Our weekly investment strategy advice for investors is: To wait until the dust settles， following last week’s shock events, which we wee predicting as an immediate consequence to Ms. Yellen’s ill timed, rate rise.
Category Archives: Weekly Market Commentary & Charts
Morning Market Commentary & Weekly Charts
Economic data this week is expected to confirm slowing economic growth in the US. Data will be sufficient to prompt the Fed to increase the Fed Fund rate for the first time in a decade. As indicated earlier, an increase in the Fed Fund rate will set the stage for a significant recovery in North American equity markets over the next three months.
Morning Market Commentary & Weekly Charts
Economic news this week focuses on November Retail Sales. El Nino type weather through this winter is expected to have a positive impact on Industrial Production and the S&P 500 Index (i.e. an extra 3% gain during El Nino winters). The month of December is the strongest month of the year for North American equity indices. However, strength tends to be concentrated during the last two weeks of the month (i.e. Christmas rally period).
Morning Market Commentary & Weekly Charts
International events will dominate all asset classes, as terrorism in several parts of the world remains a focus. Economic news this week is expected to be slightly positive relative to previous reports. US Thanksgiving holiday is on Thursday. US markets are open on Friday, but trading will be exceptionally thin.
Morning Market Commentary & Weekly Charts
For the past 10 months, the global economy has fared increasingly disappointing. And, we continue to see no encouraging signs for the coming 6 – 9 months for any of the major economies, be it in Asia, Europe or the Americas. Additionally, the most tragic events over the weekend in Paris, and the to be anticipated responses by French and European and allies’ intelligence forces are going to put additional stress into families, societies and consumers. We are anticipating significant government retaliatory and future pre-empting measures, which collectively are surely not going to affect the psychologies of European and foreign consumers and tourists and travelers in a positive way.
Morning Market Commentary & Weekly Charts
The easy money in equity markets and economic sensitive sectors has been made already for the current intermediate up cycle. Q3 reports will have an influence on equity markets again this week. Earnings released to date have been mixed. Beyond the earnings report season, seasonal influences are positive for most equity markets and primary sectors. We advise investors to accumulate seasonally attractive equities and economic sensitive sectors on weakness. Economic data this week focuses on the October employment report on Friday. Consensus is that the report will improve significantly from the exceptionally disappointing in September. Other economic data is expected to be mixed. PMI reports from China and Europe are expected to show a slight improvement over previous reports.
Morning Market Commentary & Weekly Charts
Economic data this week focuses on the FOMC meeting on Wednesday. Consensus is that the FOMC wants to increase the Fed Fund rate to reflect improving economic conditions, but wants more evidence of sustainable growth. We remain convince that there is not enough US intrinsic macro strength, besides global macro weakening, for the FED to raise rates in 2015, and very likely the same for 2016
Morning Market Commentary & Weekly Charts
International news is expected to be relatively quiet this week. Economic data focus in the US this week is on the housing industry.The easy money in equity markets and economic sensitive sectors has been made already for the current intermediate up cycle. Beyond the earnings report season, seasonal influences for equities turn positive. Short and intermediate technical indicators are overbought, but have yet to show signs of rolling over. Preferred strategy is to accumulate seasonally attractive equities and economic sensitive sectors on weakness between now and the end of the month.
Morning Market Commentary & Weekly Charts
Seasonality Trends February and September have historically been the weakest months for the European major indices, and also for the S&P 500, with December as the strongest. May – September is seasonally weaker for returns as compared to upticks seen in October – May. (Look at page 9 – 13 for the major equities benchmark seasonality charts)
Morning Market Commentary & Weekly Charts
Bond proxies like utilities and REITS gained ground, while banks and insurers sold off sharply. It was a bad week for risk assets leading to the bigger question of whether the August prices plunge was a normal correction or something more serious. A bounce off that low was expected, but has now run its course. We are still expecting for markets to retest the summer lows between September and October.
Morning Market Commentary & Weekly Charts
Risks related to international events remain quiet with most focus on China. Volatility in Chinese equity markets remains extreme. Economic news this week (other than the FOMC news on Thursday) is expected to be mixed. FOMC news on Thursday is by far the most important equity market-moving event this week. Polls say that chances of an increase in the Fed Fund rate are 25%. Knee jerk reaction to an increase likely will be negative. However, weakness will provide a buying opportunity.
Morning Market Commentary & Weekly Charts
We continue to advise investors to reduce weightings towards US equities and add aggressively towards equities markets such as Europe, (Germany, France, Netherlands; Spain) and Asia, (Japan, China, India, Vietnam, Indonesia; Philippines) and Latin America (Brazil, Mexico).
