Tag Archives: Stocks and Bonds

Financial Markets: Bulls Ready To Repeat 09 Rally

Credit market outperformance was reversed today as investors took profits ahead of the FED minutes. The FOMC statement this afternoon will be watched even more closely than usual given the expectations of further quantitative easing.The bulls are ready to repeat “The Grand Rally of 2009”.

“…and chairman Ben Bernanke is well-known for favouring of “unconventional”  measures…”

Gavan Nolan

An expansion of the FED balance sheet was positive for risky assets during 2009 – when the US stock market gained more than 60% – and the rally in recent weeks suggests that investors are expecting a similar outcome in the coming months. But there are dissenting voices within the FOMC;  Thomas Hoenig has been vocal in his opposition. However, he is outnumbered, and chairman Ben Bernanke is well-known for his “love of unconventional  measures”.

Some investors are expecting a provisional asset purchase schedule to be announced dependent on the evolution of economic data. The Markit iTraxx Europe move below 100bp proved short-lived as the profit taking pushed it back above the key level, according to Markit Financial Information.

A tightening in Chinese monetary policy also dampened sentiment earlier in the day. China’s central bank said that it was raising the reserve requirement ratio of four major state-owned lenders and two privately-owned banks in an effort to rein in rampant lending.

The move served as a reminder of the different positions the US and China, not to mention the ongoing imbalances in the global economy.

Intel’s results after the close, mostley getting overshadowed by the FED minutes, will be keenly anticipated nonetheless.

“A relatively weak third-quarter is expected given the chip maker’s sales warning in August. But it will be the fourth-quarter outlook that investors will be watching out for,” Gavan Nolan, vice president at Markit Credit Research writes.

The final quarter of the year is traditionally the strongest for PC makers and the markets will be looking at the outlook as a gauge of demand.

“JP Morgan‘s results tomorrow could also be a catalyst for spread change, and the bank’s spreads were 7bp wider at 84bp at the time of writing,” Nolan notes, adding;  “Fortune Brands and JC Penney continued to widen sharply after activist hedge fund Pershing Square revealed that it has bought large stakes in both firms. Pershing, owned by investor William Ackman, is known for pressurising companies into shareholder-friendly actions.”

  • Markit iTraxx Europe 101bp (+3), Markit iTraxx Crossover 464bp (+8)
  • Markit iTraxx SovX Western Europe 145.5bp (+3.5)
  • Markit iTraxx Senior Financials 122bp (+3)
  • Sovereigns – Greece 690bp (-4), Spain 210bp (+2), Portugal 398bp (+14), Italy 184bp (+5), Ireland 437bp (+15), Belgium 126bp (+4)
  • BP 146bp (+5)

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UNIQUE MARKET ACTIVITY:

The ‘Unique Market Activity’ section lists stocks which were not active on Markit BOAT on the previous trading day.

Markit BOAT is a trade reporting platform which consolidates pan-European cash equity trade data from MTFs, Dark Pools and OTC transactions. The trading activity in this report took place on 11th October 2010 and was published by Markit BOAT on the same day. Trading activity reported with the ‘Market Condition’ flag is excluded from this report. Such trading activity is not relevant because the trade price and/or trading process does not reference or correlate with the then current market price.

Name Sector Volume Turnover €
YOOX Consumer Services 382,200 2,938,218
BROOKFIELD ASSET MANAGEMENT Financials 136,900 2,838,211
PRINCESS PRIVATE EQUITY HOLDING Financials 465,483 2,327,415
HANDLOWY Financials 34,413 761,543
PBG Industrials 11,496 689,591
AMPLIFON Health Care 187,103 657,895
SVM UK ACTIVE FUND Financials 300,000 586,441
PIAGGIO Consumer Goods 257,485 581,691
POWSZECHNY ZAKLAD UBEZPIECZEN Financials 5,716 568,891
GERRY WEBER INTERNATIONAL Consumer Goods 18,039 566,170

Top 10 ETF

Name Volume Turnover €
DJ STOXX 600 OPTIMISED FOOD & BEVERAGE SOURCE ETF 165,158 27,466,410
DJ STOXX 600 OPTIMISED BASIC RESOURCES SOURCE ETF 60,387 19,844,021
DJ STOXX 600 OPTIMISED INSURANCE SOURCE ETF 337,040 14,360,006
DJ STOXX 600 OPTIMISED AUTOMOBILES & PARTS SOURCE ETF 78,705 13,612,090
DJ STOXX 600 OPTIMISED BANKS SOURCE ETF 190,000 13,567,805
ISHARES DAX DE 176,000 10,266,080
ETFS GRAIN DJ-UBSCISM 2,300,140 10,024,089
ISHARES DJ ST 600 TELECOM DE 363,121 9,938,622
DJ STOXX 600 OPTIMISED RETAIL SOURCE ETF 68,351 8,181,744
ISHARES PLC – ISHARES FTSE 100 1,246,762 8,084,082

