Get Markets Right

A friend in Hong Kong wrote some thing to me, where I allow to pick the main aspects.

Data published by National Bureau of Statistics of China lately confirmed that the world’s 3^rd largest economy is on track.

Retail sales gained a 16.2% year-on-year increase, which is 0.7% above the figure of last month. Some economists hold the opinion that China’s economy rebound is mainly due to its huge stimulus package. This mainly drive up its fixed investment, and this kind of economic growth mode is not sustainable when government retreat from this huge economy. The steadiness in the private consumption gives the economy a long-term momentum which we notice as a positive factor.

Very important was the industrial output that…

Worse than expected. The jump to 10,2% in jobless rate against the market consensus  of 9,9% is the headline to hit the newspapers Saturday morning. It cannot be neglected despite some weather conditions making it impossible for more workers to come to work compared to the average October. I also respect that the September non-farm payroll was revised to a significant better number. All in all it doesn’t change the 10,2% nasty number. The investor should also notice that the weekly working hours didn’t go up as many expected – i.e. no real demand for more working hours. As mentioned last week do I expect this to hurt both the greenback and US equities meaning the negative correlation between USD…

Dear Reader,

During the last month I have explored some technical problems which I apologise. I have have been working on some changes as well. The new updated version of the blog I expect to launch in mid December. The comments goes on as usual.

Best regards

Peter

Central bank rates – What can they do? Print more money…..

US Federal Reserve Bank: Quantitative easing……

Bank of England: Now at 1,00% with a good chance that they will cut again. 

European Central Bank: A surprise cut with only 25 basis points, but another 25 basis points will come very soon, down to 1,00%.

Bank of Japan: 0,10% – that was it.

They will be posted tomorrow Thursday.

Technical problems for a couple of days – apologise.

Best regards

Peter

Central bank rates – they give it another try at ECB……

US Federal Reserve Bank: Now Fed is at 0 – 0,25%. Next step is intervention in Treasuries. Fuelling money supply……

Bank of England: Now at 1,00% with a good chance that they cut again. 

European Central Bank: Next cut is on Thursday to 1,50% from the current 2,00%.

Bank of Japan: 0,10% – that was it.

Central bank rates – The next in line is ECB

US Federal Reserve Bank: Now Fed is at 0 – 0,25%. Next step is intervention in Treasuries. Fuelling money supply……

Bank of England: Now at 1,00% with a good chance that they cut again. 

European Central Bank: Next cut in mid March to 1,50% from the current 2,00%.

Bank of Japan: 0,10% – that was it.

China – many hope that the year of the Ox will be better.

Hang Seng (15.478)  Shanghai B (114)  USD/CNY (6,8340)

It’s obvious that many are hunting opportunities from the start of this year, so here is one more for hungry investors.

A survey conducted by The Nikkei Veritas and Nikkei Research among 76 market analysts showed that 75% expects a rebound in Chinese stocks (55% pointed at a rebound in Japan as no. 2 opportunity).

As always, I agree that when the world turns around one need to be long Chinese stocks. As an extra upside the domestic demand growth will boost Chinese stocks even further when it comes.

As mentioned under the equity comments that the positive expectations maybe are priced…

Central bank rates – Cutting as much as possible, and then what?

US Federal Reserve Bank: Now Fed is at 1,00% and Tuesday evening they are at 0,50%, maybe even 0,25% (I go for 0,50%). Going below 0,50% is very difficult as money market funds will create a negative return. Despite the money market funds a zero rate is in the cards. Trying to repair a credit bubble that exploded by getting credit rolling.

Bank of England: They will drive it as low as possible – to American and Japanese levels. 

European Central Bank: Very quickly taken down to 2,50% so now will Mr. Weber needs some time to digest. Further cuts are already priced in and also likely, but slowly towards 1,50%…