Weekend edition—The one-child policy, sexism in robots, melting Greenland

Good morning, Quartz readers!

As of this week, China’s infamous one-child policy is gone. But its paternalistic family-planning policies remain, in the form of a “two-child policy.”

This makes no sense. There are no signs of the resource-straining baby boom that family planning officials have long prophesied. In the many areas where the one-child policy was already lifted, far fewer couples than expected are planning on having a second child. What tiny fraction would be entertaining a third?

Plus, China needs those extra babies. It’s getting older way faster than it’s getting richer, making the country likely to languish in the dreaded middle-income trap. On top of that, China desperately needs more girl children to begin closing its yawning gender gap.

Received wisdom holds the one-child policy responsible for these problems. It isn’t (though it did exacerbate them). The fertility rate began dropping in the 1970s, years before the one-child policy. A preference for sons—due to cultural traditions, labor practices, and old-age security—likely caused the gender gap, as Elizabeth Remick and Charis Loh argue (paywall).

Since the one-child policy didn’t create these problems, scrapping it won’t fix them. Instead, bulking up social welfare would help wean China’s poor rural residents off their reliance on sons for support in old age (which may explain why the government just announced plans for a universal pension). Better leave policies and education reform would encourage couples to have more children. So too, of course, would letting them have as many as they want.

So why institute a two-child policy when it could have ditched the policy altogether? For 35 years, the state has loomed over the lives of its people, controlling uteruses and re-rigging family trees. Letting them plan their families would imply new personal freedoms—and those clearly still don’t jibe with the Communist Party’s vision.—Gwynn Guilford

Five things on Quartz we especially liked

A complete guide to Chinese data-doctoring. Gwynn Guilford draws on her long experience of interpreting Chinese economic data to offer a rundown on all the ways the government fudges the figures, including ditching datasets, mixing up the methodology, faking numbers they think no-one’s watching, and just stopping publishing inconvenient stats. You’ll never look at a PMI the same way again.

Has ExxonMobil helped Putin face down the West? The American oil giant persuaded the US and EU to postpone the onset of sanctions just long enough to—by remarkable luck!—discover a massive new oil and gas field in Russian waters. Steve LeVine analyzes the new leverage that this may—by sheer coincidence!—have given Russia’s Vladimir Putin.

What we get if men build all our robots. If we’re terrified of what artificial-intelligence machines might do, it’s partly because of who’s making them, writes Sarah Todd. She speaks to a range of female scientists about how the lack of gender and ethnic diversity in AI and robotics is influencing the kinds of inventions being created and the uses to which they’re being put.

Southeast Asia’s environmental nemesis: palm oil. The plumes of smoke wafting across New Guinea can be seen from space. Millions of hectares of rainforest are going up in flames to clear the way for palm-oil plantations, and it’s not only adding to global warming but spreading toxic haze and respiratory problems across the region, Steve Mollman reports.

Dubai’s strangely self-destructive foreign policy. The UAE has set itself up as a beacon of economic stability and opportunity in the Middle East. So why, asks Haroon Moghul, is it actively meddling in conflicts, backing dictators, and generally doing everything possible to incite radical Islamists to attack it?

A podcast we like, and think you’ll like too

This week Actuality, the Quartz/Marketplace podcast, goes orbital and finds it’s quite a mess. Satellites and space stations are dodging orbital trash, and there’s business opportunity in cleaning up—but no “sexy space garbage trucks” yet. Plus, a mysterious piece of space trash is coming back to earth.

Five things elsewhere that made us smarter

Watch Greenland melt away. The New York Times interactive team pulls off another visual treat with a zoom-down-from-space and fly-across-the-ice feature that gives you both a good sense of the life of a scientist investigating the effects of climate change in polar regions, and a clearer understanding of how it’s happening.

Are you a chimera? Buzzfeed’s Dan Vergano on the curious case of how a failed paternity test revealed that millions of people born as single children could be chimeras, carrying a vanished twin’s DNA in some of their cells. That would call into question a whole raft of the genetic tests that criminal cases and paternity lawsuits rely on.

Our sports bras, our selves. Many women find sports bras ineffective, uncomfortable, or just plain ugly. At Racked, Rose Eveleth’smarathon-like exploration of the history, physics, and stigma surrounding the sports bra finds that—astonishingly—”researchers are still a long way from understanding exactly how breasts move during exercise”—and concludes the garment suffers the same challenge as many women: How to do everything well and still look good.

An archaeology of Lockerbie. Ken Dorenstein explores the relationship he had with his older brother Dave through the otherwise banal objects he inherited—from notebooks and audio tapes to cigarettes and pocket change—in an equally heart-warming and heart-breaking interactive journey for PBS Frontline, which begins well before Dave died on the bombed Pan Am Flight 103 in 1988, and continues well after.

The best of Grantland. Far more than an American sports journalism site, ESPN’s Grantland—which was shut down this week—did some outstanding longform reporting on topics from the race protests in Ferguson, Missouri to the relationship between sumo and seppuku. Our friends at FiveThirtyEight have compiled a list of personal favorites.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, chimeric DNA, and sports-bra designs tohi@qz.com. You can follow us on Twitter here for updates throughout the day.

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A pharma mega-merger, #Nintendo’s smartphone play, fake salmon

Good morning, Quartz readers!

What to watch for today

The US and China hash it out over the South China Sea. A top US admiral and his Chinese counterpart will hold a video conference to talk about a recent boundary-testing visit by the US navy to nearby a Chinese man-made island.

China’s Communist Party concludes a major meeting. Delegates will agree on the 13th five-year plan of the People’s Republic, outlining the country’s economic and social development goals from 2016 to 2020. Details won’t emerge for weeks or months, but Beijing created a bonkers English-language video to tide us over.

US GDP growth is expected to slow. Analysts estimate that the economy grew by just 2% in the third quarter from a year earlier. That’s higher than some earlier projections but significantly lower than second-quarter growth, which came in at 3.9%.

Oil, coffee, cable, and more: Royal Dutch Shell, Nordisk, Mastercard, Starbucks, Barclays, ConocoPhillips, Time Warner Cable, Sony, LinkedIn, and others report quarterly results.

While you were sleeping

Pfizer and Allergan began merger talks. The two pharmaceutical giants are in the early stages of discussions, and no deal is guaranteed yet, according to the Wall Street Journal (paywall). Together, the companies have a combined market cap of $331 billion; a tie-up would be the industry’s largest, despite a rash of mega-mergers in the past year.

Samsung’s profit finally grew. The South Korean smartphone manufacturer reported a third-quarter operating profit of 7.4 trillion won ($6.5 billion), up 82% from a year earlier, but projected a decline in fourth-quarter earnings due to currency fluctuations. To soften the blow, it plans to spend 11.3 trillion won on a massive share buyback.

The Fed kept interest rates steady (again). The US central bank cited slower job growth as it kept benchmark rates near zero, but did use unusually specific language when discussing the possibility of hikes in the near future. Investors are now eyeing a December rate hike.

Nintendo gave a sneak peek of its first smartphone game. The maker of video game consoles and handheld devices said Miitomo will be free to play and contain in-app purchases. But the company’s share price, already suffering from low profits, dropped by as much as 7% after it revealed the game’s launch will be delayed from this year till next.

