Monday, 13 July 2015

Financial Orbit wrap 13/07/15

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. Well, what a last 24 hours for Greece.  I write up the agreement after a whole night's of negotiation here in my Yahoo Finance Contributors column with the general observation that the deal is unlikely to be a definitive one...especially as the hoped-for privatisation receipts are unlikely to be anywhere near the targets...

2. Still - and nevertheless - markets bounced and the euro fell.  Volumes were however light and my broader observation is that the reaction overall was rather benign.  I see resistance on the euro falling much lower than its current 1.10 level against the US dollar which means risk-reward on the German DAX index is probably not the greatest.  At best Europe is a stock specific market but frankly I would be keeping exposure light(ish). A run at <10,500 feels to me far more likely than 12,000+

Meanwhile almost out of nowhere the Nasdaq put together two big back-to-back days in this chart via Fast FT.  Hmm! 

3. As for China, well a calmer day. ‘Only’ about one-third of Chinese shares not trading today!  CSI 500, an index of small cap stocks in Shanghai and Shenzhen, is up 7.1%, on track for its biggest daily climb since November 2008. June trade data better with exports up and import decline not as large.  Still not a headline cheap market but a stock picking one undoubtedly...if you are brave enough. 

4. "Clunky term but speedy progress here in contrast to " Rico move to 'consensual adjustment' its debt"

Puerto Rico's top officials announced a plan to reform its economy while moving towards "consensual adjustment" of part of the island's debt during a meeting with creditors at Citibank's offices in New York on Monday. "As evidenced by examples elsewhere in the world, a contentious, drawn-out adjustment process will not be in the best interests of the Commonwealth or of its creditors," Puerto Rico Government Development Bank chief Melba Acosta told investors. Despite recent reforms, the territory is still facing significant challenges, Acosta said - including declining investment in the island, falling housing prices, high labor costs, low labor participation rates and declining population. The meeting came after Puerto Rico Governor Alejandro Garcia Padilla announced that the island's $72 billion debt is "not payable" on June 29, saying he wants to restructure debt and postpone bond payments.

5. Thank goodness earnings season really kicks off tomorrow...not just to decide which two out of JPM, Wells Fargo and Johnson & Johnson to concentrate on tomorrow morning...! 

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