Less concerned with fundamentals: more concerned with long term health of markets

With a new quarter starting it will be interesting to see how much of the sell-off in recent weeks has been window dressing and delta hedging from the derivative markets and whether there are genuine long term value investors prepared to … Read More

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A fundamental shift is coming in utilities’ business model

The Fed didn’t raise interest rates last week, despite the US economic indicators suggesting that they should, for the same reason that they haven’t moved for the last seven years (or increased for the last nine years) – global market … Read More

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Back to the 1990s as markets become less correlated

Markets are becoming less correlated with one another which, as analysts at Citi point out, suggests an environment more like the mid-90s than the mid noughties and an era where both asset allocation and stock picking become more important. Major … Read More

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China – beware the noise markets and the über bulls and über bears

Investors need to recognise that the received narrative on markets is usually created by short term traders. On China this has swung from ‘uber bull’ to ‘uber bear’, while the reality has always been half way. The market moves in … Read More

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China’s intervention in markets was trying to prevent a bubble unlike market interventions in the West

Last week, we discussed how China was being criticised in the west for its attempts to stabilise its financial markets, often by the very same people who were all too keen for the G4 to intervene in previous market panics. … Read More

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Leveraged plays in down trending markets are rarely a good idea

The situation in Greece continues to dominate the headlines in Europe and cause headaches for European officials, with the (honestly this time it really is final) deadline approaching. On balance it still looks like some form of ‘extend and pretend’ … Read More

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A Greek default is more likely than Grexit and may trigger hidden contagion

When momentum stalls in a market, short term traders tend to become less greedy and more fearful and are thus vulnerable to profit taking – as well as to the stories the short sellers whisper in their ears to make … Read More

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The bond roller-coaster ride – all about leverage and crowded positioning creating forced buyers and distressed sellers

The spring bond market sell-off has been extremely painful for traders, particularly in European and emerging market bonds. It was clearly the ‘Sell in May’ trade that had strong echoes of the taper tantrum of 2013. Then, as now, we … Read More

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The Asian Big Bang

While the majority of investors are worrying about things through the traditional western viewpoint, the real story is that China is building a financial system before our eyes. The balance sheet structures are being reformed and established to create a … Read More

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If we chose to look in the right places, China is largely doing the right things with its economy

The recent retreat in the dollar trade weighted index has been matched by a rally in commodity prices, particularly oil, but I suspect that these are pull backs in new long term trends rather than reversals. Just as the dollar … Read More

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