Marco Rubio appeared to win the US Republican debate. The junior Florida senator fended off attacks on his Senate attendance record and personal finances, even managing to score points against his long-term ally Jeb Bush. Outspoken billionaire Donald Trump, whosuspected the debate would be unfair, took a backseat.

SPONSOR CONTENT BY ROSETTA STONE

Why your business needs a language strategy An increasingly globalised economy requires businesses to have a language strategy that aligns with the strategic goals. Harvard Professor Robert S. Kaplanshares experiences from his time abroad, where he experienced the impact language barriers have on a company’s culture, talent and execution of the business strategy.

Quartz obsession interlude

Sibusiso Tshabalala on “2G Tuesdays” at Facebook. “The company hopes its staff will better understand what it’s like to access the platform via a 2G connection, a reality for many of its users living in the developing world. In Africa, Facebook has over 120 million active users, 57% of which access the platform using a feature phone with a 2G connection.” Read more here.

Quartz events

Quartz’s The Next Billion is back in New York on Nov. 16, exploring the next wave of internet users in emerging markets and on mobile platforms. Speakers include Phil Libin of Evernote, Luis von Ahn of Duolingo, Catherine Hoke of Defy Ventures, and many more. We’re hosting a full day of live interviews, interactive demos, debates, and networking with local and international innovators and decision makers.Register today using the code QZBRIEF for 40% off a ticket.

Matters of debate

Apple should buy a university. A nonprofit “Apple U” would only use a fraction of its $205 billion cash holdings.

Dubai’s foreign policy is a disaster. It’s feckless to attempt neutrality when you’re incredibly vulnerable.

The TV trope of the “evil bisexual” needs to end. Characters are stereotyped as manipulative and morally lax.

Jeb Bush just killed his presidential campaign. A lame debate attack and an inability to defend it means he should go.

Go on, finish eating your bacon. Something is going to kill you; life is about what you do before that.

Surprising discoveries

Your salmon might not really be salmon. Especially in the winter, sellers are prone to mislabelling their fish.

It’s been 18,967 days since a US president died in office. That’s a new record.

Robert Mugabe won’t accept China’s Confucius peace prize.Because it isn’t affiliated with the Chinese government.

The US military lost control of a 240-foot (73-meter) blimp in Pennsylvania. The runaway ship knocked out power for thousands of people.

A recently deceased librarian had reviewed over 30,000 books on Amazon. She critiqued two to three books a day.

Our best wishes for a productive day. Please send any news, comments, rejected peace prizes, and blimp lassos to hi@qz.com. You can follow us on Twitter for updates throughout the day.

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#Apple excels, #Twitter tanks, trigger-happy pooches

Good morning, Quartz readers!

What to watch for today

Angela Merkel kicks off her visit to China. With the Germanchancellor’s eighth visit to the mainland since 2005, Germany is looking to outdo the UK’s recent business deals with China, whichtotaled £40 billion ($61 billion). Merkel will lead a business delegation—including new Volkswagen CEO Matthias Mueller—to the city of Hefei.

Speaking of Volkswagen… Before his trip, Mueller will have to face investors at the carmaker’s first quarterly earnings call since the diesel-emissions scandal. VW is expected to post an operating loss of €3.3 billion ($3.6 billion), from a similarly sized profit a year earlier, and it faces up to €78 billion in total costs from the scandal.

Republican candidates debate the economy. A two-hour debate entitled “Your Money, Your Vote” will probe 2016 presidential hopefulson the economy. Ten big names will debate at midnight GMT; four others will get screen time at 10pm GMT.

Mark Zuckerberg takes questions in India. The Facebook CEO will host a townhall-style Q&A at the Indian Institute of Technology Delhi. His visit comes after Indian prime minister Narendra Modi visited the Facebook offices last month and discussed the growing partnership between Silicon Valley and India.

Earnings: PayPal and Hilton report earnings, as do Booz Allen Hamilton, Deutsche Bank, Fiat Chrysler, Garmin, GlaxoSmithKlein, GoPro, Hershey, Yelp, and Pacific Gas and Electric.

While you were sleeping

Apple added plenty more cash to its pile. The iPhone maker reported a fourth-quarter net income of $11.1 billion, far higher than last year’s $8.5 billion, due in part to a doubling in iPhone sales in China. Shares rose in after-hours trading but wobbled over concerns that quarterly China sales fell compared to the second quarter.

Twitter’s user growth tanked. The social network forecast a fourth-quarter revenue of no more than $710 million—well below analysts’ expectations of $740 million—and added only 4 million new monthly active users in the third quarter, also missing estimates. Shares fell by as much as 13%.

The US announced Iran was invited to the Syria talks. Iran’s presence at discussions among the US, Russia, and Arab and European powers would be a first, and the gesture signifies a further warming of US-Iran ties. But while Iranian leaders have been invited, it remains to be seen whether they’ll attend the meeting, to be held in Vienna later this week.

Walgreens Boots Alliance agreed to buy Rite Aid for $9.4 billion.The deal will combine the second- and third-largest US drugstore chains, respectively. Shares of both companies surged on the news, with Rite Aid shares up 38% on hopes that a merged company would be able to cut costs—though getting antitrust approval could be tough.

Mixed signals for China’s economy. The Minxin purchasing manager’s index—an alternative to the recently ceased Markit/Caixin preliminary index—put China’s manufacturing sector at 43.3 in October, up from 43 last month but well below the 50 mark that separates expansion from contraction. Consumer sentiment also fell to a record low in October (paywall).

Japan’s retail sales looked a little brighter. Third-quarter sales rose 1.8%, marking a return to strength after growing a feeble 0.2% in the second quarter this year. Analysts believe rising wages and falling prices are finally taking effect, and that the central bank may not increase its stimulus measures on Friday.

SPONSOR CONTENT BY ROSETTA STONE

Why your business needs a language strategy An increasingly globalised economy requires businesses to have a language strategy that aligns with the strategic goals. Harvard Professor Robert S. Kaplanshares experiences from his time abroad, where he experienced the impact language barriers have on a company’s culture, talent and execution of the business strategy.

Quartz obsession interlude

Corinne Purtill on how airlines handle sexual assault between passengers. “If a person is subjected to unwanted touching or other crime on board an aircraft, they should tell a flight attendant as soon as possible, Hughes said… He also suggested that women traveling alone avoid alcohol, sleep-inducing drugs, and sleep itself to guard against attacks on long flights.” Read more here.

Matters of debate

In the race for Africa, India and China aren’t all that different. India is struggling to differentiate itself from China.

Taylor Swift was wrong about Spotify. It isn’t undercutting the music industry, but it’s not leaving artists any better off.

Texting at your wedding is perfectly acceptable. This is how millennials socialize, so just deal with it.

Poland’s shift to the right is bad news for its economy. Newly empowered conservatives could squander recent gains.

Surprising discoveries

Fifty-three years ago today, the US ordered the launch of 32 nuclear warheads. Not all of them were aimed at Russia.

Russian police discovered half a metric ton of contraband caviar in a hearse. It was pulled over for speeding.

About one American per year is shot by a dog. Four of the 10 since 2004 occurred in Florida.