Morning Market Commentary & Weekly Charts
Economic news this week is expected to show accelerating US economic growth in Q3, a scenario that likely will raise concerns about timing of the first increase in the Fed Fund rate. International events also could influence equity markets this week Hot spots include China, Russia, Venezuela and selected Middle East countries.
Morning Market Commentary & Weekly Charts
Global equity markets entered into a meltdown phase on Friday, and are undergoing a usual “Sell in May & Go away”-type summer correction, or as we had correctly predicted for 2015 “Sell before May & Go away”. International events could influence equity markets again this week. In Europe and the US, economic news is expected to show a mixed-to-stable economic growth momentum in Q3, a scenario that likely will continue to occupy investors about timing of the first increase in the Fed Fund rate. Seasonal influences for North American and European equity markets
are negative between now and the second week in October. Historically, the
month of September is the weakest month of the year for equity markets.
Short and intermediate technical indicators are trending down and most are oversold.
However, signs of a bottom have yet to appear.
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Morning Market Commentary & Weekly Charts
Chinese inflation grew +1.6% y-o-y in July, up from +1.4% the previous month and
ahead of estimates of +1.5%. Talks between Greece and its international creditors are progressing and hopes are that a third bailout deal could be agreed by 20th August. The outlook for Ireland has been amended to positive from stable by the credit ratings agency Fitch. In the US, data from the Labor Department showed employers added 215,000 jobs in July, missing the consensus forecast of 225,000. Lastly, the global economies are getting relief from Oil prices declining to new lows.
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Morning Market Commentary & Weekly Charts
As we had highlighted in several publications since March 2015, Global GDP Growth is set to slow across a growing number of the world’s largest economies, including the US and China. China’s worries have spread to oil, which is adding to last week’s -5% drop. Global economic growth slowed during June, led by a significant contraction in emerging market output. The global economy is struggling with secular stagnation. Too much fiscal and monetary intervention by governments an their central banks and now with even more of these policies, things will get increasingly worse, not better. For now, we are expecting for Europe to temporarily slow over the next 2 months again, before gaining macro momentum in late September until the end of the year.
Morning Market Commentary & Weekly Charts
We are seeing increased technical evidence that world equity markets and most sectors remain in a corrective phase since mid-May. Short and intermediate technical indicators for most equity markets and sectors are oversold but continue to trend down. The latest survey of investors’ sentiment conducted by sentix has revealed that investors’ feel relief after the turn in the Greek debt drama. From an already high level, sentix Sentiment rises once more by over 10 percentage points and signals a party mood. In contrast, commodities command investors’ respect. Here, fears that the whole sector is in a free fall dominate. Meanwhile, the US$ benefits.
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Morning Market Commentary & Weekly Charts
The EU and Greece have secured debt restructuring and medium-term financing. We are not expecting for “Greece’s no vote” to have a substantial impact for equities, either for bonds or foreign exchange. For both equities and bonds, early signs of a peak in summer volatility have appeared. Now is the time to prepare for seasonal buying opportunities. However, we are seeing increased technical evidence that world equity markets and most sectors remain in a corrective phase since mid-May. Short and intermediate technical indicators for most equity markets and sectors are oversold but continue to trend down.
Morning Market Commentary & Weekly Charts
Valuations for European equities are even more very favorable since the usual sell-off in May began, both on an absolute and on a relative basis. We are expecting for the ECB to make a decision whether to continue providing emergency liquidity assistance (ELA) to Greece at a meeting today. Consequent to the continued geo-political uncertainty in Europe regarding Greece and implications on the rest of the Eurozone, and the US, we do continue to expect for the US Federal Reserve not to raise the Fed Funds rate in 2015.
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Morning Market Commentary & Weekly Charts
European 10-Year government bonds are entering their period of seasonal strength from mid-May until end of August. After the short-term current correction in US, European and Japanese 10-Y
treasuries, which we expect to last for another few days, we are expecting for further yield compression between French, Italian, Portuguese, Spanish 10-Y Government bonds and the German bunds to materialize over the coming 2 – 3 months, and are advising for investors to increase their weightings into Spanish, Italian, Portuguese, Irish 10-Year bonds into the current correction.
