In a shock move this morning, the Swiss central bank scrapped its minimum exchange rate of 1.20 Swiss francs a Euro, which was introduced four years ago
to protect Switzerland from the Eurozone debt crisis. The Eurozone’s trade surplus widened in November as exports rose, indicating that a weakening Euro is starting to provide a boost to the economy. The European Union’s statistics agency today announced the Eurozone recorded a surplus in its trade in goods with the rest of the world of EUR20 bn ($23.6 bn), up from EUR16.5 bn in the same month of 2013.
011415 – CGI Global Automotive Demand Atlas
01 14 2015 CGI – GADA – January 2015 edition
Automotive Analyst Sabine Blumel reviews global automotive demand by country.
011315: CGI Global Strategy Update: 2015 Market Musings
01135- CGI Strategy Update- 2015 Market Musings
Global Strategist Steve Gluckstein provides his outlook for global markets and sectors in 2015.
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.
Morning Market Commentary & Weekly Charts: 2014 Final Words
The yield on the benchmark 10-year Treasury bond ended the year at 2.17%, exactly at our 2014 target price, and down substantially from where it started the year at 3.03%. Despite the fact that the Fed ended its quantitative easing program in October 2014, we do see the long end of the Treasury curve likely to move lower in 2015 on the back of weak global growth, and the fact that “the Fed is boxed in” consequently, and eventually will become more accommodative one more time.
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 November Global Automotive Demand Atlas
11 24 2014 CGI – GADA – November edition
Senior Automotive Analyst Sabine Blumel analyzes Global Automotive Demand.
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.
Global Automotive Demand Atlas
10 20 2014 CGI – GADA – October edition
Automotive Analyst Sabine Blumel analyzes current demand in the global automotive industry.
Daimler 3Q14 Results Commentary
10 28 2014 CGI – Daimler – 3Q14A results commen
Automotive Analyst Sabine Blumel’s comments on Daimler’s Q3 results.
All that Glitters Is Not Gold: It’s Palladium
CGI 102814 Strategy Update- Palladium in focus
Global Strategist Steve Gluckstein outlines his positive outlook on Palladium over the next 12 months
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 $, Buy Bovespa, Buy Industrials
100614 CGI Morning Market Commentary & Weekly Charts
Strategist Carlo Besenius provides his weekly outlook for equity markets and sectors, commodities, and currencies.
09222014: CGI Weekly Market Commentary and Technical Outlook
Global Strategist Carlo Besenius provides asset allocation views for the near and medium term.
091114 – CGI Morning Market Commentary – US Dollar Temporarily Overvalued
091114 CGI Morning Market Commentary Charts
Carlo Besenius’ views on the global markets – equities, fixed income, and currency.
080114 – CGI Global Automotive Demand Atlas August/September
09 01 2014 CGI – GADA – August-September edition
Automotive Analyst Sabine Blumel analyzes global automotive demand trends.
08212014 – CGI Global Strategy Update – Prelude to Jackson Hole
CGI 140821 Strategy Update – Prelude to Jackson Hole
Strategist Steve Gluckstein discusses the outlook for US rates and monetary policy.
08182014 – CGI Morning Market Commentary and Weekly Chart
Global Strategist Carlo Besenius discusses the outlook for the Euro and European Equity Markets.The recent under-performance of equities in the Eurozone relative to those in the US has been more pronounced than might have been expected based on the size of the fall in the Euro against the US$. 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.
080114 – CGI Morning Market Commentary – Buy WTI, Dax, Eur
080114 CGI Morning Market Commentary Buy $WTI, Buy $DAX, Buy $XEU
Global Strategist Carlo Besenius highlights current asset allocation recommendations.
072814 – Daimler (Eur 63) – 2Q Results, Buy – PT Eur 80
07 28 2014 CGI – Daimler – 2Q14A results comment
Auto Analyst Sabine Blumel discusses Daimler Q2 results and Buy recommendation
072814 – Ford ($17.62)Q2 Results – Buy, PT $22
07 28 2014 CGI – Ford – 2Q14A results comment
Auto Analyst Sabine Blumel discusses Ford Q2 results.
072114 – CGI China Strategy Update – Follow the Leader
Strategist Steve Gluckstein reiterates his positive views on China’s economic outlook.
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.
063014 – CGI Global Automotive Demand Atlas – June
06 30 2014 CGI – GADA – June 2014 edition
Automotive Analyst Sabine Blumel’s analysis of Global Automotive Demand.
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.
