Sunday, 18 January 2015

Stories we should be thinking about

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

Macro matters:

A couple of final charts on Switzerland (which I have written about extensively over the last week).  First a reminder about just how materially the Swiss government bond curve did move...

...and second a reminder that Swiss stock market weakness did also follow a period of stock market strength/success: 

Meanwhile this article highlights that maybe Denmark's peg against the euro may also be in trouble...and not helped by high Danish debt levels. More currency volatility potential...

Next week is a huge week for the ECB with the latest meeting of the Governing Council.  As a tweak on what appears to have become a bit of a big pro-QE consensus, The Sunday Times observed this: 

'Last week, it appeared that ECB officials had made a crucial concession to win German support. State central banks would buy bonds issued by their own governments — but would not have to shoulder the risk of losses on bonds bought by other national lenders...Yesterday, however, ECB officials denied that the bank had abandoned the idea that risk should be spread across the 19 members of the currency bloc'

All good fun...and of course we know that QE is no panacea (as this chart below from Credit Suisse shows) and requires structural reforms too.

Additionally - as this great little chart from FT Alphaville shows - QE doesn't lead to lower bond yields generally for long: 

This article highlights that maybe seed investing has peaked.

No surprises that the latest rig data shows the biggest fall since the end of the financial crisis:

Hours worked data only until the year 2000 but very striking...

...meanwhile I see that this report from McKinsey also talks about the recent fall off in productivity.  Not a good combination with the above for the world.  

Prices of new homes in big Chinese cities fell 4.3 per cent in December from a year earlier, the largest drop since the current data series began in 2011, according to Financial Times calculations based on government data released on Sunday.

Company-related observations:

Interesting read for UK income investors in the energy space (link here)

'In terms of dividend forecasts it's only Tullow, Petrofac, Eurasia Drilling and Hunting where analysts are predicting cuts to payouts. But with indications that oil stockpiles are positively brimming, and hence no sign of rising oil prices in the near term, it's likely that further downgrades to both earnings and dividends are around the corner'.

Nice chart via @EddyElfenbein on a stock I own (and think is cheap) Google:

On the same stock, I thought this via Seeking Alpha was kind of interesting:

'Ad tech firm Marin Software provides some encouraging mobile search data ahead of Google's Jan. 29 Q4 report. A Marin study found mobile accounted for 49% of Q4 U.S. search ad spend, up from 42% in Q3, and that smartphone ad click rates were 38% higher than PC rates (thanks in part to accidental clicks?). On the other hand, mobile still only accounted for 32% of conversions'

Hutchison Whampoa, the owner of Britain's fourth largest mobile operator 3 Group, is in early stage discussions with Telefonica about buying its O2 network for as high as £9B ($13.6B), the Sunday Times reports.

Really good report about things you should know about Xiaomi (link here)

Fascinating report on how Lego became the Apple of toys.  Link here.  

And finally...

What a game 'Market Meltdown' sounds:

“[P]layers start rich” explains a game description in the Guardian, “and try to stay solvent in the face of defaults, spiralling debts and bonus caps...Flying private jets round the board, they bet on the stock market (represented by a roulette wheel), and can “go rogue” by borrowing up to £1bn to cover losses should their trades go awry. Players can be fined for market manipulation or wiped out when the price of oil plummets.”

And this on the routines of creative people is brilliant: 
Have a good week

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