Dagens skörd

Är det nån gång den här veckan det ska hända något substansiellt så är det idag. En hel del data som ex CPI och Philly Fed.

Annars verkar det vara fler och fler som hoppas på nästa PMI siffra från Kina. Kina säger att de säsongrensar siffror men det syns inte alltid. Av den anledningen brukar ALLITD nästa reading slå förväntningarna med råge. Den siffran kommer första veckan i september.

Björnen Rosenberg är ute och baissar igen. Han har några argument:

1, Challenger layoffs have surged 80% in the past three months. That will lead to higher jobless claims in the near-term.

komm, inte bra helt klart, men behöver de leda till negativ job creation. Inte så säker!

2 Consumer buying intentions for big-ticket items has sagged to recession levels. Watch the savings rate in the next six months — this will be key to the macro outlook.

komm, inte så konstigt när politiker bråkar, och consumer confidence sjunker.

3, Productivity has declined for two straight quarters and actually, unless companies wilfully want their margins to implode, will soon respond by shedding labour input.

komm, den var rekord high rent cykliskt så den bör sjunka undan.

4, This already goes down as the weakest recovery on record despite unprecedented policy stimulus. Every dollar of balance sheet expansion at the Fed and the Treasury since the beginning of 2009 has generated 80 cents of incremental GDP gains. Not only is that a pitiful multiplier but now that there is no more stimulus, it is a legitimate question as to how an economy that only operated on policy steroids for the past two-and-change years is going to perform.

komm, jo tack detta vet alla

5, There is no doubt that the economy is not yet contracting, but the debate is whether it will start to by year-end. The withdrawal of stimulus is feeling like a policy tightening. And after coming off a mere 0.8% annual rate of gain in GDP so far this year, the question is how the financial shock since mid-year in the form of higher debt levels and equity cost of capital is going to impact an already near-stagnant economy.

komm, som sagt, i en LTG miljö kanske USA växer med CAGR 2% ränta. Men det betyder inte att i de mindre cyklerna så tangerar den både 0% och 4%.

6, The data on a three-month basis are following a classic pre-recession pattern and so is the stock market. Only three times in the past did the S&P 500 go down as much as it has without a recession ensuing. Market signals are important and this is what most economists missed in 2007. The 5-year note yield at 0.93% is a tell-tale sign — and is negative in real terms. Even with the speculative grade default rate falling in July to 2.3% from 1.9%, spreads are 150 basis points wider now than they were a month ago.

komm, RISK OFF

7, Do these economists realize that S&P financials are down 25% from this year’s highs? Can they explain how this fits into their forecast? The economy can hardly grow without credit unless it receives ongoing doses of government support, which for now is no longer forthcoming. The bank stocks are down more from their early highs than they were from January to August 2007 when the downturn was right around the corner.

komm, I en LTG miljö där folk deleverage kan knappast loangrowth imponera, HELLO

8, In plain-vanilla manufacturing inventory cycles, recessions are typically separated by five years, sometimes even longer as we saw in the 1980s and 1990s. But in a balance sheet/deleveraging cycle, recessions come more quickly — every two-to-three years. That puts late 2011/early 2012 in the spotlight. The imbalances in housing and debt were not fully resolved in the last recession, unfortunately enough (there is a nifty article on page A2 of today’s WSJ, which cites Zillow research showing that only one-third of the 130 housing markets across the country can be considered ”undervalued”). In a vivid sign that housing is no longer responsive to interest rates; mortgage applications for new purchases cratered 10.1% in the August 12th week. They have declined now for three of the past four weeks and are at the lowest level since July 2010.

komm, detta är ingen vanlig cykel.

9, In a sign that households are concentrating more on getting their financial conditions into better shape than making that additional debt-financed purchase, the rate of late credit card payments fell to a 17-year low in the second quarter. Of course that is good news for the future, but going on a diet is never easy over the intermediate term (take it from me). The U.S. consumer is on a debt-reduction plan, having taken the aggregate level of liabilities down $50 billion in Q2. If we’re not mistaken, Wal-Mart had some pretty cautious things to say about the U.S. consumer yesterday and we see that Dell, having missed its estimates today, also discussed that it is seeing a lack of ”confidence” in ”both corporate and household sectors” and ”uncertain demand” as it cut its guidance for the year.

komm, så sant så, en del av LTG

10, Core Europe is stagnating and the Asian economy is cooling off. The Q2 contraction in Hong Kong GDP was the canary in the coal mine; Chinese industrial production contracted 0.4% MoM (based on a seasonally adjusted basis calculated by Haver Ana lytics) in July as well. We always said that Korea is important to watch because of its global export exposure, and with this in mind we recommend that you read Global Woes Land a Punch in Korea on page C5 of the WSJ. This bodes ill for the U.S. export sector. Also take note that the sharp slowing in core Europe is spreading through the entire continent — have a look at Slowdown Spreads to Central Europe on page 3 of today’s FT.

komm, kan få rätt, men jag hoppas mkt på Kina när inflationen lagt sig.