062014 CGI Morning Market Commentary – Gold
Global Strategist Carlo Besenius reiterates his positive stance on gold, both the commodity and mining stocks. Since early June, Gold is up 6%, and Gold Mining Stocks are up 16%. Next resistance for Gold is at 1331.40. CGI’s outlook for potential policy actions in Abe’s 3rd arrow are also included.
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.
061114 – Global Automotive Demand – Emerging Markets
06 11 2014 CGI – GADA – Emerging Markets – June 2014
Auto Analyst Sabine Blumel reviews the outlook for automotive demand in the Emerging Markets.
060914 – CGI Morning Market Views: Buy 10Y EuroBonds, Sell $, Sell US Equities
Carlo Besenius analyzes the European Bond markets and sees further support for periphery bonds in the coming months. Equity markets have become parabolic, with downside risks increasing greatly.
060514 – CGI Morning Market Commentary: USD/EUR, Euro rates
Global Strategist Carlo Besenius looks at the Euro/$USD rate in light of the recent moves by the ECB to lower rates, and the dynamics of the US trade deficit. We keep our year end forecast of $1.42. Equity indices are entering their period of seasonal weakness.
140604 – The Perfect Storm
Global Strategist Steve Gluckstein takes an in depth look at the debate over inflation has become increasingly polarized—perhaps due
partially to the distortive impact of accommodative monetary policy by the world’s leading central banks during the past five years. Nonetheless, when looking out over the distant horizon 24-30 months from now we see several factors coalescing into a
“perfect storm” that will likely propel inflation materially higher and cause significant challenges for central bank monetary policy three to five years from now.Rising deficits, resurgent wage growth and rising money velocity should all re-emerge as potent inflationary economic forces.
060214 – CGI Global Markets Commentary and Weekly Charts
Carlo Besenius explains his current views on the global markets. Equity markets are entering a period of increased volatility during the summer months, as investors reduce exposure in favor of bonds. The compression of yields is a global phenomenon. Expect to see further compression of European periphery yields in the coming months
053014 – European Elections – Plus ca Change
053014 – CGI European Strategy- Plus ca change
Trish Twining reviews the impact of the European Parliamentary Elections across Europe. While the Euro-skeptics won 143 streets, the headlines imply greater impact than reality at present. Fragmentation between parties is significant, largely playing to their home audience. More significant is the need for both individual Member States and the EU to focus on jobs growth and restarting the economic engine. Infrastructure initiatives already in process by the European Commission and the European Investment Bank (EIB) to stimulate public private partnerships (PPP’s) may provide interesting opportunities.
053014 – CGI Global Automotive Demand Atlas, May
05 30 2014 CGI – GADA – May 2014 edition
Analyst Sabine Blumel reviews Global Automotive Demand by major market globally. SAAR revised down slightly due to the worsening outlook in a number of emerging markets,the FY14E forecast is a 3.5% increase to some 87.3m; this implies a deceleration from last year’s restated +3.9% growth to 84.36m.
052214 – CGI Seasonality Analysis
We review the seasonality factors impacting global debt and equity markets over the summer. Equities are expected to see a period of weakness, with good probability for an increase in volatility mid summer.
050814 – CGI Market Commentary: Breakdowns!: Sell NASDAQ, $USD, Buy EURO
050814 CGI Morning Market Commentary EURO testing critical resistance, US$ retesting support
Global Strategist Carlo Besenius reviews market technical patterns. For the past month we have voiced concerns over the market, and feel that the markets are set for a correction over the summer months. See our full report for Index and Sector recommendations.
050714 – BMW 1Q14 Results Commentary – BUY
05 06 2014 CGI – BMW – 1Q14A results comment
1Q14A group results in line with 1Q14E. Strong result at Automotive segment, despite front-loaded costs. We keep FY14E estimates virtually unchanged and confirm those for 2015E-16E. Our 2016E EPS is EUR 10.34 and our YE14 target price of EUR 110.00 implies a 25% upside potential for BMW shares.
The short term technical outlook for BMW shares is neutral/negative. The risks of BMW shares not holding support at that level are high, and we expect for BMW shares to test the next support level at the 200-day moving average at EUR 82. The long term positive outlook for BMW shares remains positive.
0505 2014 -BMW (EUR 89.10) – BUY 2014E-16E outlook – EPS growth at CAGR of 8.5%
BMW (EUR 89.10) – BUY
2014E-16E outlook – EPS growth at CAGR of 8.5%
Our 2016E EPS is EUR 10.34; our YE14 target price of EUR 110.00 implies a 24% upside potential for BMW shares
05052015 – BMW 1Q 2014 Results Preview
05 05 2014 CGI – BMW – 1Q14E preview
Automotive Analyst Sabine Blumel presents 1Q 2014 Results preview.
