World economy talk

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Coming Soon: September Volatility | BlackRock Blog | ETF Global market intelligence

Coming Soon: September Volatility

Since spiking earlier this summer, market volatility is now back to spring lows.

This is partly because mixed economic reports – including last week’s second-quarter gross domestic product and July non-farm payroll data – continue to suggest that the US economy is grudgingly improving.

The modest pace of the recovery, coupled with historically low inflation, suggests that the Fed has the latitude it requires for a gentle exit. As a result, stocks have been eking out gains lately, the 10-year Treasury has been stuck in the 2.5% to 2.75% range, and market volatility has decreased.

Investors, however, shouldn’t expect this calm to continue come September. While I still believe US and global equity valuations are reasonable and stocks can advance over the next year, market volatility is likely to increase in September for four reasons:

1.) September is the one month of the year when the calendar really does matter. Looking at data on the Dow Jones Industrial Average back to 1896, September has historically been the worst month of the year for stocks, with a consistent, and statistically significant, negative bias.

This September swoon phenomenon extends beyond the United States. September has also historically been the worst month of the year in a number of European markets – including Germany and the United Kingdom – and in Japan.

2.) Anxiety over Fed tapering is likely to climb as we approach the Fed’s September meeting.

3.) Europe is likely to re-emerge as a source of volatility as Germany holds an important federal election in September.

4.) The US budget debate will heat up again as Congress needs to pass a continuing budget resolution before the fiscal year ends on September 30th. Not surprisingly, Congress has made little progress to-date.

To be sure, September did not play to script last year and September’s negative seasonal bias is much less pronounced in years when the market is up year-to-date, as clearly is the case this year. But last year’s September rally had a lot to do with more-than-expected support from the Fed, something we aren’t likely to see this year.

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testing testing

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there's no volatility

testing


testing


testing


testing

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[Monseratto]

So much for Abenomics...

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Bank of Japan decision --- monetary policy unchanged as expected

maintain QE at 60-70 trillion yen per year

says "Japan's economy is starting to recover moderately"

USDJPY not impressed

Nikkei 225 not impressed

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boom!

[[archie]]

^wow! What's with tesla, aside from its electric cars. Did they manage to get investors for mass production or something?

[Ry_Tower]

^wow! What's with tesla, aside from its electric cars. Did they manage to get investors for mass production or something?

They are just expecting that the tredn for high-quality elecetric cars will really pick-up 'coz the potential for it to be cheaper is there.

[uls]

^wow! What's with tesla, aside from its electric cars. Did they manage to get investors for mass production or something?

they're making money

everybody was expecting they'll report a loss in Q2

http://files.shareholder.com/downloa...r%20Letter.pdf

Tesla Motors, Inc. – Second Quarter 2013 Shareholder Letter
 Net income (non-GAAP) increased 70% from Q1 to $26M
 Record sales of 5,150 Model S vehicles in North America
 Gross margin of 22% (non-GAAP), despite significant reduction in ZEV credits
 On track to achieve Q4 gross margin of 25%, excluding ZEV credits
 Strong balance sheet with almost $750 million in cash and no government debt
 Primary focus is on expanding production to meet worldwide demand

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The last I've heard of tesla was they can't manage to produce a lot of cars to meet the demand. 750m with no government debt is a very strong indication of viable market in the electric car business.

Kala ko talaga dati babagsak yung company.

[jhnkvn]

No, the problem with Tesla is that it's only the shining hope of the electric automotive industry. If you think of electric, you usually won't think of Leafs or Priuses.. the ones leading the forefront is now just Tesla Motors. Couple that with a very charismatic Elon Musk and you got a company that's overvalued by valuation. But in investing, you're looking at future promise after all not the current promise.

The jump in Tesla was because they outperformed analyst EPS estimates by double of their estimation. Analyst were expecting $0.20 Q2 EPS earnings, Tesla delivered $0.40.

If you dig deep down, they're actually not profitable in their core operations as assumed by a negative number on cash from operations. However, the black ink is the fruits of legislation. In Q1, they churned out a $11 million net earnings.. digging down more deeply, you'll be greeted by $85 million in income from green tax laws. $68 million from ZEV credits and $17 million from greenhouse gas credits. Not to mention there's the $1b additional shares to pay off government debt which translated into a $11 million warranty liability savings. By far, Tesla was in the red in just the manufacture of their cars.

From then, they're banking on rapid expansion for economies of scale to push down the production costs. However, there's still hurdles to be done. For example, the construction of numerous "Superchargers" doesn't come at a cheap price. Not to mention not all governments are willing to legislate "green" laws such as in our country.

I haven't read nor analyzed their Q2 reports atm.. it's my task to do in the evening

Take note that Tesla's market capitalization at the moment is higher than Fiat Group's total equity in their 2012 annual report. And that says a lot about how excited the market is.

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tesla is a momentum stock

the market is pricing in earnings growth but if earnings growth slows the stock will decline sharply

like what happened to AAPL, NFLX

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Japan GDP big miss

Japan, the world's third-largest economy, grew an annualized 2.6 percent in the second quarter, a third straight quarter of expansion but slower than a downwardly revised 3.8 percent rate in the first quarter.

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boom!




BlackBerry directors explore a sale of the company - Aug. 12, 2013

BlackBerry's board of directors is exploring the option of selling the company, said the smartphone maker on Monday.

BlackBerry's (BBRY) directors have formed a special committee "to explore strategic alternatives to enhance value and increase scale" in order to boost sales of its BlackBerry 10 smartphone.

"These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions," said the Canadian company.

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US equities look toppy

ran out of reasons to go higher

[jhnkvn]

boom!




BlackBerry directors explore a sale of the company - Aug. 12, 2013

It's about time. But I fear they admitted their mistakes way too late. By the time they launched their Z10 with its propriety Blackberry software, the market was already crowded with iOS and Android makers. Hopefully, they can still leverage their expertise in corporate security thanks to their Blackberry Network (BBM and all). I was a former investor when I saw their decline and was fooled by their cash flow generation and increasing revenues (thanks to distribution networks from Americas to global), but I kinda got burned in 2012

[Monseratto]

Following the footsteps of Palm OS...

[Ry_Tower]

Following the footsteps of Palm OS...

Seems like it. Mga dating leaders na ngayon for sale na. Sino kaya okay na bumili? Lenovo? They have great ambitions in the smartphone industry e.

Sent using Lenovo via Tapatalk