Markets

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Wall Street worries about European anti-austerity votes

NEW YORK | Restless and suspicious. That is how Wall Street seems to be feeling after France and Greece’s pushback against austerity measures. U.S. stock futures fell on Monday, while Treasuries gained. Investors wonder whether the stimulus advocated will derail bailout deals. And what will happen now that the Sarkozy-Merkel tandem is broken and the Greek parliament will have three new anti-bailout parties represented. This added to the uncertainty created by…


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Barclays Capital: Spain’s debt dynamics sustainable

MADRID | Barclays Capital made a realistic yet not Armageddon-like exercise in which the Spanish banking sector would need a recapitalisation equivalent to 6 percent of the country’s GDP, plus an additional 5.4 percent of GDP as an extra-safety calculation. Its analysts threw in 0.9 percent of GDP in Greek liabilities, and 3.5 percent of GDP in administrations’ accumulated debt payments. The scenario considered included yields on 10-year bonds of…


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Euro zone PMI in April at mid-2009 levels

The Purchasing Managers Index provides one of the most reliable hints about a country’s GDP behaviour, so isn’t difficult to agree with all observers that April’s relapse in PMI figures in the euro zone spell loss of momentum in industrial activity. The data are at the lowest level since mid-2009. With no signs of acceleration of the indicators of activity and with early sentiment indexes’ falling in the second quarter of 2012, the risk of the…


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Bolsas y Mercados’ equity trading up in April, but drop in corporate debt volume

MADRID | Bolsas y Mercados Españoles BME, the operator of all stock markets and financial systems in Spain, said Thursday that equity trading volume on the Spanish stock exchange in April had reached €65.75 billion. This is an increase of 7.25% from the previous month but 19% down on the same period in 2011. The trading volume for the first four months totaled €242.70 billion, down 26% from the same period…


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The Ibex’s diem horribilis

The major European markets closed Wednesday in the negative, with losses of -0.93% for London and -0.78% for Frankfurt, while Paris scored +0.42%. But Milan with -2.6% and Madrid suffered the biggest falls. The Spanish stock market dropped 2.55% today and recorded a new annual minimum (6831.9 points) hurt by the slowdown in industrial activity in Europe, weak job creation in the United States and the decline of the banking sector. The hit could have been worse as during the session the index came to be over -3%, that is approaching…


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European flows to bonds not a confidence vote in the euro, Morningstar warns

LONDON | Is that a global bond boom we have before our eyes? Morningstar research said the latest European asset flow data showed that long-term funds enjoyed a strong first quarter this year, receiving more than €50 billion of new investor assets. Of this, more than 70 per cent went to fixed-income funds, while equity funds, by contrast, had net redemptions for March and only slightly positive inflows between January and March….


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Most Europe investment managers optimistic on the long term

LONDON | The majority of asset managers working on the European markets agree that there are opportunities to invest despite fragility of the single currency. The UK’s Association of Investment Companies (AIC) published this week the results after having polled Europe managers to gauge opinion on what may be in store for the region. Whilst managers expect pain in the short-term, and do not see miracles happening overnight, over the longer-term they…


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Skandia’s Gillham: “Downgrading devil is in the Spanish bank funding detail”

LONDON | The worsening of Spain’s debt risk grades will have grave implications, whether market participants believe the situation in which the country’s public finances are is reversible or not. Portfolio manager at Skandia Investment Group’s fixed income funds and researcher, Anthony Gillham distrusts talk of priced-in negative events. Although last Friday’s announcement by Standard and Poors that Spain is to be downgraded by two notches from A to BBB+ was…


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Lack of appetite for risk

By Luis Arroyo, in Madrid | Please, bear with me. First, I took a graph from the Noah Smith’s blog, in which everyone can see that venture capital has almost passed away since the 2000 crisis. The chart shows the value of equity shares, and each line is a selection made under a different approach. The 1990’s were the golden age of risk, people loved risk and the VC funding…


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A euro devaluation against sterling is on the cards, HiFX reports

LONDON | As the markets are rocked by France’s presidential elections and attention continues to linger on Spain, where official figures announced that it is once again in recession, currency specialists HiFX reported on Monday a 175% increase in euro sales. The move could benefit euro country members’ exports to the United Kingdom but it would hurt the British economy, as 40% of foreign sales go to the European Monetary…