Comments »MADRID (AP) — Throw a dart at a map of Europe now and it takes expert aim to hit a country run by a left-of-center government, especially after Spain’s Socialists were emphatically drubbed out of power over the weekend.
Although the shift to the right began years ago in such heavyweights as France and Germany, it is now all but complete three years into the continent’s grinding debt and economic crisis. Why? When times get tough — when “the cows get thin” as the Spanish say — political experts say edgy voters seek comfort with conservatives.
“The center-right is the natural preference in times of crisis,” said Piotr Kaczynski of the Centre for European Policy Studies in Brussels. “If you look at societies and how they make their preferences, they all tend to vote more conservative in times of crisis and more center-left in times of economic progress.”
Granted, on the European Union map there are scattered spots of leftist liberalism. A new Social Democratic government runs Denmark, there is a center left government in Norway and there is a broad Social Democratic-led coalition in Austria. And the Socialists might beat conservative President Nicolas Sarkozy in France’s presidential election next year.
Monthly Archives: November 2011
Jefferies fights “lies”
Comments »BOSTON (AP) — Investment bank Jefferies Group Inc. on Monday tried to calm recent market worries about its financial exposure to Europe’s debt crisis with a letter stating that it has been the target of an orchestrated campaign of “malicious lies and false rumors” in the wake of the MF Global Holdings collapse.
The company said it has recently cut its exposure to debt-burdened European countries, and that it expects to post record operating results for its fiscal fourth quarter.
The letter follows a sell-off of Jefferies shares that has reduced their value by about one-third since Oct. 27.
A six-page letter addressed to “clients, shareholders, bondholders, employees and friends” from Chairman and CEO Rich Handler and Executive Committee Chair Brian Friedman said: “Throughout the month of November, Jefferies has been barraged by a group of people maliciously spreading rumors, half-truths and outright lies through every means possible, including calling analysts and security holders, as well as using the mass media in an effort to amplify and legitimize their efforts.”
WSJ: EZ spreads now even spread-ier
Comments »Along with the traditional showering and shaving, MarketBeat has added to its list of morning rituals the daily checking of the euro-zone bond spreads.
This morning finds spreads wider across the board, particularly in Spain, which just elected a new government. So much for votes of confidence.
Spanish 10-year debt yields 6.53% this morning, or about 4.63 percentage points above German bunds, yielding 1.90%. That spread against bunds is about 26 basis points wider today.
Italian debt, meanwhile, yields 6.65%, 11 basis points wider against bunds.
French debt yields 3.45%, 5 basis points wider against bunds.
Austrian debt yields 3.37%, 7 basis points wider against bunds.
Belgian debt yields 4.78%, 9 basis points wider against bunds.
This all means an unpleasant morning is in store for risky assets generally.
The euro is down to $1.3465. Dow futures are down 143 points, S&P futures are down 16 points and Nasdaq futures are down 20 points.
Cramer: $10 Trillion in Losses Possible in Europe
Cramer is on CNBC saying Europe is on the cusp of nationalizing its banks and “crunching” bond and preferred holders for $10 trilly.
Comments »Update on European 10 Year Yields
Italy 6.66% +.39%
Spain 6.55% +2.74%
France 3.44% -.78%
Belgium 4.79% +.29%
Poland 5.81% +.42%
Czech Republic 4.06% +2.59%
Hungary 8.39% +1.1%
Comments »
FLASH: Crack Spreads Soar
+10% to $15.85.
