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More Actors On Stage, But The Real Curtain Goes Up Tomorrow!

Jan. 09, 2014 3:36 PM ET
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Medium-Term Horizon, Long Only, Value, Growth

Seeking Alpha Analyst Since 2010


1/24/2018: Soos Global Capital is no longer managing money! The founder and CIO, Ed Leventhal, is now a private investor, and any commentary or publications of his are personal views and not those of his former role as a manager of a registered investment advisor company. All posts on this blog are strictly for nostalgic and entertainment purposes, not advice.

Former disclosure:

IMPORTANT DISCLOSURE INFORMATION in the 'Company' section below applies to ALL correspondence made by Soos Global on SeekingAlpha.com. Soos Global Capital Advisors, LLC was founded by our Principal, Edward J. Leventhal, after a 23-year career at Salomon Brothers, which became Citigroup through mergers. Since 2002, Ed was among Citigroup's Senior Management (top 1% of the firm). After graduating from The Wharton School of Business in 1982, Ed started his career in Corporate Banking at Bank of America, where, for four years, he was an associate in the Fortune 500 group advising international companies such as Macy's, American Brands, RJReynolds, Zayre Stores and JC Penney. In 1986, in addition to completing his MBA at New York University, Ed moved to Salomon Brothers, where he worked for the next 23 years, through its mergers with Travelers and then Citigroup. During that time, he was in institutional sales and trading advising many of the largest hedge funds, banks, mutual funds, central banks and other government institutions on investment opportunities in various asset classes all over the world. His career advanced from US Treasury sales with specialization in derivatives, to heading the Global Government Bond team in the US, followed by managing Salomon's West Coast Fixed Income business (based in San Francisco), after which he returned to NY to become Global Product Manager of Emerging Markets, and finally, leading Global Relationship Management for Citigroup's premier institutional clients across Equities and Fixed Income around the globe. Soos Global Capital Advisors, LLC provided Ed's global markets and institutional level experience to a select group of high-net-worth private investors who were looking for that level of sophistication in the way their money was managed and in designing investment portfolios suitable to their investment goals, risk tolerances, and liquidity preferences. Capitalizing on years of experience in global financial markets and on three full passports of international travel, Ed's assessment of global opportunities provided Soos Global with its key competitive investment edge.

Soos Global no longer manages money and has been closed.

Market Musings...Thursday, January 9, 2014
Lots of news for markets this morning (see below), mostly of the 'good' variety (mostly).
The preponderance of data is seemingly favorable to equity markets, and that's an encouraging way to go into tomorrow's employment data. Earnings season is already underway, but will kick off unofficially tonight with Alcoa's release, which will be followed in coming days/weeks with a barrage of earnings by other companies that need to be watched closely for top-line growth in sales and bottom-line earnings growth, and in between, what is happening to margins!! Many market commentators routinely focus on the overall market P/E being at or near historical levels, and conclude that there's plenty of upside for equity markets, even from recent record highs, as long as earnings grow. But one risk that could unravel that view is if companies face modest sales growth and can no longer squeeze expenses enough to keep margins as high as they've become, and therefore not be able to drop as much to the bottom line. Furthermore, much of the EPS data is benefiting from the abundance of stock-buyback programs which reduces the number of shares outstanding and in turn raises the EPS ratio which in turn lowers the P/E ratio.
So when the curtain comes up on corporate earnings for Q4 2013, that's high on the list of things that I'll be focused on: sales growth, margin compression, earnings, stock buyback announcements, etc. Stay tuned for more detail, especially on specific portfolio holdings, in coming days, and in the meantime, please share your thoughts either broadly by commenting below, or privately w/me through the 'chat' or 'email' features on the right side of this blog.

  • China's CPI inflation was less than expected. Inflation has been a persistent yet sporadic problem in China, often led by spikes in food prices. This abated in today's report and many believe it has to do with efforts that the central government has already made to crack down on everything from inefficiency to fraud. The markets, however, appeared to shrug off the good news, as some pointed to soft PPI, a measure of wholesale prices, as deflating 1.4% y/y, raising concerns about the real strength in the Chinese economy.
  • Indonesia's central bank held rates steady, which while expected, is in stark contrast to the several rate hikes that the central bank has had to do since June 2013 in order to defend its currency and combat inflation. Indonesia, and other countries such as India, are important to watch with regard to the impact that US tapering has on capital flight from their countries, depreciation of their currencies, and in turn, the counter-cyclical policy responses that their central banks are forced to do. Also of note in Indonesia was their successful bond sale this week which met w/huge demand, mostly from US investors. According to the FT, January is already the busiest month for Asian bond issuance, particularly helpful to countries who are dealing w/current account deficits!
  • Europe is enjoying a plethora of good news, starting with Germany's stronger industrial output data for November. In addition, there were stronger than expected readings on Eurozone confidence surveys of both consumers and businesses. Add to that, a bond auction by Portugal that met with enormous demand, allowing the yields to fall further, and raising prospects for Portugal to exit their bailout program on schedule. A similar statement could be made about Spain's bond auction today: strong demand and record low yields! And both the ECB and Bk of England left policies unchanged at their respective monthly meetings today.
  • US, while waiting for tomorrow's all-important Non-Farm Payroll number, got another uplifting employment data point with the decline in Jobless Benefits by 15k, beating estimates. That comes on the heels of yesterday's stronger than expected ADP numbers.

Please continue to visit Soos Global Market Musings for updates.

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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