Not a firm believer in anything much in these times, I am not sure if this CLSA chart is anything to go by and I will remove it if they accuse me of copyright infringement.
Nonetheless, it looks like a nice starting point.
Nice call for a first half rally and for us to rush back to work tomorrow and buy every single stock in sight, 2800 HK especially, because this is a HSI centric report.
I did these tables last Friday morning just for a reality check.
Table 1. Equity Indices Change (local ccy) YoY cut off Friday 8 Feb am.
Table 2. Commodities Table Change YoY (in USD). cut off 8 Feb am.
Table 3. Fx Changes YoY vs USD (note that +ve numbers means strengthen only for EUR, AUD, GBP, XAU and XAG; for the rest, -ve numbers means the ccy has strengthened)
Guess what it basically says.
* if you were an investor in the Nikkei a year ago, you would have only made 3% vs the USD.
* if you were a Japanese investor in the DAX, you would have made >35% returns.
* if you were a Japanese investor in Bean Meal and Orange Juice, WOW ! >50% !
There is a reason why markets would rally more from here.
| 2013 Earnings Are Now Forecast To Be Less Then 2009 Earnings Were Projected To Be In 2007 |
Maybe it is just all about the JPY.
| The Yen Is Everything |
I am going to play it snake style, sly and contrarian.
Looking at all the down commodities – Nat Gas (LNGA LN -46% and BOIL US -43%), Sugar (LSUG LN -45%), Coffee (LCFE LN -69%) etc. Target 5% gain 3 mths.
Looking at shorting EM Equities – EEV US -14.7%. Target 5% gain 3 mths.
Looking at buying VIX – VXX US -76%, UVXY US -97%. Target 5% gain under 3 mths.
Looking at shorting EUR/JPY, target 120. Cut 127.
The Pope just announced he would be resigning on 28 Feb. My initial reaction was that he would be running the Italian elections ! God bless him.