Top 10 Trades

Name Sector Volume Turnover €
BBVA Financials 17,000,000 165,750,000
BANCO SANTANDER Financials 10,000,000 93,699,999
GLAXOSMITHKLINE Health Care 5,000,000 74,691,679
EBRO PULEVA Consumer Goods 3,031,476 44,380,810
SNAM RETE GAS Oil & Gas 10,000,000 37,499,061
BSKYB Consumer Services 3,170,413 25,661,323
ENI Oil & Gas 1,488,384 24,111,822
TELEFONICA Telecoms 1,250,000 23,691,487
RENAULT Consumer Goods 425,000 16,575,000
BEKAERT Industrials 80,000 16,124,000

Major Movers

Name Sector Volume Volume (T-1) % Change
PV CRYSTALOX SOLAR Industrials 11,398,939 55,654 20382%
ENTERPRISE INNS Consumer Services 9,716,859 482,223 1915%
BSKYB Consumer Services 7,079,030 509,495 1289%
ENI Oil & Gas 6,112,519 1,170,186 422%
UNICREDIT Financials 15,525,750 4,513,964 244%
ENEL Utilities 4,756,320 1,640,725 190%
ALCATEL LUCENT Technology 4,130,134 1,780,534 132%
BT Telecoms 12,542,976 6,625,224 89%
BP Oil & Gas 5,314,114 3,273,075 62%
BAE SYSTEMS Industrials 5,515,663 3,882,406 42%

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DnB NOR Markets: Weekly FX Update & Stock Recommendations

Increased focus on bank losses and more turmoil surrounding the future of the euro, are amongst the things that will influence the forex market the coming week, Norwegian brokerage firm DnB NOR Markets writes in their weekly FX update. Here’s also DnB NOR’s weekly recommendations of stocks listed at the Oslo Stock Exchange.

“The euro seems vulnerable.”

DnB NOR Markets

“We now expect new QE measures from FED, and hence expect USD to remain at today’s levels short term. Longer term we are still USD positive. We are still bearish on the euro going forward, as fiscal tightening is expected to weigh down on growth,” analysts Camilla Viland and Maren Romstad writes.

 

Camilla Viland

 

Adding: NOK TWI is still relatively strong. We are more or less neutral regarding NOK going forward, but due to euro weakness EURNOK is expected to trade lower going forward.”

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In this weeks analysis DnB NOR Markets takes a closer look at the GBP.

Ms. Viland and Ms. Romstad belive in a stronger British Pound.

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Maren Romstad

 

“Developments in key figures and growth in particular has been a hot topic in markets lately.”

  • British GDP grew by 4.9 % q/q s.a.yr in Q2.
  • However, several indicators points towards weaker growth going forward.
  • Still, we believe in stronger growth than in the euro area.
  • And our estimates for British growth are perceived as somewhat more positive than consensus’ view, while we seem to be more negative than consensus regarding European growth.
  • Our view on relative growth, thus indicate a stronger GBP going forward.

Here’s a copy of the full analysis.

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Equities; New Recommendations

DnB NOR Markets published Monday the following BUY-recommends of shares listed at the Oslo Stock Exchange:

Here’s the full analysis (Norwegian only).

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Credits: Always look on the bright side…

Fitch Ratings declared their downgrade of Ireland, Wednesday, and the latest US job report missed the estimates. However, disappointing economic data from the US couldn’t contain the rally in credit markets today as the positive sentiment from yesterday showed little sign of dissipating.

“In fact, it is possible that the weaker than expected ADP employment report acted as a spur to risky asset.”

Gavan Nolan



The survey showed that the US private sector cut 39,000 jobs in September, easily missing expectations of a 20,000 gain. After Bank of Japan’s aggressive easing yesterday investors appear convinced that the Federal Reserve will follow with more quantitative easing, vice president Gavan Nolan at Markit Credit Research writes in his daily alert.

Gold is at record highs with investors seeing policy-induced inflation down the line.

A relatively strong ISM non-manufacturing report yesterday was viewed as no impediment to the FED taking further unconventional measures.

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“If the ADP report is a reliable indicator of non-farm payrolls – most would say it isn’t – then another set of weak data will give more ammunition to the QE proponents,” Gavan Nolan comments.

