Tag Archives: Markets

Oil, gold and rates: something does not work in the markets

Performance evolution of the main world markets last year

Old civilisations believed that weird natural or astronomical events were signals of disasters or even the end of the world. A modern version of those myths could be the evolution of some financial references: oil, gold and rates. Their behaviours are far from being rational. Why? There is a lot of uncertainty and fear amongst investors.

Gold is the traditional safe haven in times of high inflation. This is not the case now, because we experience very low inflation or even deflation. The Depression that we have lived pressured the wages, something that have a direct relationship with the price evolution (in both as a production cost and consumption capacity). Why is the price of gold going up? Because investors buy the precious metal to preserve capital. Currently, there are not many options to obtain good performances: neither fixed income, nor equities (not to mention traditional products as deposits…). Gold is a way, at least, to avoid losing value.

Oil dropped in January to the lowest price for years: Brent was around 30 dollars. However, the market sentiment was not positive at all. The fall of the price was linked with excess of supply from several producers pumping and fighting for a largest market share that demonstrate suicidal. On the hand of demand, the economy does not grow as wished, mainly in Europe. Low demand, large supply: the traditional equation gives as a result a decline in the oil price. Usually, investors smiled, when oil reduced the prices, but it is not the case now. Prices are recovering around the 50-dollar threshold, but it is not enough to calm down the markets.

Finally, rates are in negative figures. The world turns upside down. Creditors have to pay debtors. German 10-year-bund has negative interests and Euribor is negative since 2014. The extreme would be that banks, pressured under the current situation, asked customers for fees or interests for their fixed-term deposits. Central banks intervention is creating a weird situation in which there are no rational behaviours in markets. Another sign is that wealth managers are holding more cash than ever since 2001 in their portfolios.

The Brexit poll, the uncertain US presidential election, China’s deceleration, the absence of strength in the European recovery… too many uncertainties. Investors are always frightened and money looks for security. Gold, oil and rates are indicators that markets are not working. What will be the solution? Will the markets recover their proper operation when central banks end the intervention? But when will they end it? Uncertain questions for an uncertain world.

Ranking T-Advisor: Our best stocks and funds till October

What stocks and funds were the best in the ten first months of 2014? T-Advisor publishes its ranking taking into account the score. T-Advisor patented score provides an asset rating (bullish, neutral or bearish) based on key performance indicators and technical analysis.

The best shares till October were as follows:

Company Score Perf. YTD Volatility Weekly VaR Market

USA

Nike Inc

10

20.29%

17.36%

-4.20%

NYSE
Dominos Pizza

10

30.43%

18.02%

-3.01%

NYSE
Caseys General

10

17.77%

18.41%

-3.68%

Nasdaq
Amgen Inc

10

40.55%

20.60%

-3.06%

Nasdaq
IDEXX Labs

10

37.17%

20.99%

-4.20%

Nasdaq

EUROPE

Basware Oyj

10

60.60%

35.79%

-7.89%

Helsinki
CytoTools

10

133.53%

37.80%

-5.01%

Xetra
Elektrobit

10

19.54%

50.42%

-11.99%

Helsinki
Montupet

9.96

91.84%

54.11%

-11.25%

Euronext Paris
Virbac SA

9.94

11.91%

24.97%

-6.49%

Euronext Paris

ASIA

Ryohin Keikaku

10

29.28%

30.55%

-8.18%

Tokyo
Tobishima

10

62.84%

39.09%

-5.49%

Tokyo
Essex Bio-Tech

10

77.51%

44.93%

-9.76%

Hong Kong
Singapore Post

9.88

46.79%

15.49%

-2.20%

Singapur
Shimano

9.88

64.45%

29.11%

-7.28%

Tokyo

LATAM

Paz Corp

9.89

28.80%

22.98%

-4.74%

Santiago de Chile
Indiver

9.70

118.51%

54.32%

-4.77%

Santiago de Chile
Edegel

9.64

27.45%

20.83%

-5.59%

Lima
Cruz Blanca

9.63

8.69%

31.78%

-3.45%

Santiago de Chile
Corpbanca

9.46

7.29%

26.06%

-4.80%

Santiago de Chile

The best funds till October were as follows:

