Tag Archives: newsletter

It was a miserable week that ended a miserable year, followed by an apparently bad first week in 2016. In fact it was the S&P 500’s worst since the start of the bull market in 2009, ending the year down 0.73% at 2043.94 points! Volume was seasonally very low. If you are frustrated with the stock market’s performance, I can well understand it, but if you look at the video (Ctrl + Click) below, “Ouch! 5 CEOs lost a combined $20 billion in 2015!”, you may be comforted to see that Warren...

Chinese shares and the yuan stabilized with the apparent help of the government's guiding hand, but global markets are still on the defensive.     The euro extended yesterday's decline through the $1.08 level.  The next immediate technical objective is near $1.0730.   The greenback is firmer against most major and emerging market currencies.  The chief exception is the Japanese yen.    Lower equity prices and the continued pullback in US yields are often associated with a stronger yen. ...

(from my colleague Dr. Win Thin) Meet the new year - same as the old year.  EM starts 2016 on a weak footing, with negative sentiment carrying over from 2015.  The global backdrop remains poor, with the Fed likely to continue its tightening cycle with another hike in March.  Commodity prices remain near the lows, while China data suggests that the slowdown (albeit modest) continues. Idiosyncratic EM risk remains in play, but in some instances could take a bit of a breather.  Brazil’s...

Perhaps it may be lesser known than his other Laws, but Murphy wrote one for the basis analysis. It goes like this. If we observe that the fundamental price of a metal is far removed from the market price, the two won’t likely converge the next week. On the other hand, suppose we say this (as we did last week): “The Monetary Metals fundamental price is measuring just that, the fundamentals. As with stocks or any other asset, our centrally banked, government-distorted markets can experience...

The start of a new calendar year does not necessarily mean the rise of new market drivers.   In fact, the key issues investors face at the start of 2016 are the same that dominated Q4 2015.   These issues center around pace of Fed tightening, the outlook for the world's second largest economy and its markets, the impact from the drop in oil prices, and commodity prices more generally, Europe will deal with the centrifugal forces that threatening it, and whether Japanese economy can find...

The US dollar firmed against nearly all the major currencies in the last week of 2015.  The exceptions were the Antipodean currencies and the Japanese yen. The relatively high short-term yields offered Australia, and New Zealand may have attracted some hot flows looking park over the turn.  The yen's gains were all scored on New Year's Eve in thin turnover, as equity markets and US yields slipped lower. Since the ECB eased policy on December 2, the US Dollar Index has been mostly...

Our analysis of the forecasts of economic data for 2015 shows that the Swiss banks were too optimistic for most data. US growth, the oil price, inflation and interest rates were far lower in 2015 than they expected. The forecast errors for stock indices and unemployment, however, were  smaller. In December 2014, the Neue Zürcher Zeitung (NZZ) published the forecasts of the leading Swiss banks for the year 2015. UBS, Credit Suisse, Julius Bär, die ZKB, Raiffeisen, Pictet und J. Safra...

As you may have expected, last week the market moved more into wind-down mode as the week progressed and dosed to a near-sleep on Friday’s half-day with the S&P500’s volume down 53%. This is the usual script at this time of year, so that the market ignored the WTI crude oil price, which it had recently been closely correlated to, when it moved from last week’s close $34.73 per barrel to this week’s price of $38.10, an increase of 3.38%. The market still languishes in its ‘under...

One year ago (and just two months before the shocking announcement the Swiss Franc’s peg to the Euro would end, dramatically revaluing the currency, and leading to massive FX losses around the globe and for the Swiss National Bank) the Swiss held a referendum whether to demand that their central bank should convert 20% of its reserves into gold, up from 7% currently. After the early polls showed the Yes vote taking a surprising lead, the Diebold machines kicked in and the result was a...

Full story here