Weekly Recap: Conflicts

world.2014-12-12.2014-12-19

Equities

Major
DAX(DEU) +2.00%
CAC(FRA) +3.23%
UKX(GBR) +3.88%
NKY(JPN) +1.44%
SPX(USA) +2.42%
MINTs
JCI(IDN) -0.31%
INMEX(MEX) +2.18%
NGSEINDX(NGA) -1.49%
XU030(TUR) +0.92%
BRICS
IBOV(BRA) +3.43%
SHCOMP(CHN) +5.80%
NIFTY(IND) +0.01%
INDEXCF(RUS) -0.72%
TOP40(ZAF) +2.96%

Commodities

Energy
Ethanol -5.78%
WTI Crude Oil -0.41%
RBOB Gasoline -1.60%
Brent Crude Oil -1.00%
Heating Oil -2.34%
Natural Gas -8.76%
Metals
Gold 100oz -2.18%
Palladium -1.18%
Platinum -2.83%
Copper -0.68%
Silver 5000oz -7.02%

Currencies

USDEUR:+1.82% USDJPY:+0.64%

MINTs
USDIDR(IDN) +0.24%
USDMXN(MEX) -0.68%
USDNGN(NGA) +0.83%
USDTRY(TUR) +0.75%
BRICS
USDBRL(BRA) +0.32%
USDCNY(CHN) +0.53%
USDINR(IND) +1.61%
USDRUB(RUS) +2.29%
USDZAR(ZAF) -0.08%
Agricultural
Cocoa +3.59%
Corn +3.53%
Soybean Meal -3.96%
Soybeans -1.39%
Coffee (Arabica) +0.57%
Cotton +0.12%
Feeder Cattle -2.39%
Orange Juice -5.25%
Sugar #11 -0.40%
Wheat +0.88%
Cattle -0.34%
Coffee (Robusta) -2.21%
Lean Hogs -6.49%
Lumber +0.29%
White Sugar +0.10%

Credit Indices

Index Change
Markit CDX EM -0.30%
Markit CDX NA HY +0.52%
Markit CDX NA IG +0.73%
Markit iTraxx Asia ex-Japan IG +8.59%
Markit iTraxx Australia +7.20%
Markit iTraxx Europe +4.16%
Markit iTraxx Europe Crossover +16.58%
Markit iTraxx Japan +2.11%
Markit iTraxx SovX Western Europe +2.94%
Markit LCDX (Loan CDS) -0.18%
Markit MCDX (Municipal CDS) +2.46%
All I can say about this week is that I am glad that its over.
The NIFTY ended flat for the week but that hides the roller-coaster ride it put investors through. After all the oil-related panic, the S&P ended up more than 2% for the week.
Oil ended down, dollar up.
Hopefully Santa visits before expiry.

Index Returns

index performance.2014-12-12.2014-12-19

Advance Decline

advance.decline.line2.2014-12-12.2014-12-19

Market Cap Decile Performance

Decile Mkt. Cap. Adv/Decl
1 (micro) -6.25% 63/74
2 -3.65% 63/73
3 -2.93% 64/73
4 -2.21% 61/75
5 -3.07% 63/73
6 -1.98% 65/72
7 -2.00% 56/80
8 -1.38% 64/73
9 -1.17% 64/72
10 (mega) -0.01% 68/69
The sell-off was brutal below the mega-caps…

Top Winners and Losers

ZEEL +5.45%
PETRONET +6.27%
PFC +8.11%
DLF -13.19%
BAJAJHLDNG -8.34%
RCOM -7.32%
Broad based action saw a mix of winners and losers…

ETF Performance

CPSEETF +3.32%
BANKBEES +0.98%
INFRABEES +0.54%
NIFTYBEES -0.03%
JUNIORBEES -0.22%
GOLDBEES -0.99%
PSUBNKBEES -1.93%
Banks withstood the onslaught well…

Yield Curve

yield Curve.2014-12-12.2014-12-19

Bond Indices

Sub Index Change in YTM Total Return(%)
GSEC TB +0.44 +0.04%
GSEC SUB 1-3 +0.43 -0.43%
GSEC SUB 3-8 +0.19 -0.53%
GSEC SUB 8 +0.08 -0.34%
Yields went up – breaking a long streak of falling rates.

Investment Theme Performance

Thought for the weekend

Asset managers and asset owners have a relationship beset with natural conflicts.

  1. Asset owners want fees below 10 bps; asset managers prefer “2% + 20%.”
  2. Asset owners want transparency; asset managers favor black-box opacity.
  3. Asset owners want simplicity; asset managers hire rocket scientists to create complex optimized solutions for sex appeal.
  4. Asset owners want “future” outperformance after they fund a manager; asset managers would be satisfied with strong past outperformance to facilitate future asset gathering.
  5. Asset owners want a bigger alpha; asset managers would happily sell them the possibility of alpha and charge handsomely for the service of selling hope.