Morning Market Commentary & Weekly Charts
Economic focus this week in the US is on the FOMC meeting results to be released on Wednesday. Earnings and sales by S&P 500 companies during the next two quarters remain a concern. Intermediate and technical indicators for most equity markets and sectors remain overbought and trending down. Short-term technical indicators (mainly momentum indicators) for most equity markets and sectors are trending up.
CGI Morning Note & Weekly Charts
“The Federal Reserve should defer raising interest rates until there are greater signs of wage or price inflation than are currently evident”, the International Monetary Fund said today. The IMF now took the GDP growth outlook for the US down to 2.5%. This is still way above our 2015 forecast for the US of 2.2% GDP growth, which we are likely going to revise down in the coming months, if growth does not kick in massively in the current quarter, which we do not see in most of the aggregate data, which
we use in our assumptions.
Morning Market Commentary & Weekly Charts
Total global debt is up 40% since 2007 to US$ 199 TRN according to a study by Mc Kinsey. As a percentage of GDP, debt is now higher in most nations than it was before the crisis of 2008/2009. On average globally, it is 286% now vs. 269% in 2007. Despite the economic rebound since 2009, the debt of households, corporations and especially governments continues to rise. Governments in advanced economies have borrowed heavily to fund bailouts in the crisis and offset demand in the recession. The danger is far larger and more imminent than commonly admitted, as evidenced in the chart below.
Morning Market Commentary & Weekly Charts
If the current slow GDP trend continues, and all signs we see point to this, then the level of earnings for the S&P 500 could be the lowest seen in two years. Q1. We are convinced by the initial data that this year’s Q2 will not be nearly as strong; we maintain our 2015 forecast for +2.2% GDP growth. It is time to make a few portfolio adjustments.
Morning Market Commentary & Weekly Charts
European, US and Japanese equity markets period of seasonal strength is starting now. Hence, why we recommend reducing equity weightings in those markets, and advising investors to wait for better prices for re-allocating money in late summer.
Morning Market Commentary & Weekly Charts
We are still not assuming that the Fed will raise the FED Fund rate this year, so, consequently we see US equity markets may trade down within the “normal historic period of seasonal weakness” from May to September, which has been between -8% and -10%, before then a later FED move on raising rates may circumstantiate a more pronounced correction for equities in the US, and globally, to the tune of a -10% to -15% correction.
Morning Market Commentary & Weekly Charts
International events could have an impact on equity markets this week. The Greek government is close to running out of international currency to pay its debts. Negotiations continue. Discussions about framework of the Iran nuclear agreement continue. Venezuela is close to government breakdown. Terrorist hot spots seem to surface on a regular basis. Economic news this week is expected to show a slight recovery in the US economy in March from the weather related slowdown in February. Focus is on March Housing Starts to be released on Thursday.
Morning Market Commentary & Weekly Charts
Seasonal influences turn strongly positive (possibly due to anticipation of good news released by CEOs at annual meetings when they release “difficult” first quarter results e.g. stock splits, share
buy backs, dividend increases). We are advising investors to accumulate seasonally attractive economically sensitive North American and internationals equities, with the exception of Japan
(due to March 31st being end of fiscal year, and a consequent -8% – 10% historical sell-off affecting Japanese equities from April – July) on weakness this week for a seasonal trade lasting until at least May.
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Morning Market Commentary & Weekly Charts
International events will influence financial markets including the election in Israel and evolution of events in Greece. Economic news globally this week is expected to show a mild improvement relative to comparable reports released at the same time in February. US economic focus this week is on the FOMC meeting and news conference on Wednesday. In the US, stocks drifted lower on Friday as investors jockey for position ahead of this week’s FOMC meeting. FOMC meetings where a quarterly press conference has followed are thought to be the most probable time for the Fed to announce its first rate increase; the next opportunity won’t be until June 17, therefore it is no wonder that investors have been reacting in the equity, currency, and treasury markets much more
significantly than past meetings.
Morning Market Commentary & Weekly Charts
We are not fearful of a Fed rate hike, as that is typically good for stocks given that it means the economy is in good shape and stocks stay on the uptick for 2-3 years after. Plus, worldwide government bond competition will lead more investors to US Treasuries to keep a lid on rates and thus continue to make stocks look attractive by comparison. Our views for 2015 (as for 2014) of the global investment world differ substantially from consensus, and applied by other investors on Friday. Yet when level heads prevail, however, it may take the market 3 – 4 months, as it has
in the past years, we think that more people will come around to our investment views and conclusions. As such, we believe that this is a buyable dip for US 10-Year government bonds with higher highs on the way for 2015. For now, US bonds are still more attractive to investors than US stocks.