The Markit CDX IG index has outperformed relative to the Markit iTraxx Europe in recent days, with the basis between the two indices at its widest for some time. This narrowed slightly today as European markets took their cue from rallying US and Asian markets.

Sovereigns, however underperformed for a second day, not helped by a Fitch downgrade to Ireland.

The rating agency cut its rating one notch to A+, citing the “exceptional” cost of the bank bailouts. Fitch also placed it on negative outlook, warning of economic uncertainty and a possible weakening of political resolve.

Ireland’s spreads started the day about 13bp tighter at 425bp but the Fitch announcement led to its spreads widening out to 450bp.

Fitch Ratings Press Release.

“While unwelcome for the sovereign, it should be borne in mind that the downgrade had been more than priced in by the market. Ireland has an implied rating of single B, according to Markit data,” Nolan points out.

Markit BOAT – Equity Trading Highlights

Markit BOAT is a trade reporting platform which consolidates pan-European cash equity trade data from MTFs, Dark Pools and OTC transactions. The trading activity in this report took place on 5th October 2010 and was published by Markit BOAT on the same day. Trading activity reported with the “Market Condition” flag is excluded from this report. Such trading activity is not relevant because the trade price and/or trading process does not reference or correlate with the then current market price.

Unique Market Activity

The “Unique Market Activity” section lists stocks which were not active on Markit BOAT on the previous trading day.



Name Sector Volume Turnover €
TOSHIBA Industrials 8,194,000 29,292,518
TOYOTA MOTOR Consumer Goods 765,200 19,717,856
FASTWEB Telecoms 179,609 3,224,880
ALL NIPPON AIRWAYS Consumer Services 1,117,000 2,918,171
FIRST QUANTUM MINERALS Basic Materials 37,630 2,135,472
ALTRI SGPS Industrials 377,840 1,353,400
HORNBACH HOLDING Consumer Services 15,451 1,111,430
GENERAL ELECTRIC Industrials 84,217 980,040
INTERNATIONAL BUSINESS MACHINES CORP. Technology 9,954 973,090
PROCTER & GAMBLE Consumer Goods 22,403 970,926

Top 10 ETF

Name Volume Turnover €
DJ STOXX 600 OPTIMISED BANKS SOURCE ETF 1,501,369 107,595,442
DB X TRACKERS – MSCI EMERGING MARKET TRN INDEX ETF 546,448 16,213,805
ISHARES PLC – ISHARES FTSE 100 2,440,139 15,624,684
DJ STOXX 600 OPTIMISED INDUSTRIAL GOODS & SERVICES SOURCE ETF 109,845 12,058,310
ISHARES MSCI JAPAN FUND 1,422,805 10,250,835
AMUNDI ETF CAC 40 208,945 8,281,748
DB X TRACKERS – MSCI WORLD TRN INDEX ETF 350,000 7,268,580
DB X TRACKERS – DAX ETF 116,458 7,156,578
DJ STOXX 600 OPTIMISED FOOD & BEVERAGE SOURCE ETF 40,900 6,818,372
MSCI WORLD SOURCE ETF 286,000 5,951,000

Top 10 Trades

Name Sector Volume Turnover €
INMARSAT Telecoms 29,340,000 212,753,153
BBVA Financials 15,000,000 147,899,995
RWE Utilities 1,640,000 80,278,001
BANCO SANTANDER Financials 6,228,638 57,428,044
VODAFONE GROUP Telecoms 29,331,172 53,885,029
BP Oil & Gas 10,487,180 51,883,227
TOTAL Oil & Gas 1,200,000 45,359,999
SIEMENS Industrials 494,601 37,243,457
SNAM RETE GAS Oil & Gas 10,000,000 36,799,080
UMICORE Basic Materials 1,000,000 32,519,501

Major Movers

Name Sector Volume Volume (T-1) % Change
INMARSAT Telecoms 46,812,387 874,577 5253%
CABLE & WIRELESS WORLDWIDE Telecoms 18,028,306 829,777 2073%
BANCO SANTANDER Financials 16,225,952 1,393,599 1064%
SNAM RETE GAS Oil & Gas 15,248,043 3,032,024 403%
HSBC Financials 13,907,541 3,314,841 320%
BBVA Financials 406,708,276 111,896,938 263%
LLOYDS Financials 34,690,381 13,755,013 152%
BARCLAYS Financials 13,219,147 5,469,338 142%
BP Oil & Gas 15,059,224 8,540,518 76%
VODAFONE Telecoms 55,079,099 32,405,897 70%

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