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Not about U S Markets,but the word PANIC has appeared Time to panic over Brazil? • 4:18 PM From Seeking Alpha
“Brazil’s capital markets appear to be suffering from a sudden flight of capital," says Michael Shaoul, warning of a danger of "abrupt collapse in investor confidence ... Brazil should be watched closely in the days ahead." The Bovespa slid another 1.75% today, but more alarmingly, the country's 10-year yield spread (vs. the U.S.) shot to its highest level since the summer of 2009. This morning, Q3 GDP was reported to have contracted by 0.5%, worse than expectations. From Capital Economics: "Brazil is not particularly attractive to foreign firms ... Woefully low domestic savings mean that Brazil relies on attracting foreign capital in order to fund investment projects. But with the current account already in a significant deficit, there is little scope for running up an even larger external deficit to fund investment." Off 1.3% today, the iShares MSCI Brazil Index ETF (EWZ) is down 20% YTD. ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR http://blogs.barrons.com/emergingmarketsdaily/2013/12/03/are-investors-fleeing-brazil-after-the-q3-gdp-contraction/?source=email_rt_mc_body&app=n From Ted's Morgan Stanley Letter; Morgan Stanley's Adam Parker MAKING THE CASE. So can the market multiple continue to expand? Three things need to be in place. First, the dream of higher real interest rates must remain intact. If investors believe that the 10-year US Treasury yield can move to the 3.0%-to-3.5% range without a material change in inflation, there is a precedent for a higher multiple. Second, the Federal Reserve will have to effectively communicate that tapering securities purchases is not tightening monetary policy. Finally, the probability of the bear case in earnings, now 20%, must not grow, even if the base case remains mediocre.
Oh, brother. "When I was a whippersnapper in London, many years ago, a grayhair in the City (the financial district) warned me about this. “A bull market doesn’t peak,” he growled at me over lunch in an old, dark tavern, “till the last bear turns bullish.” That, he explained, was the moment of final capitulation — when the final doubters got on board. After that happened, there was no one left to convert. Share prices then reflected widespread optimism — and the smart money got out. " From Brett Arends's ROI Archives | Oct. 29, 2013, 6:03 a.m. ED
From Seeking Alpha Morgan's Parker unveils S&P 500 target of 2014 in 2014 • 11:31 AM 12/02/2012 Morgan Stanley's Adam Parker completes his turn from one of the Street's most bearish to its most bullish investment strategist with his S&P 500 2014 in 2014 target - an 11.5% advance from here. "The only thing people are worried about is that no one is worried about anything," he says ... "That isn't a real worry." He's not discounting the chance of a "Pavlovian" sell-off amid taper banter, but says any spring dip as the taper commences will be a buying opportunity "unless our outlook for corporate earnings markedly deteriorates.” "It isn’t preposterous to say that we could be in an environment of synchronous global economic expansion in 2014, and tapering or not, that isn’t fully in today’s prices.” http://blogs.wsj.com/moneybeat/2013/12/02/morgan-stanleys-adam-parker-the-most-bullish-strategist-on-wall-street/?mod=yahoo_hs&source=email_rt_mc_body&app=n
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Time to panic over Brazil? • 4:18 PM From Seeking Alpha
“Brazil’s capital markets appear to be suffering from a sudden flight of capital," says Michael Shaoul, warning of a danger of "abrupt collapse in investor confidence ... Brazil should be watched closely in the days ahead."
The Bovespa slid another 1.75% today, but more alarmingly, the country's 10-year yield spread (vs. the U.S.) shot to its highest level since the summer of 2009.
This morning, Q3 GDP was reported to have contracted by 0.5%, worse than expectations. From Capital Economics: "Brazil is not particularly attractive to foreign firms ... Woefully low domestic savings mean that Brazil relies on attracting foreign capital in order to fund investment projects. But with the current account already in a significant deficit, there is little scope for running up an even larger external deficit to fund investment."
Off 1.3% today, the iShares MSCI Brazil Index ETF (EWZ) is down 20% YTD.
ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
http://blogs.barrons.com/emergingmarketsdaily/2013/12/03/are-investors-fleeing-brazil-after-the-q3-gdp-contraction/?source=email_rt_mc_body&app=n
From Ted's Morgan Stanley Letter; Morgan Stanley's Adam Parker
MAKING THE CASE. So can the
market multiple continue to expand?
Three things need to be in place. First,
the dream of higher real interest rates
must remain intact. If investors believe
that the 10-year US Treasury yield can
move to the 3.0%-to-3.5% range
without a material change in inflation,
there is a precedent for a higher
multiple. Second, the Federal Reserve
will have to effectively communicate
that tapering securities purchases is not
tightening monetary policy. Finally, the
probability of the bear case in earnings,
now 20%, must not grow, even if the
base case remains mediocre.
Oh, brother.
"When I was a whippersnapper in London, many years ago, a grayhair in the City (the financial district) warned me about this. “A bull market doesn’t peak,” he growled at me over lunch in an old, dark tavern, “till the last bear turns bullish.” That, he explained, was the moment of final capitulation — when the final doubters got on board.
After that happened, there was no one left to convert. Share prices then reflected widespread optimism — and the smart money got out. "
From Brett Arends's ROI Archives |
Oct. 29, 2013, 6:03 a.m. ED
From Seeking Alpha
Morgan's Parker unveils S&P 500 target of 2014 in 2014 • 11:31 AM 12/02/2012
Morgan Stanley's Adam Parker completes his turn from one of the Street's most bearish to its most bullish investment strategist with his S&P 500 2014 in 2014 target - an 11.5% advance from here. "The only thing people are worried about is that no one is worried about anything," he says ... "That isn't a real worry."
He's not discounting the chance of a "Pavlovian" sell-off amid taper banter, but says any spring dip as the taper commences will be a buying opportunity "unless our outlook for corporate earnings markedly deteriorates.”
"It isn’t preposterous to say that we could be in an environment of synchronous global economic expansion in 2014, and tapering or not, that isn’t fully in today’s prices.”
http://blogs.wsj.com/moneybeat/2013/12/02/morgan-stanleys-adam-parker-the-most-bullish-strategist-on-wall-street/?mod=yahoo_hs&source=email_rt_mc_body&app=n