FA Observations Vol. 1
The market closed down 1.43% today after a slew of negative macro news hit the tape. In a reverse of yesterday’s poll reports where the Greek pro-bailout party led, a poll this morning showed anti-bailout Syriza back on top re-stoking the Greece euro exit fear.
Add a government report from China talking down any large-scale stimulus, Italy/Spain bond yields spiking, reports that the ECB said no to a Bankia recap using ECB lending facilities, and finally Germany reiterating its opposition to using the ESM to recap banks directly, you had a recipe for a weak market.
Although gold did bounce today, oil/copper/euro continued dropping. If the euro continues to fall as the 6-month chart above shows, U.S. multinational companies’ Q2 earnings estimates will be at risk on the FX move alone.
Gamestop executives probably had a sigh of relief as the WSJ reported according to their sources both Sony and Microsoft will include an optical disc drive in their next generation consoles. Apple also had relative out-performance due to David Einhorn pitching the long thesis on the company in his latest investor letter.
I highly recommend reading Mary Meeker’s latest 2012 Internet Trends PowerPoint deck Link. There are loads of interesting charts and data within it. A must read for any data-driven fundamental investor.
Macro
-Italy (10 year 5.93%) and Spain bond yields (10 year 6.65%) soar Link
-Euro-zone business confidence 90.6 vs. 92 estimate Link
-ECB oppose Spain Bankia recap idea through ECB facilities Link
-China state-run media says no plan for large-scale stimulus Link
-Anti-bailout party Syriza leads Greece poll Link
-Germany reiterates opposition to using ESM to re-cap banks directly Link
-Pending Home Sales Index –5.5% vs. 0.5% est., 3.8% prior
Stocks
-Amazon agrees to collect New Jersey sales tax in 2013 Link
-Visa reports April and May numbers. U.S. credit growth 8% and 10% (vs. 11% in Goldman model for the quarter) Link
-Sony and Microsoft decide to include optical disc drive in their next generation consoles according to WSJ sources Link
-Teavana tumbles on a sale miss Link
-Mary Meeker’s latest 2012 Internet Trends Powerpoint deck Link
-David Einhorn’s May 29, 2012 investor letter. He writes about his Apple long thesis Link