Posts Tagged ‘Investment Group’
Chart: Baltic Dry Index Continues to Drop
Thursday, February 4th, 2010
“The Baltic Dry Index, which measures changes in the cost to ship goods by sea, is about as volatile as an option contract. As shown in the chart below, the index has had a number of major swings over the past few years and months. We can’t imagine what it must be like in the shipping industry to have to deal with these kinds of price changes all the time. Since December 2008, the index has risen by 547%, fallen by 50%, risen by 115%, and is currently down 42% since November 19th. Going back farther, from 2005 to mid-2008, the Baltic Dry rose 575%, and then it fell 94% from its peak to its trough on December 5th, 2008.” - Bespoke Investment Group
Source: Bespoke Investment Group, February 3, 2010
Tags: Baltic Dry Index, Investment Group, Option Contract, Price Changes, Shipping Industry, Swings, Trough
Posted in Markets | No Comments »
Pro investors more bullish than individuals
Friday, August 28th, 2009
Short interest has dropped to multi-year lows according to AAII, says Bespoke Investment Group:
In the last few days, we have noted how short interest is at multi-year lows and newsletter writers are more bullish than at any other time since the start of 2008. While the so-called pros are bullish, individual investors apparently need more convincing. According to this week’s survey of the American Association of the Individual Investors (AAII), only 1/3 of investors surveyed are currently bullish, while nearly half (49%) are bearish. Based on these surveys at least, not everyone is bullish.
Source: Bespoke Investment Group, August 27, 2009
Tags: Few Days, Individual Investors, Investment Group, Lows, Newsletter Writers, Short Interest, Surveys
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Global Equity Market P/E Ratios
Friday, June 26th, 2009
Below is a chart showing global equity market valuations, as produced by Bespoke Investment Group. Canadian stocks are currently fetching a P/E of 13X, and given Canada’s relatively stronger economic fundamentals, from a fiscal and banking industry standpoint, and its significant commodity complex, are relatively attractive. It is notable that Canada’s P/E was around 9X back at the beginning of March, so the strong rally since has aided significant P/E multiple expansion off the lows.
Bespoke: As shown, Russia currently has the lowest P/E ratio at 6, followed by Italy (10) and France (11). At 14, the US is more attractive based on its P/E ratio than most countries. Taiwan has the highest P/E at 60, and the UK is surprisingly bad at 34. It’s valuation is worse than China’s. Germany also has a very high P/E ratio at 27.
Tags: 13x, Banking Industry, Canada, Canadian Stocks, China, Commodities, Commodity, Economic Fundamentals, Equity Market, Germany, Global Equity, Investment Group, Italy, Lows, Market Valuations, Rally, Ratios, Russia, Standpoint, Taiwan
Posted in Markets | 3 Comments »
Leveraged ETF Performance
Wednesday, June 10th, 2009
The following note is courtesy of Bespoke Investment Group, who are masterful at creating nice clean charts. As always, a good picture or chart can say a thousand words.
Below we highlight the year to date performance of the various leveraged and inverse ETFs. Out of the 112 that we track, 29 are up year to date while 83 are down. As shown below, the 2x long silver ETF (AGQ) is up the most at 65%. The 2x inverse long-term Treasury ETF (TBT) is up the 2nd most at 51%, followed by 2x technology (ROM), 2x Nasdaq 100 (QLD), and 2x basic materials (UYM).
The 3x inverse financials is down the most year to date with a big decline of 87.29%. Interestingly, the 3x long financials is also down big with a decline of 60%. This financial index that these two ETFs track is down 0.24% year to date. Go figure.
Source: Bespoke Investment Group
Tags: Agq, Basic Materials, Decline, ETF, Etf Performance, ETFs, Figure Source, Financial Index, Investment Group, Long Silver, Nasdaq 100, Silver Etf, tbt, Treasury
Posted in Markets | No Comments »
Bespoke: BRIC countries continue to surge
Sunday, May 31st, 2009
Bespoke Investment Group, who do a brilliant job charting, have put together the year-to-date look at BRICs vs. S&P500 [below].
Are emerging markets equities decoupling once again from developed markets equities?
