. The higher…

So Dubai took the center stage all of a sudden, but how should we treat it ? We all know the short term logic consequence some developers, private investors and banks will lose money. Probably are the banks the most hurt as they regarding all debt in Dubai as quasi sovereign supported, but it was not.

Apart from these very direct losses the Dubai problem shouldn’t affect the world in any particular way, unless the financial markets are in some sort of stress. But they are and that’s why the reactions are so negative. For me it shows that the upside momentum in the global equity markets is getting more and more heavy as all coming positive news already…