tag:blogger.com,1999:blog-34323687.post900216705288214682..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: A couple of thoughts on EM equitiesMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-34323687.post-5526529318701160332014-07-23T09:52:31.426+01:002014-07-23T09:52:31.426+01:00macro man,
you work all your models out in excel ...macro man,<br /><br />you work all your models out in excel alone? <br /><br />seems like you've had a lot of work done on itAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-41444187661667591942014-07-23T05:54:29.360+01:002014-07-23T05:54:29.360+01:00
Liberalism’s Grand Finale Came On July 22, 2014, ...<br />Liberalism’s Grand Finale Came On July 22, 2014, On Reports That China Buys US Debt At Fastest Pace On Record.<br /><br /><br />Asia Excluding Japan, EPP, Emerging Asia, GMF, The Emerging Markets, EEM, EWX, EDIV, DGS, EMMT, more specifically the BRICS, EEB, Brazil, EWZ, Russia, RSX, India, and China, YAO, jumped higher taking the Emerging Market Currencies, CEW, higher, on the Financial Sense report that China Buys US Debt At Fastest Pace On Record.<br /><br /><br />China Investments, CHXF, CHIX, CQQQ, ECNS, CHII, TAO, CHIQ, CHIE, HNP, YAO, CHII, CHIM, CHXX, REMX, EWH traded to new rally highs. Indonesia, IDX, IDXJ, and Singapore, EWS, EWSS, traded to new rally highs. Taiwan, EWT, and South Korea, EWY, traded strongly higher. <br /><br /><br />Ambrose Evans Pritchard reports China’s Terrifying Debt Ratios Poised To Breeze Past US Level .<br /><br /><br />Emerging Market Financials, EMFN, Brazil Banks BBDO, India Banks, HDB, IBN, The Chinese Financials, CHIX, rose to new rally highs. Asset Managers, such as IVZ, BEN, BK, AMP, STT, KKR, traded strongly higher. <br /><br /><br />Bloomberg reports Record India Bank Issues Seen As RBI Allows Longer Debt. Incentives for Indian lenders to issue longer-dated debt to fund infrastructure and affordable housing will trigger record sales of rupee-denominated bank bonds this year, according to the nation’s biggest underwriter.<br /><br /><br />The trade lower in the Benchmark Interest Rate, ^TNX, to 2.47%, drove Home Construction, ITB, Design Build, FLM, Networking, IGN, Casinos, BJK, and US Infrastructure, PKB, higher. Smartphone, FONE, and Transportation, XTB, rose to their former rally highs. Nasdaq Large Caps, QQQ, Health Care Providers, IHF, and Steel, SLX, rallied to a new highs. <br /><br /><br />Global Industrial Miners, PICK, specifically Aluminium Producers, traded to a new rally high, and Copper Miners, COPX, traded strongly higher, as Base Metals, DBB, specifically Aluminum, JJU, traded to a new rally high. <br /><br /><br />Global Real Estate, DRW, and US Real Estate, IYR, Residential REITS, REM, Mortgage REITS, REM, traded to a new rally high. Global Infrastructure, IGF, and Global Utilities, DBU, traded strongly higher. <br /><br />Emerging Market Local Currency Bonds, EMLC, traded strongly higher leading Aggregate Credit, AGG, to a new rally high, as the Benchmark Interest Rate traded lower to 2.47%. The case for Interest rates going higher has come of age as David Kotox posts Financial Sense posts Tapering Is Now Tightening.<br />theyenguyhttps://www.blogger.com/profile/08515095308836729043noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-89311883019820550912014-07-22T20:40:32.550+01:002014-07-22T20:40:32.550+01:00Just my 2 cents concerning the stock screen.
If yo...Just my 2 cents concerning the stock screen.<br />If you converts continuos ecofin variable into digital equal spaced numbers (ranking) you lose the outliers power which very often proves to be importsnt in stock selection. In ither words: it's risky to follow big banks quant model for customer. Ciao ciao <br />Gianni<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-80692933866190062752014-07-22T20:16:55.057+01:002014-07-22T20:16:55.057+01:00Not so "Fragile Five" Stock market perfo...Not so "Fragile Five" Stock market performance YTD 2014, in local currency, even strong in USD and Euro<br /><br />India ~ 20%<br />Brazil ~ 12%<br />Turkey ~ 20%<br />South Africa 12%<br />Indonesia ~ 19%<br /><br /><br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-84911152660600383582014-07-22T19:09:07.808+01:002014-07-22T19:09:07.808+01:00"Spoos surge to 2000 perhaps, on the wings of..."Spoos surge to 2000 perhaps, on the wings of USDJPY 102"...<br /><br />So you are saying a <1% move is some kind of a surge? Spoos will put on the required 15 points the first time Cook says "watch".<br /><br />I agree with your assessment that whats driving markets is CB's, but I think I disagree with you that there is no catalyst that will make that, or them, stop. None of these policies are efficacy-based - in fact its the opposite where indications they are not working will only increase the magnitude of the effects.<br /><br />EM's are cheap for a good reason. I'll stick with my crowded HYG@6% trade over hoping Putin shares his table scraps with me in Gazprom.Mr. Tnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-75204054368527238972014-07-22T18:37:58.821+01:002014-07-22T18:37:58.821+01:00Watching EM equities with interest, mainly to see ...Watching EM equities with interest, mainly to see what might be worth buying the next time there is a general global dump whenever there is another real or imagined liquidity shortage.<br /><br />BUCKY is approaching 81, which in June proved to be a barrier he couldn't surmount. If our favorite carry trade is USDJPY then that means we might see USDJPY make another run at 102, and then presumably fail once more, as nobody really believes we are going to see meaningful Fed tightening beyond the now widely anticipated October end of the current QE program. In line with the above thinking, we can see Spoos surge to 2000 perhaps, on the wings of USDJPY 102, but that should contain it for a while.<br /><br />The technical picture for EURJPY continues to get weaker and weaker. In part this is reflecting a raft of economic data out of Germany, which indicates that the main engine of the EU economy has been slowing down, perhaps an inevitable result of the EUR reaching a level above 1,3500 where the Southern EU economies simply cannot operate.<br /><br />Capital markets are currently sustained by the forces of Abenomics, Yellenomics and Dr Aghi's Bazookanomics, but not so much by actual fundamental economics. It cannot last.<br />Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1587142940919538962014-07-22T16:34:23.738+01:002014-07-22T16:34:23.738+01:00Anon 3:51 here.
