Monday, 20 July 2015

Financial Orbit wrap 20/07/15

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. Gold - I talked about some potential disappointment / accounting explanations with the Chinese reserve data that came out late last week (see the MUST READ story on Stories we should be thinking about - link here).  Nevertheless today's price action was very cautious with the shiny metal sub US$1100 in early Asian trading (but recovered a little now to be down 1-2%)

A few other thoughts included this observation related to potential dumping/margin sales in the local Chinese market...

According to ANZ, the sudden collapse in gold prices earlier in Asia was due to 5 tonnes of bullion being dumped on the Chinese market. As the Bank states, "half an hour after the market opened we saw 5 tonnes of gold sold through the Shanghai gold exchange, which is way above normal levels."

I also note that the shiny commodity is at a very interesting technical level...

(h/t @DavidInglesTV)

My view: time to be opportunistic.  I may well be posting more on this later this week but suffice to say I did add to my holding in Randgold Resources today.

2. I observe some good trends at Yum! Brands but also still some material residual uncertainty regarding the speed of recovery within its important China division.  No need to panic with any holding...but also not the price in my view to be buying the stock (link here).

3. I have not looked intimately at Lockheed Martin before but the material citing (see below) of 'Section 338 (h) (10) Tax Election' as a more than ten times synergy generator for the company in its takeover of the United Technologies unit Sikorsky is...striking:

4. I am impressed by the Honeywell numbers...but its rough peer GE (who also reported last Saturday) feels more opportunistic despite the latter's strong numbers and upping of guidance...(link here)

5. Meanwhile in Greece we get the slight comedy of the country using its bailout and related monies to repay owing monies to the IMF and the ECB...

...still at least it is not quite at the bottom of the list of the estimated worst performing economies in 2015:

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