Friday, 24 April 2015

A few macro and related stories today

Greece latest – it is Friday so it is Riga and the latest European leaders meeting to discuss/try to find a deal…don’t hold your breath!  Certainly none of the key 'troika' participants are anticipating anything: 

German FinMin Schaeuble: Not Expecting A Deal On Greece Today – BBG

EU’s Dombrovskis: Not Enough Progress On Talks With Greece -- BBG
-Greece Must Accelerate Work On Reform List

The Greek finance minister writes – ‘The Greek government wants a fiscal-consolidation path that makes sense, and we want reforms that all sides believe are important. Our task is to convince our partners that our undertakings are strategic, rather than tactical, and that our logic is sound. Their task is to let go of an approach that has failed’. All very worthy...but the realpolitics and reality of Riga and beyond will influence more (link here).  

UK election – 20 FTSE-100 business leaders anxious about the lack of a Conservative poll lead over Labour as per a story on the front page of the FT but…

UK election #2 – …maybe it does not matter: apparently hedge funds are building up long positions in the £ as believe fear over a post election fall overstated.  Certainly any £ fall would be net helpful to the average listed UK large cap (as they generate multiples more profit outside of the UK).

An example of this would be the miners...I like this sector with (outside of gold stocks) my core long being BHP Billiton ahead of their non-core spin-off at the end of May.  Good news then that after a terrible run the iron ore price has managed to increase every day for a whole week.  

Market levels -  (via Fast FT) Nasdaq Composite closed in record territory on Thursday, completing a 15 year recovery.  After hours good for the Nasdaq too with Microsoft +3%, Google +3%, Amazon +4% and Starbucks +5%. Meanwhile, the S&P 500 may be a long way from repeating the double digit gains of the last three years, but the US benchmark index touched a fresh record in late trading on Thursday. 

As a holder of both Google and Amazon - on whom write-ups will be completed pre the US open - I 'enjoyed' the above BUT at a general market level I remain cautious.  Maybe the better interpretation of the above is that stock picking opportunities do abound...especially as the average company lifespan on the S&P 500 index is getting shorter and shorter...

Interestingly European analysts have not been too optimistic...

Finally bitcoin and Asia.  Nice graphic here.  It strikes me that if bitcoin is ever going to work then adoption/use in Asia would be crucial.  

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