Abu Dhabi Rushes To The Rescue
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%.
Overall modestly positive with only jobless claims surprising to the negative side. Business inventories at low levels if we expect revenue recovery.Looking at the business to inventory ration we can see it has come down to the almost normal levels. If sales pick up we could have 4% GDP growth rate in the U.S. next year just on inventory rebuilding.
Chart 1. U.S. Business Inventories to Sales Ratio
Source: Econoday
Portfolio update: Again entered short SPY and IYR positions via ATM puts. Not so happy with that today.
Abu Dhabi, Business Inventories, Consumer Confidence, Dubai, Initial Jobless Claims, Nakheel, Retail Sales