Tuesday, December 31, 2013

Morning Memo: Tuesday, December 31, 2013

"Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  

We hope you find this useful and informative....and as always, that you'll share feedback!!

5:00am ET...
  • Asia...with many markets already closed for New Year's holiday, China's Shanghai and Hong Kong exchanges ended slightly higher, despite ongoing concerns over yesterday's release of the audit of local gov't debt levels that have risen 67% since 2010.  The Chinese markets were also cautious ahead of tomorrow's (Wednesday's) release of official PMI data.
  • China...in the 'of interest' category:  the gov'ts cabinet issued rules banning gov't officials from smoking in gov't buildings and many other public places including offering cigarettes to others when performing official duties.   Quoting from MarketWatch:
  • Health experts have been urging China to curb smoking as deaths mount and medical costs rise. China is the world's largest consumer and producer of tobacco, home to more than 300 million smokers and 43% of the world's cigarette production, according to the American Cancer Society and the World Lung Foundation.  
  • Europe...most markets were either closed all day or traded a half day.  Very quiet activity.
  • More "of interest"
    • Coffee...wholesale prices have fallen 20% this year as higher prices several years ago brought a wave of new production on board and has now resulted in a supply glut.  Since 2011, prices are down close to 50%.  (Editorial note:  haven't you seen that same price drop in your own coffee purchases?  I can answer that:  no!  Prices at the retail level have largely stayed the same or gone up!  So who benefited from the lower wholesale prices?  Hmmmm.....Check the profit margins of some of the largest coffee companies....).
    • China....President Xi Jinping was named yesterday to head the committee overseeing China's economic reforms, an area of responsibility formerly in the hands of the number two in command, the Premier.  This elevation seemingly signals the importance of the reforms, especially on the heels of yesterday's local gov't debt audit.  How President Xi attempts to tackle the problem of a massive local government debt burden will be watched closely.  Massive borrowing by local governments in recent years did help spur economic growth, but also resulted in significant overspending and overbuilding which has left China with a big supply of unused and empty real estate and other projects.  Quoting a WSJ article: 
      The swelling debt problem presents Mr. Xi with a menu of bad choices, say economists. He can essentially try to muddle through and avoid a bust by providing somewhat more central government funds and using regulation and backroom orders to banks to tighten restrictions on loans.....Or he could attack the problem aggressively by raising taxes, selling off assets and allowing some defaults as a way to warn financial firms or local governments of the risks involved.
  • More later..... 
  • LATER:
    • US...Case-Shiller increased in October at the highest rate since February '06, but noted caution about a slowing pace of price increases ahead in '14.
    • Chicago manufacturing index falls to 59.1 in Dec fr 63, below expectations, but still significantly above 50 indication expansion.
    • Consumer Confidence (Conference Board) rises in December to 78.1 fr 72% in Nov.
  • SOBERING:
Please continue to visit Soos Global Market Musings for updates.

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs, incl AEO and UN .  Positions may change at any time without notice.

Monday, December 30, 2013

Morning Memo: Monday, December 30, 2013

"Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  

We hope you find this useful and informative....and as always, that you'll share feedback!!

5:00am ET...
  •  Asia....markets mostly higher with the Nikkei ending the year up 57% as the USD/Yen traded above 105!  On the other end of the performance spectrum is China's domestic market, the Shanghai Index, which is down 7.6% on the year.  Most Asian markets will be closed Tuesday, with a few trading a half day.
  • China...PMI data due out on Wednesday, expected to drop in Dec to 51.2 from Nov's 51.4.  Meanwhile, an audit of local gov't debt levels released earlier today shows the total has grown to $3Trillion! The audit by the National Audit Office has been anticipated since it was announced last July, and is being watched closely for indications of reform measures that President Xi will pursue in order to assure that local government debt remains at manageable levels, which is how the report described current debt levels. Many analysts remain concerned that local gov't debt levels, both from official and unofficial sources, has risen to 'bubble' levels and could trigger a major financial event if not wound down.
  • Europe....quiet and mildly mixed ahead of year-end. 
  • Weekend geopolitical news with potential global macro markets implications:
    • Russia...a suspected suicide bomber killed well over a dozen people in a major train station on Sunday.  Earlier today, another report of a bombing on a bus is reported to have killed ten people.
    • Lebanon....Saudi Arabia pledged $3B to bolster Lebanon's army, taking a stand against Iranian-backed Hezbollah, adding to already high tension levels in the region.  Separately, two weeks after an Israeli soldier was killed on the Lebanese border, rockets were fired into Israel from the same area.
    • Ukraine...anti-govt protests continue, angered by the move towards Russia and away from the EU.
    • South Sudan....despite the gov't's offer to suspend fighting w/rebels, the fighting goes on.  (oil supply disruption risk?)
    • China...protesters in China's Xinjiang region, which is a hotbead of anti-gov't sentiment led by a separatist mostly Muslim group called the Uighurs.  The Chinese gov't killed eight, calling them terrorists, as they attacked a police station.
    • more later....
    • LATER:
      • Nov Pending Home sales below expectations and revised lower prev mth.
Please continue to visit Soos Global Market Musings for updates.