Earth needs more poop. As large species die off, the environment is losing a crucial source of phosphorus.

Drones make excellent leaf blowers. Just in case you needed a reason to buy one this Christmas.

Our best wishes for a productive day. Please send any news, comments, contraband caviar, and wedding selfies to hi@qz.com. You can follow us on Twitter for updates throughout the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. We’d also love it if you shared this email with your friends. They can sign up for free here.

Earthquake aftershocks, #Apple earnings, #Titanic snacks

Good morning, Quartz readers!

What to watch for today

The US Fed mulls its interest rate. It begins a two-day meeting today to discuss when it ought to raise the cost of borrowing. Chairperson Janet Yellen has said an increase would be needed this year, but continued stimulus in Europe may confuse that.

Apple and Twitter release quarterly reports. Apple investors will bescrutinizing iPhone sales, especially in China, with analysts predicting a 25% increase in units sold worldwide. Meanwhile, Twitter CEO Jack Dorsey will have to convince investors that he is making strides in attracting new users.

A look at the US housing market. The S&P/Case Shiller house price index for August is expected to show about a 5% rise in prices, compared to a year earlier. Separately, the Census Bureau reports third-quarter housing vacancies and ownership rates.

More earnings. Bristol-Myers, Merck, Pfizer, UPS, and Ford are also reporting.

While you were sleeping

The death toll continued to rise from a Pakistan earthquake. At least 260 people died after a 7.5-magnitude quake struck the Hindu Kush on Monday. The majority of the deaths were in Pakistan; officials said they expect the death toll to keep climbing as they reach more remote areas.

IndiGo raised $482 million in an IPO. The Indian budget airlinebenefited from its tight cost controls (paywall) and the massive growth potential in India’s domestic airline industry. The initial offering beat expectations that IndiGo would raise $465 million.

The US navy sailed a warship into waters claimed by China. The USS Lassen passed within 12 nautical miles of the Subi Reef in the South China Sea’s Spratly archipelago, demonstrating that the US does not recognize China’s territorial claims there. China has created islands with airstrips over the reef.

Low commodity prices hit a major Australian energy producer.Adelaide-based Santos is in talks to sell stakes in its Western Australian oil and gas fields and in its Papua New Guinea gas projects. A drop in commodity prices has left the company potentially exposed to too much debt; the deals could raise over A$2.5 billion ($1.8 billion).

China reported sluggish manufacturing data. Core industrial profitsdropped by 0.1% in September from a year earlier, following a record 8.8% drop in August. Some analysts are concerned that major industrial companies could default on debts, as China’s economy shifts from infrastructure spending.

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Small businesses are the new face of international trade. It’s easier than ever for small to medium enterprises (SMEs) to distribute product throughout the globe, thanks to the reach of supply chains. But even with policy support for SME growth, there remains untapped potential for expansion. Scaling businesses navigating the remaining barriers to exporting abroad should consult these steps.

Quartz obsession interlude

Alice Truong on the benefits of graduating from coding bootcamp. “While the makeup of students who attend coding schools still largely skews white and male, there are encouraging signs these so-called bootcamps are helping diversify the industry by encouraging people in their early- to mid-careers (on average, participants were 31 years old) to become programmers.” Read more here.

Matters of debate

Demand for “healthier” fast food is causing problems globally.The knock-on rise in demand for palm oil comes with human rights and environmental violations.

Fantasy sports league games are pretty good money laundering vehicles. Here’s how one might use a service to clean their ill-gotten gains.

Chinese bachelors should share wives. Polyandry could erase the country’s huge surplus of single men (and there’s historical precedent, too).

Britain should abandon Halloween pumpkins. Turnips, beets, and potatoes have a much longer “Jack-o’-lantern” lineage.

Surprising discoveries

Colleges are snooping on applicants. Educational data mining is used to juice university acceptance stats.

Turkey tried to delay changing from Daylight Savings Time. But ubiquitous smartphones foiled the plan.

Fitness fanatics can buy a $365 foam roller. The handmade device gives a deeper, more painful muscle massage.

A US sixth-grader is selling super-strong passwords for $2 each.Her method involves rolling dice.

The Titanic’s last cracker sold for $23,000. It came from the survival kit on one of the doomed ship’s lifeboats.

Our best wishes for a productive day. Please send any news, comments, ironclad passwords, and collectible crackers to hi@qz.com. You can follow us on Twitter for updates throughout the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. We’d also love it if you shared this email with your friends. They can sign up for free here.

ETF Pricing Problems Cause Continued Wide Market Swings

October 27, 2015

 

By Louis Navellier

All content in this Introduction to Marketmail represents the opinion of Louis Navellier of Navellier & Associates, Inc.

ETF Pricing Problems Cause Continued Wide Market Swings

We remain in a “washing machine” market with wild daily price swings, but through last Friday we’ve seen an 8% gain in the S&P 500 during October. We are now in the heart of earnings announcement season; but the short sellers are out in full force, doing their best to scare investors, sometimes targeting specific stocks. Short sellers like to slam leading stocks and then use sector ETFs to ruin the entire neighborhood. Due to the overall nervous nature of the market, one more retest of the August 24th lows is still possible.
Speaking of the August 24 lows, in a public statement released by the SEC on October 15, 2015, recently retired SEC Commissioner Luis Aguilar said it may be time to “reexamine the entire ETF ecosystem,” specifically how market structure rules are applied to the products following the wild price swings several ETFs experienced on August 24th. Aguilar added, “Why ETFs proved so fragile that morning raises many questions.” However, I suspect that any ETF policy reforms will be presented in 2016 at the earliest as SEC proposals are typically subject to industry and public comments.
In the meantime, ETF pricing will likely remain the “Wild West” of Wall Street, since the premiums and discounts relative to the underlying securities in ETFs remains abnormally high in the wake of the market volatility during the third quarter. Complicating matters further, ETFs are clearly responsible for much of the recent day-to-day volatility, since they accounted for 42% of overall daily trading volume on August 24th.
In This Issue
 
Crude oil has failed to rally, despite escalations of the hot war in the Middle East. In Income Mail, Ivan Martchev will handicap the chances for a continued decline in crude oil. Gary Alexander’s Growth Mail will examine the case for owning both stocks and gold, while Jason Bodner’s sector spotlight will psychoanalyze the bipolar nature of the S&P sectors. My “Stat of the Week” column this week will focus on international trends, particularly the evidence of deflation in Europe and Asia during China’s slowdown.
 
Income Mail: A Crude About-Face
The U.S. Dollar Awakens
by Ivan Martchev
 
Growth Mail: The Case for Owning Both Gold and Stocks
Five Reasons to Consider Gold Now
by Gary Alexander
This Week in Market History: The Bright Side of Late October
Major Market Moves in Late October
by Gary Alexander
 
Sector Spotlight: Bipolar Disorders in the S&P Sectors
The Last Shall be First
by Jason Bodner
 
Stat of the Week: China Cuts Rates to Revive Economy
European Deflation Deepens
by Louis Navellier
 
NAVELLIER SEMINARS in Your Area?
 
High Yields in Both Stocks and Bonds
Income Mail
All content in “Income Mail” represents the opinion of Ivan Martchev.

