Posts Tagged index
Mobius Says Fresh Financial Crisis Is Around Corner
Posted by Oksana Grebenjuk in Favourites, Investing on Май 30th, 2011
Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.
The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008. The MSCI AC World Index of developed and emerging market stocks tumbled 46 percent between Lehman’s downfall and the market bottom on March 9, 2009. Read the rest of this entry »
Stocks drop on Libya, surprise Chinese deficit
Posted by Oksana Grebenjuk in Fund Markets on Март 14th, 2011
The battle for control of Libya and weaker than expected Chinese economic data weighed on markets Thursday while a debt rating downgrade of Spain hit the euro, a day ahead of a crucial meeting of EU leaders.
Sentiment over the past few weeks has been driven by developments in North Africa, most recently in Libya, which in normal times produces a little under 2 percent of the world’s global oil needs.
Though the regime of longtime leader Moammar Gadhafi appears to be recapturing ground lost to rebels, investors remain cautious of staking out fresh positions given worries over oil supplies and how the crisis in the Arab world will spread.
The main impact has been in oil markets, sending prices up to their highest levels for around two and a half years. By mid-morning London time, the benchmark oil contract on the New York Mercantile Exchange was down 3 cents at $104.35 a barrel, while Brent crude in London fell 71 cents to $115.23.
Both rates are slightly lower than where they were on Monday but remain elevated and a threat to global growth prospects. That fear has hung over stock markets recently — equities are a leading indicator of perceptions for economic expansion. Read the rest of this entry »
Dow’s Surge to 12,000 Echoes April With 81% of Stocks Above Average Price
Posted by Oksana Grebenjuk in Fund Markets on Февраль 2nd, 2011
Investors who pushed the Dow Jones Industrial Average above 12,000 for the first time since 2008 this week may be getting ahead of themselves.
The gauge surpassed that level the past two days before plunging the most since 2010 today, preventing the longest stretch of weekly gains since 1995. As of yesterday, more U.S. stocks were trading above their 200-day average price than any time since April, when the Dow began a 14 percent slump, and the cost to insure against Standard & Poor’s 500 Index losses fell to an almost three-year low.
The Dow may have surged too fast following its more than 2,000-point jump since August even as analysts forecast a third straight year of profit growth for the S&P 500, said James Investment Research Inc.’s Tom Mangan and BB&T Wealth Management’s Walter “Bucky” Hellwig. Mangan and BGC Partners LP’s Michael Purves see signs investors are too optimistic about the next few months.
“We expect a setback of 10 percent or more in the S&P 500 and the Dow,” said Mangan, who helps oversee $2.4 billion in Xenia, Ohio. “The market is going to face much stronger headwinds over the next months as the rally gets old and it gets increasingly difficult to find a rationale for further gains, but there will be a lot of buyers on a pullback and it would probably be a short-lived decline.” Read the rest of this entry »
Strong Stocks and Euro, Weak Dollar on GE’s Earnings
Posted by Oksana Grebenjuk in Fund Markets on Январь 25th, 2011
After a weak 2 days, stocks bounced back. Strong euro is on its 8-week high versus the dollar and against 14 more out of 16 currencies. Companies’ earnings such as General Electric Co.’s are higher than estimates while commodities gain is led by sugar and cotton and German business confidence increased.
The S&P 500 Index was at 1,283.35 (0.2%) in New York at 4p.m. Stoxx Europe rose 0.7%. Credit-default swaps that support Europe’s indebted nations went to largest 2-week drop. 10-year treasuries yield dipped 4 basis points (3.41%).
GE’s 1st increase in 2 years encouraged earning season’s optimism. Since Jan. 10, out of 57 companies, 42 topped per share profit. Fiduciary Trust Co.’s Michael Mullaney said the strong earning season shows sustainable economic recovery and that good sales momentum is promising for the stock market.
S&P 500’s 43 companies in 57 reported 8.4% increase. GE, since March 2009 rallied at 7.1% whose CEO, Jeffrey Immelt, incidentally, will be named by President Obama as outside economic advisers panel head.
