Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

What a great interview with Bill Gross...so many highlights but a couple of quotes I really liked:

'A three-year German bund trades at negative six basis points [hundredths of a percentage point]. If that’s not a head wind, I don’t know what is. Interest rates are low around the world. That doesn’t mean yields can’t fall and bonds can’t rise when people worry about something going amiss, whether it’s slowing growth in China or the spread of the Ebola virus. Bonds are protection against inflation and disaster. But my low-growth outlook suggests that bonds will earn their coupon'

and...

'Investment-grade corporates in the five-, 10-, and especially 30-year space are vulnerable, not from a default standpoint but from a liquidity standpoint. If investors look to raise cash because they are worried about world events or slower growth in the U.S., there could be a rush to the exits in this small theater'

Where does a sub 6% unemployment print (as achieved by the US on Friday) come out versus history:

Staying with the US economy interesting to see the dollar pessimism is usually the norm but the recent rally has pushed this pessimism up to a critical resistance level: 

Good from DIV-net '20 quick ways to check a company'. Link here.

'Global six-month real narrow money growth fell sharply in August, based on data covering 90% of the aggregate followed here. September / October data should be awaited to assess whether this represents a genuine change of trend; if so, the suggestion is that the global economy will lose momentum in early 2015'.  Interesting article around this and the graphic below here.

A few views from Schwab on relative momentum in the global economy.  A bit controversial including Europe and Japan 'improving' and the US nearly in 'weakening':

Talking about Europe, this was interesting in the German press over the weekend (as reported by Seeking Alpha):

'The International Monetary Fund will cut its estimates for German economic growth in 2014 and 2015 to around 1.5% per year due to the crises in Ukraine and the Middle East, Der Spiegel reports…says the IMF will also call on the German government to do more to boost public and private investment to boost growth in the short term and bring benefits for the country in the medium term'

The other European story of note is the ongoing debate over the level of ECB 'support'.  Again from Seeking Alpha:

'The ECB's attempts to weaken the euro and interfere with the euro/dollar exchange rate are "shocking," former ECB chief economist Stark tells Focus magazine. "The ECB is not demonstrating leadership, but is bowing to the expectations of the financial markets and political pressure from France and Italy." ' 

Meanwhile the Financial Times notes: 'France tells Europe it must focus on growth rather than deficits'

Brazil election round one this weekend.  Interesting chart on this (unsurprisingly) out-of-favour market.  When there is a bit of political certainty I wonder if 2015 may prove an ok (if volatile) investing year for the country: 

Talking about electoral impacts, interesting to see that in a year 2 of a Presidential election cycle that October-December are the strongest three months...

Great graphic on Africa:

(h/t @JavierBlas2)

So true...

"Traits that make you a successful

and attractive person in the rest of

your life may hurt you as an investor,

and vice versa. In most situations,

being energetic and optimistic are

great assets, but inactivity and

skepticism help more with investing."

(John Tillinghast of Fidelity, Barron's, 

October 6, 2014, page L10)

Company-related observations:

Samsung has some preliminary quarterly numbers out this week.  This interesting article (link here) opines that the company should outperform Apple.  Some fascinating charts including this one:

A thought-provoking article on the coal sector which is horribly out-of-favour as shown by the sector ETF performance over the last six or seven years.  A sector I will be watching the Q3 earnings comments on with interest (no positions at the moment).

After comparing GlaxoSmithKline and AstraZeneca this article concludes:

'GlaxoSmithKline is the runaway better dividend stock. Although Glaxo is facing patent problems with Seretide/Advair, its COPD franchise looks strong, as does its remaining pipeline. With its reasonable valuation and a trailing dividend yield of 5.5%, few companies in healthcare might be more attractive to dividend-seeking investors than GlaxoSmithKline'.

The Janus 10 year chart indicates - ex the top of the bull market - share price resistance at this level.  Now either Mr Gross brings back the 2006-7 glory days or...

(h/t for the initial observation @MarkBrant1KM)

This via Trefis 'It turns out that tobacco major Philip Morris International (NYSE: PM) spent €5.25 million to lobby Members of European Parliament (MEP), the highest for any company in the European Union in 2013 . This is not a small feat considering that the competition included  Exxon Mobil (NYSE: XOM), which came in a close second at €5 million'.  More on the reasons why can be found here.

The Sunday Times notes that Apache has hired Goldman Sachs to find a buyer for its UK/North Sea oil interests, continuing its recent trend of trying to create value from its diversified range of international (non-US) investments.

And finally...

On euro weakness:

On the ranking of the letters of the alphabet (I was a bit hacked off to see the ranking of 'C'!)  Link here.  

 Have a good week