Posts Tagged Dubai
Abu Dhabi Rushes To The Rescue
Posted by Belisarius in Markets on December 14, 2009
Looks like Nakheel PJSC bonds will be paid off in full. Bloomberg link: Abu Dhabi Bails Out Dubai World With $10 Billion.The move has prevented Asian stock exchanges from going into negative territory; Europe is trading up around 1% in average.
Short follow up on last weeks U.S. economic data: Jobless claims ticked up reaching 474.000 vs. 460.000 consensus and 457.000 the week before; Trade deficit was lower at $-32.9bn than expected ($-36.4bn) and last reported ($-36.5bn); Consumer sentiment for December surprised to the upside coming out at 73.4 vs. 68.2 consensus and 67.4 in October; Business inventories in October rose 0.2% vs. consensus of -0.2%, and -0.4% in December; Retail sales rose 1.3% in November, the consensus was at 0.9%, prior reading for October at 1.4%; Retail sales ex-autos rose 1.2% vs. the consensus of 0.5% and a prior reading of 0.2%.
Searching For A New Theme
Posted by Belisarius in Markets on December 9, 2009
I feels like the markets are searching for a new theme. The signs of a U.S. dollar strength have scared off recent themes (falling dollar = rising risk assets). Combined with a Bank of America capital issuance and a desperate attempts of Citigroup and Wells Fargo to do the same have completely altered the investing landscape.
International headwinds (Dubai, Greece, Spain) brought the additional suspense.
U.K. imposed a new tax levy on banker bonuses and it is planing to raise income tax. Sometimes this kind of, on first sight, unimportant changes cause large sentiment swings. Bloomberg story: Darling Raises Taxes on Income to Curb Deficit.
New Stimulus
Posted by Belisarius in Markets on December 8, 2009
After Germany (the U.S. is stimulating all the time), Japan announced some sort of stimulus. Telegraph story: Japan unveils $80bn of direct spending in $274bn stimulus package. $80 is peanuts for a Japan size of economy. The monetary stimulus was also small. Looks like politicians are trying to convince people they are doing something.
Yesterday’s Mr. Bernanke speech brought some relief to gold as he repeated “extended period” term when talking about interest rates.
Correlation Divergence
Posted by Belisarius in Markets on December 4, 2009
Well I must admit that I don’t have a clue what’s happening in the markets now. The markets opened positive on large positive surprise in non-farm payrolls and in mid of trading everything reversed. Three reasons come to my mind: first is a deeper look in unemployment numbers; the second one would be the new low in Nakheel bond indicating a stall/collapse in Dubai World debt restructuring efforts and the third would be distorted correlations at opening today that disoriented algorithm driven trading.
Return To The Carry Trade
Posted by Belisarius in Markets on December 1, 2009
Back to norm. Dubai World announced debt restructuring talks on (only) $26 billion debt, and the crowd has gone wild. WSJ story (with nice interactive extras): Dubai World in Talks on Debt Restructuring. The dollar is falling again, risky assets are rising and the saga continues.
New addition to the situation is The Bank of Japan surprise meeting last night and a announcement of new 10 trillion yen ($115 billion) lending program to commercial banks. Bloomberg story: BOJ to Provide 10 Trillion Yen in Emergency Credit. The market has viewed the move as a prelude to moving to real quantitative easing. As Jen is a second carry trade currency of choice this send the currency down, and all risky assets up.
U.S. Shopping Season
Posted by Belisarius in Markets on November 30, 2009
We have first numbers for the Black Friday shopping season start. The number of people shopping increased to 195 million from last’s year 172 million; they have spent $42. 2 billion vs. $42 billion last year which translates into $343 per shopper vs. $372 last year. Nothing new here, the shift to buy discounted merchandise continues. Bad for the retailer margins overall, good for the discounters. Bloomberg story: Holiday Sales to Drop 1% in U.S. as Forecasters See `Discipline.
Chart 1. Black Friday Weekend Shopping Patterns
Source: Conducted for NRF by BIGresearch, November 26-28, 2009. 4985 respondents.
One Day Scare
Posted by Belisarius in Markets on November 27, 2009
Looks like markets are dismissing the potential Dubai World default as a catalyst for a meaningful correction. Nice outline of the situation by Telegraph: Dubai’s financial crisis: a Q&A.
If the markets dismiss this as a not strong enough catalyst it will show the strength of the belief of the global economy is recovering. I think it all comes to the U.S. dollar now. If we have flight to safety and dollar moving sharply we would have a carry trade unwind and all risky assets moving sharply down – I don’t see this coming for the time being.
LSE Off-Line
Posted by Belisarius in Markets on November 26, 2009
First of all, happy Thanksgiving Day to my U.S. readers!
Market moving news of the day is definitely Dubai World asking its creditors a “standstill” as it tries to negotiate a extension of maturities for its debt. Bloomberg story: Dubai Debt Delay Rattles Confidence in Gulf Borrowers. Oh, what a surprise, they invested billions in projects of questionable fundamentals at market zenith and now they default. The surprise amuses me.
This sparked a lot of rather bullish mood sending all equity indexes down. The trading at LSE got halted because off large order inflow. Guardian story: London Stock Exchange crash halts trading. The trading was resumed, but the coincidences mentioned in the article are interesting. Maybe the markets are at similar tip point.