Fund Score Perf. YTD Volatility Weekly VaR Managing company

EQUITY FUNDS

Franklin Biotechnology Discovery Fund I

9.72

27.77%

25.14%

-6.34%

Franklin Templeton AM
JPM Global Healthcare A – EUR

9.67

31.09%

16.07%

-3.18%

JP Morgan AM
Franklin India Fund I EUR

9.42

55.94%

18.20%

-3.63%

Franklin Templeton AM
JPMorgan Funds – Highbridge US STEEP Fund

9.25

12.59%

10.22%

-2.27%

JP Morgan AM
JPM American Investment

9.21

14.60%

12.89%

-3.48%

JP Morgan AM
Schroder ISF US Smaller Companies I Cap

8.96

7.13%

12.54%

-3.13%

Schroder Investment
JPMorgan Funds – US Select 130/30 Fund

8.95

12.45%

12.17%

-2.59%

JP Morgan AM
JPMorgan Funds – Global Real Estate Securities Fund (USD)

8.92

13.48%

10.28%

-2.12%

JP Morgan AM
BGF US Growth A2 EUR

8.88

16.70%

15.82%

-3.69%

BlackRock Fund Managers
BGF World Technology A2 EUR

8.76

17.74%

15.15%

-4.09%

BlackRock Fund Managers

FIXED-INCOME

OM Glb Eq Ab Re — Accum.Ptg.Shs — Class -I- USD

8.86

6.56%

4.98%

-1.27%

Old Mutual Dublin Funds
BGF As Tig Bd A2C

8.66

9.19%

2.38%

-0.54%

BlackRock Fund Managers
SISF Global Bond USD Hdg I

8.54

7.75%

1.62%

-0.38%

Schroder Investment
BGF World Bond E2 EUR

8.49

16.38%

5.20%

-1.05%

BlackRock Fund Managers
AI – GLOBAL HIGH YIELD BOND FUND I

8.49

3.94%

6.96%

-0.64%

Aviva Funds
FF-ASIAN BOND Y

8.47

8.34%

2.16%

-0.35%

Fidelity
Invesco Global Investment Grade Corporate Bond Fund- Accum [Lux] E

8.41

19.64%

5.17%

-1.11%

Invesco Asset Management
BGF  US Government Mortgage Fund E2 EUR

8.40

15.38%

5.57%

-1.15%

BlackRock Fund Managers
JPM Aggregate Bond A – USD

8.37

5.63%

1.79%

-0.35%

JP Morgan AM
FF-EMERGING MKT DEBT Y

8.36

10.52%

4.43%

-0.90

Fidelity

 

Global market trends: markets in October

October is generally known in the stock exchanges as an unstable month. This year was not an exception in this trend. Market trends were influenced by economic data and the ebola crisis, which hit unexpectedly some developed countries. Just to get an idea about the volatility last month: Dow Jones moved more than 1,500 points, S&P highest and lowest marks were between 200 points and Nasdaq moved more than 500 points. The debate was whether the negative trend was a correction or a real downward trend after these positive years.

Global trends in T-Advisor

The correction in US exchanges last month stopped around the second week and the markets turned again into positive. This trend was also pushed by the good third quarter GDP, which exceeded the analysts’ predictions. Another relief was that the Federal Reserve announced that interest rates would maintain the current situation despite the end of the quantitative easing policy.

Market trends in US in T-Advisor

Europe lived the worst situation, as the constitution of the new European Commission led by Mr. Juncker is taking a very long time. This is important, as the European Union has an unstable balance between common institutions and countries’ interests. On the other hand, the German machine is failing. After the fall in the second quarter, it is expected that third quarter GDP will confirm another recession (technically, two negative quarters in a row). The perfect storm took place with the economic crisis in France, the unstable political situation in Italy and the results of the bank stress test, which did not totally clear up doubts. Banks suffered a hard correction.

Europe market trends in T-Advisor

Latam main news were related again to Brazil. Socialist candidate Marina Silva, who was expected to be in the second round in the presidential election, lost this chance as socialdemocrat Aecio Neves obtained a better result to fight against President Rousseff. Finally, Rousseff gained a second term but with a very little difference (51- 49). Markets bet for Neves, with a more center-right programme, and reacted negatively after Rouseff’s victory.

Latam market trends in T-Advisor

In Asia, warning signals came again from China, as the economy is growing at a lower pace. Some figures offer many doubts about a future evolution. Crossing the sea, Japan has reacted with more Abenomics (the expansive programme organized by Prime Minister Abe). Bank of Japan will enlarge the monetary expansive programme in another attempt to move the economy of the second largest Asian giant, which lives in an eternal crisis since the 90s.

