News Feeds
Friesen | Rebec & Associates NewsXML Feed | Subscribe | Display all
Publication NewsXML Feed | Subscribe | Display all
| Bullishness Creeps Back into the Picture |
|
The last week of July witnessed the results of the
long awaited stress tests for 91 European banks.
For the record, only 7 of those 91 banks failed the
test.
See the full PDF version of this month's commentary as well as the archive in our Market Info Section.
MARKET ACTION IN JUNE & OUR CURRENT OUTLOOK…The last week of July witnessed the results of the long awaited stress tests for 91 European banks. For the record, only 7 of those 91 banks failed the test. EU regulators carried out these stress tests in order to reassure investors about the banking industry’s ability to withstand a potential second recession and a sovereign debt default. The difficulty of these tests has been called into question but the success of the exercise will not be how many pass or fail, but rather how much transparency regulators provide on the criteria used in their evaluation. It really boils down to a confidence building exercise for investors. The tests were easy to begin with and now European policy makers can focus on the task of cutting deficits and getting their fiscal houses in order. In addition, earnings season has continued to largely impress investors. Bellwethers on both sides of the border have delivered better than expected second quarter results to date. 85% of the S&P500 have beaten consensus expectations for earnings. As always, this commentary is to apprise you of recent changes to our investment posture and resulting portfolio positions. Several months ago our risk management systems had us exit international investments. Last month, these same systems caused us to begin exiting domestic investments as our system signaled a complete exit from stocks at the end of June. The markets rebounded in July and put the markets back into an uptrend, flashing buy signals across the board – albeit just barely in some asset classes. With the market acting sloppy at times, the main approach here is to buy quality big stock leaders while seeking the lowest-risk entry points. Patience is key when re-entering the equity markets. Also, with so many conflicting signals, we are alert to a higher than normal likelihood of markets reversing through the month, which would cause us to move to the sidelines again in September. While this type of ‘whipsawing’ is frustrating, it is a normal function of our systems, and reflects the complex, adaptive nature of markets. See the full PDF version of this month's commentary as well as the archive in our Market Info Section Other topics:
|