Our 1Q14E EBIT estimates are EUR 1.67bn/9.7% for the Automotive segment and EUR 2.10bn/11.2% for the group.
Our 2016E EPS is EUR 10.34 and our YE14 target price of EUR 110.00 implies a 24% upside potential for BMW shares.
1Q14E group: we expect that a 6.9% yoy increase in revenue to EUR 18.76bn generated yoy increases of 3.0% in EBIT to EUR 2.10bn/11.2% and 5.0% in net profit to EUR 1.37bn. We thus expect that BMW management will confirm their bullish guidance for FY14 of a ‘significant increase in its group’s pre-tax profit’, driven by ‘a significant increase in sales’.
At the dominant Automotive segment, we expect that in 1Q14E a reported a 8.7% increase in retail sales to 487.0k units (that include 108.0k sales in China, 62.5k of which were sold by a JV) generated a 9.3% increase in PBT to EUR 1.66bn/9.6%. We expect that a reported 4.8% yoy increase in fully consolidated retail sales to 424.5k units (incl. 45.5k cars imported to China) generated increases of 8.0% in revenue to EUR 17.18bn and of 5.3% in EBIT to EUR Continue reading
0501 2014 – Daimler 1Q14 Results Commentary
05 01 2014 CGI – Daimler – 1Q14 results review
Automotive Analyst Sabine Blumel comments on Daimler 1q 2014 results: 1Q14A EBIT in line with 1Q14E: EUR 2.07bn for the group & EUR 1.18bn at M-B Cars. Some disappointment: at M-B Cars, a lower than expected 7.0% margin and at Trucks, lower than expected EBIT (EUR 0.35bn/4.9%) due to country-mix. We fine-tuned our FY14E EPS to a 19% increase to EUR 5.93. Our YE14 TP of EUR 82.00 implies a 24% upside potential for Daimler shares.
050114 – CGI US Strategy Update
Strategist Steve Gluckstein sees 1Q GDP as an anomaly, and believes the resumption of a long awaited upturn in capital spending is already underway.
050114 – CGI Morning Market Commentary: Euro and USD, Commodities
050114 CGI Morning Market Commentary EURO & $USD, Commodities
Global Strategist Carlo Besenius sees the Euro continuing to strengthen over the coming months, with concomitant pressure on the USD. The Euro is 56% of the $USD index. Commodities prices will benefit from this move.
050114 – Seasonality Trends and Mid Year Allocation Strategies
050114 CGI Seasonality of various Asset Classes and Mid Year Strategies
Short and intermediate technical indicators for most global markets and sectors are overbought and rolling over. We are advising investors to use any temporary market strength is an opportunity to take profits, keeping seasonal trends of the various shown equity indices, bond indices and currency indices in mind. We believe that it would be prudent for investors to reduce exposure in US & European equity markets in economically sensitive sectors at current prices.
We have been focusing on various type of alpha generating strategies since our early days; however, one of the most effective strategies we constantly attempt to refine and adapt to maximize outperformance is the “seasonality affect” of various asset categories.Although there are defined seasonal trends for equities, bonds, currencies, and commodities, they are not directly correlated, nor inversely correlated. It takes more detailed analysis in order to get a better understanding on the “why’s and why not’s” of seasonality factors for each asset class.
We welcome the opportunity to work with you directly to create appropriate portfolio hedging strategies to take advantage of these seasonality trends.
042814 – Ford Results Quick Response
Quick Response: 1Q14 EPS miss blamed on ‘accumulation of unusual factors’ that understate the underlying strength of business. Confirmation of FY14 guidance implies 1) stronger 2-4Q14 results; 2) upgrade for FY14 Asia & Pacific and Europe; downgrade for FY14 South America outlook.
We consider management’s FY14 guidance and the underlying market assumptions realistic and also conservative enough for the company to surprise on the upside in the next quarters. More importantly, we are of the opinion that Ford is well on track implementing its global growth strategy and should be able to resume earnings growth from 2015 onwards. We consider Ford a ‘fundamental’ buy with a medium-term target price of USD 20, but short-term technical headwinds for the sector, inclusively Ford should give investors renewed opportunity to buy into Ford at lower prices. (See p.3.)
