The Banking and Strategy Initiative

Chillin' out till it needs to be funded

It’S MoNDaY aGaiN (US Economy & Markets): Fixed income investors need Japan more than ever, McDonalds jumpstarts June despite the flu. The Week ahead June 10 – June 14, 2013

Global Village

Global Village (Photo credit: Bilal //iRza بلال ميرزا)

McDonalds sales in our eyes beat everyone playing hookey at the employment Situation Report quarters, even as the  Fed tried to pull more wool over the recovery’s eyes, calling the return of household wealth to (admittedly) its highest at over $70 T as a complete recovery leaving analysts lingering over the adequacy of 1% inflation or 2% inflation before rognsticating there will be QE by the end of 2013. As of now however, yields are still more than 32% higher from a yeaar ago just on the 10 year bond and the selldown is continuing with ca comfortable cover ratio ofrom the buyers at the smaller auctions by the Fed, showing the fiscal health that could back the bilious scare of backing off the liquidity but one should not forget the Fed will not be disposing off any of the QE securities so they will expire on the Fed account and the inflation at 1% is not encouraging enough to carry. Addedly, as commentators found on Friday, Jobs additions ahead of the marginal addition to employable population did not mean enough was happening to contain the cyclical unemployment though the number of unemployed for more than 27 weeks ( 6 months +1 week) is a 1 Billion or nearly 20% lower at 4.5B

One can see Japan’s GDP took no exception to the JGB selldown by US hedge funds or the slowdown in China data that started equities lower in the week thru Asia and Europe, Dow futures tentative despite India ok with the falling price of Oil and Korea and Singapore looking strong bulls for the global trade machine even as China settles down to seemingly long parleys with the US in an edition of SED being held on the West Coast in earnest. China’s war in the WTO over the solar panels industry embargo is serious news, EU seemingly copying US action of just a few months ago and a likely fallout if President Xi cares enough could be that China starts isolating every EU office and directly align with Germany. That would be interesting for the road this week as Chinese media made it very clear that europe is losing its place under the trade sun and is no longer as important as it was when it was pushed with a new WTO ban for predatory pricing on its Wines in Europe
European industrial production followed end of the month positive GDP data with optimistic and pretty obvious jumps in Industrial production in France, but Italy and Finland & Sweden continue to show deeper cuts in Industrial production and Italy’s case its GDP.  The Global services Product seems to be headed for new leadership of the Global growth context
Chinese trade surplus goes on increasing despite President Xi Jinping’s confirmation to enforce more consumption led growth in the Chinese Economy but McDonalds’ starta global corps stream of good news for Q2 with a +2% growth in comp sales in May across US, Europe and even Japan growing comp sales after a long time showing last  stream of contracting growth data to be a double lie(Try FT.com’s new Fast FT) US GDP also changes calculation of gdp from next month adding stock of movies, software and other services and IP to the GDP calculation
A 7.6% unemployment rate Mr Bernanke? Alpha funds and other proprietary investments seem to be headed for another bout of negative returns in Q2 and the confirmation of the equities not going up trend could post in interesting changes in strategies only that fnds just changed a lot ahead in April and so i will not be worth to measure any strategy changes till june end. Interestingly, in important market misdirections last week (or the week before that) the last 2.4% burst of gdp growth came at the expense of savings down from 7% in the us economy to 3% ( so much for Fed reporting house hold wealth has completed recovery!) in one strike and also despite us being bullish, very little cash is left to play with in the us markets, portfolio cash down to 16% from more than 35% in 2009 when the run fr gold had begun – see MKTW chart ) and before you go, as the bells have rung on Wall Street,  S&p assumes chances of a US downgrade are now less than a significant one in three and oh yes, the fed hates the word ‘taper’
Oh yes, we do think Google has run out of time as the General electric of this century, assuming the follow up impact of Moore’s law transmitted not just without loss but at a rate constant which is apparently growing the impact of Moore’s law from Edison’s 1878 invention to the 90s in less than 15 years in this century( from 1997)
Enhanced by Zemanta

Archives

%d bloggers like this: