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…

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…

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…

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…