Mint – Blain’s Morning Porridge - September 27 2013
Our belief was that if we kept putting great products in
front of customers, they would continue to open their wallets…
The phoney war continues as markets remain in the grip of
post taper-caper cross-currents. Still think long-term bull, but short-term
caution. Up a bit today and down a bit tomorrow. Consensus is taper will start
in December once new Fed is in place – but some of the recent US inflation data
suggests a still very weak economy. Does that mean further bond gains? Doubt
Mint – Blain’s Morning Porridge - September 26 2013
The America's Cup is a race of management, money, technology,
teamwork and, last and incidentally, sailing
I would love to talk about markets this morning, but please
forgive me as I wax lyrical about last night’s America's Cup. (Drop down for
thoughts on trading France and all the other stuff that might or might not
matter in markets.) I feel sorry for New Zealand. The prime minister summed it
up when he simply tweeted “Bugger” this morning.
Well done Team Oracle – it’s an awesome thing to come back
from 8-1 down. The team of Englishmen, Italian, Dutchmen, Aussies, Kiwis (yes!)
and a token Yank (whose name we can’t recall, but I think was born in Ireland)
pulled back the most spectacular recovery in history. Imagine a football team
trailing 8-1 at half time and winning on the final kick of the game. As my
colleague Andy said this morning: “they aren’t boats, they’re
News just arrived from PIMCO, reporting the launch of the
PIMCO GIS Capital Securities Fund, which it says utilises a global approach to
subordinated debt instruments issued by banks, insurance companies and other
speciality finance companies. The fund is managed by Philippe Bodereau,
managing director and head of global financials research based in PIMCO’s
London office. Bodereau, it adds, has been successfully managing assets under
this strategy since July 2011, returning 12.29% annualised since inception, outperforming
the benchmark by 11.92%.
Mint – Blain’s Morning Porridge - September 25 2013
Going to be really short this morning as too much business
going on! The no-taper rally didn’t last very long and steady declines confirm
markets are still confused and frankly unconvinced. Common sense and the long term
say be bullish (see yesterday’s porridge for reasons as to why), but short term
nothing gives a particular sense of solidity. Correction feels in the air.
Mint – Blain’s Morning Porridge - September 24 2013
Whoa lady, I only speak two languagues, English and Bad
As we approach the end of Q3 we’re at a very peculiar point
in markets. Participants scratching their heads to understand what happened and
what’s going to happen next. Is it going to be bullish or bearish?
Well, I reckon we should be putting our bull hats on. Get
over the confusion and put your buying boots on. Even though the Fed tripped
over its own “forward guidance” nonsense and utterly confused us all
(momentarily), and the taper remains an imagined future threat, let’s think
through the global reality and the US within that.
Conway, Head of Emerging Market Equities, takes a look at why emerging markets
(GEMs) have underperformed developed markets over the last three years, whether
the trend will change and what has been discounted in equity markets
Why have emerging markets underperformed?
Why have GEMs underperformed? It is probably fair to say
that many investors accept that the long-term structural case for emerging
markets remains intact. Superior economic growth driven by favourable
demographic trends and strong balance sheets means the centre of gravity of the
global economy will continue to move towards the emerging world.
The following (unedited) breathless press release just landed in my
in-tray. I'll leave you to make your own mind up whether you agree with me that
it is absolute bollocks. Then again, maybe you agree that the agency charged
with the transformation has delivered “a revitalised brand that connects with
customers in a contemporary, engaging and distinctive way”. Do let me know...but I've been a Lloyds customer for nearly 30 years so am speaking from a position of first-hand knowledge; I've half a mind to jog up to my branch and gawp at the transformation for an hour or two...
THE BRAND TRANSFORMATION STORY OF THE YEAR
LLOYDS BANK LAUNCHES REVITALISED BRAND AND REDEFINES ITS
CUSTOMER EXPERIENCE WITH RUFUS LEONARD, RKCR/Y&R, PROXIMITY LONDON and MEC.
The agency group worked with the British banking icon to
deliver a brand that serves customers in a contemporary and distinctive way
Mint – Blain’s Morning Porridge - September 23 2013
Everyone is equal, but some are more equal than others...
Lots going on this week as markets weigh the implications of
last week's unexpected Fed do-nothing, and the German elections. Taper is not
stopped, just delayed. The sword of Damocles still hangs over us. It will be a
wild ride into year end, but lots of funds long treasuries will be thanking
Bernanke for their Get-out-of-Jail cards.
But bond markets are tired, and stock markets look fully
priced. Time for flatners? Perhaps. We’re likely to see more schizophrenic
trading behaviours after markets rallied on the perverse news the US is weaker
than we thought it was.
This summer the eurozone bond market’s focus has been on
interest rate risk and the impact Fed tapering would have on the global
economy. The Fed’s decision this week not to taper has clearly repriced
interest rates across the world. But it has had little impact on eurozone
sovereign spreads to Bunds. These have had a relatively quiet summer, with
Italy and Spain the main oupperformers.
