Every day I dissect the news of the day into bite sized snippets using Tweets I find on Twitter. My goal is to make sense of the news so that the reader has an easier time understanding it better and thus better placed to use that information more efficiently.
For those of you who may not have the time to follow my blog everyday I will post up an omnibus every weekend for your convenience to catch up. So let's jump right into thing;
Monday 28th September 2015
Samurai Summary: 28/09/2015
Top Tweets Today:28/09/2015
Sunday was D-day for the Spanish region of Catalonia who went to the polls to elect a regional leader. The reason these elections were so important is because there's been a decisive split in support for the existing ruling party ironically named the Popular Party and a separatist group proposing independence away from Spain. The results raises the stakes for the Eurozone who is battling to show a united front in the face of ongoing debt burden. This serves only to distract leaders from the real business of the trade bloc. Portugal is due to hold elections today with much anticipation surrounding the results.
Billionaire investor and activist Carl Icahn posted a video expressing his concern over the current state of global financial markets saying that the Fed needed to act sooner rather than leaving things too late which has resulted in the window of opportunity being missed and economic data not supportive of an interest rate hike. He said he is more hedged than he has ever been and believes that there is a new bubble in the system that could burst when the Fed's party finally comes to an end. It is not known if the Fed might be holding off interest rates in case a need arises to implement a new QE program which I personally think would be absurdity, the world has for too long forgotten the problems it faces and fuelling it with free money doesn't solve anything.
Tuesday 29th September 2015
Samurai Summary: 29/09/2015
Top Tweets Today:20/09/2015
The biggest story of the week has to be undoubtedly the plunge in the price of Glencore Plc which saw its stocks reaching new all time lows dropping as much as 31% in a single day. The company however hit back at its critics by releasing a statement saying that it is a robust entity with the financial backing from banking institutions it has built long terms relationships with over the years and stating that it still committed to cutting back its debt from $30 billion to $20 billion. At one stage through all the chaos it was reported that Ivan Glasenberg had loss $500 million in a shareholder value in just a single day.
I thought it would be appropriate to chart the JSE Resources 20 index to show the level of damage that has been done over the past year with mining stocks receiving a beating that has taken them down to lows last made in 2009. I said that 30 000 would be key support for the index with many value investors looking to hop on board at those levels but whether the index has the strength to hold those levels is another argument altogether.
Wednesday 30th September 2015
Samurai Summary: 30/09/2015
Top Tweets Today:30/09/2015
South African born entrepreneur Elon Musk launched yet another electric power car called the Model X to add to his existing line of vehicles manufactured. The 7 seater SUV can go from 0-60mph in just over 3 seconds which is quite an impressive feat. Green energy's golden boy is proving once again that the fallacious beliefs the world thought about renewable energy is a myth to prevent an industry from hitting steady revenue from the existing pollutant energy sources such as coal and oil by manufacturing innovative products that is both economically viable and affordable to use.
Barry Ritholtz posted an interesting fact that US government had issued the highest yield government bond to date 34 years ago which I thought was quite ironic given that the debate we have on our hands right now is when will the Fed being lifting rates from an all time low of between 0-0.25%. I commented that printing money only kicks the can further down the road and eventually the problem will have to be dealt with something which I thought is drawing closer and closer.
Thursday 1st October 2015
Samurai Summary: 01/10/2015
Top Tweets Today:01/10/2015
A new month, a new quarter as October kicked off in a good spirits with Chinese PMI numbers coming in better than expected hinting that the government's efforts to kickstart the ailing economy may finally be trickling to the system. This gave global markets all the impetus it needed to bounce back from a protracted selloff. However more evidence is needed in months to come to show signs of this for the world's second largest economy to inject confidence not only within its own economy but also the entire world economy. This on the back of Chinese stocks returning the worst quarterly performance since 2008.
I used the opportunity of difficult market conditions to highlight the reality that as we traders we don't need to be present in the market to make money, in fact there are times when trading only serves to destroy trading capital. I used an article found by Steve Burns to list the points you need to think about when your trading system starts to falter within the market environment.
Friday 2nd October 2015
Samurai Summary: 02/10/2015
Top Tweets Today:02/10/2015
Following from a story published by Bloomberg about the WTO (World Trade Organisation) cut its world trade to 2.8% versus 5% average since 1995. I went into detail about how dollar strength how's hurt many economies and used an example of South Africa to show the extent it has had on emerging markets this as the world waits for the Fed to begin the cycle of lifting rates. The expectation that rates were going up has made the dollar stage a mammoth rally that has thrown everything into chaos.
Friday was the an important day for US Labour Data with NFP (Non-farm Payrolls) coming in lower at 142 000 instead of an expected 200 000 which represented a huge miss. This implies that rates will stay lower for longer which spurred the market to rally at the end of the week. I found an excellent chart of long term labour participation rate by Charlie Bilello CMT who showed the constant decline in participation since 2000 to lows last made in 1977. These are worry stats as the US economy is battling to reach growth rates it would need to settle investors confidence.
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