Wednesday, 7 October 2015

Financial Orbit wrap 06/10/15

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...

A day of meetings and related on Tuesday...

1. Value vs growth - Using indexes of "pure value" and "pure growth" stocks in the S&P 500, the difficulty for value-oriented investors is easy to see this year. The pure growth stocks have returned more than 1 percent including dividends, outperforming value stocks by 9 percentage points (link here).

This due to big underperformance of sectors like energy, so interesting it came out on day when S&P Energy sector back above its 50-DMA for the first time since 5/22, breaking a streak of 92 trading days below...

(via Bespoke Invest)

And this outperformance continued on Tuesday...more on this below.

2. China – best primary/secondary/tertiary chart I have seen.  Few realise that the services sector is already the largest aspect of the Chinese economy...

(h/t @sobata416)

3. PepsiCo kicked off the Q3 earnings season...and with a bang too as they upgraded:

A full write-up in due course...

4. Meanwhile the IMF reduces its global growth forecasts in its latest World Economic Outlook:
for a second time this year. The IMF sees the world economy growing 3.1% this year (2.9% prior) and 3.6% (3.2% prior) in 2016."The distribution of risks to global growth remains tilted to the downside,"

5. Back to the energy sector mentioned above.  As per Business Insider (link here)...

Crude oil prices rallied 5%. West Texas Intermediate crude oil futures in New York rose to as high as $48.72 per barrel. Brent crude, the international benchmark, rallied to $52. There were two major oil-related headlines: According to Reuters, OPEC secretary-general Abdullah al-badri said the 12-member oil group should collaborate with non-members to deal with the oil oversupply. And, Energy Information Administration's latest short-term energy outlook estimated that US oil production fell by 120,000 barrels in September. 

...and this is what happened to the high flying biotech index:

The iShares Nasdaq biotechnology ETF sold off again, falling as much as 6% and approaching its biggest one-day drop since August 2011. 

'value versus growth'.  Hmm, interesting.  From a quarter four perspective do we have a rotation ongoing?

(nb: Yum! Brands shares sharply down after numbers on Tuesday after the close as their Chinese growth (plus some inevitable FX translation issues) impact.  Much more on this on Wednesday)

tumbles nearly 18 per cent in extended action on weak Q3 results, disappointing outlook.

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