It may still be too soon to tell, however, a recognition of the underindebtedness of BRIC-based companies and consumers, healthy banking systems, sound fiscal and monetary policies, as well as a resurgence in government spending and domestic consumption could be behind the recovery which has taken place in Emerging Markets since last November’s lows, which began 4 months sooner than the equity market recovery in March in the G-7.
Oil’s surging recovery from the $30s to $66 [Friday], and the weakening Greenback [which has been good to commodities' prices] have provided a further boost to Russia and Brazil’s commodity complex.
A landslide general election victory for India’s incumbent Congress [Liberals] coalition government has cleared the way politically for India to move forward on much needed reforms for at least the next 5 years.
China’s economic rebalancing, via its $600-billion stimulus appears to be trickling very solidly into the corporate sector and the economy, much faster than anticipated.
Time will tell.
Russia’s RTS stock index was up another 3.2% today [Friday], while China was up 1.71% and India was up 2.3%. The BRIC (Brazil, Russia, India, China) countries continue to surge higher in 2009, as they’ve far outpaced stock markets of so-called ‘developed’ countries. Below we highlight their year to date performance compared to the S&P 500. As shown, Russia is up a whopping 72.1% this year, followed by India at 51.6%, China at 44.6%, and Brazil at 39.7%. The S&P 500 is up 0.22%.
Source: Bespoke, May 29, 2009.
Tags: Banking Systems, BRIC, Bric Countries, BRICs, Brilliant Job, Coalition Government, Commodities Prices, Corporate Sector, Domestic Consumption, Election Victory, Emerging Markets, Fiscal And Monetary Policies, government spending, Greenback, India, India China, Investment Group, Last November, P500, Rebalancing, Stock Index, Stock Markets
Posted in Emerging Markets, Markets | No Comments »
World’s Largest Companies: Top 25
Thursday, April 30th, 2009
This is a guest contribution by Bespoke Investment Group:
“For those interested, below we highlight the 25 largest companies in the world. For each company, we provide its country, sector, price (local currency), year to date change, and market cap in dollars. As shown, Exxon Mobil (XOM) is the biggest company in the world and the only one worth more than $300 billion. PetroChina ranks second and is the only other company worth more than $200 billion. The Industrial and Commercial Bank of China is the world’s third largest company, giving China two of the biggest three. Wal-Mart and Microsoft round out the top five. The United States still dominates the list with 12 of the 25 spots. China ranks second with four spots. General Electric used to be the biggest company in the world, but it has slipped all the way down to the 18th spot. Google (GOOG) is also on the list at number 22.”
Source: Bespoke Investment Group, April 27, 2009
Tags: Bank Of China, Biggest Company In The World, Commercial Bank Of China, Currency, Exxon, Exxon Mobil, General Electric, Goog, Google, Industrial And Commercial Bank, Industrial And Commercial Bank Of China, Investment Group, Largest Companies In The World, Market Cap, Microsoft, Number 22, United States, Wal Mart, Xom, Year To Date
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Country ETFs Overbought
Thursday, April 30th, 2009
This is a guest post from Bespoke Investment Group:
From our daily ETF Trends report at below we highlight various country ETFs and their current trading levels. An ETF becomes overbought when it trades more than one standard deviation above its 50-day moving average. The % overbought number is how far the ETF is currently above this initial overbought level. This is the first time in quite awhile that all country ETFs have been overbought at the same time, and it’s a sign that markets around the world are extended from their normal trading ranges. The Taiwan ETF is the most overbought at 13.32%, followed by Italy (8.34%), India (7.92%), Brazil (7.14%), Sweden (7.08%), and South Korea (7.08%). Japan is the least overbought at 1.4%.
Tags: Brazil, Current Trading, Emerging Markets, ETF, India, Investment Group, Italy, Japan, Moving Average, South Korea, Standard Deviation, Sweden, Taiwan
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How are the BRICs Doing?
Wednesday, March 18th, 2009
Highlighted below are two charts from Bespoke Investment Group detailing the relative performance of the BRIC Markets (Brazil, Russia, India, China) compared with the S&P500.
Over the last year, the US has performed better than Russia and China, inline with India, and worse than Brazil. Russia’s stock market is down the most of the BRIC countries at -68%. China’s Shanghai Composite is down 46% and has really seen a nice pickup lately. India’s Sensex is down 43%, which is right inline with the S&P 500, and Brazil is down 36%.