Bank of America Corp. was down 2% after $1.24 billion 4th quarter loss report.
Europe’s Stoxx 600 showed 2 gained for every stock decline while Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA were 3.3% up. Following UK bank discussion report on Financial Times, Royal Bank of Scotland Group Plc surged 6.5%. Read the rest of this entry »
Egypt Stocks Drop Most in Six Weeks on Concern Tunisia Unrest May Spread
Posted by Oksana Grebenjuk in Fund Markets on Январь 19th, 2011
Egyptian stocks fell the most since November after a popular uprising in Tunisia forced the ouster of President Zine El Abidine Ben Ali, raising concern Egypt’s regime may face similar pressure.
Commercial International Bank Egypt SAE, the country’s biggest publicly traded lender, closed at the lowest level in more than a month. EFG-Hermes Holding SAE, Egypt’s biggest publicly traded investment bank, declined 2.4 percent. The EGX30 Index lost 1 percent, the biggest drop since Nov. 30, to 7,082.09 at the 2:30 p.m. close in Cairo. Tunisia’s benchmark Tunindex tumbled 13 percent last week as increasing violence lead to the toppling of the country’s leader on Jan. 14.
The Tunisian protests may embolden demonstrators who have recently taken to the streets in other North African and Middle Eastern countries, including Egypt, Morocco and Jordan, all of which have experienced demonstrations about economic conditions, said Marina Ottaway, director of the Middle East program at the Carnegie Endowment for International Peace in Washington.
“People are selling because they think the same might happen here” given unemployment and inflationary pressure, Alia Khalil, senior equity trader at Cairo-based Pharos Holding for Financial Investments, said by telephone. Read the rest of this entry »
Seven Stocks In Financial Sector For Next Year
Posted by Oksana Grebenjuk in Investing on Декабрь 9th, 2010
Year to date (YTD), NYSE Financial Index is the third best performer, among the major NYSE indices, with a return of 25.9%. Those sub sectors (real estate services; thrifts and mortgage lenders) that pulled down the performance of finance sector in the year ago period seem to have recovered a major portion of their lost ground. Should you expect good times continue into 2011?
YTD financial sector (10.02%) has outperformed S&P 500 (7.79%) by nearly 2.23 percentage points and I see this margin widening further in 2011. The reason being most of the problems (capital shortage, asset value write downs, etc) that faced financial sector are nearly behind us. For the financial services industry, 2009 was among the toughest operating environments in many decades. The year 2010 has been relatively good and 2011 is expected to be better.
On a broad level, we can classify financial sector into 10 sub sectors namely — Consumer Financial Services, Insurance (Accident & Health), Insurance (Life), Insurance (Miscellaneous), Insurance (Prop. & Casualty), Investment Services, Misc. Financial Services, Money Center Banks, Regional Banks, and S&Ls/Savings Banks.
Since life insurance sector is yet to return to positive territory, I will avoid picking stocks from this sub sector. Read the rest of this entry »
Leading economic indicators index rises in October
Posted by Oksana Grebenjuk in Trading Markets on Ноябрь 26th, 2010
The Conference Board reported that its index leading economic indicators (LEI) for the U.S. increased by 0.5 percent in October to 111.3, following an 0.5 percent increase in September, and a 0.1 percent increase in August.
“The LEI remains on an upward trend, suggesting the modest economic expansion will continue in the near term. The LEI’s growth has been slowing this year, but gains in the financial components helped its pickup in October,” said Ataman Ozyildirim, an economist at The Conference Board.
Ken Goldstein, also an economist at The Conference Board, noted “the economy is slow, but latest data on the U.S. LEI suggest that change may be around the corner. Expect modest holiday sales, driven by steep discounting. But following a post-holiday lull, the indicators are suggesting a mild pickup this spring.”
The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.1 percent in October to 101.5, following no change in September, and no change in August. The Conference Board Lagging Economic Index (LAG) increased 0.1 percent in October to 108.7, following a 0.5 percent increase in September, and a 0.1 percent increase in August. Read the rest of this entry »
Retail stocks have already priced in strong Black Friday
Posted by Oksana Grebenjuk in Fund Markets on Ноябрь 25th, 2010
As “Black Friday” approaches tomorrow, U. S. retailers are expecting a strong holiday season – at least, compared to the dismal performance of the past two years.
