19 Mar 2012: My view on the markets + Apple announces plans

  • My view on the markets: Equities pull back from cyclical highs. Traders succumb to the multi-month highs, tempted to sell risk assets, which has seen a slight fall in global equities. FTSE All World has already gained 12% in 2012, while several other indices have seen cyclical highs in the last 1-2 months. Investors/Traders are beginning to see lesser and lesser value beyond these highs, and are ready to cash in on their gains prompting bearish trends. Gold having surpassed the $1800 mark recently now sits at a more reasonable $1650, while Brent Crude will remain unpredictable for now in the wake of sanctions on Iran. Fixed income is offering a haven for bargain nibblers, as stocks have already peaked and commodities seem mildly unpredictable. Yields on US treasuries are slightly down owing to higher demand. The yields for Italian bonds are at a nine-month low. The rise in oil prices has also been taken unkindly globally owing to fears of slowing the growth down in developing countries dependant on fossil fuels; $125 seems to be the resistance point for Brent Crude currently.
  • Stocks: FTSE All World is down 0.1%, FTSE Eurofirst is down 0.3%; S&P 500 looks set to lose 0.2% at opening bell; FTSE 100 loses 0.4% at open and is at 5940
  • Currencies: Euro is almost flat against dollar 0.3% and is at $1.3165; Yen touches a 4-month low against Euro, providing relief to Japanese exporters. Yen is 83.12 against the dollar.
  • Debt: US 10-years at 2.28%; Bunds at 2.02%; Italian bonds at 4.81%; Gilts are at 2.40%
  • Commodities: Brent Crude loses 73 cents and is sitting at $125.08/barrel; Copper loses 0.3% to sit at $3.86/pound; Gold is up 0.1% to $1654/ounce
  • Other news, briefly
  • Apple releases plans for $100bn cash surplus: Apple plans to buy back $10bn worth of its shares and incorporate $2.65/share quarterly dividend from its surplus cash holding.
  • Rusal’s profits hit by 92%: Rusal, worlds largest Aluminium producer has reported a 92% net profit reduction due to a writedown of its stake in Norilsk Nickel. Its 25% stake in Norilsk lost 52% of its value.
  • Greece creditors in line for a $2.5bn CDS payout: Creditors who purchased credit default swaps (insurance against Greek default) will be paid about $2.5bn by the market. The CDSs will have to pay 78.25 cents per Euro to settle the contracts triggered by the nations debt restructuring earlier this month. Sellers of the CDSs will  pay the buyers face value in exchange for the underlying security or cash equivalent.
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