Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director’s Cut
Beyond VIX to rays of light in Europe
Forget the VIX. James Murray and the European quant team have created a
new index to measure risk in major asset classes, not just equities. Importantly,
they found their index is a better predictor of future equity returns when risk falls,
which suggests it will soon provide a better buy signal than watching the VIX.
Based on the results from September 21, the Macquarie Risk Index sees
equities and sovereign bonds as high risk, but within these Japan is seen as
lower risk. Risk in FX is seen as normal, and in that space the index prefers US
dollars and Asia ex-Japan currencies over the Euro.
On the subject of Europe, Dan McCormack sees a 50% chance of at least a
quarter or two of negative growth. With downward revisions accelerating, he
therefore believes the balance of risks for European equities are to the
downside. That said, he believes there is plenty of upside on a 12 month view
due to global Central Bank actions to stimulate growth, particularly in China.
In terms of his strategy, Dan favours commodity stocks, particularly the bulks
such as Rio Tinto (RIO LN) and BHP Billiton (BHP LN), as well as BP (BP
LN). He also recommends being underweight financials, and would focus on
those with stronger balance sheets and funding like HSBC (HSBA LN).
Dan also has a small overweight in defensives for now, which he is playing
through telecoms and consumer staples. The two stocks he likes most in these
sectors are Tesco (TSCO LN) and Vodafone (VOD LN), which both have
reliable earnings and sector leading dividend yields.
New Macquarie Risk index is superior to the VIX as it highlights areas of
high and low risk across key asset classes globally, not just US equities
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director’s Cut
Beyond VIX to rays of light in Europe
Forget the VIX. James Murray and the European quant team have created a
new index to measure risk in major asset classes, not just equities. Importantly,
they found their index is a better predictor of future equity returns when risk falls,
which suggests it will soon provide a better buy signal than watching the VIX.
Based on the results from September 21, the Macquarie Risk Index sees
equities and sovereign bonds as high risk, but within these Japan is seen as
lower risk. Risk in FX is seen as normal, and in that space the index prefers US
dollars and Asia ex-Japan currencies over the Euro.
On the subject of Europe, Dan McCormack sees a 50% chance of at least a
quarter or two of negative growth. With downward revisions accelerating, he
therefore believes the balance of risks for European equities are to the
downside. That said, he believes there is plenty of upside on a 12 month view
due to global Central Bank actions to stimulate growth, particularly in China.
In terms of his strategy, Dan favours commodity stocks, particularly the bulks
such as Rio Tinto (RIO LN) and BHP Billiton (BHP LN), as well as BP (BP
LN). He also recommends being underweight financials, and would focus on
those with stronger balance sheets and funding like HSBC (HSBA LN).
Dan also has a small overweight in defensives for now, which he is playing
through telecoms and consumer staples. The two stocks he likes most in these
sectors are Tesco (TSCO LN) and Vodafone (VOD LN), which both have
reliable earnings and sector leading dividend yields.
New Macquarie Risk index is superior to the VIX as it highlights areas of
high and low risk across key asset classes globally, not just US equities
No comments:
Post a Comment