Thursday, February 23, 2012

Some Quick Notes

- Euro and China PMI data reversed their recent upswings with downtick readings - we saw markets off slightly.  It was obvious that euro economy was frail, but the recent reduction in rates by China is obviously showing signs that their economy is slowing at a pace, that should be kept in mind.

- Kevin Rudd Australia's foreign minister resigned amidst more labour party turmoil.  Whilst Australia's economic govt policy has been good in the past decade, that was more due to favourable macro conditions, and stable Aussie financial system and housing markets - however, with the MRRT, carbon tax, and bickering in the labour govt for 2 years running, we are going to see some uncertainty ahead.  This may be a reason why the ASX200 has been underperforming the recent upswing in equities globally.

- The Euro/USD pair failed to break 1.33 after the Greece bailout as I had thought might occur.  I took 2 stabs at long positions all stopped out at break even.  The AUD/USD has fallen sharply from 1.08 highs - as this seems to be an intermediate top.  Might be worth taking shots at shorts at 1.08.

- The Yen is now weakening dramatically, after staying below 80USD we are not finally seeing a breakout of this level - could this be the beginning of a trend in Yen weakening?

- Dell and HP both reported weaker earnings, the larger players in Tech are obviously hurting from weak consumer demand.

My position in WYNN was decently timed last week as we saw a boardroom battle as they accuse a major shareholder of unethical behaviour and will buy out his large stake of about 1bn with an IOU at a discount of 20% or so.  We should see continued buying over the next week based on this news.

There seems to be no identifiable macro catalyst for the time being; with oil remaining high we might see a coverage of green energy stocks in the news - we've had a decent run-up in uranium and solar but there are other green energy stocks that got sold off hard in 2011 that may be worth looking at.  I've picked up some ESI and CFU in the past week in anticipation over the next few weeks.

Will the market breakout of the 2008 highs 1368 on the sp500?