Indeed, retail sales rose a surprisingly strong 1.2 percent in October, despite persistently high unemployment, continued foreclosures and an overall fragile economy.
The National Retail Federation (NRF) forecasts that holiday sales for 2010 will increase by 2.3 percent to $447.1 billion, far better than last year’s 0.4 percent uptick and the 3.9 percent sales drop in 2008. In addition, retail sales have climbed in four of the past five months; while same-store sales have risen for fourteen consecutive months.
“This continued momentum is good news for the industry, especially with Black Friday… quickly approaching,” said NRF CEO Matthew Shay.
“While there is no question that consumer demand has improved, there are still questions about consumer confidence tied to high unemployment. We need to see improvement in key economic indicators to sustain any long-term growth.”
Indeed, retail stocks have surged the past few months, far outperforming the broader market, largely in anticipation of a robust Christmas shopping season. Read the rest of this entry »
Municipal bonds turn bearish as yields rise
Posted by Oksana Grebenjuk in Fund Markets on Ноябрь 24th, 2010
Yields on municipal bonds has risen recently, with long-term yields rising more sharply than those on the short-end since the beginning of the November.
R.J. Gallo, senior portfolio manager and head of the municipal bond investment group at Federated Investors, noted that the 30-year, AAA-rated municipal yield rose 76 basis points through November 17, producing a loss of about 6 percent for the 22-years-and-longer portion of the Barclays Municipal Bond Index.
Similarly, the 10-year AAA muni yield rose 50 basis points and the 5-year yield rose 28 basis points over the same period, producing estimated losses on the corresponding portions of the Barclays index of 2.5 percent and 1 percent, respectively.
“We believe a sharp deterioration in the balance of supply and demand for municipal securities are driving this bear steepener,” Gallo said. “Uncertainty about whether the popular Build America Bonds (BABs) program… will expire at the end of this year has prompted a near-term supply surge. Meanwhile, investor demand has slowed due to a number of factors, including an increase in investors’ risk appetite, the Fed’s new quantitative easing program (QE2), calendar effects and, to a lesser degree, concerns about municipal credit quality.”
Initiated as part of the February 2009 federal stimulus bill, the BABs program provides municipal issuers with a cash rebate subsidy equal to 35 percent of a bond’s coupon rate on taxable securities, allowing issuers to offer taxable bonds without fully paying the higher interest cost. Read the rest of this entry »
Stocks May Surprise By Year-End
Posted by Oksana Grebenjuk in Favourites, Fund Markets on Июль 5th, 2010
Economic news has been weak lately. Financial markets have performed poorly for over two months. Dow Theory «sell signals» have been issued. You may have heard a «death cross» is on the way. It is nearly impossible to find a bull among the growing sloth of bears. We are concerned about both the fundamentals and the technicals. However, in the context of history the current situation is not all that unusual.
On the economic front, the Wall Street Journal helps put recent weak economic numbers in some perspective. Stocks did quite well from late 2002 to late 2007. They also did well from 1992 to 1994.
Pauses aren’t uncommon early in a recovery. After rebounding from recession in late 2001 and early 2002, the economy had a 12-month stretch in which it grew at a paltry 1.5% annual rate, sparking fears of a double-dip recession. In late 1991, growth waned after a recovery had started. In the past 12 months, the economy has gotten off to a faster start than in 2002.
From CNBC: Former Federal Reserve Chairman Alan Greenspan said that the recent stock market decline is «typical» of a recovery, and that international instability has more to do with the recent decline than problems in the United States. «What we’re looking at is an invisible wall, which we’ve run into here. Which, essentially, as far as I can see, is a typical pause that occurs in an economic recovery,» Greenspan said in an interview with CNBC. «Ordinarily we’re saying that the stock market is driven by economic events, I think it’s more in the reverse.» Read the rest of this entry »
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