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Morning Market Commentary & Weekly Charts
We continue to advise investors to increase allocations towards Japanese equities and towards the $NIKK in particular, as we see the structural changes made by Abe’s government gaining traction and delivering tangible results, and Japanese investors increasing exposure into domestic equities. Historically, the N-225 is in a period of seasonal strength from January until early April (in part due to fiscal year end {March 31st} window dressing related performance).
As we had been expecting, European benchmarks have been outperforming US benchmarks since the beginning of the year, mainly due to the much lower valuations attracting investors (P/E; P/CF; much higher dividend yields) but also benefiting from the accommodative monetary policies enacted by the ECB. We see increasingly technical evidence of the strength in European equity markets set to continue, following historic seasonal strength patterns that run through to the start of May, which is coinciding with the end of annual dividend pay-out period.
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022315 – CGI Morning Market Commentary and Weekly Charts
Strategist CArlo Besenius reviews global equity, fixied income, currency and commodity markets.
Morning Market Commentary & Weekly Charts
Equities globally rallied on today, boosted by news that Greece has reached a deal to secure a loan extension with its creditors. The German DAX 30 and the Dow Jones Industrial Average charted a new all-time closing high, following the S&P 500 Index and Russell 2000 Index, which charted all-time highs earlier in the week.
Morning Market Commentary & Weekly Charts
Treasury bond prices are vulnerable to further technically corrective declines, particularly given that we are in the midst of the period of seasonal weakness for the asset class; negative seasonal tendencies persist through April. However, over the past 30 years, each time the long-term treasury bond has met up with this rising level of resistance, stocks have generally performed well in the months and years that have followed. However, we continue to advise investors to trade bonds according to their long-term trend channel dynamics. We see nothing fundamentally having changed over the past 2 months for that trend to change.
020215: CGI Morning Market Commentary and Weekly Charts
Global Strategist Carlo Besenius reviews global equity, fixed income, commodity, and currency markets.
Morning Market Commentary & Weekly Charts
Stocks are trading at extremely high valuations against a backdrop of slowing economic growth and rising global financial and geopolitical instability. Market cap to GDP ratio is currently at twice its historical average. The Shiller Cyclically Adjusted P/E Ratio (CAPE) is at 1.7x its historical average. The forward P/E ratio of the S&P 500 is currently 16x versus an historical average of 14x .
Morning Market Commentary & Weekly Charts
We believe that the US$ impact is not at all factored in by sell side analysts, and will make for a nasty surprise in the coming quarters in 2015. The price of the long-term bond continues to bump against trend line resistance that has spanned the last 30-years. Should this trend line hold, the long-term treasury bond may succumb to selling pressures following the Fed announcement. International market ETFs including Emerging Markets and European equity market led world equity markets on the upside last week, and we are expecting for that trend to continue over the coming months.
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Morning Market Commentary & Weekly Charts
North American equity markets entered into a short-term corrective phase on December 29th. The corrective phase is expected to continue until end of the fourth quarter earnings report period (i.e. late January/early February). Thereafter, North American equity markets are expected to resume an intermediate uptrend as they normally do during a US Presidential Pre-election
year. We are expecting for equity markets around the world to be exceptionally volatile this week due to a series of economic/political news events.
011215 – CGI Global Market Strategy and Weekly Charts
011215 CGI Morning Market Commentary & Weekly Charts
Global Strategist Carlo Besenius reviews global equity, fixed income, commodity and currency markets, with commentary on Global market Strategy
Morning Market Commentary & Weekly Charts
US Equities are extremely expensive compared to its global peers, and have been overweighed & overheld for a very long time by foreign investors. The fact that foreign ownership of US stocks is at an all-time high, totaling 16% in 2014, the highest in 69 years since such records have been kept, is of additional concern. For 2015, we are advising US investors to increase their foreign holdings, and reduce US equities exposure.
010515 – CGI Morning Market Commentary and Weekly Charts
010515 CGI Morning Market Commentary & Weekly Charts
Global Strategist Carlo Besenius reviews global equity, fixed income, currency and commodity markets.
122214 – CGI Global Markets Strategy and Weekly
Global Strategist Carlo Besenius comments on global equity, fixed income, currency and commodity markets.
121614 – CGI Global Markets Strategy and Weekly Charts
Global Strategist Carlo Besenius comments on global equity, commodity, currency and fixed income markets.
120814 – CGI Morning Market Commentary and Weekly Charts
Global Strategist Carlo Besenius commentary on global equity, currency, fixed income and commodity markets.
