Diary of a Financier

Top Newsstuffs (July 7-13)

In Bookshelf on Sun 13 Jul 2014 at 07:06

First Cape weekend of the summer…

Macro

Rail traffic weekly: Railroad volumes accelerate at high speed | Association of American Railroads (AAR)
Weekly traffic: +9.9% y/y
Growth ytd: +0.1pp @ +4.6%
Carload groups: 10 of 10 posted gains; motor vehicles/parts +53.7%, grain +21.7, metals +14.5, petroleum +14.3
[13th consecutive week prolongs an unheralded rally; autoparts surge is real, because 2013 comp was low only due to high 2012 base (thinking of $GM $VC $MGA).]
#Bullish! $XLE $USO $DBA $XME

PBOC’s monetary policy bordering on fiscal policy as China boosts stimulus | Bloomberg
In April, PBOC launched a CNY 100B ($16B) “relending program” for agriculture & small businesses, combine with another CNY 300B for low income housing.  “Relending” is essentially targeted lending, in which the PBOC gives state agencies capital to pass onto specific companies or industries.
PBOC is also preparing a revamped relending tool called “pledged supplementary lending” to control intermediate-term interest rates & provide liquidity without cutting banks’ reserve requirements (RRRs).
[Previously]
$FXI $GXC

Sentiment

US, Europe & UK short selling drops to lowest level since 2006 | The Financial Times (FT)
Short interest @ 2% in US & Europe, 1% in UK — all lowest since Markit data began in 2006 vs highs ~5.5% in 2007.
#Bearish $SPY $EWU $FEZ $EZU $HEDJ

Investor sentiment survey: Back down to norms (July 9, 2014) | American Association of Individual Investors (AAII)
Respondents’ expectation for equity performance over next 6 months (through 12/2014):
– Bullish: -0.9pp w/w @ 37.6% vs 39.0 historical avg & 45 extreme high
– Bearish: +6.3pp @ 28.7 vs 30.5 LT avg & 25 extreme low; 18.5 postcrisis low in January
Neutral: -5.4pp @ 33.7 vs 30.5 LT average; back within 1σ above mean
– Bull/Bear ratio: @ 1.31 vs 1.28 avg
[Amidst a renewal of Small Cap ($RUT $IWM) correction, an influx of Bears returns the ratio to normal levels, with the large Neutral cohort persisting.]
#Neutral

Interests

Drawing: “Nisan” | Alessandro Ditti
Anamorphic pencil drawing is a 2-dimensional illusion made to look as if it were 3D:

Drawing: "Nisan" | Alessandro Ditti Anamorphic pencil drawing is a 2-dimensional illusion made to look as if it were 3D.

–Romeo

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  1. […] Both asset allocations and sentiment are still around historical […]

  2. […] add to #Automotive basket ($VLKAY): $GM @ $37.8 $MGA @ $110.8 $VC @ 98.15 #Trades #QuantScreen thebuttonwoodtree.wordpress.com/2014/07/13/top… 2014.07.14 @ […]

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