Emerging Money http://emergingmoney.com Your Ticket Around The World Tue, 28 Jul 2015 15:06:04 +0000 en-US hourly 1 China’s Single Day Drop of 8.48% Sparks Investigation http://emergingmoney.com/analysis/chinas-single-day-drop-of-8-48-sparks-investigation/ http://emergingmoney.com/analysis/chinas-single-day-drop-of-8-48-sparks-investigation/#comments Tue, 28 Jul 2015 15:06:04 +0000 http://emergingmoney.com/?p=94581 China’s Shanghai Composite Index dropped like a rock by 8.48% Monday and continued into Tuesday with an intraday low of over 5% before closing down 1.68%.

Monday’s single largest drop since February 27, 2007 has prompted China’s (FXI, quote) Securities Regulatory Commission liaison to open an investigation into public [...]]]> China’s Shanghai Composite Index dropped like a rock by 8.48% Monday and continued into Tuesday with an intraday low of over 5% before closing down 1.68%.

14_CHINAMMonday’s single largest drop since February 27, 2007 has prompted China’s (FXI, quote) Securities Regulatory Commission liaison to open an investigation into public complaints and concerns according to the exchange’s liaison Zhang Xiaojun.

 

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-49/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-49/#comments Mon, 27 Jul 2015 15:31:08 +0000 http://emergingmoney.com/?p=94424 Emerging Money Daily Audio Call July 27 - Focus squarely on China where markets take their biggest move since February of 2007 down -8.5% after a relatively calm morning session word leaked that China was pulling back on their market support.  US traded Chinese ADRs will be collateral damage and worth picking over [...]]]> Emerging Money Daily Audio Call July 27 - Focus squarely on China where markets take their biggest move since February of 2007 down -8.5% after a relatively calm morning session word leaked that China was pulling back on their market support.  Phone AudioUS traded Chinese ADRs will be collateral damage and worth picking over when this is done...BIDU reports after the bell with the focus being on costs related to their push into services linkage. 

EM trades all the way through December lows and pressure coming from all sides – currencies, macro and capital flows.

With 40% of US earnings come from outside the US so you will need to see a view that EM is not collapsing or investors will have to re-price their view on US multinationals if EM growth is collapsing as fast as the market is pricing into EM.

The Dollar is weaker today against the Euro but commodities are down strongly again today.  We argue this is more about an unwind of positive carry trades where the Euro was sold to fund trades.

Tune into your account for more info…

 

 

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-48/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-48/#comments Fri, 24 Jul 2015 16:21:22 +0000 http://emergingmoney.com/?p=94193 Emerging Money Daily Audio Call  July 24 - Weaker macro and commodity prices become a self-fulfilling backdrop for global equites who are limping into the weekend.

EM underperformance continues and is rooted in major currency weakness despite the Dollar appearing more benign on the DXY.

Bond funds are well bid and this [...]]]> Emerging Money Daily Audio Call  July 24 - Weaker macro and commodity prices become a self-fulfilling backdrop for global equites who are limping into the weekend.

Phone AudioEM underperformance continues and is rooted in major currency weakness despite the Dollar appearing more benign on the DXY.

Bond funds are well bid and this coupled with the lower bond yields we are seeing tells you that the world is not ready to say that equities need to continue to fresh all-time highs.

Have a great weekend.

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Dalio on China http://emergingmoney.com/analysis/dalio-on-china/ http://emergingmoney.com/analysis/dalio-on-china/#comments Thu, 23 Jul 2015 18:12:14 +0000 http://emergingmoney.com/?p=94062 There is a front page Wall Street Journal article today outlining how Ray Dalio of Bridgewater Associates is changing his view on Chinese investments.  Dalio and his team until recently have been proponents of investing selectively across China. 

Ray Dalio is arguably the most successful hedge fund manager of all [...]]]> There is a front page Wall Street Journal article today outlining how Ray Dalio of Bridgewater Associates is changing his view on Chinese investments.  Dalio and his team until recently have been proponents of investing selectively across China. 

ChinaRay Dalio is arguably the most successful hedge fund manager of all time.  Dalio’s firm, Bridgewater Associates manages some $169Bn in assets which means it’s a monster amongst monsters.  This size fund is absurd in terms of its potential impact on markets if it decides the make an allocation shift. 

