Opening Bell 27.11.2014

Your world at 9am

world.2014-11-27

Equities

Major
DAX(DEU) +0.55%
CAC(FRA) -0.20%
UKX(GBR) -0.03%
NKY(JPN) -0.29%
SPX(USA) +0.28%
MINTs
JCI(IDN) +0.21%
INMEX(MEX) +0.70%
NGSEINDX(NGA) +1.37%
XU030(TUR) +0.90%
BRICS
IBOV(BRA) -0.83%
SHCOMP(CHN) +0.66%
NIFTY(IND) +0.15%
INDEXCF(RUS) +0.51%
TOP40(ZAF) -0.35%

Commodities

Energy
Brent Crude Oil -1.41%
Ethanol +0.00%
Heating Oil -1.11%
Natural Gas -0.37%
RBOB Gasoline -1.13%
WTI Crude Oil -1.19%
Metals
Copper +0.44%
Gold 100oz -0.15%
Palladium +0.32%
Platinum -0.15%
Silver 5000oz -1.02%

Currencies

USDEUR:+0.03% USDJPY:-0.17%

MINTs
USDIDR(IDN) +0.04%
USDMXN(MEX) -0.03%
USDNGN(NGA) +0.00%
USDTRY(TUR) +0.03%
BRICS
USDBRL(BRA) -1.13%
USDCNY(CHN) -0.03%
USDINR(IND) -0.03%
USDRUB(RUS) +2.20%
USDZAR(ZAF) +0.07%
Agricultural
Cattle -0.60%
Cocoa +0.00%
Coffee (Arabica) -0.82%
Coffee (Robusta) +0.00%
Corn +0.00%
Cotton +1.91%
Feeder Cattle -0.23%
Lean Hogs -0.25%
Lumber -0.36%
Orange Juice +0.03%
Soybean Meal +0.00%
Soybeans +0.00%
Sugar #11 +0.81%
Wheat +0.00%
White Sugar +0.00%

Credit Indices

Index Change
Markit CDX EM +0.14%
Markit CDX NA HY +0.06%
Markit CDX NA IG -0.63%
Markit iTraxx Asia ex-Japan IG -0.22%
Markit iTraxx Australia -0.60%
Markit iTraxx Europe -0.03%
Markit iTraxx Europe Crossover -3.17%
Markit iTraxx Japan -1.74%
Markit iTraxx SovX Western Europe -0.12%
Markit LCDX (Loan CDS) +0.00%
Markit MCDX (Municipal CDS) +0.00%
Sideways drift continues as US markets enjoy their Thanksgiving weekend and snow-storms…

Must reads

Amazon.com is in an initial-stage discussion to acquire Jabong.com, backed by Rocket Internet, in a deal worth about $1.2 billion. (BS)

AG tells govt not to appeal Vodafone tax dispute ruling. (LiveMint)

Every third mobile sold in India is a smartphone. (ET)

EU wants to build bridges to nowhere. (MW)

Without a model that connects econometric output to decision-making, we’re just a bunch of idiot savants predicting pop-tart sales. (WW, StockViz)

Good luck!

Opening Bell 26.11.2014

Your world at 9am

world.2014-11-26

Equities

Major
DAX(DEU) +0.77%
CAC(FRA) +0.32%
UKX(GBR) +0.02%
NKY(JPN) -0.07%
SPX(USA) -0.12%
MINTs
JCI(IDN) +0.06%
INMEX(MEX) -0.58%
NGSEINDX(NGA) +0.71%
XU030(TUR) +0.35%
BRICS
IBOV(BRA) +0.28%
SHCOMP(CHN) +0.85%
NIFTY(IND) -0.79%
INDEXCF(RUS) +0.00%
TOP40(ZAF) -0.38%

Commodities

Energy
Brent Crude Oil -0.13%
Ethanol +0.00%
Heating Oil +0.65%
Natural Gas +0.68%
RBOB Gasoline +0.05%
WTI Crude Oil -0.28%
Metals
Copper +0.32%
Gold 100oz +0.09%
Palladium -0.36%
Platinum -0.37%
Silver 5000oz +0.16%