120114 – CGI Morning Market Commentary and Weekly Charts
120114 CGI Morning Market Commentary & Weekly Charts
Global Strategist Carlo Besenius’ weekly review on global equity, commodity, fixed income and currency markets.
112414 – CGI Morning Market Commentary and Weekly Charts
Global Strategist Carlo Besenius’ weekly review of equity markets, fixed income, commodity, and currency markets
111714 – CGI Morning Market Commentary and Weekly Charts
Strategist Carlo Besenius reviews the global equity, fixed income, currency and commodity markets. Sectors which seasonally outperform during this period include: Technology, Consumer Discretionary, Industrials and Materials.
101414 – CGI Weekly Market Commentary and Technical View: WTI risk to $78
Strategist Carlo Besenius presents his weekly technical view of equity markets, sectors, currencies, commodities, and rates.
100614 _ CGI Weekly Market Commentary: Buy Euro, Sell $, Buy Bovespa, Buy Industrials
100614 CGI Morning Market Commentary & Weekly Charts
Strategist Carlo Besenius provides his weekly outlook for equity markets and sectors, commodities, and currencies.
09222014: CGI Weekly Market Commentary and Technical Outlook
Global Strategist Carlo Besenius provides asset allocation views for the near and medium term.
08212014 – CGI Global Strategy Update – Prelude to Jackson Hole
CGI 140821 Strategy Update – Prelude to Jackson Hole
Strategist Steve Gluckstein discusses the outlook for US rates and monetary policy.
08182014 – CGI Morning Market Commentary and Weekly Chart
Global Strategist Carlo Besenius discusses the outlook for the Euro and European Equity Markets.The recent under-performance of equities in the Eurozone relative to those in the US has been more pronounced than might have been expected based on the size of the fall in the Euro against the US$. Admittedly, we forecast the Euro to strengthen to about EUR/US$ 1.3750 from the current EUR/US$ 1.34 levels. But we do not think this will preclude Eurozone equities from recovering lost ground.
072114 – CGI Weekly Market Charts – BRICs to continue outperforming
072114 CGI Morning Market Commentary & Weekly Charts BRIC equities continue to outperform
Carlo Besenius provides a weekly market overview of Equity Markets, Rates, Currencies, and Commodities.
071414 – CGI Weekly Market Commentary: Baltic Dry, Yen, Sector Seasonality
Carlo Besenius discusses global asset allocation strategies – BDI, Yen, Sector Seasonality, EAFE vs US.
062314 – CGI Morning Market Commentary and Weekly Charts
062314 CGI Morning Market Commentary & Weekly Charts
Carlo Besenius provides his weekly strategy outlook and technical review of markets, commodities, and currencies.
061614 – CGI Weekly Technical Review
061614 CGI Morning Market Commentary & Weekly Charts Global Strategist Carlo Besenius reviews current markets, sectors, currencies and commodities in his weekly technical review and commentary.
060914 – CGI Morning Market Views: Buy 10Y EuroBonds, Sell $, Sell US Equities
Carlo Besenius analyzes the European Bond markets and sees further support for periphery bonds in the coming months. Equity markets have become parabolic, with downside risks increasing greatly.
Morning Market Commentary & Weekly Charts – EAFE cont. to outperform US equities, Oil, Commodities,
Short and intermediate technical indicators for most equity markets and sectors remain overbought. Look for a renewed seasonal buying opportunity in economic sensitive sectors on weakness in the month of January. We continue to recommend to add towards sectors which continue to show seasonal strength such as… Continue reading
Morning Market Commentary – European Stocks to continue to outperform
European stocks gained after global regulators eased the leverage-ratio rule for banks. The Basel Committee on Banking Supervision diluted a planned debt limit for banks following a meeting in Switzerland yesterday. The committee said the leverage ratio, which penalizes low-risk financial activities and curtails lending, was adjusted after thoroughly analyzing bank data. Banking stocks posted the second-biggest gain on the Stoxx 600 after the news. Deutsche Bank and Barclays were among the big risers. We like the EURO STOXX BANKS Index at current levels, and are advising our clients to add towards European Banking stocks. Continue reading
Morning Market Commentary & Weekly Stocks – Global Stocks enter positive seasonal period, German Stocks to outperform
German Equities are at an all-time high. The DAX 30 Index is +20% ytd, after +29% in 2012. Our CGI Global 50 includes 12 German stocks, of which all are in positive territory for 2013.
