Posts from Wednesday May 8 2013

The Closer


FT markets round-up: “Encouraging macro data releases from China and Germany offered further support to equity bulls as global stock indices climbed to fresh cyclical highs. Chinese export growth picked up to 14.7 per cent in the year to April from 10 per cent in the previous month, while imports rose 16.8 per cent last month from a year earlier. And there was no stopping Wall Street’s march to fresh peaks, as the S&P 500 rose 0.4 per cent – its fifth successive advance. In Tokyo, the Nikkei 225 climbed 0.7 per cent to a five-year high, while the Shanghai Composite index rose 0.5 per cent, its fourth advance in a row. In spite of the renewed strength in equities, highly rated government bonds attracted demand, with the German market helped by a strong auction of five-year debt. The yield on the 10-year German Bund fell 3 basis points to 1.27 per cent, while that on the equivalent US Treasury was 1bp lower at 1.77 per cent after a tepid auction of 10-year paper.” (Financial TimesRead more

Further further reading

For the commute home,

– A call to end the Troika in European crises. Read more

The Ira Sohn Investment Conference diversified strategy fund…

… doesn’t exist, but it would have underperformed the past year:

A Financial Times analysis of last year’s tips shows decidedly mixed results. An investor who followed every top idea from the 12 speakers last year would have made 19 per cent, less than the 22 per cent gain available from a passive index fund tracking the US stock market. Read more

Inflation is falling everywhere

(Charts via Capital Economics.)

The trend is consistent with what appears to be a spring slowdown in global growth. It’s probably worth noting that the wild fluctuations in the headline rate have had only a muted impact on core inflation in the past decade. Just something to keep in mind when you start hearing calls for policy action at the first hint of commodity price gyrations. Read more

From junk bonds to…

We’re going to need a new name for junk bonds. They’re yielding less than 5 per cent for the first time ever (h/t to our own Tracy Alloway):

The 5% yield barrier has proved no match for this Federal Reserve-fueled junk-bond market, which last night reached yet another all-time record-low average yield-to-worst of 4.97%, according to the Barclays US High Yield Index. It marked a new level of market capitulation to central-bank forces as it’s the first time the index has dipped below 5% in its 30-year history (before January the market had never even fallen below 6%). The average price of 107.31 cents on the dollar also marks a record high.

 Read more

Going ex-Sir Alex

(That 1989 pic via the Daily Mail’s Matt Fortune)

Twenty-three years, the Glazers, a JOBS Act-assisted listing in New York — and $3bn of market capitalisation later… Read more

It’s that time of year again: the sun is shining and thousands of CFA candidates are stuck inside

With less than a month to go, several of this blogger’s mental faculties seem to have gone offline. In the space that previously housed “fear of public failure,” new tenants have arrived in the form of after-tax return equations, biases that impact investment decisions, and a multitude of currency hedging strategies.

Ego defenses down, FT Alphaville would like to draw your attention to a brilliant post by the people at the 300 hours. It’s entitled “Sh*t People Say (to CFA candidates)”. Tl;dr version available to the right.

Drumroll… Read more

Volatile copper and the return of the hedgers

Implied copper volatility has risen sharply over the past month, according to Goldman Sachs:

…not that the levels are in any way unprecedented. Read more

Markets Live: Wednesday, 8th May, 2013

Live markets commentary from 

The (early) Lunch Wrap

Mapping billionaires || China’s April trade figures || Japanese exports || RBNZ intervenes in FX markets || Toyota’s net profit triples || New WTO director-general || Second shareholder advisory group calls for Dimon to drop chairman role || Commodities hedge funds continue losing streak || SAP’s big step into the cloud || Data brokers warned on business practices || Portugal’s bond issue || Chinese brokers boost profits with prop trading || Alibaba’s revenues surge || Markets update Read more

Billionaires, mapped

Someone at Bloomberg will be getting it in the neck for not having done this already.

Here’s the concentration of ultra wealth by city, courtesy of Wealth Insight. Click to enlarge. Read more

No-one is impressed by China’s amazing April trade figures

The good news is China’s April trade figures are super high! The bad news is no-one believes them, which is fair enough because just a few days ago the Chinese foreign exchange authority virtually said that the export numbers are not reliable — it plans to crackdown on companies that appeared to be over-invoicing for exports as a way of skirting capital inflow restrictions.

The promise of a crackdown was taken seriously, but it’s believed to be much too late for the April data. Read more

Hopium and Japanese exports

A surging stock market, increased corporate earnings (check out Toyota) and frothy domestic consumer spending are lending some real optimism to Japan’s Abenomics but the main avenue through which hope flows might be narrower than originally thought.

Consider this chart from Citi’s Steven Englander:

 Read more

RBNZ is really not the one

New Zealand’s central bank has done what it threatened to do back in February and intervened directly in the country’s rather high exchange rate via the FX markets.

Governor Graeme Wheeler confirmed the RBNZ had been intervening in a parliamentary hearing this morning. From Read more

Further reading

Elsewhere on Wednesday,

– Does temporary help data help forecast US employment?

– Citi, the Ghost of Lehman, and some lols.

Only three out of five? Read more

The 6am Cut London

Asian stocks rise on central bank optimism, Dow closes at record || China’s trade soars in April but everyone is sceptical || More pressure on Dimon’s dual role ahead of vote || Schauble softens tone on EU banking union || Santander car finance IPO planned || Coty’s IPO roadshow to begin within weeks || Qatar sounded out Bankia over IAG stake || Portugal bond market return went well || Disney revenues beat || Institutions like ETFs more and more  Read more