Wednesday, October 28, 2009
a potential ceiling for oil
over the next 3 years Dubai has 50 billion worth of loans coming due. It is believed that Dubai is currently exploring a new bond offering to refinance the 50 billion. Should they experience any difficulty with the bond offering, Dubai maybe forced to sell extra oil. Just a thought
Tuesday, October 27, 2009
yesterday's sell off, today's opportunity
yesterday we saw selling across almost all asset classes. Some what surprising that as people were unloading risk in the equity markets and taking some profits in oil that we didn't see bids in gold and government bonds.
A little late on this, but this was the perfect opportunity to get long 10yr UST and take advantage of momentary disconnect
A little late on this, but this was the perfect opportunity to get long 10yr UST and take advantage of momentary disconnect
Monday, October 26, 2009
EM infaltion risks
watch inflation risks in emerging markets as food prices took a tick up this past month. typically food is a much bigger portion of CPI in EM vs. developed markets. Goldman today said that rising food prices in emerging markets typically are an indication of upside future inflation risks. Could help strengthen the dollar vs emerging market currencies in the coming months
Emerging Markets Over Valued?
Something to think about moving forward.
An article from this weekends FT says that the MSCI Emerging Markets Index trades at around 2.1 price to earnings while developed markets are trading around a 1.7 multiple
In the past emerging markets were attractive because they were generally undervalued, this data would suggest that is no longer true. At this point most emerging market plays are going to be a function of currency exchange rates.
Analysts are mixed on the value of the US markets, many are upbeat as US companies continue to impress on earnings. However there are many bears out there like Andrew Smithers of London research boutique Smithers & Co who examined S&P500 PE ratios and "q" ratios (market cap/net worth) and he finds that the US stock market is around 40% over valued.
Who is right??? They probably both are and one should probably look at pair trades of high and low PE ratio stocks. If you are dabbling with options then look for cheap implied volatility in some of those stocks that might be extremely overvalued
An article from this weekends FT says that the MSCI Emerging Markets Index trades at around 2.1 price to earnings while developed markets are trading around a 1.7 multiple
In the past emerging markets were attractive because they were generally undervalued, this data would suggest that is no longer true. At this point most emerging market plays are going to be a function of currency exchange rates.
Analysts are mixed on the value of the US markets, many are upbeat as US companies continue to impress on earnings. However there are many bears out there like Andrew Smithers of London research boutique Smithers & Co who examined S&P500 PE ratios and "q" ratios (market cap/net worth) and he finds that the US stock market is around 40% over valued.
Who is right??? They probably both are and one should probably look at pair trades of high and low PE ratio stocks. If you are dabbling with options then look for cheap implied volatility in some of those stocks that might be extremely overvalued
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