Global Macro Perspectives
Well, with Wells Fargo moving to repay TARP funds that chapter in the economic history will be closed. Citigroup succeeded in repaying yesterday. I expected that move to repay TARP funds and serial stock offerings would bring some strain to the bank share prices (and even broad market), but nothing jet on that front. Yes, […]
Well, nothing particularity interesting in news today. I have place a new trade in the last minutes of Friday trading. I bought IYR ATM puts. IYR is iShares Dow Jones US Real Estate ETF. It’s a pure sector leaders/laggards play. We are experiencing selectivity in the stock performance as a consequence of flight to quality. […]
As expected equity markets got a nice push up from Alcoa earnings. Looks like the earnings season will probably have similar “better than expected” flavor like the one preceding.The market looks bound to new highs.
The news flow on consumer and credit card credit continues to throw shadows on this equity rally. Consumer credit shrank for the seventh month in a row, contracting 12 billion USD in August to 2.46 trillion USD implying -5.8% annual growth rate. Credit-card debt fell for a record 11th straight month, down 9.9 billion USD. Shrinking at annualized rate of 13.1%. The credit outstanding ended at 899.4 billion USD. This could pose important set back to the recovery of U.S. economy as it shows the lenders are reluctant to extend credit to the economy and consumers are keen to reduce its debt. Consumer credit press release. I will post again the Meredith Whitney article explaining the issue in detail. WSJ story: The Credit Crunch Continues
The market has come down slightly in last few days. Again, major theme was health of world banking sector.