The Banking and Strategy Initiative

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US Economy & Markets (The week ahead: August 18 -22, 2014)

It’s Monday Again! BREXIT  this 100 mtrs, S&P pulls back in two weeks, 13Fs report a smug summer

Even though patent cliff candidates Pfizer (20%)  and AbbVie (318%) struck up a chord with short traders, Everyone who had money at all notable fund houses was buying as far as the Q2 13Fs were concerned as released towards the weekend, though Buffet made a brief stand in a 13G to bring back news of its Dow Chemical buy in 2009 probably as he gets ready to sell at a huge profit. Paulson of GS and prime mortgage CDS fame, is buying into acquisition targets DirecTv and Covidien, while Einhorn is finally getting a reprieve apart from his increase in play at AAPL as he buys a little of the magazine spllit of this quarter ( after the Mcgraw hill split earlier a year ago) .Einhorn is buying a bit of Time from the TIME WARNER split, and Buffet is doing a switcheroo from the Liberty Media side to the Charter Comms side of the big Cable TV deal. Allys looking a bit warm too. Buffet has also filed a 8K for a 2.1% senior note issue with GS and Merrill Lynch

Icahn of course is still squeezing Apple for that dividend, increasing his stake as of July, while GM and American Airlines are out of mind and out of sight even as Caterpillar and Schlumberger continue their marvelous climb to beat the banks in yield since the tide turned for them in Mid September of last year His stake in Family Dollar just jumped with Family Dollar up 11% in pre open on the counter offer from Dollar General at $78.50, $4 ahead of $74.50 made by Dollar Tree almost a month back

Though, you’ll have to check, it’s likely that derivative and ETF plays have been also pounding down, doubling their bets on the SPX and the SPY since the flavor of the season is no longer to exit equities and with or without the Munis, no one is selling their Bond portfolios for a long time coming. AS US 10 year yields tick back to a never ‘afore 2% mark hitting 2.36% before the week closed, the week is likely to see hectic return of activity to ETFs having a bad July

The week’s economic data releases will keep home market watchers very busy with the homebuilder’s index today and ending in the Existing home sales data on Thursday after the weekly release of Purchase Applications not doing so sell but the rates have been coming down and Housing starts too that may surprise on the up side on Tuesday

Inflation will likely tamp down even further to near 0 levels as the FEd fights the urge to get into raising interest rates and explains why in the mid week release of FOMC minutes Everyone and Janet Yellen would be at Jackson Hole again this weekend

Emerging Markets may be a diverse basket but India and China have definitely hit the HR strike and will be running the mile in the last two quarters of the year making one more decision for global investors and tightening the noose on the Euro and Oil markets even as the Gold markets look like they are ready for a climb out of the big hole on demand in India returning slowly and surely this year. The Euro tried twice in the last two weeks to cross back to 1.34 levels but it looks like it will go all the way south to 1.30 levels as the bond investors divide their time more equally between both sides of the pond and SPain and Portugal trades cause a scare from HY and PIGS bonds, negating the rare pick up in sentiment in the Sterling which has been down despite the hype on the Economy as the Euro drags it down to near two year lows . Brent starts the week looking South from weak 102 levels

Meanwhile look out for the EBOLA virus spreading death and disease worse than SARS and more Oil going down the drain in the skirmish in Ukraine continuing another month, the latter not doing any good to prices as US Oil takes care of any price pressures on Oil

BREXIT? Well Wall Street’s return to London is seemingly shortlived as a leader in FT warns of their getting ready to leave London again, this time for Cork and Dublin as their Irish Licence sets them up nicely in the EU minus London, but then London is, right? or , London always WAS! , never is or will be..

The London Trader Deutsche Bank is also looking at a new lease of life continuing its second leg of capital raising in 2014 in the private chambers of Qatar investor Sheikh Hamid Bin Jassim, who has designated humself as anchor investor and may well end up saving London’s future as the Financial Capital yet again.

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This entry was posted on August 18, 2014 by in Uncategorized.

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