Saturday, 16 May 2015

A few interesting Saturday macro charts

A few interesting Saturday charts.  

I see a few headlines around talking about US earnings being much better than hoped in Q1.  Maybe...but at 1.4% consensus growth for FY15 for the S&P 500 index (and with consensus hopes still declining versus even say 1st April) is not that good, is it?

Of course the dollar's strength is impacting. Some excellent new statistics (including sentiment indications now) on global currency positioning.  Note the consensus positioning of short euro, long dollar...meaning in my view the likely next scenario is further euro strength.  This will help US earnings sequentially (and knock European ones - themselves 'only' estimated to currently grow 7% in 2015). 

So potentially more bad news for (strong performing in 2015 so far due to a weak euro plus QE imposition) European assets.  The recent bond market push-back has not helped either.  Note this interesting correlation of the German bund and oil prices showing the impact of higher inflation and changing sentiment:

Overall I still feel more stimulus is likely. As is well-documented global QE has materially increased across the world's central banks and more to come from China, Japan and Europe particularly... nicely observed in this cartoon: 

Useful graphic showing the BRIC countries are hardly homogenous...

...and this story in the Financial Times today indicates some specific challenges for China going forward to: 

 Finally - as we have noted before - observe the strong video advertising/smartphone theme all centred on the rising number of people online and/or wanting to be online when mobile too.

The information and internet theme is probably bigger now than even the rise of the Chinese (emerging market consumer) per se.  Despite some of the poor earnings and QE largesse above there are still themes to believe in (and invest in).

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