Opening Bell 03.09.2015

Your world at 9am

world.2015-09-03

Equities

Major
DAX(DEU) +0.32%
CAC(FRA) +0.30%
UKX(GBR) +0.41%
NKY(JPN) +1.42%
SPX(USA) +1.83%
MINTs
JCI(IDN) +0.29%
INMEX(MEX) +0.13%
NGSEINDX(NGA) -1.17%
XU030(TUR) +0.14%
BRICS
IBOV(BRA) +2.17%
SHCOMP(CHN) -0.20%
NIFTY(IND) -0.88%
INDEXCF(RUS) -0.42%
TOP40(ZAF) +1.67%

Commodities

Energy
Ethanol +0.00%
Natural Gas -0.19%
RBOB Gasoline -0.46%
Brent Crude Oil -0.65%
Heating Oil -0.59%
WTI Crude Oil -0.86%
Metals
Copper +0.13%
Platinum -0.23%
Silver 5000oz +0.00%
Gold 100oz -0.19%
Palladium -0.80%

Currencies

USDEUR:+0.09% USDJPY:+0.22%

MINTs
USDIDR(IDN) +0.21%
USDMXN(MEX) +0.18%
USDNGN(NGA) -0.29%
USDTRY(TUR) +0.17%
BRICS
USDBRL(BRA) +1.69%
USDCNY(CHN) +0.00%
USDINR(IND) -0.04%
USDRUB(RUS) -0.08%
USDZAR(ZAF) -0.23%
Agricultural
Corn -0.42%
Cotton +0.00%
Lumber +0.47%
Soybeans -0.06%
Cattle +0.00%
Coffee (Robusta) +0.00%
Sugar #11 +0.37%
Wheat -1.16%
Cocoa +0.00%
Feeder Cattle +0.00%
Lean Hogs +0.00%
Orange Juice +0.00%
White Sugar +0.00%
Coffee (Arabica) -1.41%
Soybean Meal -0.35%

Credit Indices

Index Change
Markit CDX EM -0.76%
Markit CDX NA HY -0.61%
Markit CDX NA IG +2.77%
Markit iTraxx Asia ex-Japan IG +5.78%
Markit iTraxx Australia +3.76%
Markit iTraxx Europe +2.86%
Markit iTraxx Europe Crossover +14.66%
Markit iTraxx Japan +1.76%
Markit iTraxx SovX Western Europe +0.12%
Markit LCDX (Loan CDS) +0.00%
Markit MCDX (Municipal CDS) +1.47%
So… Risk ON?

Must reads

Jim Rogers stops smoking the hopium – exits India. (LiveMint)

Meanwhile, Morgan Stanley issues ‘full house’ buy alert for stocks. All five of the bank’s key timing indicators are flashing a green light for the first time since early 2009, suggesting the worst may be over for global equities. (Telegraph)

Feeling the brunt of the commodity swing: Canada, Australia, New Zealand and Norway. (WSJ, FT)

The world economy is bearing the brunt of a third deflationary wave in less than a decade. The first was the US-led housing and financial crisis of 2008-9, the second wave was the eurozone crisis of 2011-12, and now a third, an emerging markets crisis. (FT)

David Dunning: “…incompetent people do not recognize—scratch that, cannot recognize—just how incompetent they are. What’s curious is that, in many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge.” (TheNess)

Good luck!

Options Daily 03.09.2015

Summary: Sep NIFTY 8200 calls added 428,800 contracts while 8800 calls shed 78,925. On the Put side of the equation, the 7500 strike added 895,325 while the 7700’s shed 198,850.

Our trend model indicates a SHORT on the NIFTY and LONG on the BANKNIFTY.

SEP NIFTY OI

SEP NIFTY OI chart

SEP BANKNIFTY OI

SEP BANKNIFTY OI chart
Dotted lines indicated actual underlying volatility. Solid lines are IVs.