We think so, particularly when looking at the anemic bond yields that European, US and Japanese government and corporate bonds are offering. We are seeing but one way for German investors, namely to increase equities investments, albeit late, however not too late to the plate, and invest now in their own equity market. Continue reading
Morning Market Commentary & Weekly Charts – Energy, Gold, Precious Metals to improve
Our recommended investment strategy is to maintain a healthy cash position for possible entry into the favorable seasonal trade in October. Seasonally, equity markets hold up rather well during the first half of September, posting gains of 1.3% on average over the last 20 years. The weakest three weeks of the year occurs during the last two weeks of September and the first week of October. Declines over this three-week period reach 2.5%, on average, based on the same 20-year time-span. Contradicting this calendar tendency is the “Sell Rosh Hashanah and Buy Yom Kippur” tendency, which runs through to this Friday. Loss for the S&P 500 between these key dates on the Jewish calendar averages 1.25%. Whichever scenario plays out, caution is warranted as seasonal volatility fuels erratic returns over the weeks ahead.
Morning Market Commentary & Weekly Charts
Looking forward to the next couple of months, equity markets are entering the weakest period of the year. Over the last 20 years, the S&P 500 index has averaged a loss of 0.20% for the month of September; positive results were realized in only 11 of the past 20 periods. The weak return in September ties it for the third weakest month of the year, behind February and August. The month that September ties with is June as investor reallocate portfolios at the end of the second quarter, just ahead of earnings season at the start of July. A similar reason is culprit for lackluster returns in September as the third quarter concludes. The weakest stretch of the entire year is a three week period that spans the last two weeks of September and the first week of October as investors buy and sell positions ahead of the volatile and uncertain third quarter reporting season. Continue reading
Morning Market Commentary & Weekly Charts – Summer breeze to continue for global equities?
Equity markets have just completed a traditional period of strength from the last week in June to the third week in July. Since the low on June 24th, gains have been extraordinary. The S&P 500 Index gained 8.44%, the Dow Jones Industrial Average improved 6.82% and the TSX Composite Index advanced 5.76%. It’s time to take trading profits in equity index based investments. Sectors with traditional positive seasonality are the exceptions. Gold, gold equities, biotech and utilities are bucking the trend by moving higher as well as outperforming equity indices.
Morning Market Commentary & Weekly Charts – “Tough labor” Day ahead for investors
US equity markets reached an intermediate peak on August 2nd. Short-term momentum indicators for equity markets may rebound early this week from deeply oversold levels, but seasonal trends are expected to re-assert themselves in September. We advise our clients to maintain high cash positions for possible entry into favorable seasonal trades into increasing downside volatility between now and October. We advise our clients to continue to hold/accumulate precious metal and precious metal equity ETFs. They continue to move contrary to equity market trends.
Morning Market Commentary & Weekly Charts – What’s next for the remainder of the Summer?
US equities to continue to underperform, Asia, Emerging markets & European equity indices to outperform, Gold & Metals & mining to outperform, US$ to weaken & correct further.
Morning Market Commentary – Baltic Dry Index Observations
US equities to continue to correct downwards, MSCI World, Asian & European Equities to outperform, Gold & Precious Metals to continue to improve & outperform, Global Government Bond Yields to continue to rise.
Morning Market Commentary & Weekly Charts – Summer Doldrums for global equities
Emerging Equities & Europe to outperform US equities, Gold, Metals, and Commodities to outperform.
Morning Market Commentary & Weekly Charts – Global equity observations for August
Four major factors in Europe are improving: Euro GDP has bottomed, Consumer spending has bottomed (car sales show signs of improvement, Manufacturing starts to increase and Central Bank policy is becoming more stimulating. Hence, why we are recommending for our clients to increase weightings in European Equities.
Morning Market Commentary & Weekly Charts – Summer breeze to continue for global equities?
It’s time to take trading profits in equity index based investments. Sectors with traditional positive seasonality are the exceptions. Gold, gold equities, biotech and utilities are bucking the trend by moving higher as well as outperforming equity indices.
We continue recommending to “buy” EADS shares at the current price of EUR 44.34, and still continue to prefer EADS over Boeing, as we have for the past 6 years, since inclusion of EADS in the CGI Global 50. Our 12 months price target for EADS shares is EUR 54.
Morning Market Commentary & Weekly Charts – Facts & Reality
Facts and Reality about currencies and trade deficits and current account deficits.
Morning Market Commentary & Weekly Charts
We are advising our clients to “sell/short” the US$ index against most major currencies at current levels of ($USD 82.59).
