News of banking woes amongst the PIGS (Portugal, Italy, Greece and Spain) has sent stock markets tumbling, or so we are told. Reuters
reports that the
latest flow figures from fund tracker EPFR Global actually show a small net inflow of $861 million into European equity funds, including Britain, in the week to February 3, with flows to Germany and France prompted by more attractive valuations created by a lower euro.
which prompted the observation that
sharp market movements in the past week -- including the euro falling to an eight-month low of $1.3646 on Friday -- are more the result of short-term trading than larger, long-term investment decisions.
Says Santander Asset Management
"We don't see any fundamental moves at all. It's purely speculative, it's the question of unknowns. This is a short-term evolution rather than long-term."
This would tally with
BCA who say that shares are fully priced leaving them vulnerable to "minor disappointments"
Indeed, there are two potential scenarios for emerging market stock prices: either a full-fledged mania will develop with multiples continuing to expand, or, a setback/period of indigestion will occur before a new upleg develops. Currently, the odds of a mania-type pattern developing in emerging markets are not significant.
Full time
traders are getting rolled
Oil is down 3 bucks and the Dow is getting steam rolled to the tune of 100+ points. Some people think this is all dollar related. However, I happen to think it is panic related. The market is taking the path of least resistance and I am simply watching my gains wilt away into losses, almost in a catatonic “deer in headlights” demeanor. Naturally, the correct trade was to jump into the FAZmobile or get short. Oh, but that shit was not for me and I’ll tell you why..
whilst for
shorters it's business as usual
But I don’t think this is the beginning of a new bear market. Frankly, the earnings news has been too good and is suggestive of a short/intermediate term bottom in the economy..
..I think we enter a more rational, stagnant, range bound, bloated market environment..
..Now we can just work through all the stimulus and bailouts that are jacking up the economy and stock market and try to let markets and the economy to sort it all out and reach some kind of equilibrium.
