Here are some of the latest reports from various market leading institutional wealth private banking and equity teams.
First up lets start with the usual weekly “MM” report from CS Wealth
And here an excellent multi asset report from Commerz. “Dangerous optimism” is their opening line and i tend to agree. And note on record leverage and low volume. The cocktail continues to be very risky.
And here
And here moving into equity strat and tactical recommendations.
First up the JP US Equity Team
(Its a word doc due to the file size of the pdf).
Here the JP Euro team under the Caz wealth banner:
Now this is a considered report and due some comment.
They highlight the ‘push back’ from clients who are realizing that most, if not all, the good news is behind us. Are the tail winds becoming headwinds? The team run through some counter arguments which, to summarize consist of two points.
1) That the euro finance area may start lending again
2) That the euro firms will likely start investing again or at least use the increased credit availability to start m&a to cut costs.
In my view the latter is much more likely than the former as there are zero signs across the world of increasing capex from corporates. Quite the reverse. Indeed two of Europe’s main export markets ie Japan and EM’s inc China are struggling to maintain demand for euro products and services. The trade weighted euro has risen sharply over the last year. These are head winds not tail winds to euro corp capex increases.
So the key to the sustainability, from a strat perspective, of the euro equity run boils down to increasing bank credit. And there we must come back to the ECB for guidance. Two issues here:
A) How strict will they be on the ecb bank review progressing through 2014 to report end q3 or early q4.
B) “OMT” (or alternative non conventional monetary bazookas). Will the ECB fnally press the belated button on increasing euro money supply herself by creating euros to start expanding herself rather than stressing bank balance sheets to support money supply increases?
Of the two issues B is the stand out indicator due to the balance sheet stress the euro banks remain under. Of course clever accounting to mirror the UK’s BOE policies can also do a great deal but only if combined with OMT will the measures really set the euro zone “growth” and therefore earnings back on fire.
More reports:
Here the JP Asia equity team. Asian equities remain very beaten up. Some reits in the area are starting to look very tempting on a relative basis to US UK and even some selected euro reits.And also check the respective navs between the two zones (DM vs EM). The reallocation from west to east may be premature yet but the mean reversion investment is always worth taking especially if we get to extreme valuations on multiple metrics.
Here JP on EM equity.
And here the latest EM equity recs:
And here the Asian team on Asian equity themes.
All the best
Rich