Monday, 7 September 2015

Financial Orbit wrap 07/09/15

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. G20 – Finance ministers and central bankers from the Group of 20 nations pledged to “refrain from competitive devaluations” after a two-day meeting in Ankara. That’s the first time the G-20 has used such language since 2013. Meanwhile the PBoC head noted: “At present, the exchange rate of the renminbi against the dollar is stabilising, the correction in the stock market is already mostly over and the financial markets show hope for stabilising.” Finance ministers and central bankers supported China’s argument that changes to its state-managed currency peg last month were a step towards a more market-determined exchange rate. The sole dissenter was Aso of Japan, who said the Chinese presentation was not detailed enough.  G20 talking shop soon be forgotten about in my view...

2. Talking about China...

China edges down 2014 growth rate by 0.1% on a statistical revision.  Largest deduction from China output in 2014 growth downgrade: financial services. Will make this year's H1 boom look bigger, H2 bust smaller.  So far no huge negative volatility in the Chinese bourse despite two closed days.


Moody's Investors Service says that listed Chinese banks will face rising operating pressure over the next 1-2 years, as China's economic growth slows, and as the banks' interest margins narrow further on the government's monetary easing policies and deregulation of interest rates. Moody's conclusion was based on the banks' results for the half-year ended 30 June 2015 (1H 2015).  What has happened since?!

China did flash a death cross as per Zero Hedge...and it fell 2.5% today.  All good fun...



3. Global valuation / div yield – interesting next few years await.  In my view this chart is very consistent with a more stock picking focus: 



4. Glencore a fascinating stock to watch and write about today following their surprise announcement re a money raising / significant corporate restructuring.  I wrote up my thoughts in a column for ShareProphets you can access here.  

5. I tweeted this out...

Good charts but headline a bit deceptive "SocGen says the U.S. stock selloff is overdone & these 3 charts show why "

...and my favourite chart?  This one on divergent future QE stimulus.  Totally agree with the shape of the prospective Europe/Japan curves...not so expectant of the US/UK falling off as suggested.  


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