A Crude About-Face

By Ivan Martchev
The fact that crude oil is refusing to rise due to the escalating geopolitical situation in Syria is rather telling. The Russian Air Force just got authorization to hit ISIS convoys coming from Syria into Iraqi territory – which is a rather nebulous concept, since an ISIS convoy is an ISIS convoy, so who really cares where it is coming from? The Russians are also opening another coordination center with Amman and will fly joint operations with the Jordanian Air Force. It seems the Jordanians have determined that ISIS is a big enough threat to their country that fighting ISIS is more important to them than pleasing some world powers who might be unhappy about their cooperation with the Russians.
In other words, the heat on ISIS and any (oxymoronic-sounding) “moderate rebels” in Syria just got turned up, way up. Yet, oil is falling.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
December 2015 WTI futures (pictured above), which managed to close above $50 two weeks ago, closed below $45 on Friday. This does not look good for the oil bulls, whose only hope was for the geopolitical tensions to cause a super spike as combat operations get closer to major oil producing regions of Iraq.
Crude oil is seasonally weak in the fall and winter months. There are more people in the Northern (than Southern) hemisphere and these people tend to drive less when it’s cold. But there is another major cyclical factor and that is China. China is decelerating, so its demand for oil is not growing as fast as planned, while the supply is increasing. These seasonal and cyclical factors are reinforcing each other and are putting pressure on the oil price. The geopolitical situation is the only hope for the oil bulls in the intermediate term. The oil price can still spiral out of control if there is damage to major oil infrastructure, but so far that has not happened. And there is Iran, which is desperate to come back to the oil markets.
Over the past week the U.S. and the EU have pressed ahead with implementation of the Iran nuclear deal, which is rapidly clearing the way for the Islamic Republic – eerily resembling the more nefarious Islamic State that it is fighting – to come back to the oil markets, which should happen before the end of 2015.
After the 2012 sanctions, Iranian exports averaged 1.4 million barrels a day in 2014, down from 2.6 million at the end of 2011 (see July 14, 2015 Wall Street Journal article entitled, “Iran Deal Raises Prospect of a Fresh Oil Glut”). Since the Iranians have been prepping for this moment for a while and they need the money badly, it would seem a safe bet that they would want to come to the oil markets as soon as possible. This is unlikely to be bullish for the price of oil if there is no damage to the energy infrastructure in the intensifying aerial bombardment in rebel-controlled territories in Syria and Iraq.
I have often written that if it was left only to the forces of supply and demand – without the Russian-inspired blitzkrieg on ISIS – crude oil could fall below $20/bbl. Commodity prices on average this year fell nearly down to the level they reached in the Asian Crisis in 1998, when oil went down to $10/bbl.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
In the two months since the late August short squeeze, the December 2015 crude oil futures have been trading in a range of $44 to $51. If they fall out of that range in the coming week, that means a likely retest of the August lows in oil and major commodities, notwithstanding the Syrian situation.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Such moves in commodities are relevant to the bond market as the shale boom was financed via junk bonds which have been under serious pressure as the price of crude oil has gone down. Cheaper oil means less cash flows to service that mountain of junk debt, higher credit spreads, and more bankruptcies when shale producers get out of the absurd situation that requires them to increase production as the price of oil is falling in order to service their debts. Sooner rather than later that absurd dynamic will end, but we many need a more catastrophic decline in the price of crude oil than we have already seen. This dynamic in oil futures raises interesting questions about the major short covering rally in commodity and oil-related names that has been leading the market in October.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
All in all, earnings for energy and commodity producers are shrinking faster than George Costanza’s self-esteem when coming out of a cold swimming pool (in an infamous Seinfeld episode). This dynamic in oil futures seems to also be divorced from the short-covering moves in the Energy SPDR (XLE) and the smaller, more leveraged sub sector, the Market Vectors Oil Services ETF (OIH), both of which are substantially above their August lows. If oil is about to challenge those summer lows, one would think that XLE and OIH would do the same. (Please Note: Ivan Martchev does not own positions in XLE and OIH. Navellier & Associates, Inc. does not currently hold positions in XLE and OIH in client portfolios. However, XLE and OIH have been held in Navellier & Associates, Inc. clients’ portfolios in the past).
The U.S. Dollar Awakens
It has often been contended in these pages that the U.S. dollar rally is not over. As to how high it is going to go I cannot be sure, other than to say that it is not only Fed policy that pushed the dollar but also ECB policy and the policies of all other central banks combined.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
If we only look at the squiggly lines and the technical mumbo jumbo to help us see how the fundamental picture develops in the price discovery process, the U.S. Dollar Index has (almost) completed a six-month consolidation and is about to deliver a second leg higher in the rally that started in mid-2014.
The ECB accelerating QE would certainly be a catalyst for such a dollar move, which appears to have started. I think it is only a matter of time before the euro reaches parity to the dollar with the present ECB policy path, and I don’t think it will stay at parity.
The ECB sounded remarkably dovish from sunny Malta last week, which caused quite the sell-off in the largest component of the U.S. Dollar index (DXY) – the euro at 57% – and quite the two-day surge in the DXY itself (see October 22, 2015 Reuters articl entitled, “Euro continues fall on ECB president’s dovish tone”). There is talk of the ECB diving deeper into negative interest rate territory with their short-term policy rates, which caused German 10-year bond yields to sink into record negative territory.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
It is reassuring to see that commodity-leveraged currencies like the Australian and Canadian dollars, the Russian ruble, and the Brazilian real have been acting remarkably well, given the action in oil in the past two weeks; but I don’t think that would be the case should oil begin to flirt with its August lows. I think the Russians, or anyone interested in the oil price, know exactly where they need to land a stray bomb or a missile for us to have a major spike in crude oil futures, despite the bearish fundamentals. I don’t think that a major oil producer should think that way but you never know when billions of dollars are at stake. That is the only thing stopping me from calling for new crude oil lows by the end of 2015, which may come anyway without such a geopolitical “accident.”
Growth Mail
All content in “Growth Mail” represents the opinion of Gary Alexander.