042814 – CGI Morning Market Commentary: Alstom/GE or Alstom/Siemens?
We see better medium to long-term value creation in the Siemens proposal than in the GE possibility, both for Alstom, and also for either of the other two possible winners. This proposal is an unique opportunity to create two strong European Champions with global leadership aspiration in the fields of energy and transport, providing for a compelling industrial story while protecting the interests of both groups’ shareholders, employees, respective home countries France and Germany and ultimately the European interests as well. We do believe that Siemens is the most suited partner for Alstom, and clearly the favorite over GE, if any, however, there will be serious “antitrust” issues affecting any potential transaction, and we are advising for investors to rather focus on Siemens as an investment opportunity, rather than on any potential merger benefits, as we see little likelihood of neither takeover bids materializing.
-42514 – CGI Market Commentary: Eurozone Deflation Fears Overdone, US Markets Peak, AAPL fails to lift $NDX and $
Numerous Strategists and news commentaries have focused on the risk of deflation in the Eurozone. CGI’s Global Strategist Carlo Besenius discusses why deflation does not always lead to lower growth and employment. The ECB has numerous tools left to stimulate prices should they choose to in the coming months. As CGI has stated for several weeks, the equity markets have peaked. AAPL’s rise of 8% yesterday failed to lift the NASDAQ in spite of the company’s 7.5% weighting in the index. Take profits and reduce equity market weightings, particularly in the US.
042514 CGI Market Commentary- Eurozone deflation hype, US equity markets have peaked, AAPL is proof
041114- CGI Morning Market Commentary: Greek Bonds, STOXX, CRB, $USD
Yesterday’s Greek Bond auction was a far cry from the turmoil facing the country less than two years ago. CGI recommended purchasing European periphery debt in the fall of 2012, and contested the notion that the EU was at risk of failure. We continue to see European equity markets as fertile territory for institutional investors.
The $USD Index continues to weaken. A fall below $79 sees risk to $73.
The CRB continues to strengthen.
041114 CGI Morning Market Commentary – Greek Bonds, STOXX, CRB, $USD
Morning Market Commentary – Buy Chinese Equities $SSEC bottoming, Euro equity benchmarks continuing to gather momentum vs SPX
Global manufacturing data remains strong and it cannot be ruled out that the data out of China is distorted as a result of the upcoming Chinese New Year. Manufacturing activity in China typically declines into the Chinese holiday, which this year is on January 31. Despite the unexpected data point from China, manufacturing numbers continue to show signs of improvement, both in the US and Europe. Overshadowed by China’s disappointing manufacturing PMI report, January Flash Manufacturing PMI in the Euro-Zone was reported at the highest level since June 2011 at 53.9, firmly in expansion territory.
Although gold is not presently within its period of seasonal strength, which runs from July through to September, the metal typically does benefit from strength in metal prices at this time of year due to improving manufacturing demand.
Morning Market Commentary – Buy International equities, Energy, Oil
Much higher 10-year rates in 2014. Buy Intl. equities, EAFE, Canada, Germany, France, Spain, Japan over US as EAFE entered period of seasonal strength.
Energy, Oil & Utilities are the only ones that tend to produce higher than seasonal average returns under extreme cold weather conditions.
Morning Market Commentary – Metals, Oil, Buy Intl. Equities
EAFE to continue to outperform US equities, Chinese equities bottoming, Metals, Platinum & Palladium moving higher. Buy Intl. equities, EAFE, Canada, Germany, France, Spain, Japan over US as EAFE entered period of seasonal strength. Continue reading
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 – Buy Intl. equities, Germany trade balance
Germany has a trade balance second to none on earth. Germany recorded a trade surplus of EUR 18.10 Bn in November of 2013. Germany is world leader in current account surplus in 2014.
We are expecting for the DAX 30 equities’ outperformance to extend through 2015. EPS expectations should stabilize alongside global GDP growth. We are forecasting DAX EPS FY 2014 to rise by 16% yoy to 760. (Vs. consensus 729) . Continue reading
Morning Market Commentary – DAX, German surplus
We are expecting for the DAX 30 equities’ outperformance to extend through 2015. EPS expectations should stabilize alongside global GDP growth. We are forecasting DAX EPS FY 2014 to rise by 16% yoy to 760. (Vs. consensus 729).
In the past 30 years that we have been active in the global equities capital markets arena, Germany has been focusing like no other nation and its corporate sector in re-inventing and restructuring and repositioning itself and its economy by constantly upgrading through technological, intellectual value-added, and by high capital expenditure driven innovative research and development. This has lead to the point that the majority of German companies to-date are world class leaders, second to none.
