september markets perspectives
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FINCOR – Sociedade Corretora, S.A.
Monthly Perspectives
September 3th, 2012
.
Fincor- Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders. The contents mentioned in this document do not
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said content or about any resulting effect that could have occurred.
August: Recap
Greece – September will be crucial-Greece wants a 2 years delay to implement new austerity measures.
- But Juncker, Merkel and Hollande said that a decision will only be taken after Troika’s visit in September. All
they said if Greece wants to remain in the Eurozone they must accomplish the program designed to the
country.
-Fitch said the country will need more then the
€100B initially forecasted for its bailout.
-And Catalonia asked for a €5B bailout. Valencia
increased the amount asked from €3,5B to €4,5B.
Just these two regions spent half of the €18B
capacity of the Regional Rescue Fund.
The pressure over the Banking Sector continues as
the Non-Performing Loans continues to increase.
Spain, what are you waiting for?
-Mariano Rajoy said that the country won’t need to raise taxes in 2013. As the economy is expected to
contract and with a target budget deficit of 6,3% for this year, is this situation sustainable?
Spain, what are you waiting for?
ECB, what is your next
step?-There is a lots of talk in the markets saying that the
ECB will define a limit to the yields of each country,
and if that value is exceeded they will intervene
buying sovereign bonds.
-Bundesbank opposed immediately to this, and
PIMCO’s El-Erian also said this was a bad idea.
There is still disagreement
about the policies to takeMonti wants that the Bailout Funds of the Region to
gain a Banking Permission, something that Merkel is
against.
German court will have an important word on
September, 12.
-Economic data points to a contraction in the region.
Europe
30
35
40
45
50
55
60
65
Ap
r-0
6
Oct-
06
Ap
r-0
7
Oct-
07
Ap
r-0
8
Oct-
08
Ap
r-0
9
Oct-
09
Ap
r-1
0
Oct-
10
Ap
r-1
1
Oct-
11
Ap
r-1
2
PMI Manufacturing
Eurozone
Germany
Italy
France
UK
-6
-5
-4
-3
-2
-1
0
1
2
3
4
Industrial Production
Germany
France
Italy
UK
-Bernanke at Jackson Hole: “Unless the economy begins to grow more quickly than it is recently, the
unemployment is likely to remain far above levels consistent with maximum employment”.
-A previous study from the FED revealed that the natural rate for country’s unemployment is 6%. Statements
from several FED members points to incremental stimulus in the economy, how close to QE3?
US – Closer than ever from QE3
8,3
4
5
6
7
8
9
10
11
US: Unemployment Rate
US – The economy seems recovering
746
400
500
600
700
800
900
1000
US: Housing Starts
811
500
550
600
650
700
750
800
850
900
US: Building Permits
US – The economy seems recovering
74,3
50
55
60
65
70
75
80
85
U. Michigan Confidence
60,6
20
30
40
50
60
70
80
US: Consumer Confidence
US – The economy seems recovering
0,4
-4
-3
-2
-1
0
1
2
US: Leading Indicators
-But we should pay attention to the consistent manufacturing data that points to a possible slowdown
US – The economy seems recovering
-5,85
-40
-30
-20
-10
0
10
20
30
40
US: Empire Manufacturing
-7,1
-50
-40
-30
-20
-10
0
10
20
30
40
50
US: Philadelphia FED Index
-1,6
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
US: Dallas FED Index
-9
-50
-40
-30
-20
-10
0
10
20
30
40
US: Richmond Fed Index
-Samsung will pay a fine of $1,05B to Apple for violation of patents. The company faces the risk of being
forbidden to sell its products on the US.
New highs on Apple and new lows on Facebook
15
20
25
30
35
40
500
520
540
560
580
600
620
640
660
680
700
Apple Price
Facebook Price
-Inflation in China fell to a of two years’ low, while
manufacturing data continues to show a slowdown
in the economy.
-Brazil announced that will invest BRL133B in the
next 25 years to develop roads, transports and
railway lines. The country cut SELIC from 8% to 7,5%.
Emerging Markets
50,1
48
50
52
54
56
58
China: PMI Manufacturing
Portugal- BPI increased their capital in €200 million, by completing a rights offering of 400 million shares with a
subscription price of €0,5 each.