Market trends in Asia in T-Advisor

Ranking T-Advisor: Our best stocks and funds till September

What stocks and funds were the best in the three quarters of 2014? T-Advisor publishes its ranking taking into account the score. T-Advisor patented score provides an asset rating (bullish, neutral or bearish) based on key performance indicators and technical analysis.

The best shares till September were as follows:

Company Score Perf. YTD Volatility Weekly VaR Market

EUROPE

Boiron SA

10

32.10%

28.89%

-4.90%

Euronext Paris
Basler AG

10

42.77%

29.52%

-5.19%

Xetra
Paragon AG

10

37.50%

36.61%

-7.76%

Xetra
Cyto Tools

10

149.69%

38.11%

-5.01%

Xetra
GTF Technologies

9.97

67.05%

35.09%

-7.29%

Xetra

USA

Hormel Foods Corp

10

13.81%

16.65%

-4.17%

NYSE
Nike Inc

10

13.45%

16.68%

-4.30%

NYSE
Home Depot

10

13.26%

17.81%

-3.50%

NYSE
Southwest Airlines

10

75.37%

19.28%

-3.70%

NYSE
Hanesbrands

10

58.18%

19.93%

-3.17%

NYSE

ASIA

Tobishima

10

41.53%

37.38%

-6.74%

Tokyo
Tekken

10

55.10%

42.46%

-5.91%

Tokyo
Essex Bio-Tech

10

63.15%

45.46%

-9.76%

Hong Kong
Izumi Co

9.92

13.63%

18.55%

-5.71%

Tokyo
China Pharm

9.92

7.67%

35.83%

-8.73%

Hong Kong

LATAM

Edegel

9.31

19.60%

21.17%

-5.59%

Lima
Edelnor

9.30

13.19%

18.10%

-4.60%

Lima
Bancolombia

9.16

17.54%

19.18%

-2.31%

Colombia
Grupo Aeroportuaria

8.65

30.44%

21.39%

-4.16%

Mexico
Cruz Blanca

8.54

8.69%

32.54%

-3.76%

Santiago de Chile

The best funds till September were as follows:

Fund Score Perf. YTD Volatility Weekly VaR Managing company

FIXED-INCOME

SISF Global Bond USD Hdg I Acc

9.29

8.08%

1.58%

-0.28%

Schroder Investment
OM Glb Eq Ab Re — Accum.Ptg.Shs — Class -I- USD

9.24

5.88%

4.80%

-1.22%

Old Mutual Dublin Funds PLC
Global Bond Fund

9.20

6.64%

1.73%

-0.27%

Pimco Funds
Schroder ISF Strategic Bond C Cap

9.17

5.66%

3.62%

-0.75%

Schroder Investment
Pioneer Funds – Strategy income I

9.17

15.47%

5.18%

-0.90%

Pioneer
BGF World Bond E2 EUR

9.16

15.45%

5.33%

-1.05%

BlackRock Fund Managers
FF-US HIGH YIELD ACC EUR

9.16

13.90%

5.91%

-1.38%

Fidelity
SISF Strategic Bond A1 Acc

9.10

4.90%

3.63%

-0.77%

Schroder Investment
JPMorgan Funds – Global Corporate Bond Fund

9.06

5.70%

2.61%

-0.62%

JP Morgan AM
JPM Aggregate Bond A (acc) – USD

9.04

5.21%

1.85%

-0.36%

JP Morgan AM

EQUITY FUNDS

Franklin Biotechnology Discovery Fund I

9.85

23.34%

23.97%

-6.34%

Franklin Templeton AM
BGF  World Healthscience Fund E2 USD

9.75

15.14%

12.85%

-2.35%

BlackRock Fund Managers
JPMF Gl Health AD

9.75

14.19%

13.88%

-2.53%

JP Morgan AM
FF-GLOBAL HEALTH CARE Y

9.74

25.85%

11.45%

-2.40%

Fidelity
JPM Global Healthcare A – EUR

9.73

25.63%

13.77%

-2.63%

JP Morgan AM
Templeton Thailand Fund A SGD

9.73

29.22%

15.58%

-4.62%

Franklin Templeton AM
Fidelity Funds – America Fund A EUR

9.63

20.44%

11.28%

-2.67%

Fidelity
AXA WF Framlington Health F Cap USD USD

9.63

14.40%

12.34%

-2.78%

AXA
Fr TI Asia Sm AC

9.60

22.83%

10.46%

-1.71%

Franklin Templeton AM
AGIF Thail Eq — Shs -IT (USD)- — Capitalisation

9.54

33.29%

16.69%

-4.82%

Allianz

 

