Here the much publicized GS weekly “mm” report.
The week prior to this release they announced US equities were slightly above “fair value”.
In this report issued last Friday they discuss the client feedback and reaffirm their case.
And here is this week’s latest view:
And here JP’s latest “MM” report:
And here the usually/perma bullish US equity team from JP:
They are sticking to their bullish calls for 2014 and sighting the fundamental case. The fundamental case rests on Central bank policies rather than much else as far as I can tell, for the moment. Until expansion of the money supply is taking up by either corporates or consumer or government rather than the Fed its hard to see how ‘gdp’ can grow. Money velocity could rise again but without faster real inflation its hard to see how, for the moment. I would tend to agree though with the team that post this likely hard sell off an over weight equity strategy for the remainder of 2014 is best course of action. (Of course, subject to news flow, etc, etc).
And here the CS Asian equity team.
Tough job selling Asian equities to clients at present, note! US$ adjusted even harder.
And briefly here, the fixed interest credit markets appear benign for now. The UST has stepped back from the 3% level and is back below the 2.81 prior res. Credit is attracting higher prices again as a ‘safe’ asset.We should not forget that central banks are creating new liquidity across the developed world, expanding their balance sheets, to buy these assets from the finance community and so continuing to sustain high prices for this asset class, ie low yields.
Here JP with their useful technical analysis view of the FI mkts:
And here CS:
And here the latest CS FI view:
And herethe MS house view:
Its all fairly benign stuff for the moment. Higher rates remain the forecast but so long as volatility doesn’t spike up the asset markets and therefore allocators can ‘handle’ the issue.
And here some specific ‘special’ reports.
Firstly one of the UK here from WF and, in spite of Carney’s jaw boning at Davos, their higher rates soon view. I tend to agree that The UK is enjoying a practically mono super asset price boom that will soon get out of control unless higher rates are brought into being. Policy could get ‘messy’ or clumsy (ie extremely volatile uk asset markets and see sawing policy just as it did in the 1970s in the UK). This is not likely tomorrow but is likely, in my view, during sometime in q3 or q4 2014.
Here the WF report on the UK
And here the WF weekly economic house view:
And here CS on the European economy. The direction of the euro economy is a matter of great debate. Many houses are forecasting an expansion in the area but are unable to really explain where this is expansion will come from. Export markets are in trouble especially in Asia and the EM countries. Private sector credit still shows no signs of expansion in the block, Germany aside. The Euro is not weakening. The ECB are undertaking a ‘tough’ banking review and whats more Draghi sees “no threat from deflation” in the block and therefore “OMT” appears off the agenda again in the near term. Personally I cant help thinking this is once again a massive misjudgement by the Euro policy teams. Without OMT and without new lending to the private sector where will money supply expansion ie GDP growth come from? Not from export markets it appears. I would love to be bullish on the Euro area but alas I can’t see the touch paper yet to spark growth from this troubled economic group.
Here finally the CS Commodities report which ties in to this weak EM view. The industrial metals are in trouble here technically. Copper is being treated alongside her base metals for now which is spilling over into silver for the moment. Gold is an entirely different asset class with severe supply issues in the near term and a hedge for risk, especially if US$ fails to strengthen on ‘off risk’ days.
Here their report:
More to come very soon..
All the best
Rich