- Brisa successful tender from Tagus who now have over 85% of the company and 92% of its voting rights.
-Banif presented a loss of €125 million during 1H12, due to economic recession in Portugal and the increase
of NPLs. This month BANIF will announce a capital increase with the support of the Portuguese Government.
-Altri presented a profit of €15,85 million during the second quarter, beating all the analysts estimates.
-Banif and Cofina will join PSI20 Index on September 24th, after Brisa and Cimpor left.
-REN will launch in bonds €200 million, in a retail offering. It will have a maturity of 4 years and will pay a
coupon of 6,25%.
PerformanceThe markets had a positive performance in August, with a special regard to peripheral countries in Europe.
Last PriceLast PriceLast PriceLast Price Chg. % Chg. % Chg. % Chg. %
MTDMTDMTDMTD
Chg. % Chg. % Chg. % Chg. %
YTDYTDYTDYTD
FOREXFOREXFOREXFOREX
Euro/$ 1,2575 2,19% -2,98%
£/Euro 1,2624 0,86% -5,05%
Euro/Yen 98,46 -2,34% 1,22%
Eur/CHF 1,20081 0,03% 1,33%
CommoditiesCommoditiesCommoditiesCommodities
CRB 491,13 1,80% 1,89%
WTI Oil 96,88 9,67% -1,72%
Brent Oil 114,7 10,46% 9,69%
Gold 1687,75 4,55% 7,93%
5,523
4,513
3,5
4
4,5
5
5,5
6
6,5
10Y Bond Yields: Spread vs
Germany
Spain
Italy
Last Last Last Last
PricePricePricePrice
Chg. % Chg. % Chg. % Chg. %
MTDMTDMTDMTD
Chg. % Chg. % Chg. % Chg. %
YTDYTDYTDYTD
EuropeEuropeEuropeEurope
PSI 20 4998,86 6,63% -9,02%
IBEX35 7420,5 10,13% -13,38%
CAC 40 3413,07 3,69% 8,02%
DAX 30 6970,79 2,93% 18,18%
FTSE 100 5711,48 1,35% 2,50%
FTSE MIB 15100,48 8,71% 0,07%
SMI 6388,01 -0,18% 7,61%
Euro Stoxx 50 2436 4,64% 8,90%
USAUSAUSAUSA
DOW 30 13103,61 0,73% 7,25%
S&P500 1407,68 2,06% 11,93%
Nasdaq 3066,314 4,31% 17,70%
Latin AmericaLatin AmericaLatin AmericaLatin America
Bovespa 56996,67 1,60% 0,43%
Mexbol 39820,04 -2,17% 7,40%
AsiaAsiaAsiaAsia
Nikkei 225 8839,91 3,33% 4,55%
Hang Seng 19482,57 -0,93% 5,69%
September
Europe
-Troika returns to Greece on September 5th. What
will be the outcome?
-Germany’s Constitutional Court takes a decision
about ESM on September 12th.
-Will the ECB advance with a Security Markets
Program?
-Results to the audit of the Spanish Banking Sector
are expected to be published during the month.
US – Will the QE3 be finally announced?-Data about employment will have a high importance for a decision.
667
374
350
400
450
500
550
600
650
700
Initial Jobless Claims
163
-1000
-800
-600
-400
-200
0
200
400
600
Non-Farm Payrolls
US – Will the QE3 be finally announced?-PIMCO’s Bill Gross thinks that we are close of the QE3. “Unemployment is still above 8% and it’s obvious
that the FED isn’t comfortable”. Until unemployment is below 7% or inflation is higher than 2%, we should
continue to assist to additional stimulus from the FED.
Major risks for the markets-Accordingly with PIMCO’s El-Erian, the 4 major risks for the global economy are the Fiscal Cliff in the US, the
Sovereign Debt Crisis in Europe, a Geopolitical conflict and an economic slowdown from China.
Technical's tells us to buy
But Fundamentals are misleading
Vicious Cycle of Europe. We are currently on level 2.
Asset allocation
Corporate Bonds (name selection)
Emerging Markets Equities
European Equities
US Equities
Emerging Markets Currencies
Commodities
Sovereign Debt
Long Term Positive but still conservative due to market risks
Disclaimer
Disclaimer
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