All of this is why when Dalio writes a letter to his investors making a big investment call it is news.  When the call happens to be a view on China (FXI, quote) it’s even bigger news because China is an emotional target for many investors for many obvious reasons.  When the investment call is to move from being an advocate of Chinese investing and to saying he is staying clear of China and that he “sees no safe place to hide” this becomes a front page of the Wall Street Journal article and people react.  Often people overreact.  

I don’t read Ray Dalio’s letter as saying he thinks China is blowing up or that there is a major fallout for global markets to come from China.  As mentioned, I think it’s easy to try and draw these conclusions as a journalist and a front page WSJ article will often be prey on emotion that is already out there for most market players.  This type of articles feels more like the type of article you see as a defining sentiment bottom.  

My question do investors and readers of the WSJ is:  do you think Dalio writes the note and sells later?  No it’s the opposite.  He sells then writes the note. He is saying that they are now more cautious after the recent stock mkt events and don’t see how it won’t affect other parts of the economy.  

What’s confusing is that the article talks about how the stock mkt, debt mkt and real estate mkts are crashing at the same time.  They are not.  The equity mkt was pumped up because the real estate mkt had already crashed.  Credit mkt issues are also already well known and have been part of the Chinese slowdown that is now in its third year.  Where is the sudden impact?  China will continue to be a drag on regional economies and some EM economies who got fat on China’s insatiable demand for commodities and infrastructure, but I would argue that Chinese macro is stabilizing not crashing. 

Drawing a straight line between the Chinese stock market and US corporate earnings is also something that I think is grossly overstated in terms of potential impact.  In China, 8% of the population owns stocks.  Half of this group has any meaningful investment in the mkt.  One half of that group is the group that was speculating late into the stock mkts plunge.  Is this really the group that is going to take down Apples China growth trajectory or Yum Brands top line in China? 

Those are rhetorical questions.   

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-47/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-47/#comments Thu, 23 Jul 2015 17:11:30 +0000 http://emergingmoney.com/?p=94056 Emerging Money Daily Audio Call July 23 - Global markets pulling back from levels set a couple days ago and earnings not sending a message of increased demand and top line growth from key bellwether names. 

Dollar weakness today is not yielding a great bounce in commodities,  Watch this correlation breakdown and [...]]]> Emerging Money Daily Audio Call July 23 - Global markets pulling back from levels set a couple days ago and earnings not sending a message of increased demand and top line growth from key bellwether names. 

Phone AudioDollar weakness today is not yielding a great bounce in commodities,  Watch this correlation breakdown and evaluate whether this is telling us that we are near the bottom of this rout.  (we think so). 

China trades better despite the increased noise from the financial press about China’s fallout within the investor community.  Japan remains the highest conviction Asian market and possibly overall in the world.  

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Gold Higher Today – Time To Buy? http://emergingmoney.com/analysis/gold-higher-today-time-to-buy/ http://emergingmoney.com/analysis/gold-higher-today-time-to-buy/#comments Thu, 23 Jul 2015 13:40:40 +0000 http://emergingmoney.com/?p=94026 Gold bugs finally found the strength to push gold slightly higher after 10 days of free fall this morning.

But is it time to buy gold? A question I’ve been asked all month.

Gold (GLD, quote) prices have been under pressure for several months now as commodity traders [...]]]> Gold bugs finally found the strength to push gold slightly higher after 10 days of free fall this morning.

But is it time to buy gold? A question I’ve been asked all month.

Gold (GLD, quote) prices have been under pressure for several months now as commodity traders speculate whether the Fed will start the process of raising interest rates as soon as September.

Remember, gold is less appealing to investors in periods with rising interest rates and during these periods gold cost more to control (hold) and has no yield to pay investors while they wait for gold to return into favor.

With gold being priced in U.S. dollars and with the dollar continuing to strengthen as the Fed looks to hike rates for the first time in nearly a decade…gold will remain under pressure.

Bottom Line: I’m bearish on gold as long as the U.S. dollar (UUP, quote) continues to strengthen and an interest rate hike looms on the near term horizon. Unless Fed indicates the economy is not strengthening and backs off the notion of a rate hike I want to find other places to put money to work.

