Posts from Monday Apr 29 2013

The Closer

US stocks close at a fresh record closing high: The S&P 500 rose 0.7 per cent to 1,593.61, with the benchmark eclipsing its record high set earlier this year. The day’s gains came as investors welcomed a better than expected report on homes sales and remained optimistic that the Federal Reserve would maintain its aggressive stimulus programme ahead of meeting of central bankers beginning on Tuesday. the FTSE Eurofirst 300 index rose 0.5 per cent. Japan’s stock market was closed for a holiday. (Financial Times)

IMF warns over strong capital inflows into Asia: The international lender said strong capital inflows into Asia had increased the risks stemming from rapid credit growth and rising asset prices, but sounded an optimistic tone on the economic outlook for the region, which it expects to lead a “global three-speed recovery” with growth of 5.75 per cent this year. (Financial TimesRead more

Sin City, SEC edition

And so to Victorville. Nothing to do with FT Alphaville maybe winning some debate, but a real live city, east of LA, beyond the mountains where the desert starts, near Apple Valley. It’s what American friends would call an “ex-urb” and here’s the welcome sign:

Victorville Read more

On vested interests and profits

Jeremy Grantham as usual is the one to grab the public’s attention whenever GMO produces a note. However, it must be said, Ben Inker’s accompanying thoughts in the same edition are also worth some of your time.

Of particular interest, for example, is the following observation:

There are times when the markets do not seem to be following the script properly, and we are left wondering whether we are dealing with a temporary anomaly or a more permanent problem. Today we are faced with one of these problems: the persistently high profit margins of U.S. corporations. High profit margins should not persist in a mean-reverting world, and yet profitability in the U.S. has been higher than long-term averages for most of the last 20 years, oddly pretty close to the same length of time that the U.S. market has been trading above replacement cost.

 Read more

The US manufacturing renaissance

Oped pages in recent months have been regular hosts to pieces extolling some of the unsung benefits of the US shale-gas revolution. Some of these have gone so far as to proclaim that shale gas is, or will be, a significant benefit for the country’s entire economy.

Lately, though, the narrative is beginning to sound hollow. Read more

Like a bear in a China speech

By Theo Casey, marketcolor

This might be best considered an addendum to Kate’s Politburo detective work on Friday which highlighted China’s changing attitude to growth (now maybe less important) and financial risk (now probably more important). It’s a piece of the China recovery puzzle we don’t look at enough. Read more

About that peaking global oil demand…

We’ve been reading a lot lately about the potential for cheap natural gas to replace oil-derived transport fuels in the US — and perhaps globally.

Much of this excitement overlooks some fundamentals of energy and commodities in general and the US natural gas sector in particular. The short version is that energy markets are incredibly difficult to predict, and adding interactions between energy sources only adds to the uncertainty. Read more

The Polish-Cyprus case

Some might remember this banner from last year’s Russia vs Poland Group A match at the Euro 2012 tournament:

It was, to say the least, a little bit antagonistic. Read more

The loss of simple narratives in FX

(Or ‘goldilocks syndrome’ if you’d prefer)

An existential cry has been sounded once again in the world of FX which has suddenly been reduced to trading short term signals in a fickle market. Shocking. Gone are the days of simple carry, Risk on-Risk off and easy reifying market stories. And it seems they are missed, almost as much as they were once bemoaned…

From HSBC’s ever excellent FX team: Read more

Markets Live: Monday, 29th April, 2013

Live markets commentary from FT.com 

The (early) Lunch Wrap

JPMorgan’s executive re-reshuffle || Strong capital inflows into Asia increase risk, says IMF || HFT to face speed limits on EBS platform || Chat apps overtake text messages || Ark gala mothballed || Alphaville’s latest podcast || Pari passu saga || Deep thoughts on civilisation || Market update Read more

If you tolerate this, more holdout lawsuits will be next

Well, this was fun while it lasted. Now what did it mean?

Click to enlarge the document capping a weird week in the pari passu saga:

It’s an order from the Second Circuit on Thursday, denying an unusual request filed on Monday by the Italian retail investors who count themselves among Argentina’s holdouts.

Although looking back at it, was the unusual or just ahead of the curve? Read more

Deep thoughts on civilisation from Jeremy “Hari Seldon” Grantham

If you submit to theoretical physicist Geoffrey West’s urban development theories, then you’ve probably aware of the idea that humanity is set to face a critical crunch point soon enough (if not already). And by crunch point, we mean — either humanity throws everything it’s got at speeding up technology to ensure its resource consumption-to-population footprint becomes manageable, or we wither away.

(The Roman Empire, by the way, is perhaps the best example of a civilisation which failed to make the next great technologically leap to the carbon age and did actually wither.) Read more

This is not a financial forecast

From the London Stock Exchange on Monday…

As part of a reorganisation of London Stock Exchange Group’s (“LSEG”) Italian legal entities earlier this year, a valuation report was prepared for the specific purposes of the reorganisation and was filed with the Companies Register of the Milan Chamber of Commerce and has recently been made public. This report included a LSEG revenue projection for the year ending 31st March 2016 of €1.4Bn with 12% annual LSEG revenue growth from the start of FY14. It also included 5 year (FY14 to FY18) financial projections for the Italian legal entities together with historic information for such entities for the 9 months to 31 December 2012.

 Read more

Further reading

Elsewhere on Monday,

- The ‘floor’ idea of pricing risk.

- FOMC preview.

- Many financial insiders actually agree with Jeffrey Sachs. Read more

The 6am Cut London

Asian stocks inched up amid optimism for further global economic stimulus measures from the Fed and the ECB this week. The MSCI Asia Pacific index excluding Japan gained 0.2% per cent after rising 2 per cent last week, the most since January 4. Australia’s ASX rose 0.5%, the Kospi fell 0.3% and the Hang Seng moved between gains and losses. Japanese and Chinese stock markets are closed for a holiday. The Fed’s FOMC meets on Wednesday and the ECB’s interest rate decision is due on Thursday. (Financial Times)

The Fed is widely expected to maintain its easing policies on Wednesday, in part because of inflation measures falling below the 2% target. (Wall Street Journal)(BloombergRead more