Sunday, July 28, 2013

Weekend Memo: Sunday, July 28, 2013 and Morning Memo: Monday, July 29, 2013

"Weekend Memo" is a supplement to our daily "Morning Memo" series. Monday's Morning Memo is added below.
For 'newcomers' to our site, here's the story:
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!!  

Weekend Memo: Sunday, 4:00pm ET
  • China...announced 'urgent' audit of overall public debt including local gov't debt. Background: to circumvent Central Gov't restrictions put on local gov'ts to prevent them from taking on too much debt, many local gov'ts turned to borrowing through unofficial channels and investment vehicles.  The funds borrowed by local gov't were in turn used to invest in local infrastructure projects, many of which are not paying off as had been expected.  As a result, there's a growing concern that large amounts of local gov't debt may not be able to be repaid, raising the risks of a financial crisis.  The Central Gov't is spearheading the audit as they try to find ways to fund domestic investment in an economy that had long relied mostly on exports, which have been waning.

  • Egypt...what goes around, comes around:  One day after 74 pro-Morsi protesters were killed by police, from the WSJ:
    President Adly Mansour gave Prime Minister Hazem Beblawy the authority to allow soldiers to arrest civilians, reviving sections of an emergency law whose severity helped spark a revolution against former President Hosni Mubarak more than two years ago
  • US...Economic data: As if it's not hard enough deciphering US GDP data, this week there will be a total overhaul of the way GDP data is calculated, and all numbers going back to the early 1900's will be revised!!  The estimated impact on headline GDP is to raise it by 3%!  Also on Wednesday, Q2 GDP estimate will be released with estimates @ 1.1% annualized, but subject to wild swings in accuracy due to the revisions mentioned above.

  • This week in Economic Data:  chock full!!  The highlight will be the Employment data on Friday w/consensus hovering around 175k jobs.  Before that, the Fed will hold a two day meeting and release a statement only, no press conference, so look out for 'tapering tantrums' by the market!  And there's more, including pending home sales, Case-Shiller House prices, consumer confidence, Q2 GDP advance estimate....See this link to for all data w/estimates.

  • S&P's price history over the past couple of months w/annotated highlights:  

  • Stocks/ETFs on the radar  this is a trial run using  Below is a slideshow of several charts that are currently on the radar screen for further consideration, either as possible buys or sells.  Please email or 'chat' w/us regarding more specific thoughts on each chart.  You can view the slideshow in a new tab (and larger view) by hitting the link just below the chart below.  Or, the slideshow can be enlarged in this tab by hitting the arrows in the lower right hand corner of the chart. Then, when you're finished viewing the slideshow, hit the arrows again in the lower right hand corner of the slideshow.  Let us know what you think of this new feature!!  Thx!!).

Morning Memo:  Monday, July 29, 2013

5:30am ET...

  • Asia mkts broadly lower led by Nikkei down over 3% on stronger Yen and weaker exporter shares.  The Yen has fallen vs the dollar over 20% this year.  Recent Yen strength vs the USD with USD slipping below Y98 has put significant pressure on Nikkei in recent days.
  • China...Industrial profits wte (worse than expected) rose 6.3% y/y, far lower than the prev month's y/y rise of 15.5%.
  • market rates shot up as we approach month-end as small banks look to build cash reserves and large banks held off on lending (Reuters).
  • European mkts opened slightly higher on corporate m&a deals and earnings news.  But overall moves tempered by upcoming central bank meetings this week...Fed, ECB and Bk of England.
  • more later...
  • US...Pending Home Sales were lower m/m but bte (better than expected).

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).
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Additional Disclaimer: currently long many stocks/ETFs including CNK, CAT, MCD, NSC, QCOM, XLU and XLE.  Positions may change at any time without notice.

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