The Case for Owning BOTH Stocks and Gold

By Gary Alexander
“I like gold. I believe it’s under-owned. It should be a part of every investment portfolio, maybe five to 10 percent.” 
– Billionaire hedge fund manager Paul Singer, speaking in Tel-Aviv (Bloomberg, October 14).
Bad news sells, and there’s something in the human psyche that seems attracted to Armageddon – or a train crash, a hurricane in Mexico, a flood in Texas, a flash crash on Wall Street, or a political dog fight.
As you read this, I’m heading to the 41st annual New Orleans Investment Conference, where I’ve been MC and/or panel moderator for the last 33 editions. It’s no secret that the crowd is generally pro-gold and many speakers are negative on the stock market. I once believed in that bipolar worldview, but since 1990, I’ve been a fan of both gold and stocks. Yes, it’s possible to like both gold and stocks. Why not?
The answer is a matter of faith. The most dedicated gold bugs believe in the yellow metal as an article of faith, in particular as a defense against the devil of “fiat” (unbacked) paper money. They have a point, but investments in well-run companies can also represent a free-market response to government power.
There have been two long and depressing stock market crashes in the new century, but stocks have rewarded investors well in the long run – and so has gold. The short-term, however, is anyone’s guess.
After sentiment indicators for stocks and gold seemed to be the lowest in years – see my Growth Mail column to that effect on September 29, when the S&P 500 was retesting its August lows – both stocks and gold have rallied strongly. In the dreaded month of October, stocks surprised the bears by rallying!
Here’s the tale of the tape, in brief: Following an intra-day low of 1871.91 on September 29, the S&P 500 closed last Friday at 2075.15, up 10.9%. The gold market rose in tandem with stocks. The London pm gold fix on September 30 was $1114. It then dipped to $1106 on the morning fix of Friday, October 2. In the following two weeks, gold rose $78 (+7%) to peak at $1184 on the London pm fix as of October 15.
My case for gold is based on asset allocation, with stocks making up the lion’s share of a growth portfolio with gold in a small minority position (maybe 5% to 10%) as a portfolio balancer. In the 44 years since gold started trading freely, there have been long stretches of time when gold “zigs” while stocks “zag.” For instance, gold rose from $255 to $1920 (2001 to 2011), partly offsetting the decline of stocks from 2000 to 2009. A similar divergence happened in the 1970s, when gold soared while most stocks lagged.
In a mirror image, gold trended downward from 1980 to 1999 while stocks soared. The same situation (favoring stocks over gold) has been in force since 2011. In the last four years, stocks outperformed gold.
For over 35 years (in New Orleans and elsewhere), I have moderated debates between gold bugs and stock market bulls, but I say, “Make profits, not war.” Own them both! I am happy to report that Louis Navellier is one of the very few market analysts (in my experience) to favor BOTH stocks and gold.
Five Reasons to Consider Gold Now
#1: The Federal Reserve May Not Raise Rates – and if they do, it may be “one and done.” Gold has suffered in recent years based on the assumption that the Fed will raise rates – but they haven’t. Gold offers no interest income, so near-zero rates put gold on an “even playing field” with cash. However, if rates rise, that puts gold at a disadvantage. Gold has been trending downward based on this (so far) failed assumption. The Federal Open Market Committee (FOMC) meets again this week. If they postpone any interest rate decision again, gold may rally. Longer-term, near-zero inflation (or deflation), plus low wage growth and fear of global economic slowdown will probably convince the FOMC to keep rates near zero.
#2: The U.S. Dollar Has been Flat-lining. The U.S. Dollar Index rose rapidly (+25%), from 80 to 100, from mid-2014 to March 2015, but the Dollar Index has been flat to down over the last six months. As Ivan describes, above, the Index has risen in the last two days to 97, but it is still below the March peak. Since most commodities are priced internationally in terms of U.S. dollars, the price of gold has been gently rising in recent months. Earlier this year, when the dollar was soaring, gold soared in euro terms. One way or another – weak dollar or strong dollar – gold will likely be rising in euros or dollars or both.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
#3: Autumn is Gold’s Best Historical Season. Jewelry is still the largest single source of gold demand, and two large nations (India and China) account for about half of global gold demand. From the Indian holiday and wedding season in the fall to the Chinese New Year, gold jewelry sales tend to rise in those two economies. We could also see rising jewelry demand in the U.S. for Christmas and Valentine’s Day (note the jewelry ads on TV lately?). Jewelry fabricators must stockpile raw gold in September for the holiday season, so September is gold’s best month historically – and November is the second best month.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
#4: Central Banks are Stockpiling Gold: European and American central bankers own plenty of gold in their foreign exchange coffers – as a relic from the old gold standard years – but the developing world is catching up fast. Russia’s central bank added 31 metric tons of gold in August – its highest monthly total since March, and Reuters reported on October 16 that China increased its gold holdings by over 3% in the third quarter, buying over 50 metric tons, lifting their total holdings to 1,708.5 metric tons as of September 30. To stem its financial crisis, China has been selling dollars, but China still has the largest foreign exchange horde in the world. Its gold holdings (fifth among nations, behind only the U.S., Germany, Italy, and France) represent only 1.7% of their total foreign exchange kitty so China has plenty of opportunity to buy more.
#5: “Paper gold” Traders are looking at Gold Again. Gold-backed exchange traded funds (ETFs) have increased their gold position in recent months. The leading gold ETF, SPDR Gold Shares (GLD) must buy gold to back up net new purchases and GLD has attracted net inflows of $950 million since August 1. The same trend is evident in the commodity market. Data from the CFTC (Commodity Futures Trading Commission) shows that speculators’ net-long position is now the highest it has been since mid-May.
In addition, third-quarter demand for Gold American Eagles at the U.S. Mint rose 181% over the second quarter. According to the Mint’s official Website statistics, the U.S. Mint sold 397,000 ounces, or 45% more than the 273,000 ounces they sold in the first half.
None of this means gold will soar anytime soon, but the stars may be lining up for a positive finish to the year in both stocks and gold. Why not be the first investor on your block to own BOTH stocks and gold?
This Week in Market History
All content in “Market History” represents the opinion of Gary Alexander.