Comments »Upgrades and Downgrades This Morning
Upgrades
MWDV – MeadWestvaco upgraded to Market Perform from Underperform at BMO Capital
MS – Morgan Stanley upgraded to Buy from Hold at Collins Stewart
ALLT – Allot Comms initiated with a Buy at BofA/Merrill
MAC – Macerich upgraded to Buy from Neutral at Goldman
WMT – Wal-Mart upgraded to Overweight from Neutral at JP Morgan
DB – Deutsche Bank upgraded to Overweight from Neutral at HSBC
ARRS – Arris target raised to $13 at Kaufman Bros
VECO – Veeco Instruments upgraded to Buy from Hold at ThinkEquity
HAYN – Haynes Intl upgraded to Overweight from Neutral at JP Morgan
NTAP – NetApp upgraded to Outperform from Sector Perform at FBN Securities
HIBB- Hibbett Sporting upgraded to Buy from Neutral at Sterne Agee
CLI – Mack-Cali Realty upgraded to Buy from Neutral at Goldman
KW – Kennedy Wilson initiated with a Buy at BofA/Merrill
RGLD – Royal Gold downgraded to Sector Perform from Outperform at RBC Capital
BYI – Bally Technologies upgraded to Buy from Hold at Deutsche Bank
SBH – Sally Beauty initiated with a Neutral at BofA/Merrill
HOS – Hornbeck Offshore initiated with an Outperform at Wells Fargo
REGN – Regeneron Pharms upgraded to Neutral from Underperform at BofA/Merrill
WDC – Western Digital upgraded to Overweight from Equal Weight at Barclays
HSY – Hershey Foods upgraded to Buy at Ticonderoga
IFF – Intl Flavors upgraded to Overweight from Neutral at JP Morgan
RBS – Royal Bank of Scotland upgraded to Buy at WestLB
SXCI – SXC Health Solutions upgraded to Outperform from Neutral at Cowen
FIRE – Sourcefire target raised to $39 at Stifel Nicolaus
AMAG – AMAG Pharma resumed with an Equal Weight at Morgan Stanley
NFX – Newfield Expl upgraded to Neutral from Underperform at BofA/Merrill
FLR – Fluor upgraded to Buy from Hold at BB&T
AMNB – Am Natl Bankshares initiated with a Market Perform at Keefe Bruyette
FES – Forbes Energy Services initiated with a Buy at Canaccord Genuity
Downgrades
POT – Ticonderoga cuts estimates
GGP – Gen Growth Prop downgraded to Neutral from Buy at Goldman
TX – Ternium S.A. downgraded to Neutral from Buy at Goldman
TGT – Target downgraded to Neutral from Overweight at JP Morgan
SPG – Simon Properties downgraded to Neutral from Buy at Goldman
VNO – Vornado Rlty Trust downgraded to Sell from Neutral at Goldman
VTR – Ventas downgraded to Sell from Neutral at Goldman
UGP – Ultrapar Participacoes initiated with a Buy at BofA/Merrill
RIMM – Research In Motion downgraded to Underperform from Market Perform at JMP Securities
WAG – Walgreens downgraded to Underweight from Overweight at Morgan Stanley
HCN – Health Care REIT downgraded to Sell from Neutral at Goldman
DEST – Destination Maternity downgraded to In Line from Outperform at Imperial Capital Research
Comments »Gapping Up and Down This Morning
Gapping up
GEDU +98.9%, BSDM +5.7%, INHX +25.8%, VRTX +6.8%, GPRE +3%, REGN +6%, REGN +6.4%,
FSIN +1.3%, YGE +2.3%
Gapping down
BP -2.1%, CIM -1.5%, LVLT -1.4%, GLD -1%, TS -4.7%, MT -4.2%, RCL -4.1%, BBL -3.9%, BHP -3.5%,
LYG -7%, RIO -5.9%, FRO -5%, BCS -4.9%, DB -4.9%, HBC -3.2%, UBS -3.2%, SDRL -3.2%, SLV -3.2%,
BAC -3.1%, TOT -2.7%, C -2.6%,
Comments »In Play and On the Wires
Alleghany Said to Be Close to buying Transatlantic for $3.4 Billion
Moody’s Warns That France’s Credit Rating Could be Lowered Based on Higher Yields
“PARIS (Reuters) – A rise in interest rates on French government debt and weaker growth prospects could be negative for the outlook on France’s credit rating, Moody’s warned in a report on Monday, adding to pressure on European debt markets.
Worries that France has the weakest economic fundamentals among the euro’s six AAA-rated countries have drawn the euro zone’s second largest economy into the firing line in the debt crisis this month.
The rating agency said the deteriorating market climate was a threat to the country’s credit outlook, though not at this stage to its actual rating.