 

 

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-46/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-46/#comments Tue, 21 Jul 2015 17:05:57 +0000 http://emergingmoney.com/?p=93767 Emerging Money Daily Audio Call July 21 - Global markets look tired and EM markets want to catch a “baby bid”. 

All of this comes as a result of overbought markets and oversold commodities and selected FX markets.  Short term tactical ways to play these moves are on the site today. 

Is [...]]]> Emerging Money Daily Audio Call July 21 - Global markets look tired and EM markets want to catch a “baby bid”. 

Phone AudioAll of this comes as a result of overbought markets and oversold commodities and selected FX markets.  Short term tactical ways to play these moves are on the site today. 

Is China is moving to low volatility again?  Clearly this is a relative assessment but we are of the view that consumption related stocks in ADR form will be now able to see some fundamental stock picking flow through to beaten up charts.

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-45/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-45/#comments Mon, 20 Jul 2015 15:23:25 +0000 http://emergingmoney.com/?p=93562 Emerging Money Daily Audio Call July 20 - Global markets remain constructive but are near heavy technical resistance across Europe and the US. For EM equities the path higher has been challenging and remains so today with another leg of underperformance this AM as local markets in Latam, Turkey, weighing on prices overall [...]]]> Emerging Money Daily Audio Call July 20 - Global markets remain constructive but are near heavy technical resistance across Europe and the US. For EM equities the path higher has been challenging and remains Phone Audioso today with another leg of underperformance this AM as local markets in Latam, Turkey, weighing on prices overall despite china trading better last night.  Commodities are getting near stabilization levels in our view and there are a lot of similarities in the Copper chart to the overall chart of EM equities to the SPX.

US earnings are moving forward and providing a positive backdrop for risk along with macro and political fears having faded enough that bottom up fundamentals are now in focus. 

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Market Update – Crude Oil http://emergingmoney.com/analysis/market-update-crude-oil/ http://emergingmoney.com/analysis/market-update-crude-oil/#comments Fri, 17 Jul 2015 16:45:54 +0000 http://emergingmoney.com/?p=93315 As we head into the weekend the price of crude oil is basically unchanged hovering just above the near term support of 50.58 (7/715).

With a stronger U.S dollar (UUP, quote) and a strong global oil supply build crude oil has traded in tight range from $54.02 to [...]]]> As we head into the weekend the price of crude oil is basically unchanged hovering just above the near term support of 50.58 (7/715).

Oil stocks on earth. Isolated 3D image

With a stronger U.S dollar (UUP, quote) and a strong global oil supply build crude oil has traded in tight range from $54.02 to $50.58 for the past two weeks.

With Federal Reserve Chair Janet Yellen’s testimony to the U.S. Congress the past two days, she’s successfully danced around the issue of the committee’s first rate hike in over a decade.

Add in comments from the other committee members indicating a rate hike will occur this year and U.S. Department of Labor released its Initial Jobless Benefits Claims report with a 15k less claims week over week has provided strong support for the U.S. dollar. Suggesting a rate hike on the horizon.

My Takeaway: All my technical indicators suggest continued pressure for crude oil. With crude oil (USO, quote) under such pressure and a deal finally made in Iran that will allow Iranian oil to be sold on the open market translates to problems for Russia (RSX, quote). Russia’s main export is oil to Eurozone which will now come under pressure as Iran begins to sell cheap oil to the Eurozone. Has anyone noticed how quiet Russia has been?

 

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-44/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-44/#comments Fri, 17 Jul 2015 15:04:35 +0000 http://emergingmoney.com/?p=93310 Emerging Money Daily Audio Call July 17  - on the call we find global markets feeling very different going into this weekend than have the last couple weeks.

During the call I will be spending more time on that…I'm actually in Europe/Italy and what we have is a case of markets global [...]]]> Emerging Money Daily Audio Call July 17  - on the call we find global markets feeling very different going into this weekend than have the last couple weeks.

Phone AudioDuring the call I will be spending more time on that…I'm actually in Europe/Italy and what we have is a case of markets global markets and European markets in a very different place compared to week ago.

We will touch on the earnings power in the NASDAQ with Facebook, Google, LinkedIn and Netflix.

We also will look at how a better U.S. market and stabilizing China will effect Emerging Markets.

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Have Great Weekend

 

 

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