Tuesday, 6 January 2015

Financial Orbit wrap 06/01/15

Five sentences or graphics which sum up the Financial Orbit output over the last 24 hours across the website, twitter account and anything else thought about...

1. What a fascinating chart showing what a statistically interesting day yesterday's US market fall was: 

(obviously now the S&P has racked up 5 successive losing days...).  For what it is worth I took off my remaining long US volatility position today.  

2. China’s services sector picked up. HSBC/Markit’s purchasing managers’ index for the service sector was 53.4 in December, its highest level in four months...but still the stimulus hopes circled (and you can see why looking at the chart below): 

3. Meanwhile in Europe, Markit concluded:

“The weakness of the PMI in December will add to
calls for more aggressive central bank stimulus,
including full-scale quantitative easing, to be
undertaken as soon as possible. However, with
lower oil prices set to reduce businesses’ costs and
boost consumer spending, the outlook has
brightened, and policymakers may choose to wait
and see if the rate of growth continues to pick up
before making firm decisions on whether such
controversial steps need to be taken.”

I think that Markit are far too even-handed: Germany correctly described as ‘stuttering’, Italy <50, France only up due to easy comps...

Europe still looks...troubled:  

4. I muse in my latest Yahoo Finance Contributors column that investors should forget the January effect...and worry about the earnings (downward revision) effect.  Link here.  

5. And what else?  Oil down but I note oil stocks are generally not back at their mid-December lows... I also liked this via @ who compared the S&P and the VIX and noted:

"New year, same 'ol Hungry Alligator"

And finally Bespoke had a great chart on the US ISM Services data. Look at that difference in the last month versus the last year.  Hello rollover...



  1. Mr. Market (alligator) doesn't know we're here; could be tomorrow or years away when he chomps down again! Long VIX , short SPY with options and trade around the core hedge with your favorites.