The Bright Side of Late October

By Gary Alexander
October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August & February.”
— from “The Tragedy of Pudd’n’head Wilson” (1984) by Mark Twain
You hear a lot about “Black” days this time of year – such as “Black Thursday” (October 24, 1929) and the “Black Tuesday” that followed (October 29) – but if you put 1929 aside, late October has often been a great time to invest. Several major bull markets have begun in October. Here are a few examples:
Deeper into history, J.P. Morgan bailed out Wall Street on October 25, 1907, ending the Panic of 1907. The previous evening, he called all the major bankers to his office. Within five minutes, he raised $27 million. Then, he said that any bears would be “dealt with.” Overnight, he called every important banker in the city to his private library on East 36th Street. After hours of indecision, the bankers raised $84 million. It was Morgan’s shining and defining moment. His partners compared it to great generalship in a war. President Theodore Roosevelt, who railed against “malefactors of great wealth,” said that these “substantial businessmen acted with wisdom and public spirit.” But Morgan was 70. He didn’t want to go through a night like that ever again, so he and others urged Congress to establish a “Federal Reserve.”
On October 27, 1492, Christopher Columbus first sighted Cuba. Eventually, gold from the New World transformed the Spanish economy and the balance of power in Europe. But 470 years later, to the day, on Saturday, October 27, 1962, Soviet premier Nikita Khrushchev reneged on his promise to remove Soviet missile bases from Cuba. Under pressure by Soviet hard-liners, he publicly called for the dismantling of U.S. missile bases in Turkey in return for the removal of Soviet missiles in Cuba. While Kennedy and his advisors debated this dangerous U-turn in negotiations, a U.S. U-2 spy plane strayed into Soviet airspace, and narrowly escaped Soviet MiG fighters. Hours later, a U-2 reconnaissance plane was shot down over Cuba and its pilot, Rudolf Anderson, was killed. At the brink of disaster, and to the dismay of the hard-liners, Kennedy vetoed a military retaliation against Cuba. Instead, he agreed to dismantle Jupiter missile sites in Turkey in exchange for removal of Soviet missiles in Cuba. We narrowly avoided Armageddon. (P.S. Ironically, the U.S. stock market was fairly flat during the entirety of the Cuban Missile Crisis.)
Other Major Market Moves in Late October
On Friday, October 27, 1978: President Carter signed the Humphrey-Hawkins full employment bill, which mandated reducing unemployment to 4% and inflation to 3%, giving the Federal Reserve its “dual mandate.” Alas, both rates were to reach double digits within the next three years.   Meanwhile, 1978 was another one of those nasty Octobers, with the Dow falling 12% in 20 days (from 901 to 792, October 11 to 31). On Halloween day, the dollar set a new record low. The dollar fell by 34% in the 1970s.
On Thursday, October 28, 1982, the DJIA closed at 991, down from 1,006 the previous two days.   The DJIA closed over 1,000 10 times in October, but couldn’t break permanently above 1,000. This four-digit phobia began in 1966, when the DJIA first hit 995 and then crashed. Again in 1968, the DJIA hit 985 and crashed. The 1000 barrier was pierced in 1972, but then crashed to 577 by late 1974. The four-digit Dow barrier was pierced again in 1976, and in 1981, only to crash into the 700’s both times. Would history repeat itself in 1982? It seemed so, but the DJIA closed below 1000 for the last time December 16, 1982.
On Monday, October 26, 1987, a week after Black Monday, the DJIA fell 156.83 points (-8%), closing at 1793.93 in the second greatest daily percentage drop since 1932 – second only to the previous Monday’s 22.6% loss. The Hong Kong market, after being closed all the previous week, fell over 25% this day. The NASDAQ was down 9% on this day, and 7% the next, the #3 and #5 worst daily losses to that date. But on Thursday, October 29, 1987, the DJIA gained 91.51 points (+5%), the fourth largest point gain to date.
Monday, October 27, 1997 was the worst one-day point drop in market history, to that date, down 554 points (-7.2%), from 7715 to 7161, spurred by the Asian currency crisis. On a percentage basis, it was the third worst daily decline since the 1930s, trailing only two Mondays in late October, 1987. But the next day, the Dow rose 337 points, the biggest one-day point rise, to that date, coming a day after the worst point loss to date. For the haunted week of October 27-31, 1997, the Dow fell 272.61 points (-3.5%).
Tuesday, October 28, 2008 was the second-best DJIA point gain in history, up 889.35 points (+10.9%). The DJIA gained 14% that week, but the worst was not over for the stock market until March of 2009.
Cheer up! October is nearly over. Next week (November) begins the market’s best historical season.
Sector Spotlight
All content of “Sector Spotlight” represents the opinion of Jason Bodner.

Bipolar Disorders in the S&P Sectors

By Jason Bodner
The sun has magnetic poles just like earth. In 2024, over the period of a few months, the poles of the sun will flip with the north becoming south and the south becoming north. Given the sun’s power and size, it sounds as if this event could be cataclysmic, wreaking havoc here on earth and in the rest of the solar system. The thought of such seismic change conjures up images of unusual occurrences in our atmosphere causing our communications systems to fail and leading to panic and disorder.

But before you begin making survival plans for Armageddon, you’ll want to know that solar pole flipping is quite a regular affair. In fact, the last time this happened was 2013, and we felt little if any effect on earth. This is a very normal process, as part of its 11-year solar cycle, which coincides with the sunspot activity which runs on an 11-year cycle as well. The possible consequences to earth are some weather and communications disruption, but the overall effect tends to be pretty benign and potentially constructive. As the magnetic fields of the sun change, they undulate an invisible magnetic surface reaching out to the edge of our solar system. This undulation can help increase earth’s protection from radiation from the sun.
The equity markets seemingly flip poles a lot more often than the sun does. This market volatility rattles nerves, causing motion sickness. It’s been a tumultuous few months with wicked gyrations in the broad-based index averages, and wild undulations within the 10 S&P sector groups. It’s almost spooky to watch, like Halloween every day. Just this past week witnessed mammoth moves in some stocks, largely due to news events. On the negative side, scathing reports, missed earnings, and regular news events have been causing outsized moves on individual stocks. These moves can begin a ripple effect which spills over into related areas. ETFs holding the stocks are sold, causing downward pressure on stocks that are held alongside the offender within the ETF. This propagates more selling by short sellers and eventually leads to retail selling. The witching we are seeing in stocks is wild to watch. Then, all of a sudden, positive catalysts come along and vault the market higher. If I had told you in late August that the NASDAQ composite would be less than 1.5% away from its all-time high in 7 weeks, would you have believed me?
What we witnessed this past week in sector rotations has been more of the same story. When looking at an index, what seems like an orderly recovery grinding higher belies what is really going on under the hood. Healthcare continues to see a major exodus of money. Retail stocks have also been getting sold with abandon. The rotation has been into Financials and this week notably into large-cap tech stocks. As bellwethers and lesser-known players have come out with solid earnings “beats” in these sectors, it seems as though there may be the potential for a new uptrend to form in these groups.
The Last Shall be First
Last week, I talked about how the rally that has led us out of the depths of August’s discontent has been largely led by the losers of last year, namely energy and industrials. It is interesting to see some glimmers of hope as new leadership wants to emerge out of this past week’s earnings reports.
Let’s look at how the sectors performed this past week…
Big earnings beats attracted lots of capital as the NASDAQ approached new highs. The clear winner of this week’s sector showdown was undoubtedly Information Technology, which notched a sizeable 4.61% gain. Looking at the 1-year chart of the sector index, we can see a clear breakout to 1-year highs. The space saw a lot of accumulation in the semiconductor group, helped by M&A activity. The fact that we saw significant inflows into the info-tech space this week is encouraging as this would mark acquisition of strong stocks with notable earnings and revenue growth, bucking the recent trend of lower quality stocks leading the market higher.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Financials saw some significant life this week as well. In the past couple of weeks, we have seen accumulation of stocks in both REITs and regional banks. Last week strengthened this trend. REITs are again attracting capital as they offer attractive yields in the face of what now seems like a more uncertain environment in regards to the Fed’s view towards rates. Utilities have also staged an impressive rally since August for similar reasons as investors seek yield.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Despite the recent increase in energy as a sector, it remains by far the weakest sector index out of the 10 majors. For 12 months, the S&P 500 Energy sector index has a return of around -25%. Looking at the 6-month chart, even with the past few weeks of relief rally, we see the index trying to stabilize near lows:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
When the sun flips its magnetic poles, it carries out this volatile process for a few months, and then sets about a new cycle for the next 11 years. When markets correct and shift, oftentimes old leaders will not provide the new leadership out of a correction period. Healthcare has shined for years, and is now facing serious pressure. Is this the beginning of a new bullish cycle for U.S. stocks? Will financials and tech lead the way for the foreseeable future? It may be too soon to say, but with the market showing new 52-week highs outstripping new 52-week lows for a few weeks, this very well could be the start of a bull run.
We will keep an eye on regional banks, REITs, and large cap tech to see if their leadership continues. The U.S. is still “best in class” and the equity markets still look to be the place for strong potential returns. If the past few months seem like the sun reversing its poles, this could be an interesting pivot point for the market. Once the volatility and dust settle, what will lead us higher? Time will tell, but this week’s wild action could be an early signal that the poles of the equity market are close to concluding their shift.
Stat of the Week
All content in this “Stat of the Week” section of Market Mail represents the opinion of Louis Navellier of Navellier & Associates, Inc.

