Archive for March, 2012

Week Mar 23 2012 – Weekly Recap & The Week Ahead

Monday, March 26th, 2012

“The four most expensive words in the English language, ‘This time it’s different'”—Sir John Templeton (Founder Templeton Fund)

1. China raises retail gas, diesel prices by up to 7% — China raised retail gasoline and diesel prices for the second time this year, by 6.4% and 7% respectively, to ease losses faced by the nation’s refiners in view of rising global crude-oil prices and a decline in domestic consumer price inflation.
2. BHP exec: China demand for iron ore flatteningDemand for iron ore from top consumer China will flatten out as the world’s second-largest economy cools, an executive at mining giant BHP Billiton Ltd.
3. Chinese, eurozone factory activity worsens — PMI data out of China and Europe indicates that the contraction in factory activity has got worse in March. HSBC’s manufacturing purchasing managers’ index for March, released Thursday, printed at 48.1 on a 100-point scale, down from a final reading of 49.6 in February. an early economic indicator that reflects trends in industrial output and economic growth, raised worries about the Chinese outlook.
4. Oil giants in talks over $40B Alaska-Asia projectFinancial Times reported that BP (BP), Exxon Mobil (XOM) and ConocoPhillips (COP) are discussing a $40B project to export natural gas from Alaska to Asia.
5. Obama to fast-track part of Keystone pipeline — President Obama announced a fast-tracking of the approval of the southern half of TransCanada’s (TRP) Keystone XL pipeline.
6. Fed Hosts Global Gathering on Easy Money — according to the WSJ, the Fed hosted the world’s leading central bankers last Frid. to discuss the impact of the money printing some of them have been doing. Those joining Ben Bernanke include the BOE’s Mervyn King, the BOJ’s Masaaki Shirakawa and former ECB Chief Jean-Claude Trichet.

The week ahead — Economic data from Econoday.com:

Week Mar 16 2012 – Weekly Recap & The Week Ahead

Monday, March 19th, 2012

“It ‘s a buy when the 10-week MA crosses the 30-week MA and the slope of both averages is up”Victor Sperandeo

1. U.S. to file rare earths complaint — the U.S. filed a complaint with the WTO over China’s quota for rare earth exports.
2. Chip Maker Intel (INTC) Working on a Web-Based Video Service to Compete With Cable, Satellite Providers — Intel (INTC) is developing an Internet-based TV service to sell to consumers, and has been talking with media companies about creating a “virtual cable operator” that would offer channels in a bundle. The TV service would rely on Intel-built set-top boxes that feature the company’s own processors.
3. Pfizer likely to spin off animal-health unit — Pfizer (PFE) said that it’s more likely it will spin off its animal-health unit than sell it to one of the many companies rumored to be in the hunt to buy it.
4. Banks Stress-Tests — The Federal Reserve released the results of its stress tests, showing that “despite large hypothetical declines, the post-stress test capital level … of 15 of the 19 bank holding companies were estimated … above all 4 of the regulatory minimum levels … even after considering the proposed capital actions, such as dividend increases or share buybacks.” Citigroup (C), SunTrust (STI), MetLife (MET) and Ally Financial failed to get their capital plans approved in the Fed’s stress tests
5. Chinese Economy Already in ‘Hard Landing,’Bloomberg reported China’s economy is already in a so- called “hard landing,” according to Adrian Mowat, JPMorgan Chase & Co.’s chief Asian and emerging-market strategist. “China is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down. It’s not a debate anymore, it’s a fact.”
6. Iranian banks to be cut off from global payments system — the international community has ratcheted up the pressure on Iran by several more notches, with the EU ordering Swift, the Belgian organization that handles over $6T worth of international payments a day, to cut off Iranian banks blacklisted by the EU from its messaging system.
7. 10-Year Treasury Yield Breaks Above 200 DMA & VIX falls below 15 — below are the charts of the US 10-Year T-Bill and VIX courtesy from the Bespoke Investment Group.

The week ahead — Economic data from Econoday.com:

Week Mar 9 2012 – Weekly Recap & The Week Ahead

Monday, March 12th, 2012

“The best traders have no ego. You have to swallow your pride and get out of the losses.” Tom Baldwin

1. Markets fall as China cuts GDP target — China has lowered its GDP target to 7.5% from the 8% goal that’s been in place since 2005. Chinese leaders are determined to cut reliance on exports and capital spending in favor of consumption.
2. Iran Offers To Resume Nuclear Talks, Allow Inspectors Into Military Site Iran stated it would be willing to allow inspectors from the UN’s International Atomic Energy Agency (IAEA) to visit its Parchin military complex, which the West believes is part of a suspected Iranian nuclear weapons program.
3. China to cap expansion of major industries — China is planning to limit growth in some of its largest industries, according to a work report Premiere Wen Jiabao recently delivered to the nation’s legislature. The report lists four sectors in which capacity increases should be curbed: auto manufacturing, steel making, shipbuilding and cement production.
4. European Central Bank leaves rates unchanged — Mario Draghi expected to take a wait-and-see approach after the completion last week of the ECB’s second, three-year long-term refinancing operation, or LTRO. The Feb. 29 LTRO saw 800 banks snap up nearly 530 billion euros ($700.3 billion) in three-year loans fixed to the ECB’s 1% refi rate.
5. Over 80% of Greek creditors accepted debt swap — Greece avoids default with debt swap. Greece said €172B of bonds were tendered by private investors in its debt swap, making the participation rate 85.8%. The country intends to amend the terms of all Greek law governed bonds, bringing the participation rate to 95.7%. However, the country’s activation of collective action clauses will likely force the ISDA’s hand in declaring a “credit event,” triggering payouts on CDS.

The week ahead — Economic data from Econoday.com:

Week Mar 2 2012 – Weekly Recap & The Week Ahead

Monday, March 5th, 2012

“I’m not nearly so concerned about the return on my capital as I am the return of my capital.” Will Rogers (American Humorist and Celebrity, 1879-1935)

1. G-20 Defers Move On Aid for Europe G-20 officials met. Issues raised were the potential of rising oil prices to hurt a global recovery and the need to change the part of the Volcker Rule which bans prop trading of foreign sovereign debt. Ministers delayed consideration of new international support for Europe until the G-20’s next gathering in April.
2. Blackstone bets on natgas — Blackstone (BX) announced $2B investment in Cheniere Energy Partners (CQP) that will allow the company to build a gas-liquefaction plant in Sabine Pass, La., the first of its kind in the continental U.S.
3. Warren Buffet Posted 2011 Annual Letter click here for the link to Buffet’s annual letter.
4. ECB allots $713 billion to banks in LTRO — The European Central Bank on Wednesday allotted a larger-than-expected 529.5 billion euros ($713.4 billion) in loans to euro-zone banks in its second and possibly last three-year long-term refinancing operation. The ECB said a total of 800 banks were allotted funds under the LTRO.
5. China slashes dollar reserves WSJ reported that China has sharply cut the share of its foreign reserves held in dollars, Dow Jones calculates. Although the exact composition of China’s $3.2T reserves has always been a mystery, the portion of dollar holdings appears to have dropped to a decade-low 54% as of June 2011 from 65% in 2010 and 74% in 2006.
6. Banks Park $1 Trillion of Cheap Money Back at ECB — reported by CNBC, Commercial banks parked a record 777 billion euros ($1.03 trillion) with the ECB overnight, roughly three-quarters of the money the central bank has shovelled into the financial system in two injections of ultra-cheap three year funding since December. The deposits at the ECB highlight the continued lack of trust between European banks.

The week ahead — Economic data from Econoday.com:

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