Commodities dismal performance conveys global deflation pressure

Posted on 02. Apr, 2013 by Jean Jacques Ohana in Weekly Focus

Despite supportive liquidity and global monetary easing from Central Banks, commodities have been unable to perform since 2011. Commodities had the worst returns among every asset class over the past 250 days. Commodities, currencies and basic resources equities sectors have been under pressure, as illustrated by figure 2.

The poor performance of cyclical markets such as [...]

How long can the “risk-on” “risk-off” schizophrenia last?

Posted on 24. Jul, 2012 by Jean Jacques Ohana in Weekly Focus

The high level of financial integration shown in Figure 1 masks an increasing rift across risky assets. This rift is well-reflected in Figure 2, representing the divergent dynamics of the IBEX and banks, on the one hand, and the DAX and Food and Beverage sector, on the other hand, since 2010. It is also [...]

The consequences of the looming Chinese hard landing

Posted on 29. Jun, 2012 by Riskelia in Weekly Focus

As we have already warned several months ago, Chinese equities are under increased pressure and base metals with them. As showed in figures 1 and 2, all the equities connected to the Chinese growth are going through a negative trend which conveys a bleak picture on Chinese growth. The lackluster outlook of the Chinese economy [...]

Commodities are (again) the eye of the storm

Posted on 13. Jun, 2012 by Riskelia in Weekly Focus

Will the Spanish banks’ rescue package resolve the current market woes? This is not sure, as the Eurozone crisis is not any more the unique focus of investors’ attention and market indicators increasingly point to a gloomy outlook in the US and in emerging countries.

Riskelia has developed a synthetic indicator based on commodities’ forward curves [...]

Finding the trends in the shadows: the muddle through attractor

Posted on 24. Apr, 2012 by Riskelia in Weekly Focus

We have highlighted several times the noisy state of the financial system which prevents investors from discerning genuine investment themes from capricious moves derived from the “risk on / risk off” alternator.

As showed by figure 1, the average of Riskelia’s trend indicator over the last year enables to spot structural positive and negative investment trends. [...]

The advent of “muddle-through” assets

Posted on 31. Jan, 2012 by Riskelia in Weekly Focus

The month of January is marked by a complete shift in themes across cyclical assets:

Sectors performance rotated from defensive sectors (Food & Beverage, Health Care) to cyclical and banking sectors (Banks, Insurance, Automobiles & Parts, Basic Resources)
Emerging equities have started to emerge as performance leaders
The most cyclical commodities (cyclical precious, base metals) have clearly outperformed [...]

The deflationary spiral: are we already in recession?

Posted on 27. Sep, 2011 by Riskelia in Weekly Focus

The last doubts we could express about a looming deflation threat are fading away.
First of all, the signals on commodities producers become more clear-cut; the recommendation on Gold Miners abruptly receded, conveying a bleak overall picture on the mining and oil sectors:

More generally, all bets identified by the Radar are deflationary as depicted in figure [...]

Cyclical assets signals: are we heading to recession?

Posted on 06. Sep, 2011 by Riskelia in Weekly Focus

Financial markets can provide good signals on the global economic outlook. Indeed, in a financial 1crisis such as the one we went through in August, some assets may reflect banks funding contraction and a credit crunch earlier than economic indicators. As Georges Soros put it, financial markets and the real sphere have a reflexive interaction, [...]

Review of the troops after the storm: have cyclical assets capitulated yet?

Posted on 09. Aug, 2011 by Steve Ohana in Weekly Focus

The long haven/short cyclical assets stance gained more clarity last week after the rally of OECD countries’ bonds and the slump of European equities. However, it is too early to declare the victory of the haven assets over the cyclical assets army. Indeed, although the recent storm has claimed new important victims among cyclical assets, [...]

Is Chinese Real Estate bubble popping?

Posted on 12. May, 2010 by Jean Jacques Ohana in Weekly Focus

Maybe the European debt issues have distracted investors from paying attention to the signs of weakness in the alleged “growth zone”: Asia and specifically greater China.
For more than a month, Riskelia’s Trends and Bubbles Radar has identified a major weakness: Chinese real estate. The Trend stands at -68% with no specific bear exaggeration. This signal [...]