Currencies

USDEUR:+0.00% USDJPY:-0.14%

MINTs
USDIDR(IDN) +0.03%
USDMXN(MEX) +0.02%
USDNGN(NGA) +0.08%
USDTRY(TUR) +0.09%
BRICS
USDBRL(BRA) -0.63%
USDCNY(CHN) -0.04%
USDINR(IND) -0.06%
USDRUB(RUS) +2.69%
USDZAR(ZAF) +0.02%
Agricultural
Cattle +0.00%
Cocoa +0.00%
Coffee (Arabica) +3.03%
Coffee (Robusta) +0.00%
Corn +0.40%
Cotton +0.00%
Feeder Cattle +0.00%
Lean Hogs +0.00%
Lumber -0.15%
Orange Juice -0.27%
Soybean Meal +0.54%
Soybeans -0.10%
Sugar #11 +0.00%
Wheat +0.45%
White Sugar +0.00%

Credit Indices

Index Change
Markit CDX EM -0.22%
Markit CDX NA HY +0.42%
Markit CDX NA IG -2.27%
Markit CDX NA IG HVOL +0.00%
Markit iTraxx Asia ex-Japan IG -2.55%
Markit iTraxx Australia -1.75%
Markit iTraxx Europe -1.74%
Markit iTraxx Europe Crossover -9.37%
Markit iTraxx Japan +0.00%
Markit iTraxx SovX Western Europe -0.96%
Markit LCDX (Loan CDS) -0.01%
Markit MCDX (Municipal CDS) -0.20%
Was yesterday’s sell-off a reaction to SEBI’s new P-Note rules? If that is the case, then this sell-off isn’t done…

Must reads

Proposed: ban on sale of loose cigarettes, raising minimum age to buy tobacco products to 25 years. (DNA) ITC 360.30 -3.10 (-0.85%) GODFRYPHLP 3,058.00 28.05 (0.93%) VSTIND 1,816.00 -14.90 (-0.81%) GOLDENTOBC 36.05 -0.25 (-0.69%)

FPIs will have to combine stocks held via ODIs (mostly participatory notes) with their own holdings. The new rule may result in many FPIs breaching the 10% ownership limit in Indian companies. (LiveMint, #SEBI, #regulation)

Citi analyst identified companies, on which he had Hold or Neutral ratings, as “short” picks in “idea” dinners. (BV)

Given radical changes in the constituents of an index, is it appropriate to use the index’s historical metrics–its historical earnings, growth rates, valuations, profit margins, returns on equity, and so on–to draw conclusions about what the index’s future performance is likely to be? (PE)

Bloviators vs. experts. (KV)

Good luck!

Opening Bell 25.11.2014

Your world at 9am

world.2014-11-25

Equities

Major
DAX(DEU) +0.54%
CAC(FRA) +0.49%
UKX(GBR) -0.31%
NKY(JPN) +0.38%
SPX(USA) +0.29%
MINTs
JCI(IDN) -0.29%
INMEX(MEX) -0.13%
NGSEINDX(NGA) -0.15%
XU030(TUR) -0.16%
BRICS
IBOV(BRA) -1.21%
SHCOMP(CHN) +0.77%
NIFTY(IND) +0.62%
INDEXCF(RUS) -0.61%
TOP40(ZAF) -0.37%

Commodities

Energy
Brent Crude Oil -0.10%
Ethanol +0.00%
Heating Oil +0.05%
Natural Gas -0.43%
RBOB Gasoline -0.07%
WTI Crude Oil -0.04%
Metals
Copper +0.00%
Gold 100oz +0.00%
Palladium +0.45%
Platinum +0.31%
Silver 5000oz +0.00%

Currencies

USDEUR:+0.12% USDJPY:-0.30%

MINTs
USDIDR(IDN) +0.12%
USDMXN(MEX) +0.08%
USDNGN(NGA) +0.14%
USDTRY(TUR) +0.04%
BRICS
USDBRL(BRA) +1.21%
USDCNY(CHN) -0.04%
USDINR(IND) +0.25%
USDRUB(RUS) -2.18%
USDZAR(ZAF) +0.10%
Agricultural
Cattle +0.00%
Cocoa +0.00%
Coffee (Arabica) +0.00%
Coffee (Robusta) +0.00%
Corn +0.00%
Cotton +0.00%
Feeder Cattle +0.00%
Lean Hogs +0.00%
Lumber -0.54%
Orange Juice +2.36%
Soybean Meal +0.48%
Soybeans +0.24%
Sugar #11 -0.50%
Wheat -0.05%
White Sugar +0.00%

Must reads

State-owned banks start a bond fire. (ET, #bonds) PSUBNKBEES 438.05 -0.99 (-0.23%)

Indian entrepreneurs are more focused on the cost side of the equation than the innovation side. Jugaad is becoming a dirty word as PE funds venture into small cities for investment opportunities. (LiveMint, ET, #private equity)

Rural region accounts for only 16% of Tata Motors’s car sales. Target: 50%. (DNA) TATAMOTORS 521.85 1.90 (0.37%)

People have the wrong idea about buy-and-hold. (TFP, StockViz)

Good luck!

