On Tuesday, I wrote about the investment cycle change that was occurring in the financial markets. The critical point was that we are now in a shift and that we needed additional positive newsflow to continue to push the direction. From an earnings standpoint, this has occurred with solid numbers coming our and upside surprises beating downside. Also, we’ve had a successful Greek debt auction, we’ve had a successful Spanish auction and we’ve seen 5 yr sovereign credit ease from a peak of 267 in June to 218 today. Lastly, we’ve had global economic data that has been mainly positive … …READ MORE
Monthly Archives: July 2010
The Rain in Spain
While the tech earnings and outlooks have been equity positive, the news out of Europe on Spain has taken the edge off the rally. First, Fitch downgraded yesterday Banco Popular Espanol from AA- to A. Next, we have a story out on Spain’s city councils stating that a third of them are in dire straights and may be forced to suspend payments by the end of the year. “Spain’s federation of regional governments said councils were heading for slow “asphyxiation”, with many facing a payroll cut-off next month,” according to the UK Telegraph. Also, the borrowing by Spanish banks from … …READ MORE
Investment Spin Cycle
Investment Maytag Cycle
The global markets on a distinct three month pattern that begins with earnings and ends with policy makers.
As a purveyor and observer of newsflow, there appears to be a distinct pattern to our investment world right now. Not surprisingly, it is a quarterly time frame.
One, we get real news on earnings and outlook from companies. Two, we get the interpretation and clarification from analysts/strategists on what these numbers mean for each sector and the economy. Third, we get economic data to support or negate this viewpoint with economists providing their outlook. Fourth and finally, we … …READ MORE
Getting the Greek to the Market
Tomorrow, Greece will attempt to return to the markets to raise capital for a refunding. It’s a safe bet it’ll go well, but we won’t get a true picture until Greece has to borrow money it doesn’t already have from the European Union.
In an effort to keep contact with the international capital markets, Greece is auctioning off E1.25 billion of 26 week bills on Tuesday. According to Bloomberg, Greece has E4.5 billion of short term securities to coming due between July 10 and July 23rd. According to the IMF, this roll-over isn’t fully funded by the E110 billion loan … …READ MORE
