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I am a blended investor, following a value strategy mixed with some GARP and special situations investing, all in a macroeconomic and thematic viewpoint. I believe it's very hard to beat the market consistently, and so like to find companies with sustainable competitive advantages that seem... More
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  • Asian/European Markets Outlook: August 12

    Asian markets:

    Asian markets were up large on Monday (Nikkei +2.38%, Japan TOPIX +1.97%, China +1.38%, Hong Kong +1.29%), but there wasn't much substantial economic data released, or any significantly major news. Given that US markets spiked almost +0.8% after 12:30 on Friday, this could be a result of markets "catching up."

    • So far in "the morning," Asian markets are up small. The Nikkei is +0.14% and Australia is +0.86%.
    • Japan's domestic corporate goods price index for July (measures prices for goods purchased by corporations) rose 4.3% YoY, in comparison to estimates of +4.4%. This miss was very small, and can basically be interpreted as in-line.
    • Coming today: Australia's house price index (est. +1.1%), China's M2 money supply (previous +14.7%), Japan's industrial production and capacity utilization revisions (previous +1% and -0.7%). Japan's Q2 GDP and China's retail sales and IP numbers loom on the horizon.

    European markets:

    European markets were up slightly Monday, with the CAC40 +1.20%, the DAX +1.90%, and the FTSE +1.00%. This again could be "catch-up," as not much incremental data was released.

    • Great Britain's CB Leading economic index registered at +0.6%, in comparison to the previous of +0.5%. This small increase is slightly bullish for the economy.
    • Switzerland's retail sales crushed expectations, coming in at +3.4%, way above expectations of +0.3%. This is very bullish.
    • Coming today: France's current account (previous -3.1B), Italy's July CPI (est. +0.1%), and the ZEW estimates (est. Euro 41.3, Germany current 55.0). Initial Q2 GDP numbers come Thursday for France, Germany, and the Eurozone.

    Geopolitical events:

    Overall, it seems as if the threat from geopolitical events is lessening. Even if things flare up, the market has been slow to react to this news. A large-scale invasion in Ukraine would spook markets, but otherwise things seem calmer.

    • US airstrikes are having a positive impact in Iraq, as they have helped drive back ISIS. Kurdish forces have retaken two towns previously lost to ISIL, and U.S. forces have delivered much-needed supplies to Yazidis and others in need. http://wapo.st/Ve0L9V
    • Ukraine's forces are increasingly encircling Donetsk, providing hope for a resolution to the crisis in the country. However, Putin is said to have 200,000 forces at the border, and may be planning an invasion. http://fxn.ws/1lQ68Ua
    • Israel and Gaza have agreed to a temporary truce to negotiate. It seems to be holding, for now. http://abcn.ws/1sGuWCj

    Markets had a good day on Monday. We likely won't see much movement until larger economic data is released later this week.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: I am long some stocks

    Tags: economy
    Aug 12 10:39 AM | Link | Comment!
  • Impending Doom?

    It seems to me like a substantial part of the market is predicting "impending doom" for stocks. Bears are making their case known, on Seeking Alpha and in many other publications, and market sentiment, while high, seems to be untrusted. This bull market is one of the "most hated" of all time.

    "Stocks are overpriced! Higher than ever!"

    "This isn't sustainable, stocks can't grow forever!"

    "Profit margins are at an all-time high!"

    I see stocks rising a little bit next year, around 5-6%. I think the market is a liiiiitle overvalued, and with historical growth rates around 9%, i think 5-6% is a good target estimate.

    Any specific thoughts, valuations, reasons from bears why stocks are so overvalued? I wasn't convinced earlier in the year, but more and more recent data has me a little worried for the future of the market.

    Tags: SPY
    Dec 05 11:30 PM | Link | Comment!
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