Wednesday, 1 July 2015

A few macro and related thoughts today

A few macro and related thoughts today...

So the Greeks did not pay the surprises there.  No not in classically quality economic company: 

Greece #2 – two other interesting aspects: (1)Rifts appear in Greek Syriza govt: Deputy PM Dragasakis openly challenges Tsipras: Says advised to sign deal and referendum may not happen; (2) GREEK REFERENDUM POLL (BEFORE BANK CLOSURE)..YES 37%, NO 57%... (AFTER BANK CLOSURE) YES 37%,  NO 46%. 

It is clear from the above you cannot rule out the referendum not happening…

End of quarter moves – ‘the FTSE 100 index fell 6.6% in June – its biggest decline since May 2012’.  Meanwhile the S&P 500 in the US had its first down quarter since 2012.  Most surprising move?  Aided by an easy comp ‘the euro was heading for an increase of about 4 per cent against the US dollar’. 

The always excellent Bespoke provided this extremely useful Q2/H1 performance insight - 

Manufacturing PMIs – dull final numbers in China, Japan heightening calls for more stimulus. There has been a lot already...

The South Korea Manufacturing PMI noted Production and new orders decline at fastest rates since September 2012.  Activity across Australia’s manufacturing sector contracted sharply in June with the Ai Group’s manufacturing PMI gauge sliding 8.1 points to 44.2. The figure, the lowest seen since July 2013, was the steepest monthly decline recorded since December 2009.

Not the greatest set of numbers in combination...

Global growth - World Bank Cuts China 2015 GDP Growth Forecast To 7.1%. Some interesting detail in the report though as observed here on Fast FT

The report said more than 13m new urban jobs were created last year, exceeding a target of 10m. But average disposable income growth in urban households slowed to a rate of 6.9 per cent last year, versus rates of more than 8 per cent between 2010 and 2012.

Over the past decade the services sector has expanded from a 41 per cent share of the economy to 48.3 per cent last year.

China – ‘Stock investors of the world unite! For the first time in modern China, you outnumber the Communists - a remarkable report here

The nation’s $8.1 trillion equity market now has more than 90 million individual investors, according to China Securities Depository and Clearing Co. That compares with 87.8 million Communist Party members at the end of last year, the state-run Xinhua News Agency reported June 29, two days before the 94th anniversary of the party’s founding’ . 

China #2 – spot where this may go wrong! “Some Chinese Are Taking 22% Margin Loans to Finance Stock Purchases” Link here

Macau -

2010!  That's the impact of the anti-corruption crackdown but my instinct is that investors can make some money here (but possibly not on playing the tables). 


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