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs, incl AEO and UN .  Positions may change at any time without notice.

Friday, December 27, 2013

Morning Memo: Friday, December 27, 2013

"Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  

We hope you find this useful and informative....and as always, that you'll share feedback!!

5:00am ET...
  •  Asia....after yesterday's US rally, continued firm, closing mostly higher across the board.
  • Japan...Retail Sales rise 4% y/y.  Consumer Prices up 1.2% y/y.  Both were better than expected.   On the other hand, Industrial Production rises 0.1$ in Nov.  and Household Spending  rose 0.2%, both lower than estimates.  Collectively, however, the data shows some economic pickup and stocks rallied off of earlier lows to close near flat.
  • China....reforms continue!  China's telecom regulator announced plans to open up the mobile-services sector to more private businesses with the goal of stimulating more competition and to provide consumers with more choices.  Separately, money market rates calmed at recent levels just over 5%, which gave some relief to markets, hoping to avoid a liquidity driven spike in rates.

  • South Korea....while still confident that the economy will grow in '14, the gov't lowered slightly the GDP forecast to 3.9% from original estimates of 4.0%.
  • Europe...opens higher after having been closed for the holiday.
  • Copper....continued its rally to eight month highs on Thursday.  Earlier this week, a spike in copper prices was blamed on an erroneous trade. 
  • more later....
  • LATER:
    • OF INTEREST:
Please continue to visit Soos Global Market Musings for updates.

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs, incl AEO and UN .  Positions may change at any time without notice.

Thursday, December 26, 2013

Morning Memo: Thursday, December 26, 2013

"Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  

We hope you find this useful and informative....and as always, that you'll share feedback!!

5:00am ET...
  •  WEDNESDAY:
    • Turkey...three ministers quit government over rising tensions related to corruption scandel investigation.
    • Egypt...tensions remain high as the interim gov't declares the Muslim Brotherhood a terrorist organization.
    • Nikkei...closes above 16,000 helped by stronger USD vs Yen.
    • China...mkts moved higher on Wednesday helped by the central bank's governor re-assuring markets of more economic reforms, and a more flexible currency.
    • WSJ...running a series of Asia economists' views on 2014.  Here's the first:
      • Data from Tuesday worth noting:
  • THURSDAY:
    • Nikkei...extended its run above 16,000 on a weaker Yen and on PM Abe's comments this weak that he'd announce more reform measures in June aimed to bring more women into the workforce.
    • China...markets fell, reversing recent days' gains as the central bank did not inject liquidity to fight rising short-term money market rates.
    •  Japan...PM visits Yasukuni war shrine, a move that angered China and other neighboring countries given its historical significance as a sign of Japanese imperialism.
    • Europe...London remains closed for the holiday.
    • Ukraine...violent attacks are reported to have been made on anti-government protesters.
    • Turkey....PM Erdogan replaces 10 ministers after 3 resigned yesterday, all related to an investigation into bribery, corruption and gold smuggling.  The economic impact of the political tensions could put pressure on the Turkish Lira, which could make it more difficult to deal with the current account deficit.
    • South Sudan....Civil war continues; possible oil supply disruption impact??:
    • more later....
    • LATER:
      • Jobless Claims...338k vs 350k est. Four-week moving average jumped 4,250 to 348,000.  Continuing Claims rise to 2.923mm vs 2.85mm est.  Analysts caution that the holiday season makes this data very volatile and therefore suspect.
      •  
      • Emerging middle classes are a key investment theme (long UN):
Please continue to visit Soos Global Market Musings for updates.

(Sign up to "Follow by Email"!  And share with others!)

(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
Disclaimer: Please read and consider important information related to all communication made by Soos Global on this site by clicking here.
Additional Disclaimer: currently long many stocks/ETFs, incl AEO and UN .  Positions may change at any time without notice.