Morning Market Commentary – Buy into mini global equities’ correction
Short and intermediate technical indicators for most equity markets and sectors are overbought and showing signs of peaking. Midterm US Presidential Cycle years show that US equity markets show an average correction by the S&P 500 Index of 1.7% in the month of January followed by strength into mid-April. History appears to be repeating itself. Look for renewed seasonal buying opportunities in economic sensitive sectors following a brief period of weakness into January.
Our preferred equity markets like Germany, France, Spain, and Japan continue to outperform US benchmarks. We advise clients to add towards those countries’ equities and towards our favorite 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 – $hanghai Index ready for a major breakout, Metals, Silver, WTI, NatGas
China became the world’s biggest trader in goods for the first time last year, overtaking the US for all of 2013 and finishing the year with record trade figures in December. Trade with the rest of Asia and increasing flows with the Middle East represent a shift in power away from the US, still the world’s largest economy.
Chinese imports of crude oil grew by the least in almost a decade in 2013, new government data show, posing a challenge to exporters from the Middle East to Africa who are competing to sell more oil into the world’s second-largest economy.
We are advising clients to allocate new funds towards Chinese equities. As the chart shows, there has been a tug of war between the bulls & bears for over 6 months now, and we believe the $SSEC is ready for a major breakout to the upside in the short term. Our 2014 price target for the $SSEC is 3,000. Continue reading
Morning Market Commentary & Weekly Stocks – Global Stocks enter positive seasonal period, German Stocks to outperform
German Equities are at an all-time high. The DAX 30 Index is +20% ytd, after +29% in 2012. Our CGI Global 50 includes 12 German stocks, of which all are in positive territory for 2013.
We think so, particularly when looking at the anemic bond yields that European, US and Japanese government and corporate bonds are offering. We are seeing but one way for German investors, namely to increase equities investments, albeit late, however not too late to the plate, and invest now in their own equity market. Continue reading
Morning Market Commentary – SPX & DOW in seasonal correction AAPL “Sell/short” note
US equity markets have entered their annual period of seasonal weakness. Seasonal tendencies for stocks turn firmly negative on September 16; average loss for the S&P 500 Index over the three weeks to follow is -2.5%. The DJIA has more often underperformed during the May to October time frame with a brief counter-trend rally occurring in July. September remains clearly the worst calendar month for stock market performance.
AAPL Apple Sell Recommendation
Apple (AAPL), the biggest company still by market capitalization in the US, didn’t have the sort of effect it was hoping for with the launch of two new smart phones: its share price fell sharply as analysts expressed their disappointment with the latest gadgets: the iPhone 5S and iPhone 5C.
Apple, once the technological and applications leader has become an innovation follower, and it proves our point more and more, as the company management is struggling with its corporate vision and business plan and original strategy. Recent product announcements, like the iWatch, and “cheaper” iPhones are confirming our 2012 concerns, which we published in our leading “Sell/short” AAPL report on October 3rd 2012 (AAPL US$ 685). Apple’s business model has run out of momentum, growth is declining, and AAPL is forced by market and consumer trend dynamics to test smaller, cheaper, and lower value added gimmicks, which are going to be having a negative affect on AAPL’s margins, which we identified as unsustainable, in our last years original report.
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 – Currency & trade balance observations
As previously stated, we had expected the deficit to climb back to US$ 40 Bn after an unusually sharp decline in the prior month. The trade gap sank more than 20% in June to the lowest level since the fall of 2009. Although the increase in imports suggests strengthening demand in the US, a larger trade gap usually means slower economic growth at home since America is buying more goods and services from other countries. Continue reading
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 – Gold to move higher
We have been advising clients since June 2nd to sell equities globally prior to the peak period of seasonal weakness ahead in September and October, and continue to do so. Seasonal tendencies once again turn positive for broad market indices at the end of October.
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 – Macro Economic
We are advising clients to take the current market opportunity to sell stocks prior to the peak period of seasonal weakness ahead in September and October. Seasonal tendencies once again turn positive for broad market indices at the end of October.
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 – Equity Market Observations
N-225 poised for major breakout, Emerging market equities to come back, Gold & Silver, Platinum & related stocks to move higher.
Daimler 2Q13 Earnings, Models & Valuation
Daimler: A sharp improvement in 2Q13 results points towards strong earnings recovery in 2H13E & 2014E-15E.