The last ten years have been very tough for US equity markets, with the S&P 500 now down 42% on a simple price basis. But even after the suffering that BRIC markets have had over the last year, their ten-year returns remain strong. Russia is down 68% over the last year, but it is still up 689% over the last decade (we had to put its performance on a secondary axis in the chart below). China is up 84%, India is up 136%, and Brazil is up 314%.
Its worth highlighting that during the last decade, markets in Brazil, India, and China, experienced their strong run-ups while adhering to the advice that was given to them by the IMF and World Bank following the Long Term Capital Management fiasco, of fiscal and monetary prudence, and are today in a very sound fiscal and monetary condition. All four have amassed sizable forex reserves, consumers and corporates have under-utilized credit, especially in Brazil and India, banking systems in Brazil, India and China are sound, well capitalized and negligibly exposed to toxic assets from the G6 credit spill. In addition, stocks are cheap with P/E ratios as follows: India 9X trailing earnings, Brazil, 9-10X trailing, China 12X trailing, and Russia at 2.5X (the cheapest by far).
Although they have performed in line with S&P500 during the last year (except for Russia) they are in a much better position to recover given their “cleaner” credit fundamentals and the fact emerging markets are expected to continue to drive almost all GDP growth over the next two years, according to the IMF’s January 2009 revision, which calls for a contraction in 2009 GDP growth and a recovery in 2010.
The break in commodity prices during the last year has provided the key consuming countries, India and China, and the rest of the world, for that matter with relief from inflation, and in the case of Brazil and Russia, highlighted the fact that low cost producers of hard and soft commodities will have an unusual advantage as consumption for commodities resumes, given their lower break-evens on production.
The by-product of lower commodity prices and the ensuing global recession is also providing emerging markets central banks the room to aggressively cut interest rates in order to stimulate and accelerate domestic consumption within their own economies. This is a favourable development during a time when foreign capital flows are beginning to rebuild post the credit market crosswind that caused investors to repatriate their investments en masse from emerging markets during the last year. In China’s case, its $586-billion stimulus program announced in November, which is set to be spent over the next two years, should not only contribute very significantly to China’s domestic growth, and shore up its weakened exports sector, it should indeed provide the world with a boost as well.
Its hard to know which of the emerging markets will have the best performance over the next 2-5 years, but there is a great likelihood, that given that they continue to be the key driver of economic growth over the same period, that they will do very well.
David Swensen, Yale Endowment’s Super-CIO, recently revised upward, (this can be found in the right hand column of his recent Yale Alumni Magazine interview) his recommended allocation to emerging markets funds for individual investors from 5% to 10%.
Today, Swensen says, economic conditions might call for a modest revision. He now recommends that investors have 15 percent of their assets in real estate investment trusts, and raise their investment in emerging-market stock funds to 10 percent.
Jeremy Grantham, CIO, and founder of GMO, manager of $81-billion in assets re-entered his emerging markets trades in October-November 2008, after getting out entirely in July 2008. He had been long emerging markets for 12 years prior to the July exit, and was of the opinion that a 40% haircut was a good reason to get back in. You can read or view the interview transcript here.
Tags: Banking Systems, BRIC, Bric Countries, BRICs, Corporates, Emerging Markets, Fiasco, Forex Reserves, India, India China, Investment Group, Last Decade, Last Ten Years, Long Term Capital, Long Term Capital Management, P500, Price Basis, Prudence, Relative Performance, Secondary Axis, Sensex, Shanghai Composite
Posted in Commodities, Credit Markets, Emerging Markets, Markets, Outlook | No Comments »
Baltic Dry Index Up 7 Straight Days Bullish Sign
Wednesday, January 28th, 2009
The Baltic Dry Index, the indicator of global shipping activity is now sitting at 1014, having hit its low of 663 December 5, 2008. This is a valuable measure of global trade activity, and it is indicating a resumption of trade. It is still a long way off its all-time high of 11,793 of last spring, down 91.4% from the top, but up over 50% off its bottom.