“Elevated borrowing costs persisting for an extended period would amplify the fiscal challenges the French government faces amid a deteriorating growth outlook, with negative credit implications,”Senior Credit Officer Alexander Kockerbeck said in Moody’s Weekly Credit Outlook dated November 21.”
Comments »Gilead Looks to Buy Pharmasset for $11 Billion
Failure to Agree in the U.S. Stupid Committee is Said to Have Caused a Global Sell Off
What a joke these politicians are. I’m sure if there was a time to act to save the planet that politicians would argue until they met their grave.
Comments »
Japan’s Exports Fall More Than Expected in October
“Japanese exports dropped more than forecast in October, Singaporesaid its growth may slow to 1 percent next year and China signaled the global economy faces an extended slide.
The reports may raise pressure on policy makers in export- reliant Asia to implement further stimulus measures. A record of the Bank of Japan’s Oct. 27 meeting today showed one board member favored adding 10 trillion yen ($130 billion) in asset purchases, and Chinese Vice Premier Wang Qishan said his nation must adopt more “forward looking” and flexible monetary policy.
“Things are going to get worse before they get better,” said Vishnu Varathan, a Mizuho Corporate Bank Ltd. economist in Singapore. “Export growth will slow across Asia and we may see financial shocks coming through. Asian policy makers are going to become stimulatory all over again.”
Comments »Foreign Banks Double Dollar Reserves As The Euro Crisis Accelerates
The Turkey Gods Are Upset as Global Markets Sell Off
Chris Mathews Throws Obama Under the Bus (VIDEO)
Asian Market Update
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^AORD | All Ordinaries | 4,222.108:47PM EST |  24.60 (0.58%) |
Components, Chart, More |
| ^SSEC | Shanghai Composite | 2,405.928:51PM EST | 10.64 (0.44%) |
Chart, More |
| ^HSI | Hang Seng | 18,114.858:52PM EST | 376.38 (2.04%) |
Components, Chart, More |
| ^BSESN | BSE 30 | 16,371.51Nov 18 | 0.00 (0.00%) | Chart, More |
| ^JKSE | Jakarta Composite | 3,754.50Nov 18 | 0.00 (0.00%) | Components, Chart, More |
| ^KLSE | KLSE Composite | 1,437.738:52PM EST | 16.67 (1.15%) |
Components, Chart, More |
| ^N225 | Nikkei 225 | 8,353.608:47PM EST | 21.31 (0.25%) |
Chart, More |
| ^NZ50 | NZSE 50 | 3,256.228:48PM EST |  5.33 (0.16%) |
Components, Chart, More |
| ^STI | Straits Times | 2,702.778:47PM EST | 27.57 (1.01%) |
Components, Chart, More |
| ^KS11 | Seoul Composite | 1,815.779:07PM EST | 23.40 (1.27%) |
Components, Chart, More |
| ^TWII | Taiwan Weighted | 7,114.628:47PM EST | 119.16 (1.65%) |
Time Right (Again) for Mean Reversion?
By Frank Hassler, via ETF Prophet:
The two-day mean-reversion trade, i.e. RSI-2 or DV-2 has become very popular. Though the performance of this trade has weakened lately (during late 2010-2011). So the twenty thousand dollar question becomes: Is the edge of this trade gone or is it about to resume?
With this post I want to share an observation I’ve made by tracking my Trend Strength Indicator (TSI). TSI is a non-directional trend strength indicator. A lower TSI is indicating a tendency to mean-reversion while a higher TSI is indicating follow-through action. Read more about TSI [here].
Let’s start with some “chart porn”.
Above you see a SPY chart from 1998 until today (Nov. 2011). Prior 2009 TSI spent most of it’s time bellow 1.6. Post financial crisis 2008 it raised to the highest value ever of >2.0 and it allays maintained the level of > 1.6. However what you also can notice is the trend strength decrease lately. I can also confirm that by simply looking at the performance of my mean reversion strategy over the last few month.
Read the rest here, including a sample mean reversion strategy using TSI as a filter.
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