Morning Market Commentary Sell in May, AAPL reiterating sell/short; Gold & Silver to go higher
The period for seasonal strength in equity markets concludes on May 5th, after which a trendless market is the average. Economic events over the next few days, including central bank announcements and employment report releases, are likely to set the tone for the month ahead. The technical backdrop of equity markets has shown deterioration over recent months, particularly pertaining to momentum, and the likelihood is increasing that a market correction is near based on recent warning signals that have become prominent in April. Stocks have been up 6 months in a row. And April finished at a historic high of 1597.57.
Each May is different. And there have been some very profitable summers in years past. So it’s never wise to just take this saying at face value and truly walk away from the markets. The resilience of stocks to be pressing all-time highs after 3 straight weeks of soft economic reports (including a scary showing for Chicago PMI in contraction territory) is making it hard to say what exactly would make stocks go lower at this stage. Meaning that investors seem quite comfortable with the ebb and flow of muddle through economic growth. And as long as the Fed is on the side of investors, with all that QE, then there is no reason to walk away?
Morning Market Commentary & weekly charts SPX rolling over
Weekly Investment Conclusion: We are advising clients to use the temporary seasonal weakness to increase holdings towards select equity strategies, as equities are the better value asset class, versus cash, bonds, alternatives, combined with the lowest downside risk.
For our clients with a shorter term investment perspective, we recommend to take profits in equities sectors with seasonal weakness, as we see evidence of equity markets rolling over temporarily, and for bonds to enter their period of seasonal strength until mid summer.
Morning Market Commentary & Weekly Charts – Global Equities running out of steam
This past weekend’s meeting of the G-20 has been described by some as highlighting that there is only minimal coordination between the main economic powers. Japan was not singled out for reprobation. The G-20 and the BoJ have made it very clear to the financial community that Japan has the green light regarding continued quantitative easing and resulting in continued Yen weakness. We expect the US$/Yen 100 level will fall soon, and moving towards our 2013 price target in coming months. Short term, we expect the US$ to run into resistance at the psychologically important US$/Yen 100 level, which it hasn’t crossed since April 2009.
Morning Market Commentary & Weekly Charts – PROFIT TAKING in global equities; Commodities
Well, the profit taking has started. Despite continued resilience in the US equity markets, benchmarks around the globe have begun to trend lower, showing a series of lower-lows and lower-highs, a characteristic of a negative trend.
“Sell in May” has come early for equity markets in Canada, Germany, France, United Kingdom, and China. Negative pressures in equity benchmarks around the globe combined with significant declines in commodity markets is resulting in an increased probability that a top in United States equity markets is near, if not already realized. Trend line support for the S&P 500 is presently just above 1550, making this a logical point to trigger the conclusion to the seasonally favourable period for the market, which ends on May 5th, on average.
Morning Market Commentary & Weekly charts
“Sell in May & Go Away” or is it “Sell in April”, like it was in 2012?
Japanese companies see the continued weakening of the Yen as an opportunity to increase investments abroad, and are buying foreign assets. European companies are generating more than 50% of their earnings from outside of the Eurozone, and for the Eurostoxx 600, about 30% of earnings are coming from emerging markets. Hence why we see better buying opportunities in Japanese and European stocks.
Morning Market Commentary & Weekly Charts
Cyprus deal done. Stocks advanced strongly on Monday morning after 11th-hour talks to save Cyprus from default resulted in a last-minute bailout deal with the Troika. Following a meeting of Eurozone finance ministers that lasted almost 12 hours, Cyprus agreed to a EUR 10 bn aid package that doesn’t include a controversial across-the-board bank-account tax but involves forcing big losses on uninsured depositors.
Cyprus is about as economically significant as the German city-state of Bremen, and yet the attention of citizens and politicians alike was focused on the debt-ridden country on the continent’s periphery last week and through the weekend. Since Cypriot parliament rejected the initial bailout plan, one crisis meeting followed the next in Berlin, Frankfurt and Brussels as concepts were presented, revised, rejected and resubmitted. In the end, the European Central Bank (ECB) imposed an ultimatum on the country. The message from ECB President Mario Draghi was that either Cyprus agrees to the bailout conditions or it could be the first member of the Eurozone to declare a national bankruptcy.