Opening Bell 02.09.2015

Your world at 9am

world.2015-09-02

Equities

Major
DAX(DEU) -2.38%
CAC(FRA) -2.40%
UKX(GBR) -3.03%
NKY(JPN) +0.79%
SPX(USA) -2.96%
MINTs
JCI(IDN) -0.61%
INMEX(MEX) -2.03%
NGSEINDX(NGA) +1.82%
XU030(TUR) -2.27%
BRICS
IBOV(BRA) -2.46%
SHCOMP(CHN) -1.90%
NIFTY(IND) -2.33%
INDEXCF(RUS) -2.03%
TOP40(ZAF) -3.09%

Commodities

Energy
Natural Gas -1.22%
Brent Crude Oil -1.59%
Heating Oil -1.03%
WTI Crude Oil -2.16%
Ethanol +0.00%
RBOB Gasoline -1.20%
Metals
Platinum -0.21%
Silver 5000oz -0.43%
Copper -0.22%
Gold 100oz -0.20%
Palladium -1.07%

Currencies

USDEUR:+0.24% USDJPY:+0.65%

MINTs
USDIDR(IDN) +0.19%
USDMXN(MEX) -0.14%
USDNGN(NGA) +0.00%
USDTRY(TUR) +0.01%
BRICS
USDBRL(BRA) +2.16%
USDCNY(CHN) +0.02%
USDINR(IND) -0.40%
USDRUB(RUS) +0.29%
USDZAR(ZAF) -0.24%
Agricultural
Coffee (Arabica) -0.83%
Feeder Cattle +0.00%
Lumber -0.64%
Orange Juice +0.00%
Soybeans +0.25%
Cocoa +0.00%
Lean Hogs +0.00%
White Sugar +0.00%
Cattle +0.00%
Corn -0.14%
Sugar #11 +0.00%
Wheat +0.36%
Coffee (Robusta) +0.00%
Cotton +0.00%
Soybean Meal +0.19%

Credit Indices

Index Change
Markit CDX EM +0.03%
Markit CDX NA HY -0.31%
Markit CDX NA IG +1.53%
Markit iTraxx Asia ex-Japan IG +1.33%
Markit iTraxx Australia +0.00%
Markit iTraxx Europe +0.00%
Markit iTraxx Europe Crossover +0.00%
Markit iTraxx Japan +1.21%
Markit iTraxx SovX Western Europe +0.00%
Markit LCDX (Loan CDS) +0.00%
Markit MCDX (Municipal CDS) -0.25%
Bloodbath in overseas markets. Another down-day today?

Must reads

Car sales have been brisk. (ET) MARUTI 4,146.00 116.00 (2.88%) TATAMOTORS 331.70 7.25 (2.23%)

KKR to raise Rs1,500 cr credit fund for India investments. (LiveMint)

Moody’s: Across the world’s biggest emerging markets, the share of debt held in a country’s own currency has jumped from just over 50 per cent to just under 75 per cent in the past 15 years. (FT)

JP Morgan on startups: “if the ‘winnability’ of business models is premised primarily on price competitiveness, deep funding pockets and less so on erectable barriers to entry and differentiation, a winner-takes-all outcome is hard to come by.” (FT)

There are two dominant narratives about taxation. One is taxes are the “price we pay for a civilized society.” In this view taxes are not a necessary evil but a positive good as more taxes buy more “civilization.” The other view is that taxes are “tribute to Leviathan” — a pure involuntary extraction from those engaged in economic production to those who control coercive power producing no reciprocal benefit. In this view taxes are a bane of the civilized. In India, taxes are a tribute. (pdf)

Good luck!

Options Daily 02.09.2015

Summary: Sep NIFTY 8500 calls added 558,775 contracts while 9000 calls shed 61,750. On the Put side of the equation, the 7200 strike added 679,475 while the 8000’s shed 260,400.

Our trend model indicates a SHORT on the NIFTY and LONG on the BANKNIFTY.

SEP NIFTY OI

SEP NIFTY OI chart

SEP BANKNIFTY OI

SEP BANKNIFTY OI chart
Dotted lines indicated actual underlying volatility. Solid lines are IVs.

Monthly Recap: The Unreliable Experts

world.2015-07-31.2015-08-31

Equities

Major
DAX(DEU) -11.53%
CAC(FRA) -10.53%
UKX(GBR) -8.87%
NKY(JPN) -11.75%
SPX(USA) -6.44%
MINTs
JCI(IDN) -8.12%
INMEX(MEX) -2.52%
NGSEINDX(NGA) -0.09%
XU030(TUR) -7.15%
BRICS
IBOV(BRA) -8.27%
SHCOMP(CHN) -13.57%
NIFTY(IND) -8.82%
INDEXCF(RUS) +2.53%
TOP40(ZAF) -6.33%

