Markets Could Be Facing Significant Short-term Headwinds
Thursday, September 6, 2012
Market Recap:
Stocks started the day in negative territory after Germany reported a weak bond auction and investors grew nervous that the ECB's next round of bond buying would not be sufficient to alleviate contagion risks in periphery countries like Spain and Italy. However, stocks erased their losses after reports surfaced that ECB head Mario Draghi could announce unlimited bond buying at tomorrow’s conference. S&P sectors were mixed, with financial and technology shares underperforming consumer staple and telephone stocks.
Looking Ahead:
Tomorrows ECB meeting and Friday's jobs report are keeping investors on their toes. In our view, comments and actions by the ECB should help drive commodity prices as well as industrial shares higher. However, yesterday’s week German and Chinese PMI reports are likely to keep stocks in a relatively tight trading range. Friday's jobless claims figures along with the August unemployment report will dominate investors thoughts - consensus estimates indicate 130,000 private sector jobs created with a loss of 10,000 government jobs for a net + 120,000. In our view, it will take a significant divergence from these expectations for markets to react forcefully, as investors are also very focused on next weeks FOMC meeting announcement and comments by Fed Chair Ben Bernanke. Further into the month of February we expect market participants to begin focusing on the upcoming earnings season. So far, the trend of pre-announcements and negative surprises has sharpened. As such, we believe that markets could be facing significant short-term headwinds in the fourth quarter. Interestingly, in spite of all the macro headwinds, European companies are fairing well in this past earnings season. As we wrote about 2 months ago, shares on major European bourses seemed terribly oversold and presented some attractive values to more aggressive investors. Some of the stocks that we purchased in the GMG Defensive Beta Fund as well as some of the separately managed accounts at Gary Goldberg Financial Services include Leggett & Platt, Royal Dutch Shell, Total and Unilever. Tune into Money Matters with Gary Goldberg at 10:05 AM each weekday to hear more of our analysis and thoughts on the economy. Visit our website www.thebetafund.com or Click Here to join the program live.
by thebetafund.com
Montebello Partners LLC
Market Recap:
Stocks started the day in negative territory after Germany reported a weak bond auction and investors grew nervous that the ECB's next round of bond buying would not be sufficient to alleviate contagion risks in periphery countries like Spain and Italy. However, stocks erased their losses after reports surfaced that ECB head Mario Draghi could announce unlimited bond buying at tomorrow’s conference. S&P sectors were mixed, with financial and technology shares underperforming consumer staple and telephone stocks.
Looking Ahead:
Tomorrows ECB meeting and Friday's jobs report are keeping investors on their toes. In our view, comments and actions by the ECB should help drive commodity prices as well as industrial shares higher. However, yesterday’s week German and Chinese PMI reports are likely to keep stocks in a relatively tight trading range. Friday's jobless claims figures along with the August unemployment report will dominate investors thoughts - consensus estimates indicate 130,000 private sector jobs created with a loss of 10,000 government jobs for a net + 120,000. In our view, it will take a significant divergence from these expectations for markets to react forcefully, as investors are also very focused on next weeks FOMC meeting announcement and comments by Fed Chair Ben Bernanke. Further into the month of February we expect market participants to begin focusing on the upcoming earnings season. So far, the trend of pre-announcements and negative surprises has sharpened. As such, we believe that markets could be facing significant short-term headwinds in the fourth quarter. Interestingly, in spite of all the macro headwinds, European companies are fairing well in this past earnings season. As we wrote about 2 months ago, shares on major European bourses seemed terribly oversold and presented some attractive values to more aggressive investors. Some of the stocks that we purchased in the GMG Defensive Beta Fund as well as some of the separately managed accounts at Gary Goldberg Financial Services include Leggett & Platt, Royal Dutch Shell, Total and Unilever. Tune into Money Matters with Gary Goldberg at 10:05 AM each weekday to hear more of our analysis and thoughts on the economy. Visit our website www.thebetafund.com or Click Here to join the program live.
by thebetafund.com
Montebello Partners LLC
1368-NLD-9/6/2012
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