Morning Market Commentary & Weekly Charts – Global Equity Markets
Weekly Investment Conclusion:
Strength in US equity markets last week triggered by surprising strength in economic indicators was unexpected. US equity markets quickly regained short term momentum. Positive psychology related to the Dow Industrials reaching all-time highs also helped. This week, economic data is expected to be positive again and the S&P 500 Index (a more significant US equity index) will have a chance of reaching its all-time high at 1,576.09, despite short and intermediate technical indicators once again have returned to overbought levels.
Selected sectors with favorable seasonality at this time of year remain attractive purchases candidates on weakness. The trigger could be a rollover of the US$ from a highly overbought level. When it happens, and we do think this will happen within days, commodity stocks including metals & mining, energy, coal and steel stocks will come alive. All recorded exceptional gains on Thursday and Friday.
Morning Market Commentary & Weekly Charts – Currency Wars Musings
We still see the current US$ temporary strength as a good opportunity for investors to increase equity holding in international companies. The current temporary strength of the US$ and its inverse impact on global commodities prices as a good opportunity for US institutional investors to increase their weightings in foreign equities and commodities, and particularly to those benefiting from a seasonality point of strength, we advise investors to add towards the following equity markets and sectors: …..
Morning Market Commentary & Weekly Charts
History shows that US equity markets in the year after a Presidential election move higher into the first week in February in conjunction with fourth quarter reports, weaken thereafter until the end of March and moves higher thereafter. Given political events scheduled in the US during the next two months, history is repeating. Continue reading
Morning Market Commentary & Weekly Charts
Global Equity Markets, what next? Overheated? Or much more to go? While funds continue to flow into stocks, as we were forecasting since mid-December, money continues to move away from the bond market; particularly treasuries that have seen yields spike almost 400 basis points since the start of December.
Treasury yields have broken firmly above a long-term declining trend line that had remained intact for almost two years, diverging from the positive trend of equity markets over the same period.
Morning Market Commentary & Weekly Charts
Two unexpected events last week triggered a surprising upside move in equity markets last week, China’s $150 billion fiscal stimulus package announced on Thursday night and the ADP report showing a gain in US private employment in August instead of a loss. Gains were muted on Friday when the less than expected US employment report was released.
Morning Market Commentary & Weekly Charts
End of Q3
Now will there be a final spurt in Q4 2012?
We had the privilege to visit with some of Germany’s top corporate managements last week in Munich, plus get a glimpse at the Oktoberfest, where we were on a fact-finding mission with clients to assess the state of mind of the German corporate executives and that of the overall German consumer.
Morning Market Commentary & Weekly Charts – No Inflation?
Inflation adjusted gasoline prices in the US have soared in the past four months. The inflation-adjusted price for a gallon of unleaded is up over $0.50 since the end of June and has rarely been higher than current levels.
- Middle East crises are often associated with major swings in the price of gasoline.
- Gasoline price spikes also have often occurred prior to an economic downturn.
Middle East instability (e.g. Arab spring) and Middle East tensions (e.g. Iran) are ongoing. Continue reading
Morning Market Commentary & Weekly Charts
The Federal Reserve’s decision on Thursday to proceed with QE3 + was not a surprise to us, albeit for most of the market participants, and equity markets responded accordingly. Volume gains on Thursday and Friday were impressive. Additional follow through early this week is likely. However, news from the Fed came at a time when equity markets already were significantly overbought based on short and intermediate technical indicators. Technical action on Friday was an interesting “tell”. Equity markets moved higher at the open, dropped close to break-even just before the close and closed strong on end-of-day buy orders. Not an impressive follow through!
The weakest three week period of the year starts this week. The period is related to pre-third quarter earnings report news. The next three-week period historically is when negative guidance is most frequently released by corporations and when analysts reduce estimates and recommendations. The frequency of negative guidance since release of second quarter results has been unusually high this year. We see evidence of history to repeat during the next three weeks.
Morning Market Commentary & Weekly Charts – Russia’s “Nukes of Hazard”
Weekly Investment Conclusion:
Downside risk exceeds upside potential in equity markets during the next six weeks.The breakout by the S&P 500 Index last week implies that depth of the downside risk is less than previous. Selected seasonal trades continue on the upside (gold, energy, software) and downside (transportation). However, many of these seasonal trades reach the end of their period of seasonal strength this month. September is a month of transition.
Morning Market Commentary & Weekly Charts
So Mr. Bernanke, Ready for a run down Corbett’s Couloir?
Following on from last week’s peak of the Federal Reserve Chairman Ben Bernanke’s closely watched speech at the Jackson Hole symposium, markets widely believe that further quantitative easing (QE) is now on the cards for the central bank’s next meeting on September 13th and 14th.