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Drew Arnold
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Drew Arnold is a contributor to Seeking Alpha.
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Global Growth Story
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  • Brazilian Rate Hike

    As expected, Brazil's central bank increased the country's policy rate to 10.75%.  This comes as inflationary pressures have risen in recent months.  Consumer price inflation was reported at 5.91% in December.  The central bank's inflation target is 4.5%.  Below is a chart of Brazilian consumer price inflation and the target federal funds rate over the past two years, through December 2010.

     

    Source: Banco Central do Brasil

     

    Just to check in on Brazilian equities, below is a chart of the Brazilian ETF EWZ.

     

    Source: Stockcharts.com

     

    Inflationary pressures should continue to be a headwind for Brazilian companies, along with China's own tightening of monetary policy.

    Disclosure: No position



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Jan 20 10:35 AM | Link | Comment!
  • Rotate from China into India on Morgan Stanley Projections?
    The Economic Times reported today that Morgan Stanley projects India to experience faster growth than China by 2015.  MS sees India growing at 9-9.5%, while China will slow down to around 8%.  These projections differ from the IMF's current projections, which could provide for an investment opportunity.  IMF projections for the BRIC countries are given in the chart below.

    GDP Growth Rates

    If Morgan Stanley is right that India will be seeing more growth than originally thought, now could be a good opportunity to begin getting more exposure to the Indian growth story through the Indian ETFs INP, EPI, PIN, and INDY.  Take a look at Michael Johnston's assessment of these ETFs for a good summary.  An even better play may be the recently released India infrastructure ETF INXX.  Morgan Stanley's projections assumed a massive increase in Indian infrastructure spending, so INXX may be a good way to take advantage of that.  Lastly, make sure to keep an eye out for the IMF's next update of world growth projections, which will likely come in the October World Economic Outlook.  If the IMF begins to shift its projections in the direction of Morgan Stanley's, Indian ETFs could see additional upside.


    Disclosure: No positions

    Disclosure: No positions
    Aug 17 1:19 PM | Link | Comment!
  • Cisco vs. Google in the High-Speed Internet Race
     The Financial Times reports that Cisco will be competing against Google in the race to build an "ultra-high-speed system for internet access".  While it's still too early to judge exactly what these systems will entail, telecom operators like AT&T have to feel a little bit threatened, despite Google's claim that it has no interest in competing directly in that space.  One thing is for sure: internet users will benefit from these systems upgrades.

    Let's take a look at how Cisco and Google are trading.  Cisco has been moving higher since reporting earnings on February 3rd, which came with cheery guidance.  Cisco has pulled back and is now resting at its 50-day moving average, not a bad entry point if you're bullish on the stock.
    Cisco Chart

    Google, on the other hand, has been trading as sideways as a stock can trade for the past couple of weeks.  If you're bullish on the stock and looking for an entry point, the best play would be to wait for a pullback to its recent lows (around 525-530) and put your stop right below it.
    Google Chart


    Disclosure: No positions
    Tags: CSCO, GOOG, Technology
    Feb 23 8:46 PM | Link | Comment!
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  • Recent update on Brazilian inflation at Global Growth Story: globalgrowthstory.com
    Jan 20, 2011
  • Traders piling into natural gas, hoping it converges w/ oil. Don't count on it: the oil trade has been a hedge against inflation.
    Jun 17, 2009
  • Careful on Nokia, it's had a nice run so it might experience even more profit-taking than the rest of the market during this pullback.
    Jun 17, 2009
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