Sunday, 27 September 2015

Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

As thoughts turn to October (and the start of the potential positive seasonality of the Q4 period) the upcoming earnings season in the US is still likely to be blighted by the strength of the US dollar:

Certainly the strength of the US dollar is still for me positively correlated with market volatility.

Fascinating observation from @RyanDetrick...unfortunately two different scenarios as what this lengthy period of alternating returns could mean! I certainly get the impression it is not going to be a dull market for the balance of this year...

For Japanese watchers this selection of comments and charts via Zero Hedge is worth a close look...a stock picking market at best in my view:

Staying in Asia, possibly China, what crisis?  In the words of President Xi successful change is being adopted (link here)...

“What China needs is a higher quality and efficiency of economic development by successfully addressing the problem of unbalanced, uncoordinated and unsustainable development, so our economy will be put on a more solid basis and go forward more steadily. We are stepping up efforts to shift our growth model, make structural adjustment and place greater emphasis on developing an innovation and consumption-driven economy.”

I totally agree with this thematic view...even if the macro around China remains troubled.

Slightly concerning margin debt chart.  Yes it is high (still).  Spot the triple top!

Meanwhile recall the Greek election last week.  Well the finance minister in the Financial Times is talking about...economic growth!

 Greece will return to economic growth next year provided that its newly elected government rapidly adopts reforms that satisfy its international creditors, paving the way to bank recapitalisation and debt relief, according to the finance minister…Euclid Tsakalotos said in an interview with the Financial Times that he expected Greece’s creditors would conduct their formal review of the government’s planned reforms towards the end of November. If the verdict is positive, the government will aim to open debt relief negotiations before Christmas, he said. “It’s absolutely critical that we get something on debt relief,” Mr Tsakalotos said. “By the second quarter of 2016, if we get a positive review, bank recapitalisation and debt relief, I don’t see any reason why there shouldn’t be a return to growth.”

As for Monday morning, going to be important to watching the result of the Catalan election.  Still this is noteworthy so far:

'Voter turnout at the Catalan elections is now said to have surpassed 63% - 7% more than in 2012'

And then there is this in Europe...

(h/t @Market_Matter)

 Who would have thought the most congested emerging market cities would be these ones?!

Keep watching the velocity of money...if it ever picks up then central banks are going to have a difficult call...

(h/t @acemaxx) 

Company-related observations:

Deal multiples...still creeping up generally...  

...and I observe some big old deal spreads currently which indicates the rising caution: 

Wonderful on Japan Post the biggest Japanese IPO since the heydays of the 1980s (link here):

'Some blamed the slightly chillier weather, the light spattering of rain and the timing of the event in the middle of a working day. But for Japan Post’s stockbrokers, touring the country to inspire nationwide frisson for an $11.5bn privatisation that aims to attract more than 1m retail investors, the audience of 53 was disappointing. The fact that six of them had nodded off by the presentation’s 15-minute mark was another blow...'

VW...were apparently naughty boys back in the annals of time for not dis-similar reasons than recently...
...meanwhile in terms of recent auto sector performance guess who stands out (to the downside)?!

Meanwhile The Sunday Times noted that 'the European Central Bank has dealt Volkswagen a fresh below by refusing to buy the loans that finance sales of its cars' 

Telecoms...not about the voice anymore: 

Fascinating Silicon Valley graphic:

(h/t @PlanMaestro)

Some other company headlines (from the Sunday Times):

'AB InBev could table a £70bn bid for SABMiller this week...analysts said the brewer will need to offer at least £45 a share to seal the deal.  SAB's shares closed on Friday at £35.88'  

'Tesco is close to ditching the sale of Dunnhunby, the company behind the Clubcard, but is ready to go ahead with the £3bn sale of its central and east European operations' 

And finally...

It may just surprise you who eats the most fast food (link here)...

(h/t @CristinaAlesci)

When people post on Instagram

And finally...a wonderful piece as to why every cartoon in the world you can now use the strapline:

'I'd like to add you to my professional network on LinkedIn'. (Link here).

(h/t @patriciavalerio)

Have a good week

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