In terms of news, Germany’s desire to avoid any significant
political arguments ahead of this Sunday’s general election has more than
compensated for ongoing political uncertainty in Rome. But the relative calm
also points to stable market technicals: the absence of levered buyers and the
strong demand from deleveraging domestic banks.
Martin Skanberg, fund
manager on the European Equities team at Schroders, looks at the case for
European equities have been supported by European Central
Bank president Mario Draghi’s pledge in summer 2012 that he would do ‘whatever
it takes’ to preserve the euro. That remark, and the accompanying ECB policy
action, have helped to restore confidence in the Eurozone, and driven share
price gains. Nonetheless, we believe that there remains scope for European
equities to build on this upward momentum. The recent upturn in economic
activity in the Eurozone should see domestic earnings play a greater role in
propelling equities higher.
Davies, co-manager of the Jupiter UK Growth Fund, believes the Bank of
England’s Financial Policy Committee should hold off from intervening in the UK
property market as talk of a housing bubble is largely overdone
When is a bubble not a bubble? This is the
tricky question the Bank of England’s Financial Policy Committee (FPC) is
hoping to answer this Wednesday when it meets to consider whether government
initiatives to stimulate the UK property market are fuelling another
debt-financed housing boom. Our view is that it is quite far-fetched to call a
rise of just over 3% in house prices a boom 1.
Mint – Blain’s Morning Porridge -
September 17 2013
Mend your speech a little, lest it may mar
Are we poised on the edge of another
disorderly bond rout - a reversal of the recent rally back up to 2.75%? Is
3.25% is the next stop?
Well, that grabbed your attention - but it
feels a very real threat as things start to unwind politically in the US. One
trader told me each day is a coin-flip, no one is certain what happens next –
and I’ve never seen such poor liquidity in the treasury market. Any threat of a
renewed bout of rising US rates would be a most significant challenge for the
global market consensus. Bonds are testing the bottom of the 2.75-3% 10-year
range, but how much potential pain might result from the failures to manage the
Fed appointment, a botched taper start, and the increasingly distracted US
Fiduciary, funds and corporate services provider First Names
Group has appointed Andrew Ryan as managing director of its Irish operation. He will take over from Oonagh Hayes, who will
move to the group role of director of corporate development.
From Bogota comes the news that BNP Paribas
Securities Services has become a local custodian in Colombia. The bank says it has
also secured an operating licence from the Superintendencia Financiera de
Colombia (SFC), the country's financial supervisor.
Mint – Blain’s Morning Porridge -
September 16 2013
In the history of the world, no-one has
ever washed a rented car…
I’ve lost a number of bets on Larry Summers
to be the next Fed chairperson – sell dollars, buy bonds! Halfway through
September, and all sorts of stuff is falling into place in terms of global
growth, focus on stocks, fewer China and Japan concerns, and the switch in
focus from EM back to developed world. But this morning the whole market is
focused on personalities – trying to guess who will do/say what - which is
Ignore all my previous attempts to report correctly the results of the Jungfrau Marathon (held on September 14). Contrary to earlier reports, it was Kenyan runner Geoffrey Ndungu (pictured below) who finished first in the men's race in what, if my limited German serves me well, is a new record time of two hours and 50 minutes.
Petro Mamo from Eritrea was second. Switzerland's European marathon champion Viktor Roethlin came a creditable third in what was his first attempt at the race.
Another debutante, Andrea Mayr, took the women's title in three hours 20 minutes, another new course record. In second place was France's Aline Camboulives, who won the race in 2011.
Mint – Blain’s Morning Porridge -
September 12 2013
Gonna be so neat, Yeah…. dancing to the euro-beat
Did anything except Verizon happen yesterday?
Of course – more below. But Verizon was a cheap deal priced to sell in
quazillions. 5/6%+ coupons proved irresistible. The market was all over the
deal like the proverbial cheap suit. $100bn+ book – a single ticket of $7bn
from the Californians for the 30-year apparently.. and a $15bn 30-year tranche.
Bonds ratchet 40-60 beeps tighter on the break.
The deals success tells us lots of things
about the confidence of market to buy long dated telecoms specifically, but
more generally the lack of alternative things to do in secondary markets
because of chronic illiquidity! Other big attractive deal yesterday was the
Telefonica nc5 and nc8 hybrids – both priced attractively to sell.
This missive just arrived from Mitch
Ackles, president of the Hedge Fund Association and CEO of Hedge Fund PR.
We are counting down the days to the
FINforums Annual Hedge Fund Summit, which takes place next Thursday, Sept. 19,
in New York City. There are still a few seats left, and we invite you to join
A seated lunch will be followed by an
afternoon full of fantastic speakers, including a keynote address from
BlackRock Vice Chairman Barbara Novick titled “Managing Hedge Funds in the Evolving
In the latest edition of Global Horizons Standard
Life Investments, the global investment manager, examines how investors can use
behavioural finance to improve their understanding of markets and enhance
Standard Life Investments’ report focuses
on the insights provided by behavioural finance into collective decisions in
the context of financial markets, describing how investors interact with
machines, using them to improve the quality of trading decisions in
applications of artificial intelligence or to speed up the execution of trades
in algorithmic trading.