by James

Blood on the streets? A lot has happened in the two weeks since the last Outlook & Review. The risk rally continued, under signs of considerable strain, as we projected, and then gave way. Now there looks to be increasing momentum to the downside, although it would be cavalier at best to call the top. [...]

by James

For all the jubilation, markets proved relatively quiet last week, in part thanks to a bit of steam-letting in Friday trading. The S&P 500 has risen in eight of the last ten sessions – last week it was driven by stellar earnings from some of the big hitters, most notably JP Morgan, Goldman Sachs and [...]

by James

China continued its slide last week (see chart), despite attempts at reassurance from leading politicians. Investors would do well to listen to the Chinese leadership, which continues to demonstrate very direct control of economic momentum (inaccurate official numbers notwithstanding). Clearly China needs to cool the rate of asset price growth, but it is not going [...]

by James

Risk remained a negative concept last week, as investors stuck to aversion trades in all major markets. China was the only market that managed to rise, and even there the A-shares only climbed by 0.8%. The global selling was led by commodities. WTI Oil fell 8.75%, closing below the $60/bbl, on a combination of bearish [...]

by James

Commodities and sovereign debt remained volatile last week. US equities managed to rise 0.7% and the dollar rallied back 1% as the bond market fluctuated before closing up. At one point, 10 year bonds sold for more than 4%, and the initial pricing of a 30 year auction on Thursday raised eyebrows. But, things snapped [...]

by James

The train roles on. Central banks kept loosening (ECB dropped its refinancing rate to 1% and launched a tentative QE effort, the BOE expanded its QE effort), and the US banks turned out to need $75 bln of new equity under a relatively benign downside scenario. Markets don’t care. The S&P 500 rose an astonishing [...]

by James

Will it ever end? It is hard to say when buying took over from short-covering as a key driver pushing equities up. There are some “fundamentals” in the form of decreased probability of banks being nationalised. But the recent move hardly represents an economic recovery, rather a combination of risk closure and market-chasing. Those who [...]

by James

Away the bulls! The headlines were stolen by the G-20 last week, but arguably more important events took place elsewhere. While protestors were clogging up the City and world leaders were amassing photo credits, the ECB and FASB made moves that moved markets. True, the G-20 outcome gave a lift too, but more a sigh [...]