11, We have to understand that recessions are part of the business cycle. There is no reason to be fearful. Just be prepared. Hedge funds that are long high- quality, non-cyclical companies with strong balance sheets and dividend growth and yield attributes while being short small-caps that are highly cyclical and expensive is a money-making strategy in a recession. Hybrids with low equity correlations and BB-like yields, corporate bonds in defensivesectors with a visible cash-flow stream and a pervasive focus on energy, raw food, and gold — that is the ideal portfolio in an environment like this (as far as the food theme is concerned, go to page Cl of the WSJ and have a read of Chinese Hunger for Corn Stretches Farm Belt).

komm, det funkar till det inte funkar längre. Bakom varje såld aktie står en köpt aktie. Det finns många som gör hemläxan men misslyckas med timingen.

12 Finally, if you’re looking for the next shoe to drop, it may very well be in U.S. commercial real estate. We highly urge that you have a look at REITs Losing Haven Appeal on page C6 of the WSJ as well as Buyers Wary of Building Bubble on Cl (institutional investors are starting to back away from what appears to be an oversupplied and overpriced commercial property market in several major cities).

And one final observation on GDP, which pretty much puts the double dip debate to rest:
If you look at the monthly U.S. GDP data, it is already apparent that the U.S. economy is fraying at the edges. The economy contracted in both May and June and has shrunk now in four of the past six months. That sounds pretty recessionary to us. As the chart below shows, over the past six months, real GDP has actually declined at a 1.5% annual rate, which is just about as bad as it got at the worst point of the tech wreck a decade ago.

komm, visst man kan leka med siffrorna, men jag tycker fortfarande det luktar LTG för hela slanten.

Forewarned is forearmed.

Komm, Kan ju inte annat än att hålla med om det mesta. Det mesta är också kännt av marknaden, inget nytt under solen. Men jag tror han har fel i den bemärkelsen att det blir en ny långdragen recession med kraftigt ökande arbetslöshet. Nej, jag tycker ovan luktar LTG miljö under lång tid framöver. Vad han inte belyser är hur vinsterna kan hållas uppe så pass bra i bolagen trots en så svag ekonomi (och nej, allt handlar inte om export och cost cutting) och hur vinsterna kommer utvecklas framöver. Han nämner inte heller hur han ser på värderingen av börsen i förhållande till dem vinsterna som han tror kommer realiseras pga ovan. Han gör analysen, dåliga tider – dålig börs. Den kan mycket väl slå rätt men den är ganska tunn tycker jag!

Ännu en som tror på rejält sämre tider, och risk för ytterligare börsfall;


Trots alla tycker jag han beskriver övergången till en LTG miljö. Inte RECESSION. Den stora skillnaden, bara för att klargöra, är effekten på vinsterna. I en LTG miljö kan Earnings% för 2012e landa på +/- 15%. I en RECESSION faller de med MINST 30%, oftast MER. Ni kan bara föreställa er effekterna på BÖRSEN. Det är därför jag tjatar på om det inte räcker med att konstatera hur dåligt allt är, och hur mycket RISKER det finns. Utan man måste bilda sig en djupare förståelse kring ovan då det innebär dramatiska skillnader för börsutvecklingen.

Men tveklöst är det så att senaste tidens händelser har fått ekonomerna att skruva ner estimaten. Nedan MorganStanleys senaste, vilekt dem kallar ”Dangerously close to recession” eller LTG som jag brukar säga! Hursomhelst, bnp nedgraderingar leder till salesnedgraderingar som leder till Earningsnedgraderingar, alltså neg revisions. Då garanterar inte att börsen ska gå ner, men det brukar sällan vara ett bra köpläge. Jag är fortsatt NEUTRAL (helt enligt https://kortsikt.wordpress.com/2011/08/09/tva-skolor-och-en-lagom/)

Annars tror jag Fidelity kan vara rätt på det… de punkterna de lyfter fram tillsammans med börsnedgången kan få konsumtion och investeringar från såväl företag och konsument att avta. Detta i sig kan knuffa ekonomin in i recession.


Om GaStan

Ga Stan bloggar här under rubriken "Kortsikt's blogg". GaStan är en medelålders gift man bosatt i Stockholm och verksam i finansbranschen.
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