Source: The Promise of Smart Beta

Opening Bell 19.12.2014

Your world at 9am

world.2014-12-19

Equities

Major
DAX(DEU) +2.79%
CAC(FRA) +3.35%
UKX(GBR) +2.04%
NKY(JPN) +1.92%
SPX(USA) +2.40%
MINTs
JCI(IDN) +0.61%
INMEX(MEX) +3.51%
NGSEINDX(NGA) +1.21%
XU030(TUR) +3.10%
BRICS
IBOV(BRA) -0.45%
SHCOMP(CHN) -1.02%
NIFTY(IND) +1.61%
INDEXCF(RUS) +4.49%
TOP40(ZAF) +4.79%

Commodities

Energy
Brent Crude Oil -0.02%
Ethanol +0.00%
Heating Oil +0.25%
Natural Gas +0.60%
RBOB Gasoline -0.05%
WTI Crude Oil +0.54%
Metals
Copper +0.00%
Gold 100oz +0.32%
Palladium +0.17%
Platinum +0.22%
Silver 5000oz +0.00%

Currencies

USDEUR:+0.01% USDJPY:+0.14%

MINTs
USDIDR(IDN) -0.56%
USDMXN(MEX) -0.08%
USDNGN(NGA) +1.43%
USDTRY(TUR) +0.04%
BRICS
USDBRL(BRA) -1.93%
USDCNY(CHN) +0.16%
USDINR(IND) -0.80%
USDRUB(RUS) -0.26%
USDZAR(ZAF) -0.30%
Agricultural
Cattle +0.00%
Cocoa +0.00%
Coffee (Arabica) +1.31%
Coffee (Robusta) +0.00%
Corn -0.55%
Cotton -0.25%
Feeder Cattle +0.00%
Lean Hogs +0.00%
Lumber -0.41%
Orange Juice -2.72%
Soybean Meal +0.00%
Soybeans -0.34%
Sugar #11 +1.77%
Wheat -1.56%
White Sugar +0.00%

Credit Indices

Index Change
Markit CDX EM +2.82%
Markit CDX NA HY +1.63%
Markit CDX NA IG -6.35%
Markit iTraxx Asia ex-Japan IG -6.00%
Markit iTraxx Australia +1.35%
Markit iTraxx Europe -4.21%
Markit iTraxx Europe Crossover -20.01%
Markit iTraxx Japan -4.37%
Markit iTraxx SovX Western Europe +0.03%
Markit LCDX (Loan CDS) +0.00%
Markit MCDX (Municipal CDS) -2.60%
Most markets in the green this morning. TGIF!!!

Must reads

Sebi’s debtor’s prison is here. (ET, #SEBI)

Soon European banks and fund managers having to specify and separate the costs of research and dealing commissions for each client. SEBI should do this next. (FT)

Indian auto dealers are getting disinter-mediated. And that’s a good thing. (LiveMint)

Barry Callebaut (Swiss, public), Cargill (US, private), and Olam (Singapore, public) will account for about 60% of the world’s cocoa processing. And top 5 chocolate makers that include Mars, Mondelez and Nestlé account for more than 65% of total confectionery sales. End result: Growers only get 6% of the chocolate bar, down from 16% in 1980. (FT)

Passive investing will one day become so popular that active investors can easily take advantage. (AICIO)

Good luck and have a nice weekend!

Opening Bell 18.12.204

Your world at 9am

world.2014-12-18

Equities

Major
DAX(DEU) -0.20%
CAC(FRA) +0.46%
UKX(GBR) +0.07%
NKY(JPN) +2.55%
SPX(USA) +2.04%
MINTs
JCI(IDN) +1.15%
INMEX(MEX) +1.96%
NGSEINDX(NGA) -2.78%
XU030(TUR) +2.17%
BRICS
IBOV(BRA) +3.63%
SHCOMP(CHN) -0.64%
NIFTY(IND) -0.47%
INDEXCF(RUS) -2.11%
TOP40(ZAF) -0.33%

Commodities

Energy
Brent Crude Oil +0.29%
Ethanol +0.00%
Heating Oil +0.00%
Natural Gas +0.11%
RBOB Gasoline +0.32%
WTI Crude Oil +0.14%
Metals
Copper +0.00%
Gold 100oz -0.10%
Palladium +0.33%
Platinum +0.23%
Silver 5000oz +0.00%

Currencies

USDEUR:-0.05% USDJPY:-0.18%

MINTs
USDIDR(IDN) -0.49%
USDMXN(MEX) +0.24%
USDNGN(NGA) +0.00%
USDTRY(TUR) +0.08%
BRICS
USDBRL(BRA) -0.85%
USDCNY(CHN) +0.30%
USDINR(IND) +0.13%
USDRUB(RUS) -1.65%
USDZAR(ZAF) -0.02%
Agricultural
Cattle +0.00%
Cocoa +0.00%
Coffee (Arabica) +0.00%
Coffee (Robusta) +0.00%
Corn +0.18%
Cotton -0.15%
Feeder Cattle +0.00%
Lean Hogs +0.00%
Lumber +0.00%
Orange Juice +0.61%
Soybean Meal +0.17%
Soybeans +0.10%
Sugar #11 +0.07%
Wheat +0.08%
White Sugar +0.00%

Credit Indices

Index Change
Markit CDX EM -1.44%
Markit CDX NA HY -0.48%
Markit CDX NA IG +3.62%
Markit iTraxx Asia ex-Japan IG +10.61%
Markit iTraxx Australia +5.35%
Markit iTraxx Europe +3.09%
Markit iTraxx Europe Crossover +11.95%
Markit iTraxx Japan +6.36%
Markit iTraxx SovX Western Europe +1.38%
Markit LCDX (Loan CDS) -0.18%
Markit MCDX (Municipal CDS) +3.67%
The S&P500 +2.04% last night and follow through action on the NKY this morning is encouraging. Is this the bottom?

Must reads

The Fed “can be patient in beginning to normalize the stance of monetary policy.”

Analysts can now spend the holiday season debating whether the Fed will merely be patient or will be patient for a considerable time, or some combination thereof.

“At this phase in the relationship between markets and Fed communication, we have become trapped in minutia. Investors are dissecting the rearrangement of a few sentences to try to determine whether stocks are a buy or a sell.” (Bloomberg, WSJ)

Cabinet clears bill for nationwide goods and services tax. (Reuters)

Kingfisher, part deux? (FP)

Auto firms would like to forget 2014. Hopefully, a combination of rate-cuts, low oil and an improving economy will bring a brighter 2015. (LiveMint)

Good luck!