Commodities

Energy
Brent Crude Oil +1.55%
RBOB Gasoline -20.43%
Heating Oil +5.31%
Natural Gas -0.11%
WTI Crude Oil +2.13%
Ethanol -2.80%
Metals
Copper -2.53%
Gold 100oz +3.98%
Platinum +2.33%
Silver 5000oz -2.01%
Palladium -3.68%

Currencies

USDEUR:-2.46% USDJPY:-3.07%

MINTs
USDIDR(IDN) +4.13%
USDMXN(MEX) +4.51%
USDNGN(NGA) +0.18%
USDTRY(TUR) +5.21%
BRICS
USDBRL(BRA) +5.63%
USDCNY(CHN) +2.49%
USDINR(IND) +3.39%
USDRUB(RUS) +5.67%
USDZAR(ZAF) +5.15%
Agricultural
Coffee (Robusta) -10.83%
White Sugar -3.49%
Coffee (Arabica) -4.25%
Cotton -0.87%
Orange Juice +5.07%
Sugar #11 -3.86%
Wheat -2.76%
Cattle -1.92%
Cocoa -1.60%
Corn -2.89%
Feeder Cattle -4.25%
Soybeans -8.96%
Lean Hogs -13.32%
Lumber -7.58%
Soybean Meal -9.85%

Credit Indices

Index Change
Markit CDX EM -1.30%
Markit CDX NA HY -1.26%
Markit CDX NA IG +8.97%
Markit iTraxx Asia ex-Japan IG +20.22%
Markit iTraxx Australia +10.82%
Markit iTraxx Europe +7.90%
Markit iTraxx Europe Crossover +35.71%
Markit iTraxx Japan +3.62%
Markit iTraxx SovX Western Europe +0.08%
Markit LCDX (Loan CDS) -0.14%
Markit MCDX (Municipal CDS) +3.22%
All major indices suffered huge losses. The dollar rallied, commodities fell and investors fled risk-assets.

Oil

oil_fut_chart_august_2015

With oil down about 57 per cent from its peak last June, and copper and iron ore down about 50 and 70 per cent respectively from their peaks in early 2011, it has become clear that story was profoundly misleading. Whether or not the supercycle exists, the regular old cycle definitely does, and there is nothing very super about it at all.

Why the commodities super cycle was a myth

USDINR

usd_fut_chart_august_2015

Nifty Heatmap

CNX NIFTY.2015-07-31.2015-08-31

Index Returns

index.performance.2015-07-31.2015-08-31

Market Cap Decile Performance

Decile Mkt. Cap. Adv/Decl
1 (micro) -10.15% 69/68
2 -9.65% 53/83
3 -11.73% 45/92
4 -10.91% 50/86
5 -11.00% 46/90
6 -8.71% 51/86
7 -6.63% 56/80
8 -5.76% 57/80
9 -6.01% 61/75
10 (mega) -4.25% 72/65
Midcaps bore the brunt…

Top Winners and Losers

LUPIN +14.08%
GLENMARK +14.12%
DIVISLAB +20.52%
VEDL -24.26%
HINDALCO -23.91%
RELCAPITAL -19.41%
Pharma vastly out-performed the cyclicals and commodity players…

ETF Performance

GOLDBEES +7.12%
JUNIORBEES -3.41%
NIFTYBEES -6.44%
PSUBNKBEES -6.53%
BANKBEES -8.55%
INFRABEES -10.30%
CPSEETF -12.67%
Gold caught a safe-haven bid…

Yield Curve

yieldCurve.2015-07-31.2015-08-31

Bond Indices

Sub Index Change in YTM Total Return(%)
0 5 -0.01 +0.73%
5 10 -0.03 +0.77%
10 15 -0.08 +1.25%
15 20 -0.04 +0.98%
20 30 -0.02 +0.89%
Yields went down a smidgen…

Investment Theme Performance

The only strategy that ended in the green was low-vol…

Equity Mutual Funds

Bond Mutual Funds

FII and DII Activity

fii-investments.2014-01-01.2015-08-31

dii-investments.2014-01-01.2015-08-31

FII’s pulled out more than $2.5bn from the Indian markets. DII’s barely lent any support.

Thought to sum up the month

What ails the truth is that it is mainly uncomfortable, and often dull. The human mind seeks something more amusing, and more caressing.

Source: The Unreliable Experts: getting in the way of outstanding performance