FTSE 100 /quotes/zigman/3173262 6,271 -76 1.20%
DAX /quotes/zigman/2380246 7,721 -113 1.45%
CAC 40 /quotes/zigman/3173214 3,717 -57 1.50%
FTSE MIB /quotes/zigman/1482176 16,835 -486 2.81%
IBEX 35 /quotes/zigman/2759620 8,090 -141 1.71%
Stoxx 600 /quotes/zigman/2380150 286 -2 0.76%
http://www.marketwatch.com/#
Turning into a bit of an ugly day.
US futures are pointing to an open right now around 0.5%.
The real story today is in Italy, where concerns about the outcome of the coming election seem to be worried.
Raymond James strategist Jeff Saut offers his take on where the market is headed next.
Today is session 23 in the typical 17- to 25-session duration of a
“buying stampede.” Such skeins only have one- to three-session pauses or
pullbacks before they exhaust themselves on the upside. While a few
have lasted for 25 – 30 sessions, it is very rare to have one last for
more than 30 sessions. That said, this one feels like it will extend
towards the State of the Union address slated for February 12th.
That
address will likely be viewed negatively by the equity markets, which
should serve to finally bring about a 5 – 7% correction. How
the stock market reacts following such a pullback will tell us a lot
about the market’s future direction. In the interim I favor the upside
with the caveat that this rally is long of tooth.
Italy 10yr /quotes/zigman/3483462 4.40 +0.11 2.62%
Spain 10yr /quotes/zigman/3483373 5.40 +0.20 3.83%
TrimTabs: ’We increasingly do not like what we see…’
Stock fund inflows – combining mutual funds and ETFs -
summed to $77.4B in
January, according to TrimTabs, smoking the previous record of $53.7B
(when else, February 2000). “We increasingly do not like what we see …
Investors are piling into stocks … while companies are no longer
supporting share prices.” (uh, UTX
just announced a $5.4B repurchase program).
Dan Fuss of Loomis Sayles is the third bond fund manager to be called
a “bond god” (the other two are Bill Gross and Jeff Gundlach).
He is strongly of the view that the current fixed income market is out of control, and that a reckoning is coming.
From Bloomberg:
“This is the most overbought market I have ever seen in my life in
the business,” Fuss, 79, who oversees $66 billion in fixed-income assets
as vice chairman of Boston-based Loomis Sayles & Co., said in an
interview in London. “What I tell my clients is, ‘It’s not the end of
the world, but for heaven’s sakes don’t go out and borrow money to buy
bonds right now.’”
…
“The world is changing,” said Fuss, who started in the investment
business when Dwight Eisenhower was U.S. President. “We are coming off a
period of very low interest rates because the central banks have been
buying the bonds. Interest rates are going to go up.”
The idea of the bond bull run coming to an end is a bit more popular,
it seems, within the equity side of the world, where analysts are (to
some extent) cheerleading the shift from fixed income into bonds. That
being said, Bill Gross has clearly been skeptical of the bond market for
awhile (having been burnt on a short in 2011).
Nomura’s Andy Chaytor explains the brewing political risk:
In Italy, our economists note that the market is underpricing
political risk ahead of this month’s elections. After promising to
abolish and refund a tax on first homes implemented by Prime Minister
Monti,
former Prime Minister Berlusconi’s
centre-right coalition is expected to continue eating away at the lead
held by Mr Bersani’s centre-left coalition. Meanwhile, Mr Monti’s
coalition has again lost third place to the Five Star Movement in the
latest polls. While our economists maintain their baseline
scenario of a centre-left majority in both houses of parliament, they
note that in the increasingly likely scenario that Mr Bersani fails to
gain a majority in the Upper House, an alliance with the coalition led
by Mr Monti is more likely than new elections. Nevertheless, they note
that both the share of undecided voters (up to 35% according to the
average of the latest three polls) and, as a corollary, the risk of
ungovernability remain very high. While official publication of polling
data will stop on Saturday, it will continue on some social networking
sites, and our economists note that changes in the share of undecided
voters will be
“the most important factor to inform political risk and ungovernability.”
Europe Plunges By Most In Six Months
zerohedge@zerohedge
Italy down 3.1% now. Random stock halts accelerating
zerohedge@zerohedge
November factory orders revised form 0.0%, to -0.3%
3 minzerohedge@zerohedge
Factory Orders 1.8%, Exp. 2.2%; Ex transport +0.2%,
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