We’ll keep watching this. This is bullish for both finished exports and commodities. Its still early, and this is a promising sign. The loss experienced in the index includes the value differential owing to the crash in commodity prices experienced during the last 6 months. The BDI Index fell off a cliff in September which coincided with the collapse of Lehman Brothers, which happened to be a large underwriter of trade related financing. With other banks unwilling to take Lehman’s place, trade fell into the crater left behind.
Global trade credit froze along with the credit market as it became very difficult, if not impossible to trade, with banks unwilling to issue letters of credit.
This is a sign that the trade finance market is thawing and that shipping can resume. A continuation of this trend should be considered bullish, particularly for China exports, global trade, and for commodities producing companies and countries.
The Baltic Dry Index does not measure the price of oil, although it does include the price of fuel as a component of the shipping cost.
Chart: Bespoke Investment Group
Tags: Baltic Dry Index, Banks, Bdi, Bdi Index, China Exports, Collapse, Commodities, Commodity Index, Commodity Prices, Commodity Producers, Crash, Differential, Failure, Finance Market, Global Shipping, Global Trade, Investment Group, Last Spring, Lehman Brothers, Letters Of Credit, Price Of Oil, Promising Sign, Resumption, Shipping Activity, Shipping Cost, Straight Days, Trade Finance, Underwriter
Posted in Commodities, Credit Markets, Markets, Oil and Gas | No Comments »
World Markets Performance 2009 YTD
Monday, January 26th, 2009
Year-to-date equity market performance has been bleak, considering that out of 84 countries, 19 are up and the remainder are down. 17 countries are down more than -10%. China is the second best performing equity market so far, up 9.3%, and Brazil is the only other of the BRIC that is up, with a smaller gain of 2.49%.
Canada is the best performing G7 country with a smaller than the rest YTD loss of -3.50%.
Chart: Bespoke Investment Group
Tags: Brazil, BRIC, Canada, China, Equity Market, G7 Country, Investment Group, Market Performance, Remainder, World Markets, Year To Date, Ytd
Posted in Canadian Stocks, Markets | No Comments »
World Markets Bounce Off 52-Week Lows
Thursday, December 11th, 2008
The chart below highlights the recent performance bounces off 78 countries 52-week equity market lows. Its a good glimpse at which markets have recovered the most during the current relief rally, and those that have not done as well.
Hong Kong is up 46% off of its low just a few weeks ago. BRIC countries have nice bounces off their bottoms. Brazil is up the second most with a 34% increase, and India and China are both up 25%. Russia has been the weakest BRIC country with a gain of 19.5%. Of the developed countries, Japan’s bounce is the most at 24%, then the United States (22%), the UK, and Germany (18.9%). Italy and Canada have had the weakest gains of 10.6% and 12.1% respectively in the G7 grouping. Also, not all equity markets have had recovery rallies in recent weeks. 11 of them are trading less than a percent from their 52-week lows.
Chart: Bespoke Investment Group
Tags: 52 Week Lows, Bottoms, Bounces, Br, Brazil, BRIC, Bric Countries, Canada, Chart, China, Current, Developed Countries, Eco, Emerging Markets, Equity Market, Germany, Glimpse, Hong Kong, Img, India, Investment, Investment Group, Italy, Japan, Markets, Rallies, Rally, Russia, Trading, UK, United States, World Markets
Posted in Markets | No Comments »
High-Yield Credit Spreads Are Worsening
Sunday, December 7th, 2008
Based on Merrill Lynch data, high yield credit spreads continue to their mission to the moon, and there appears to be no signs of relief yet. As of Wednesday’s close, spreads were priced at 2036 bps above the comparable treasury securities. As of the June 2007 bottom, they have increased by a whopping 746%.
With 10-year treasuries priced at 2.65% as of Thursday, companies in the high yield universe will have to pay 23% per annum to borrow money over 10 years. That’s a tall order.
Charts: Bespoke Investment Group
Tags: 10 Year Treasuries, 10 Years, Annum, Borrow Money, Bps, Chart, Credit, Credit Spreads, high yield, Img, Investment, Investment Group, Merrill Lynch, Mission To The Moon, Money, Signs, spreads, Treasuries, Treasury Securities, Universe
Posted in Markets | No Comments »
