All posts by admin

05Oct/15

Global Automotive Demand Atlas September-October 2015 edition

In August, global light vehicle sales dipped 0.1% yoy to 6.99m, after a 0.3% decline in July, resulting in a 0.9% increase to 57.09m YTD. For FY15E, we expect a global LV market of 88.1m, implying an increase by 0.7% or 0.6m. This is a downgrade from the previous forecast of 89.0m and an implied increase by 1.7% or 1.5m. The FY15E growth rate is thus expected to be a fraction of FY14’s 3.7% and FY13’s 4.0%.

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27Sep/15

2015 Q4 Global Investment Strategy

Stocks have the seasonal tendency to outperform bonds from mid-November until the end of March, a trend that we see to continue in 2015. As in prior reports, we do think that the current stagnation-type economic environment, impacting two-thirds of the global economy, namely the US and Europe, and Japan, is going to provoke most long-term investors to conduct a major switch from “negative-return based” bond investments into high-yield equities with stable and defensive cash flow generative outlook.

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21Sep/15

Morning Market Commentary & Weekly Charts

Bond proxies like utilities and REITS gained ground, while banks and insurers sold off sharply. It was a bad week for risk assets leading to the bigger question of whether the August prices plunge was a normal correction or something more serious. A bounce off that low was expected, but has now run its course. We are still expecting for markets to retest the summer lows between September and October.

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14Sep/15

Morning Market Commentary & Weekly Charts

Risks related to international events remain quiet with most focus on China. Volatility in Chinese equity markets remains extreme. Economic news this week (other than the FOMC news on Thursday) is expected to be mixed. FOMC news on Thursday is by far the most important equity market-moving event this week. Polls say that chances of an increase in the Fed Fund rate are 25%. Knee jerk reaction to an increase likely will be negative. However, weakness will provide a buying opportunity.

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01Sep/15

Morning Market Commentary & Charts

For the month, the S&P 500 and Dow are lower by over -6%, both closing below their respective 20-month moving average for the first time since September 2011. August’s return is a significant divergence from the average return for the market, according to the S&P 500 Index. The technical status of the broad market has notably deteriorated, suggesting stocks may not be free of further downside risk, as of yet.

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31Aug/15

Morning Market Commentary & Weekly Charts

Economic news this week is expected to show accelerating US economic growth in Q3, a scenario that likely will raise concerns about timing of the first increase in the Fed Fund rate. International events also could influence equity markets this week Hot spots include China, Russia, Venezuela and selected Middle East countries.

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29Apr/15

Morning Markets Commentary & Charts

US equities, even at current extremely high valuations, still have DDM support. The present dividend yield of the S&P 500 sits around 1.95%, almost double what it was at the start of the century. For the first time since the 1950’s, the dividend yield of the S&P 500 benchmark is higher than the 10-year Treasury yield (1.92%), increasing the appeal of the equity market. Whatever the use of enormous corporate cash balances, there remain many reasons to be enticed by the equity market over the long-term. Defensive sectors like utilities (+25%) and healthcare (+24%) are leading the US sector higher last year, and we believe that the low growth environment keeping the FED monetary policies on hold will bode well again for these sectors in 2015.

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24Apr/15

Morning Markets Commentary & Charts

Historically, when stock prices went up, bond prices went down and when stock prices went down, bond prices went up. This market phenomenon did not hold true in the past 7 years, since most global central banks have been turning up the floodgates. Thanks to most Central banks monetary policies around the world, financial markets are booming in virtually all corners of the world. Most global equity markets are trading at all-time record highs. Global real estate is booming at the same time, with record valuations in many countries, including both residential and commercial properties. Art collecting too is in vogue among the world’s wealthiest citizens.

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22Apr/15

Morning Markets Commentary & Charts

US stocks ended mixed yesterday with the Dow Jones Industrial Average and the Nasdaq Composite closing on opposite sides of the flat line. Q1 US company earnings so far are beating expectations, which is positive (albeit from a much reduced level as 3 months ago), but they are coming up light on revenue, which is bothersome. Not all of the shortfalls are attributable to the translational impact of the stronger US$, which makes even more for a sup-par grade for this earnings season.

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20Apr/15

Morning Market Commentary & Weekly Charts

We are still not assuming that the Fed will raise the FED Fund rate this year, so, consequently we see US equity markets may trade down within the “normal historic period of seasonal weakness” from May to September, which has been between -8% and -10%, before then a later FED move on raising rates may circumstantiate a more pronounced correction for equities in the US, and globally, to the tune of a -10% to -15% correction.

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13Apr/15

Morning Market Commentary & Weekly Charts

International events could have an impact on equity markets this week. The Greek government is close to running out of international currency to pay its debts. Negotiations continue. Discussions about framework of the Iran nuclear agreement continue. Venezuela is close to government breakdown. Terrorist hot spots seem to surface on a regular basis. Economic news this week is expected to show a slight recovery in the US economy in March from the weather related slowdown in February. Focus is on March Housing Starts to be released on Thursday.

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