Displaying items by tag: economy

Wednesday, 30 January 2019 10:28

BAML Says Stocks Have Worst Outlook in a Decade

(New York)

BAML has put out a report chronicling a new outlook for stocks, and it isn’t pretty. The report shows that investors have the worst views on the markets in a decade. Investors are pessimistic about global growth and corporate profits, the combination of which makes them expect a weak equity market. Here is a summary of Bank of America’s report: “A poll of asset managers showed a net 60 per cent of those questioned think growth in gross domestic product will weaken over the next 12 months, the worst outlook on the global economy since July 2008 and below the trough in January 2001”.


FINSUM: So it is important to note that these are asset manager opinions, not individual investors. Accordingly, it may not be as much of a contrarian indicator as usual.

Published in Eq: Total Market

(Beijing)

Those of you who read our opinions on how the trade war with the US is affecting China will know that one of main concerns is about the relationship between the government and the people in China. This week, Xi has echoed that warning. The Chinese leader stressed the need to maintain political stability in the face of economic challenges. The warning, which came at an unusual meeting of Chinese leaders, shows the ruling party’s anxieties over the social implications of the slowing economy.


FINSUM: Chinese leadership is in a tight jam. On the one hand they have the US squeezing them with tariffs, and on the other, they have the need to maintain the economy’s strong growth to keep people happy. Remember that leaders are unelected, so their grip on control is very tied to keeping everyone satisfied.

Published in Eq: Asia
Wednesday, 19 December 2018 15:21

Goldman is Going Long Stocks in 2019

(New York)

Goldman Sachs has been sending some seriously mixed messages on stocks. Just a few days ago they published a bearish outlook for 2019. Now the bank’s investment management arm is taking the opposite stance, saying that equities are the place to be. Goldman thinks global growth will continue nicely in 2019, giving support to stocks. It does, however, favor emerging markets over developed equities. The bank still thinks US stocks look attractive after the recent selloff, however.


FINSUM: To be honest it annoys us when one institution puts out some many competing views, but then again, each of the divisions has its own interests. We are not as bullish on stocks as Goldman money management arm.

Published in Eq: Total Market
Thursday, 01 November 2018 10:41

Why the Big Selloff Won’t Hurt the Economy

(New York)

The market seems to have finally regained its footing after a very turbulent couple of weeks. This selloff felt different than any in recent memory and serious damage to the market’s psyche seems to have been done. But what might it say about the wider economy? The answer is little, according to the Wall Street Journal. The selloff will probably be just that, a market fall. In reality, tech companies, which led the losses, reported very solid earnings, with margins expanding very well. Little can be drawn from the results that might show the economy is in trouble.


FINSUM: The only aspect of this selloff we are somewhat worried about is how it might impact consumer confidence and spending this holiday season. However, so long as the market stays strong this month, we expect the impact to fade.

Published in Eq: Total Market
Wednesday, 31 October 2018 09:49

Chinese Economic Data Shows Doom Looms

(Beijing)

New data out of China suggests all is not well. A gauge of Chinese factory output fell to its lowest level in two years. The news arrives at the same time as the country is in a bear market. The data is particularly important because it shows the China’s economy is under pressure from US tariffs even if the direct effect has not showed up in trade data yet. One Chinese economist for ANZ Bank says “The economic conditions facing China’s private sector is much worse than what the headline figure suggests … Besides an expected reserve requirement ratio cut next January, we expect future supportive policy actions to be measured. The government’s priority is to avoid a financial blow-up”.


FINSUM: We think China is going to once again undertake stimulus measures to support the economy, but this time they will be facing a less accommodative trade environment.

Published in Eq: China
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