Daimler (EUR 54.21) – BUY Target price: EUR 72.94; potential +35%
Previous target price: EUR 51.97 (April 16th).
Morning Market Commentary – Q3 Asset allocation assumptions
N-225 poised for major breakout, Emerging market equities to come back.
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 – August historically a down-month
Historically, the month of August has been cruel to equity investors. August during the past 62 periods is the fourth worst performing month of the year for the S&P 500 Index, third worst for the TSX Composite Index and Dow Jones Industrial Average and second worst for the NASDAQ Composite Index. Weakest part of the month occurs in the first half. Worst performing country in the month of August, of the established international equity markets, is the German DAX, posting an average decline of -2.0% over the past 20 years; positive returns remained evident more times than not with only 8 of the past 20 periods ending with a loss.
Best performing country is the United Kingdom with the FTSE posting an average gain of 0.8% in the month of August, positive 14 of the past 20 years.
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 – Mixed Signals for Global Equity Markets
We see three significant threats to impact equity market strength ahead, which we believe global investors have not taken adequately into account: Rising US$; Surging Interest Rates and Rising Crude Oil, prices.
Morning Market Commentary & Weekly Charts – Facts & Reality
Facts and Reality about currencies and trade deficits and current account deficits.
Morning Market Commentary & Weekly Charts
We are advising our clients to “sell/short” the US$ index against most major currencies at current levels of ($USD 82.59).
Morning Market Commentary – Global equities summer blues?
Markets opened in positive territory on Friday as the FTSE 100attempted to rebound after a dramatic three per cent drop the day before following the Federal Reserve’s announcement to scale back stimulus later this year.
London’s benchmark index tumbled an eye-watering 189 points on Thursday, falling 2.98% to 6,160 as markets reacted to comments from Fed Chairman Ben Bernanke, who said that quantitative easing could come to a complete halt in 2014 if the economic recovery gains momentum. Disappointing factory-activity data from China also hammered sentiment yesterday, sending the UK index to lows not seen since mid-January.
Equity markets outside of North America recorded significant technical deterioration.
Morning Market Commentary – Buy Agri-commodities, Corn, Oil, NatGas
The US$ had been tremendously overbought, both versus the Yen, but also against the Euro, as we had highlighted in our Q2 Global Strategy Outlook, and reiterated this fact “ad nauseum” since March 2013.
So, it is of no surprise to us that the US$ has entered the recent correction versus both the Yen, but as of later now the Euro too, on the contrary, we are expecting for the EUR/US$ to continue to its EUR/US$ 1,3650 resistance, and break above it, as the US$ has entered its weak seasonality period, between April and October.
Morning Market Commentary & Weekly Charts – What’s about that US$?
Or research shows the following sectors being attractive for seasonal trades this summer and showing signs of outperformance relative to the S&P 500 Index and the TSX Composite Index: Fertilizers, Energy and Gold. Continue reading
Morning Market Commentary – Buy N-225, Short Yen
We believe that the correction for Japanese Yen and inherently for the N-225 has been completed, and are advising our clients to buy Japanese stocks at current levels, and to short the Yen against the US$ and against the EUR at current levels. We maintain our year-end 2013 price targets for the US$/Yen at 112 and for the N-225 at 17,200. Continue reading
Morning Market Commentary & Weekly Charts – Equities VIX increasing, Agris to rise further
Weekly Investment Conclusion
The intermediate corrective phase in North American equity markets remains intact.
Short-term strength provides an opportunity to reduce equity exposure, particularly in sectors that have a history of moving lower during a summer corrective phase.
These sectors included industrials, consumer discretionary, materials and financials.
The sectors, which we have identified so far, that are showing positive momentum for seasonal trades this summer are fertilizers and gold. They already are showing signs of outperformance relative to the S&P 500 Index and the TSX Composite Index.
Morning Market Commentary – All about the Nikkei
Fundamentally and long-term focused however, we continue to advise our clients to add towards Japanese equities. Investors should focus on both domestic asset reflation stock plays in Japan, and on Japanese companies with strong exporting profiles, as the Yen weakness will continue to improve their overall competitiveness and earnings capabilities in the coming years. Continue reading
Morning Market Commentary – Sell in May effect true
We continue to advise our clients to lighten up on equities, same in 2013 as in 2012, 2011 and 2010, and to wait for a better opportunity with lower global equity prices to materialize over the coming two to three summer months to re-allocate capital back into risk, as this market performance anomaly has proven to have been profitably over three decades, by choosing alpha generating investable strategies.
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?