China Cuts Rates to Revive Economy

By Louis Navellier
The big news on Friday was that the People’s Bank of China cut its one-year deposit rate 0.25% to 1.5%. This is the sixth rate cut this year and China is now approaching the ultralow interest rates that have come to characterize the West. The Chinese central bank also cut bank’s reserve requirement by 0.5%.
There was a sigh of relief that China did not devalue the yuan, like it did recently. Overall, this latest rate cut was well received by financial markets, since it could help China’s economic growth firm up.
China announced that its official GDP “slowed” to a 6.9% annual pace in the third quarter, slightly below Beijing’s official 7% target, but above private economists’ consensus estimate of a 6.8% annual pace. However, since (1) China’s exports and imports declined in the third quarter, (2) industrial production was weaker than expected, and (3) factories have faced 43 months of falling prices due to widespread deflation, some economists were skeptical about China’s GDP report. (On October 19, the Wall Street Journal reported that economists “believe actual growth is one or two percentage points below the official figure.”) The bright spots in China were growing retail sales, an improving service sector, and improving lending data.
Deflation is now clearly a worldwide problem, complicated by (1) a strong U.S. dollar pushing down commodity prices, (2) concerns over China’s slumping demand, and (3) seasonal weakness in crude oil.
Speaking of energy prices, crude oil prices fell nearly 6% last week after the U.S. Energy Information Administration announced on Wednesday that crude oil inventories rose by 8 million barrels in the latest week, which was substantially higher than analyst consensus estimate of a 2.7 million barrel increase.
OPEC met in Vienna with non-OPEC members Mexico and Russia last week to discuss ways to shore up falling crude oil prices, but since many OPEC members do not like each other and are bitter rivals (e.g., Iran and Saudi Arabia), no significant solution was accomplished. However, another special meeting was proposed in November before OPEC is officially scheduled to meet again on December 4th.
The truth of the matter is that as more countries slip into recession and crude oil demand falls further, exasperating the current supply glut, crude oil prices are expected to remain low until overall economic growth perks up and demand rises in the spring – partly due to normal seasonal demand.
European Deflation Deepens
On Tuesday, Germany announced that its producer prices declined by 0.4% in September, the biggest monthly drop since February. Prices are now down 2.1% in the past 12 months. Germany’s energy prices declined 1.1% in September and fell 6.1% in the past 12 months. Excluding energy prices, producer prices fell 0.1% in September and 0.6% in the past 12 months, so deflationary forces dominate Germany.
On Thursday, European Central Bank (ECB) President Mario Draghi signaled that the ECB is prepared to expand its quantitative easing. Specifically, Draghi talked about “downside risks” related to the slowing growth in China. Translated from central banker language, the ECB may be gearing up to boost its bond buying and quantitative easing to combat deflation by pumping more money into its banking system. (The anticipation of seeing more money in the banking system sparked a big rally in European stocks.)
Due to the anticipation of more quantitative easing from the ECB, interest rates are now plummeting in the euro-zone. In most euro-zone countries, government bond yields are now back to where they were in April. In mighty Germany, two-year government notes now yield -0.32%, which is truly shocking.
On Friday, October 23, Markit reported that the euro-zone composite Purchasing Managers Index (PMI), which measures both the manufacturing and services sectors, rose to 54 in October, up from 53.6 in September. This was a big surprise, since economists were estimating that the composite PMI would decline to 53.3. According to Markit, new orders are now at a six-month high and businesses are lowering their prices due to lower commodity prices. Since any reading over 50 signals expansion, business is booming in the euro-zone.

Websim Focus sui Mercati finanziari 26/10/2015 – WS

Il taglio dei tassi in Cina e l’accelerazione sul QE hanno impresso una svolta ai mercati finanziari.

Yuan (invariato a 6,39 su dollaro). Secondo indiscrezioni riportate venerdì da Bloomberg, la valuta della Cina sarà prestissimo ammessa nel paniere del Fondo Monetario Internazionale, in questo modo dovrebbe assumere lo status di valuta di riferimento internazionale, un obiettivo sul quale lavora da anni Pechino. Il valore dello yuan dovrebbe quindi essere fissato, più di quanto avviene ora, dalle forze del mercato dei capitali.

Asia. Stamattina prevale ancora il segno positivo. Tokyo +0,65%, Shanghai +0,4%, Hong Kong +0,1% e Taiwan +0,5%. Mumbai oscilla sulla parità

I future sulle borse europee anticipano un avvio piatto, dopo il poderoso rally della scorsa settimana.

Analisi tecnica borse. Settimana eccellente per tutti i listini principali. Ha stupito il +6,8% del Dax (10.794) che ha segnato nuovi massimi da agosto e riportato a +10% la performance da inizio 2015. La locomotiva d’Europa è ripartita. L’S&P (2.075) ha chiuso l’ottava con un guadagno del 2% riportandosi in vista dei massimi storici. Meglio ancora il Nasdaq (+3%) grazie ad alcune trimestrali “strabilianti”. Tokio +2,9% complessivo.

FtseMib (22.736). Ha chiuso l’ottava in guadagno dell’1,8%. Dopo qualche seduta di assestamento, è finalmente riuscito a sfondare con un movimento convincente il primo ostacolo a 22.550 punti. Aumenta la probabilità di approdare in tempi brevi sul successivo ostacolo verso 23.500 punti. Continuiamo a preferire i titoli “Italy sensitive” e con elevati dividendi. I provvedimenti in Cina e il rimbalzo del dollaro hanno ridato lustro al Lusso. Restiamo prudenti sui Petroliferi.

Variabili macro

Petrolio. La settimana si è chiusa con un calo del 5% che segue il -4% di quella precedente. Stamattina prezzi piatti: Brent 48 usd, Wti 44,7 usd. Lo scenario rimane fragile e non escludiamo un approdo verso l’area dei minimi estivi a 45/40 usd dove ci posizioneremo per gli acquisti.

Oro (1.165 usd). Settimana chiusa con un -1% dovuto al rimbalzo del dollaro che attira tutto l’interesse degli investitori. Solo sopra area 1.200/1.220 usd saremo disposti a rivedere in meglio la visione. Sostegni importanti verso 1.150/1.130 usd.

Forex

Valute emergenti. Avvio di settimana in leggero progresso per Rupia indonesiana, Ringgit malese e Real: da +0,5% a +1%. Nessuna novità grafica. Il quadro resta piuttosto contrastato, anche se l’emergenza estiva è alle spalle, e non c’è fretta di tornare a investire in queste aree.

Euro/Dollaro (1,104). Il dollaro ha guadagnato il 2,7% nell’arco dell’ottava, la migliore da luglio, portandosi sui livelli di metà agosto. Raggiunto il target di breve in area 1,11: per trading si consiglia di prendere profitto per i recenti acquisti di dollari suggeriti a 1,15. Ciò non toglie che la nostra visione di fondo resti favorevole al dollaro, che consigliamo di mantenere stabilmente in portafoglio. Target finale 1,05.

Bond.

