It’s from Michael Hartnett, of BoA Merrill Lynch, but you probably would have guessed that if asked.
My Big, Fat Greek Dreading (and other risks)
To the upside: concerns over Greece prove misplaced, investors over-hedge Fed risks, passage of TPP boost investor & corporate confidence, tech’s creative disruption = higher PE, lower CPI. To the downside: inflation surprises to upside.
Hartnett doesn’t have much to add specifically on Greece, other than this intriguing chart. Read more
Barclays have had a look at the reaction of various types of investor since markets started to move around with energy in April.
We find that positioning in bonds has been cut back considerably by asset allocation funds, bonds mutual funds and relative value hedge funds. However, hedge funds are overweight equities while equity mutual funds are underweight. In particular, positioning in European equities is once again extremely low. Finally, the surge in USDJPY has coincided with a surge in yen shorts back toward record levels.
Along with its cheapness (or not), one of the main arguments about European stock markets appears to be whether investors own as many stocks as they should do. Or more importantly, will they buy more?
Bank of America Merrill Lynch stirred the pot earlier this month with a fund manager survey which found that allocations to European equities had reached highs last seen in May 2007: Read more
Sadly, FT Alphaville’s New York wing couldn’t make it to this year’s Societe Generale-run bear sighting in London — the bank’s Global Strategy conference starring Albert Edwards and Dylan Grice (who’s off to the buyside).
But we did hear that Albert had called European stocks “unambiguously cheap”. It’s a “once in a generation” buying opportunity, and so on. Is Albert, no longer a equities bear!? Read more
What matters to an investor when they are choosing assets to invest in? Risk-return is the most obvious trade-off to balance. One can narrow down by asset class and sector, dividing up to achieve diversity (or an illusion thereof).
The memory of the latest crisis still being as fresh as it is, many investors are focused on the liquidity component that sits under the broader category of risk. How fast, and how efficiently, can an asset be cashed in? Read more
One of these is not like the others — chart from Nomura fixed income analyst Owen Job, who’s making a point about Asian inflation risk:
If you’re a BP investor who thought twice about catching the falling knife of the firm’s post-Gulf spill shares this summer — well, spare a thought for Norway.
Thanks to the government’s sovereign wealth fund, it’s faced a similar dilemma. Read more
This week’s UBS investment research is brought to you by the number eight. (That’s eight, as in eight o’clock, or eight-ish)
You see, the global financial crisis cycle can, according to UBS, most easily be conveyed to investors around the world from the point of view of a clock face…. Read more