Just to be clear: I was not tryin...Anon 3:51 here.<br /><br />Just to be clear: I was not trying to deflect blame (Russia/separatist are most likely perpetrators in this case), just attempting to be fair and balanced (not in the Foxnews way ;)).<br /><br />I just discovered your blog and I really like it by the way. Have you by any chance looked at the Chinese real estate numbers? The cement production (as a whole and per capita) are quite scary. <br />br<br /> Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1259966387768724822014-07-22T16:07:36.409+01:002014-07-22T16:07:36.409+01:00@ Anon 3:51 Point taken re prior episodes of the ...@ Anon 3:51 Point taken re prior episodes of the US and Ukraine, though AFAIK the last of the countries you mentioned is too busy with their own problems right now to have opined on the MH17 disaster. It's amazing what sticks in the brain and what is forgotten (or in some cases, never taught, viz CIA involvement in overthrowing Mossadegh)Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23948306382299059742014-07-22T15:51:19.315+01:002014-07-22T15:51:19.315+01:00First of all, i agree that the Moscow backed rebel...First of all, i agree that the Moscow backed rebels/morons/separatist are the most likely culprits. <br /><br />However, I did not really like your wording. You were saying the Russians have prior form on this....<br />well: so have the US<br />http://en.wikipedia.org/wiki/Iran_Air_Flight_655<br />and the Ukraine<br />http://en.wikipedia.org/wiki/Siberia_Airlines_Flight_1812<br />and the Isrealis<br />http://en.wikipedia.org/wiki/Libyan_Arab_Airlines_Flight_114<br />and... <br />.. so its not like any nation have the moral high ground here. <br /><br />With regards to the cheapness of Chinese stocks: I am not sure if the bursting bubble in real estate (look at the numbers, e.g. cement consumption over the years, per capita, etc) is already priced in. Real estate and all sectors connected (construction, steel, finance) are an important sector of the Chinese economy and I think overcapacity is slowly revealed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-54621193625762944432014-07-22T15:32:12.832+01:002014-07-22T15:32:12.832+01:00Looking at European China proxies, I do not think ...<br />Looking at European China proxies, I do not think a chinese slowdown is priced in, China stocks have governance issues and Taiwan has been "cheap" since I can remember... <br />http://viennacapitalist.com/2014/07/06/elevators-in-china-is-a-chinese-slowdown-priced-in/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21713018792154703722014-07-22T14:43:04.306+01:002014-07-22T14:43:04.306+01:00I have held a position in Russia for some time (un...I have held a position in Russia for some time (unfortunately) and added during the episode in March. <br /><br />The key rub with the valuation is that most of the optically cheap markets and stocks tend not to manage returns for capital. It might seem like an obvious point, but if you look at the best returning markets through history they tend to have the British legal system, property rights and the rule of law, in common (the English language). <br /><br />Russian oil and gas stocks tend to destroy, steal or confiscate capital via the capital expenditure programs which are also used for national service. <br /><br />In other emerging markets it might also be the state, but the point is that companies are not run for minority shareholders. <br /><br />On the positive side, Russian companies are still paying one of the highest market dividend yields globally and leverage is very low by global standards. This is not true in China or Brazil. <br /><br />Outside of these markets, EM is not very cheap. Perhaps a better way to trade EM is via the diversified miners which have started to out perform or catch up and are levered to unloved China/EM? <br />Skippynoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6474152242019890262014-07-22T14:05:37.730+01:002014-07-22T14:05:37.730+01:00Sberbank over Gazprom any day! I already put some ...Sberbank over Gazprom any day! I already put some away here. Which leads into an interesting delve into the composition of EM 'cheapness'. A lot of it has to do with Banks, which are super cheap in the EM (China, Brazil, Russia) though mainly due to high NIM/ROE and low NPLs (China). Along with the SOE oil stocks which no one wants to touch unless there is a pending election (look at a recent chart of Petrobras. Hey Dilma, vai tomar no cou!)<br /><br />Third Point's recent letter talked about some investments in Argentina. Election there in 2015. If we go by the playbook of the past 2 years (Brazil, India, Indonesia, Mexico etc) now may be the time to get serious on it<br /><br />Nice post MM<br /><br />abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-24389577055649820422014-07-22T09:12:21.990+01:002014-07-22T09:12:21.990+01:00Not shocked to see the Far East up there. It is wh...Not shocked to see the Far East up there. It is where credit growth has been hardest and fastest post-crisis: https://pbs.twimg.com/media/BtGdo9fIQAA7RKw.jpg:large<br /><br />But is this time different?<br /><br />Also interesting to see MSCI ZA up there. The ALSI priced in USD has decently out-performed the MSCI EM trend since the end of Q1 this year: http://oi57.tinypic.com/210by50.jpgCaustic Popnoreply@blogger.com