Bund tedesco. Sulla scia di Draghi il rendimento è sceso venerdì sotto 0,5%, stamattina si risale a 0,515%. Ricordiamo che per noi, gli spunti sotto lo 0,5% sono occasioni per vendere/prendere profitto.

Grecia. Da segnalare che il rendimento a 2 anni è sceso a 6,65% da 7,25% di venerdì mattina, nuovo minimo da ottobre 2010. Rendimento del decennale al 7,25% da 7,40% con lo spread a 675 da 682, siamo sui minimi da dicembre 2014. I bond ellenici non rientrano nel QE, ma proviamo a immaginare cosa potrebbe accadere se …

Italia. Il nostro ostinato ottimismo sta producendo i suoi frutti. Il rendimento a 2 anni del nostro BTP è ormai a “zero”. Lo spread decennale riparte da quota 98, è sceso anche a 94 sul livello più basso da marzo. Il rendimento è sceso a 1,49% da 1,66% di venerdì mattina. Continuiamo a ritenere credibile un approdo dello spread tra 50/80 punti base per fine anno. Diciamo, con un pizzico di orgoglio, che oggi è piuttosto facile prevederlo, lo era un po’ meno già ad agosto con lo spread a 165 e meno ancora un paio di anni fa con lo spread a 250, ma non ci siamo mai persi d’animo.

http://www.websim.it

MONETARIO – Cosa succede oggi lunedì 26 ottobre 26/10/2015 – RSF

LEGGE STABILITA’ – Si apre oggi in Senato il confronto sulla manovra, il cui testo licenziato dal consiglio dei ministri del 15 ottobre è stato firmato ieri da Sergio Mattarella. Opposizione e minoranza del Pd si preparano intanto a muovere obiezioni principlamente sulla tassazione degli immobili e sul tetto del contante. L’onda delle polemiche, non soltanto sulla legge di Stabilità con le Regioni in rivolta per i tagli alla spesa sanitaria, raggiunge Matteo Renzi. Da Lima, il presidente del consiglio torna a far riferimento ai successi economici delle riforme, esortando a smetterla di “piangersi addosso”.

IFO – L’indice di fiducia delle imprese tedesche a ottobre sarà il piatto forte della seduta dal lato macro. Lamediana delle attese degli economisti raccolte da Reuters in un sondaggio prospetta una lieve flessione a 108 da 108,5 della precedente rilevazione. Ma potrebbe esserci qualche rischio verso l’alto, considerata la progressione della fase espansiva registrata nel settore privato dall’indagine Pmi relativa allo stesso mese(news).

BCE – Sotto i riflettori l’intervento di Mersch, membro del comitato esecutivo dell’istituto centrale di Francoforte, primo esponente di punta adintervenire dopo la conferenza stampa di Draghi, che giovedì ha messo in chiaro che la Bce adotterà nuove misure espansive già a dicembre se necessario. Il discorso del banchiere centrale è previsto alle 11,45 e sarà il primo di una serie diinterventi di esponenti di punta della Bce che scandiranno questa settimana.

RATING – Venerdì in serata Fitch Rating ha confermato la propria valutazione di ‘BBB+’ per il merito di credito della Repubblica italiana, il cui outlook resta’stabile’. L’agenzia ha fatto riferimento a un’economia diversificata e ad alto valore aggiunto, con un modesto livello di indebitamento del settore privato cui fa però da contraltare un rapporto debito/Pil che dovrebbe rimanere oltre 120% fino al2020 fine decennio. Parimenti confermati – su livelli identici all’Italia – sempre da Fitch rating e outlook sulla Spagna.

BTP – I dettagli dei titoli a medio-lungo termine in asta giovedì completeranno il quadro dei collocamenti di finemese, che prevedono domani l’offerta fino a 1,75 miliardi di Ctz agosto 2018 e mercoledì Bot semestrali per 6 miliardi, su 6,5 miliardi in scadenza. Secodo Intesa Sanpaolo, il ministero dell’Economia metterà a disposizione fino a 4 miliardi del nuovo Btp 5 anni, 2,5 miliardi in titoli a 10 anni e 2 miliardi in Ccteu. Lo spread di rendimento tra Btp e Bund decennali, strettosi venerdì fino a 94 punti base, minimo da metà marzo, per effetto delle dichiarazioni accomodanti di Draghi, ripartirà da100 punti base.

FOREX – Tira il fiato il dollaro sul finale della seduta asiatica, dopo la corsa che ha portato l’indice sulle principali controparti al massimo da due mesi e mezzo. La correzione del biglietto verde ha tuttaviaspazi contenuti se si considera il clima di maggior propensione al rischio, incoraggiato anche dalla mossa espansiva varata venerdì dalla banca centrale cinese. Intorno alle 7,40 euro/dollaro <EUR=> 1,1031/35 da 1,1014 venerdì in chiusura a New York, dollaro/yen <JPY=> 121,14/17 da 121,45 ed euro/yen <EURJPY=> 133,63/66 a 133,79.

GREGGIO – Derivati sul greggio poco variati, con gli investitori che soppesano le prospettive per il mercato su cui l’offerta dovrebbe superare la domanda ancoraper mesi. Alle 7,40 il futures Brent <LCOc1> recupera 8 centesimi a 44,67 dollari il barile, mentre il Nymex <CLc1> risale di 9 cent a 44,69 dollari.

TREASURIES – Governativi Usa sulle posizioni, con il benchmark decennale <US10YT=RR>in rialzo di 1/32 per un tasso di 2,076%.

DATI MACROECONOMICI
GERMANIA
Indice Ifo ottobre (10,00) – attesa 108,0.

USA
Vendita case unifamigliari settembre (15,00) – attesa 0,550 milioni m/m.

ASTE DI TITOLI DI STATO
ITALIA
Tesoro, annuncio tipologia e quantitativi Btp e Ccteu in asta il 29 ottobre.

EUROPA
Francia, Tesoro offre titoli di Stato a breve termine.

USA
Tesoro offre 13 miliardi dollari titoli diStato a 13 settimane, scadenza 28/1/2016 e 26 miliardi di dollari titoli di Stato a 26 settimane, scadenza 28/4/2016.

BANCHE CENTRALI
EUROPA
Zona euro, intervento membro board Bce Mersch a convegno banca centrale del Belgio aBruxelles (11,45).

APPUNTAMENTI
ITALIA
Milano, assemblea generale Assolombarda: conferenza stampa con Gianfelice Rocca (13,30); inizio assemblea alla presenza di ergio Mattarella; partecipano Pisapia, Maroni, E. Marcegaglia; relazione di Squinzi; intervento Padoan.

Milano, incontro organizzato da Bocconi-Fondazione Giacomo Feltrinelli “Nuovi lavoratori, nuovo welfare?” con Boeri (10,00).

EUROPA
Atene, Dombrovskis incontra Tsipras, vari ministri e governatore banca centrale.

Bruxelles, consiglio Affari Esteri.

AMERICA LATINA
Lima, Renzi a ‘Business Forum’ con Premier peruviano Pedro Cateriano, Calenda (9,30); incontro con presidente Repubblica del Perù Ollanta Humala (11,00); dichiarazione congiunta e firma accordi (12,30).