Sunday, 4 September 2016

Stories we should be thinking about

Ahead of the new working week here are a few finance and related stories to be thinking about.

Macro matters:

Jolly looking group picture for the G20 summit in Hangzhou...


...but I have to say this alleged G20 communique draft excerpt is a bit too mainstream and hence a bit disappointing: 

Leaders should make full use of pol options incl fiscal as well as mon to revive growth.

There are some deeper issues out there. For example this sounds like a must listen/watch via @SheryAhnNews and her 'interview with @OECD chief Angel Gurria coming up @BloombergTV Monday "Trade no longer locomotive of growth" '

My observation on all this: 'Unfortunately true but wish it wasn't. We need supply side reform & trade liberalisation..we get stimulus & rhetoric'

At least there is general understanding that a lack of free trade matters (link here)...you can see the reason why this is important: 


The extent of intra-G20 protectionism is just stunning: 

(h/t @SimonEvenett) 

Of course matters like trade protection can really inhibit economic growth levels and hurt stock market valuations - especially at a time of a generalised lack of earnings growth (and multiple expansion via other forms): 
]
(h/t @DavidBelleFX)

I am not sure however whether G20 per se will have much impact on any decision to raise US interest rates or not this year.  Fascinating to see that US election years have not historically been too much of a barrier...

...although my personal take on the NFPs was that December is so much more likely than September.  After all the US labour market is hardly fixed as the next couple of charts show: 

(h/t @edwardnh)

(h/t @conkers3)

Also relevant for labour markets has been migration flows.  Europe is still struggling as per comments over the weekend by Donald Tusk...

(h/t @GreekAnalyst)

...and the general consensus among policy-watchers is for more EU level solutions.  We may be waiting a while for these would be my observation. 

(h/t @TEHAmbrosetti)

However what we will not be waiting long for in Europe is the next ECB meeting and press conference which occurs on Thursday.  I see there is a rising consensus for more stimulus action...quelle surprise: 


Is more stimulus good news for index-tracking as it encourages a lack of stock/risk differentiation? Fascinating on passive investment (link here) and I agree with the central notion that the next iteration of investment trends are much more likely to benefit a more active approach:


Turning back again to China and interesting that "Nearly 30 percent of Chinese car buyers bought on credit last year, up from 18 percent in 2013"(link here) (h/t @zesty_finance).  Kind of positive for continued growth of the most important emerging market economy at the margin (although ultimately as the West shows too much credit growth eventually eats itself).  
Good to read (link here via @jiabaoChina) 'China Is Building a Start-Up Boom'. More flexibility...
Meanwhile in Japan I still see a future of more stimulus AND a lower yen even if recent history has been a little different: 



Finally for this section...amazing what happens when you stop oil drilling?

(h/t @cbs11jeffrey)


Sector and companies: 

With earnings season nearly over a great insight below (link here) as to why European earnings are historically over-anticipated...and Asian earnings under-anticipated:


Pretty easy to spot the Syngenta - ChemChina (proposed) deal: 

I see also from the Financial Times that there are ring fencing challenges at RBS...although my initial instinct was re the profitability of the utility-like Natwest!  Still opportunities in financials (which were the best performers in the US and Europe in August)...


...albeit that UK financials do still have some Brexit challenges: 


Great chart showing how the auto sector is very active in Mexico: 

(h/t @PlanMaestro) 

And finally...

No shortage of money in English Premier League football (or depending on where you are reading this in the world...soccer):



And if you like this mix of macro charts and company/sector insights don't forget to apply for the week-long trial of Financial Orbit Macro and Financial Orbit Stocks 

Have a good week 

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