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Fri, 29th July 2016

Anirudh Sethi Report

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Latest Posts

1929 vs. 2000

From the peak of the tech bubble in early 2000 the returns on the stock market have been underwhelming. In fact, if you line up the peak of the market in 2000 with the peak of the market in 1929 just before the stock market collapsed, the returns aren’t that far off:

Screen Shot 2016-07-27 at 10.13.18 AM

Although the Great Depression was far more severe than what we experienced during the Great Recession, there are some similarities that these time frames share. There were two massive bear markets in the 1930s along with two recessions that saw stocks fall over 80% from 1929-1932 and another 50% in 1937. In the latest period, stocks were cut in half in both the 2000-2002 and 2007-2009 bear markets.

Here’s the breakdown of how government bond yields and long-term valuations changed over each period as well:

Screen Shot 2016-07-27 at 11.31.56 AM

ArcelorMittal profits on rising steel price ,YTD STOCK is up 46%

Arcelor Mittal-ASRRising steel prices and a one-off boost from a labour deal saw ArcelorMittal, the world’s biggest producer of the metal, post a sharp increase in second-quarter profits as it cast a cautiously confident gaze across the rest of 2016.


The Luxembourg-based company said net income was $1.1bn in the three months to the end of June, helped by an exceptional gain of $0.8m relating to employee benefits following the signing of a new contract with its US workers

This compared to a net loss of $0.4bn in the preceding quarter, or net income of $0.2bn in the same period a year earlier.

After being hit by a dramatic slide in the value of the commodity last year, steelmakers have seen prices for the metal rise throughout 2016, although this has tailed off in recent weeks.

Nevertheless, ArcelorMittal, which resorted to a $3bn capital raise earlier this year to reduce debt, remained confident in its prospects.

Lakshmi Mittal, chief executive, said: Read More 

Swiss National Bank announce H1 2016 profits of CHF 21.3bln

Swiss National Bank deliver their H1 2016 results 29 July 2016

  • fx net profit CHF13bln
  • gold valuation gain CHF 7.6bln#
  • overall exchange-rate related losses CHF 2.9bln
  • Q2 EUR holdings qq 41% vs 41% prev
  • Q2 USD holdings qq 34% vs 33% prev
  • Q2 JPY holdings qq 8% vs 7% prev
  • income from negative interest rates CHF 629m

SNB massaging of the franc is paying dividends it appears. Shareholders will be happy at least.

Full report here

French economy ground to a halt in Q2 flash 0.0% vs +0.2% exp

France’s economy ground to a halt between April and June, according to official estimates, which will do little to lift already fragile confidence in President François Hollande’s government.

Growth in the second quarter was flat from an upwardly-revised 0.7 per cent in the first quarter. Prior to today’s release, economists had forecast quarterly growth to drop, but for the economy to still eke out 0.2 per cent expansion.

Year-on-year the economy grew 1.4 per cent, less than the 1.6 per cent economists were looking for but stronger than the 1.3 per cent recorded for the first quarter.

A wave of strikes in protest at labour market reforms disrupted the economy during the second quarter. The reforms are designed to increase flexibility in the country’s notoriously rigid jobs market but have proved highly contentious with unions and young people.

Recent survey data has suggested France’s manufacturing sector is deep in contraction territory. The spate of terrorist attacks have also raised concerns that France’s tourism industry will be take a significant knock.

Air France-KLM warned earlier this week that there was a “special concern” among air passengers about France as a destination.

Really Big disappointment- BOJ announcement: EASE FURTHER – ETF buying

Bank of Japan monetary policy statement

  • BOJ EASES MONETARY POLICY FURTHER
  • BOJ: TO INCREASE ETF BUYING SO BALANCE OF ITS HOLDINGS RISES AT ANNUAL PACE OF 6 TRLN YEN VS PREVIOUS 3.3 TRLN YEN
  • BOJ SAYS NO CHANGE TO BASE MONEY TARGET
  • BOJ SAYS NEGATIVE RATES KEPT UNCHANGED AT -0.1 PCT
  • BOJ SAYS NO CHANGE TO AMOUNT OF JGB BUYING
  • BOJ SAYS NO CHANGE TO AMOUNT OF PURCHASES OF J-REITS, CP, CORPORATE BONDS
Please excuse the capitals – hot off the Reuters press!
OK … so the only expansion of easing is via an increase in ETF purchases.
More:
  • BOJ says to increase size of lending programme that provides dollar funding to Japanese financial institutions
  • Says will conduct comprehensive assessment of effects of QQE with negative rate policy at next rate review
  • BOJ says Kuroda as chairman of board instructed staff to prepare deliberations on assessment at BOJ’s next meeting
USD/JPY getting hit lower now: