Notes from the kitchen - Episode 4
- The equity sector merry go round continues for another week, with Travel, Leisure and Retail sectors catching a bid, while all the stuff actually making money took a break from leading the pack. Every Dog / Dead Cats / other apposite animal metaphors spring to mind.
- Despite even TEAM’s considerable heft being behind the bull story, precious metals endured a pretty torrid week, Gold fell by 6% whilst Silver was down over 8%. Looks like a short term buying opportunity, so for now, we’ll have to content ourselves with looking at the ytd gains of 28% and 55% respectively.
- The first significant widening in Government yields for some time looks like a slightly less compelling buying opportunity. But let’s put things into perspective, 10 year US Treasuries went from 55 to 65 basis points on the week. That’s 0.65%. For 10 Years. Perhaps you’d prefer the risk of not getting your money back from 10 Year BBB Euro Corporate debt? How about an average yield of 0.85% ? Yup, ‘thought not.
- China’s Q2 GDP growth came in at 3.2%. Not so great when you’re used to seeing numbers in the 6’s, but not so bad when you look at the 2nd quarter horror stories from Germany (-10%), France (-14%), the UK (-20.4%), or the US (-32.9%), for the same period. It’s also worth reminding ourselves that some those nations don’t have elections between 2 geriatrics, each with plans that have a fair chance of cratering their domestic economy, in 3 months’ time. Psst, you wanna buy some Dollars Meester?
- Maybe there really is something in this ‘shirking from home’ lark? FTSE 100 up 5% for the month, Dax and CAC 5.5%, and the Italian MIB 6.5%. August is supposed to be the quiet month when everyone is either at home, or wrestling for towel space somewhere in the Med. S&P 500 ‘only’ up 3.5%. European stocks out-performing in August ? La Plume de ma tante, as they’re probably saying over there.