Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Given investor concerns about a double dip, we re-introduced our
Double Dip Watch two weeks ago. The seven indicators in our
Double Dip Watch are suggesting a soft landing.
● The seven indicators are Ted spreads (20 bp), German IFO
business expectations, European PMI (Purchasing Managers’
Index), US retail sales less automobiles (up 0.3% in May, 11th
consecutive monthly rise), US capex (up 11.1% in the March
quarter), US non-farm payrolls (up a disappointing 54,000 last
month, but three-month moving average is still 160,000) and the
OECD Leading Indicator (up 0.2% in the year to May 2011).
● Our Double Dip Watch analysis suggests buying Korea and
Russia. Both these markets tend to fall as the US ISM peaks. The
average fall in the KOSPI and RTSI$ from the high to the low is
11% and 22%, respectively.
● But the average gain after these falls in the 2004 and 2010 soft
landings was 30% 9 to 12 months after. We reiterate our
OVERWEIGHT calls on Korea and Russia.
Double Dip Watch
Ted spreads are a low 20 bp (see Figure 1). This is our proxy for
contagion from peripheral Europe to the financial system.
German IFO business expectations. This together with the
European PMI are our proxies for contagion from peripheral to core
Europe. While this fell in May to 107.4 from a high of 110.8 in
February, the level is very high.
European PMI (Purchasing Managers Index). While this fell to 54.8
in May, the level is comfortably above the 50 expansion threshold.
US retail sales less automobiles. Figure 2 highlights that this rose
0.3% in May (released yesterday) and April was revised up to a 0.7%
gain. This is the 11th consecutive monthly rise in retail sales less
automobiles.
US capex was up 11.1% in the March quarter.
US nonfarm payrolls were up a disappointing 54,000 last month, but
the three-month moving average is still 160,000 and the OECD
Leading Indicator was up 0.2% in the year-to-May 2011.
Our Double Dip Watch analysis suggests buying Korea and Russia.
Both these markets tend to fall as the US ISM peaks. The average
falls in the KOSPI and RTSI$ (from high to low) are 11% and 22%,
respectively.
But the average gain after these falls in the 2004 and 2010 soft
landings was 30% in the 9 to 12 months after. We reiterate our
OVERWEIGHT calls on Korea and Russia.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Given investor concerns about a double dip, we re-introduced our
Double Dip Watch two weeks ago. The seven indicators in our
Double Dip Watch are suggesting a soft landing.
● The seven indicators are Ted spreads (20 bp), German IFO
business expectations, European PMI (Purchasing Managers’
Index), US retail sales less automobiles (up 0.3% in May, 11th
consecutive monthly rise), US capex (up 11.1% in the March
quarter), US non-farm payrolls (up a disappointing 54,000 last
month, but three-month moving average is still 160,000) and the
OECD Leading Indicator (up 0.2% in the year to May 2011).
● Our Double Dip Watch analysis suggests buying Korea and
Russia. Both these markets tend to fall as the US ISM peaks. The
average fall in the KOSPI and RTSI$ from the high to the low is
11% and 22%, respectively.
● But the average gain after these falls in the 2004 and 2010 soft
landings was 30% 9 to 12 months after. We reiterate our
OVERWEIGHT calls on Korea and Russia.
Double Dip Watch
Ted spreads are a low 20 bp (see Figure 1). This is our proxy for
contagion from peripheral Europe to the financial system.
German IFO business expectations. This together with the
European PMI are our proxies for contagion from peripheral to core
Europe. While this fell in May to 107.4 from a high of 110.8 in
February, the level is very high.
European PMI (Purchasing Managers Index). While this fell to 54.8
in May, the level is comfortably above the 50 expansion threshold.
US retail sales less automobiles. Figure 2 highlights that this rose
0.3% in May (released yesterday) and April was revised up to a 0.7%
gain. This is the 11th consecutive monthly rise in retail sales less
automobiles.
US capex was up 11.1% in the March quarter.
US nonfarm payrolls were up a disappointing 54,000 last month, but
the three-month moving average is still 160,000 and the OECD
Leading Indicator was up 0.2% in the year-to-May 2011.
Our Double Dip Watch analysis suggests buying Korea and Russia.
Both these markets tend to fall as the US ISM peaks. The average
falls in the KOSPI and RTSI$ (from high to low) are 11% and 22%,
respectively.
But the average gain after these falls in the 2004 and 2010 soft
landings was 30% in the 9 to 12 months after. We reiterate our
OVERWEIGHT calls on Korea and Russia.
No comments:
Post a Comment