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’Your new safe havens are in Japan
And that would be not for currency, but property and equities.
If the low yields of Treasuries and Bunds are becoming too tedious for words, take a look at this in the FT:
Industry officials say US investment funds managed by large groups including Blackstone and Fortress Investment,
Eurofright
OK, volumes are seriously low and it’s Labor Day in the States. On the other hand…
Banks bore the brunt at pixel time with the Italian banks again suspended for excessive volatility. Anyone remember
Beware of low-flying bund yields
Did you know? 10-year bund yields just fell to a record low of 2 per cent. As the below chart from German financial consultant Achim Duebel points out — it’s very much a changed trading world:
Eurozone wars, or vigilante vs vigilante
Bond vigilantes — per James Carville — are intimidating things.
And no more so than in Europe. Rising bond yields in the region have managed to force austerity onto places like Greece, and are currently testing political will in Italy.
Phew…
The Dow Jones is back in positive territory for the year, after rising to about 11,669 at pixel time on Wednesday morning, according to Bloomberg. It closed around 11,577 at the end of last year.
“Dangerously close to recession” — earnings edition
Or, earnings recession risk, and still not getting it in equities.
Interesting spot from Morgan Stanley’s European equities analysts, following the bank’s major downgrade of global growth forecasts and its belief that Europe in particular is “dangerously close”
Staring recession in the face
The 6 per cent Kospi drop overnight was a warning…
And a look via Reuters at Europe’s biggest fallers at pixel time shows plenty of blue-chips getting smashed. Financials were bearing the brunt too with Italian banks suspended limit down this morning already.
The Tobin tax lives on – part two
Yesterday the Merkozy plan for a Financial Transaction Tax caused some hefty damage for London-listed exchanges and brokers.
Not a surprise really. The analysts at Adam Smith Institute were hopping mad on Thursday:
The price of JGB-isation
Japanese history lesson by Citi rates strategist Mark Schofield — probably you can guess the subject:
It is tough to just look at the price action in Japan as the policy process was so long and drawn out.
Stock market Richter scale
In the natural world a magnitude 9.0 earthquake equals widespread devastation.
If you equate standard deviations with the Richter scale, it looks like in 2008 we experienced something in the region of a 9.2 event.
Insiders are buying at fastest pace since May 2008
Everyone is selling and yet insiders have stopped offloading their equities and have begun buying instead. Buying at the fastest pace since May 2008, no less.
According to Trimtabs, an investment research firm,
Well played, NY Daily News
Marginally more tasteful than a hooker’s drawers anyway… (H/T Michael Roston)
Official: FTSE 100 in bear market
Low on Tuesday at pixel time of 4855.35 = off 20 per cent from the FTSE 100′s February 2011 high of 6091.33:
MSCI All-World not far off a bear market either. This sucker’s going planetary. Update (0938 UK time):
Asia update: It’s getting grimmer
Firstly, the Chinese official inflation figures for July came in higher than expected: 6.5 per cent compared with an average forecast of 6.3 per cent in Reuters and Dow Jones polls — the highest monthly increase for three years.
Don’t come looking to Asia for relief
Just in case you were thinking of it. The un-rally monkey is here, too:
Except for gold:
Hang Seng opens soon.
Car falls down mineshaft…
…Europe gets convulsed by full-on growth scare. Note all the car-makers and miners in Europe’s biggest fallers in Monday’s sell-off:
Both the CRB and (as Reuters columnist John Kemp notes) GSCI commodities indices are flat in 2011.
Correction
RTRS – U.K.’S FTSE 100 INDEX FALLS 10% FROM FEBRUARY HIGH
Meltdown [updated -- to rollercoaster]
Nine days of stocks falling. Nasdaq — like the S&P 500 — is now negative for the year. Situation in crude also ugly and the 10-year Treasury yield is advancing down to 2.5 per cent:
Update — Nasdaq is back in positive territory at pixel time (the FTSE Eurofirst 300 closed down 2 per cent though.) WTI crude’s hugging $92.
Terry Smith says the world is living in a fantasy
Terry Smith, CEO of Tullett Prebon, has given a remarkably bleak interview to the BBC’s Today programme on Friday.
Though it’s scarily logical.
Here are the key points:
1) He is very pessimistic about the Greek deal — “it doesn’t cut Greece’s debt enough”
Piggy banks
This is timely given the relief rally in the European banking sector.
It’s some back-of-the-envelope calculations from Citigroup on the potential magnitude of underinvestment in Europe’s peripheral banks:
Market stress
A stress test theme in the biggest fallers in Europe at pixel time:
Although shares in Greece’s Atebank (which failed) were up 8.8 per cent. Marvellous!
Correlation is back (with a vengence)
ConvergeEx Group’s Nicholas Colas has noted something “remarkable” this month when it comes to correlation:
…the rally in the S&P 500 of 3.8% over the past four weeks has come with HIGHER industry sector correlations.
Sell in May and go away and come back on…
….. err Independence Day.
That seems to be the view at several big houses, which have either upgraded equities on Monday or urged their clients to buy in the wake of last weeks’ powerful rally.
Deutsche Bank:
Syntagma Square and the price of sovereign equity
You appear to be violently protesting about privatisation and it is scaring markets, says the Eurogroup to the Greek people. Please privatise some more then. About €50bn before 2015 should do it.
A strange kind of bullishness
Nope, no US recession just yet, say Credit Suisse’s Andrew Garthwaite and his global strategy team:
That chart’s from a note doing the rounds on Tuesday, in which Garthwaite and team have gone to overweighting equities again,
Glencore debuts… [updated]
Up 3 per cent from the IPO price of 530p at pixel time and trading on a conditional basis — chart via Reuters:
Apparently they’re hoping for a 5-10 per cent rise on the first day…
Update — Aargh.
Meanwhile in China…
…. another big move in Shanghai B shares overnight:
At one point the index of China’s foreign currency denominated shares was down as much as 7 per cent, before recovering to close 2.8 per cent weaker — but still at a five-month low.
Royal Wedding markets, then and now
And so it begins. The first Royal Wedding investment-related PR research.
It comes from Fidelity Interanational, who say they’ve found some “striking similarities” between the market situation now,