Opening Bell 24.11.2014

Your world at 9am

world.2014-11-24

Equities

Major
DAX(DEU) +2.62%
CAC(FRA) +2.67%
UKX(GBR) +1.08%
NKY(JPN) +0.33%
SPX(USA) +0.52%
MINTs
JCI(IDN) +0.79%
INMEX(MEX) +0.94%
NGSEINDX(NGA) +1.49%
XU030(TUR) +0.98%
BRICS
IBOV(BRA) +5.02%
SHCOMP(CHN) +1.90%
NIFTY(IND) +0.90%
INDEXCF(RUS) +0.56%
TOP40(ZAF) +3.60%

Commodities

Energy
Brent Crude Oil +0.36%
Ethanol +5.26%
Heating Oil +0.02%
Natural Gas -4.90%
RBOB Gasoline +0.16%
WTI Crude Oil +0.31%
Metals
Copper +0.00%
Gold 100oz +0.00%
Palladium -0.77%
Platinum -0.24%
Silver 5000oz +0.00%

Currencies

USDEUR:-0.01% USDJPY:+0.02%

MINTs
USDIDR(IDN) -0.13%
USDMXN(MEX) +0.17%
USDNGN(NGA) -0.08%
USDTRY(TUR) +0.00%
BRICS
USDBRL(BRA) -2.22%
USDCNY(CHN) +0.17%
USDINR(IND) -0.29%
USDRUB(RUS) -0.98%
USDZAR(ZAF) +0.02%
Agricultural
Cattle +0.46%
Cocoa +0.00%
Coffee (Arabica) +0.96%
Coffee (Robusta) +0.00%
Corn -0.40%
Cotton -0.44%
Feeder Cattle -1.65%
Lean Hogs -0.17%
Lumber +1.34%
Orange Juice +0.95%
Soybean Meal +1.91%
Soybeans -0.34%
Sugar #11 +0.06%
Wheat -0.32%
White Sugar +0.00%

Credit Indices

Index Change
Markit CDX EM +0.53%
Markit CDX NA HY +0.50%
Markit CDX NA IG -3.02%
Markit CDX NA IG HVOL -2.00%
Markit iTraxx Asia ex-Japan IG +0.48%
Markit iTraxx Australia +1.07%
Markit iTraxx Europe -3.32%
Markit iTraxx Europe Crossover -10.82%
Markit iTraxx Japan +2.82%
Markit iTraxx SovX Western Europe -0.42%
Markit LCDX (Loan CDS) -0.02%
Markit MCDX (Municipal CDS) -0.50%
Brazil clearly liking the Chinese easing. NKY and the Shanghai Composite are in the green this morning. Looks like we are set up to be green…

Must reads

On tap for the next budget: a larger opening-out in more sectors, stability of policy and tax regime and ‘reasonable’ cost of capital. (LiveMint, #economy)

The Centre is going to propose subsuming in the GST all types of entry tax, including the one for local bodies. (BS)

More than 50% of land allotted to SEZs across the country remains idle, with no significant increase in employment, and government’s revenue of Rs 83,000 crore foregone between 2007 and 2013. (TOI)

Good luck!

India Hedge funds under-perform a simple Momentum strategy

Long/short equity funds, which make up a bulk of the India-specific funds, are up 47% year-to-date.

LiveMint recently ran an article, “India hedge funds outperform, but investors remain sceptical.” (link)

I don’t have access to the report quoted in the article and I am not sure if the returns are after fees and profit-sharing. But what is surprising is that these funds under-performed a basic, un-levered, momentum strategy. In the same period, our Momentum 200 Theme is up 61.54% and you can take all of it to the bank.

If you are charging 2 and 20, you should do better. Besides, most of them haven’t been through a down-cycle. And yes, Momentum will totally get crushed in a down-cycle, but at least investors know what they are getting into. For all you know, hedge funds, being the black-boxes that they are, could be just long momentum.

Turns out investor skepticism is warranted after all.

momentum.performance