Risk and investments: an inconvenient marriage

Risk and investments

If there is a sure word always linked to investments, it is not performance: it is risk. All investors try to reduce or avoid it. Nobody wants to lose their money, but it is possible, because there is a long list of dangers to deal with. Let’s begin:

  1. Interest rate risk: it affects to fixed-income investments, as bonds. Its value decline if the interest rate increased. Currently, central bank rates are extremely low, but it will take a long time till the curve change the trend.
  2. Currency risk: some investments are made in foreign stocks or bonds, or directly in currencies. Well, the exchange rate plays a big role to decide if you were right with your decision.
  3. Business risk: all business has a common risk, because they can fail and suddenly the investors discover that the company is in bankruptcy. It can also affect to a whole sector. Think about the banking sector around 2007-2008…
  4. Market risk: as a result of the movements in the markets, it can happen a downturn in your investment. Pity, you have chosen the wrong share or the wrong bond.
  5. Inflation risk: sometimes we are too conservative, because we want to avoid a failure, but prices increase and our investments have a lower performance compare with them. We are losing purchasing power. Some people call it “the risk of avoiding risks”.
  6. Liquidity risk: this risk is linked to the counterparty. What if the company or the country has no cash to pay your dividends or your coupon? It is worse when your investments are in funds and the manager has no money for redemptions. This risk also refers to the inability to sell your asset. Think about properties…
  7. Personal risks: your life is a continuous risk and you need money to deal with them. Sometimes there are special situations (from happy ones, as a wedding or the purchase of a car, till unpleasant ones, as illness or accidents) in which you need to redeem your investments, but it can happen that the market situation is not the best one.
  8. Tax risks: with the current high shortfall in the developed countries, tax increases have been sometimes the immediate solution. Suddenly, your tax plans for your investments go to the trash.
  9. Political risks: tax risks are also in this item, but it also includes other government decisions and laws, as restrictions in investment products or in markets.
  10. General risk: we live in an ultra-connected world. This does not only mean Internet, but political events. Do you remember the market impact of the 9/11? Or the Iraq war? Or the Asian crisis at the end of the 90s?

Is it possible to avoid them? No, absolutely. There are two chances to partly control and reduce them. The first one is good information, not only previous to the investment, but also as long as you keep it. Being well reported is a key to survive in this risky world. The second one is diversification. You can fail in a part, but success in the other. Could you mention other investment risks?

World global market trends in May

Markets improved slightly their bullish trend, always with very low ratios, as there are still doubts amongst the investors about the strength of the economic recovery, mainly in US. There is also another ingredient in this financial mixture: US markets are touching their highest levels and many analysts are wondering when the correction will come.

Global market trends in T-Advisor

US market trend in T-Advisor

But the eyes are on Europe. ECB meets tomorrow to take possibly historical decisions in its monetary policy. Low inflation figures are warning European authorities about the risk of deflation. One of the main points is the exchange rate with other currencies. Europe is importing deflation with the high rate against dollar and others and exporters are suffering to sell abroad, apart from the deeper trouble: the credit restrictions. These problems have effects in the economic development and employment perspectives. The fear is that the ECB will not be tomorrow brave enough and disappoints the markets, which are really expecting many measures, not only a rate cut.

Europe market trend in T-Advisor

The bullish trend improved also slightly in Asia. The main news was the election of the conservative Narendra Modi in India as prime minister. Markets have high expectations about him and Indian market experienced a strong bullish trend this month, so T-Advisor figures. The results of the election in Indonesia were also positively welcomed by the investors. However, Japan and China carried on their weak market trend.

Asia market trend in T-Advisor

Finally, LatAm showed the best trend in world markets pushing by Argentina. Its government announced an agreement with its lenders to pay the debt. Argentina was the instability focus in the lasts years in the continent and the deal about the debt opens new expectations for investors. On the other side, Brazil remains quite weak.

LatAm market trend in T-Advisor