There is alot of talk about the Greek bailout talks over the weekend and today. It consumed a good portion of financial newspapers and web sites. I do not disagree that this is a large development and the fate of Greece in the Euro zone it at stake, but lets not let this cloud out changes in other parts of the market, that is often when bubbles burst and opportunities are missed.
Turkish elections have created a divided parliament that has roiled stock markets and the currency. While this will create more tensions in the near term it is good to check the consensus view that has been emboldened the AK party over the the years. In time there could even be longer term opportunities from this as parliament will have to work on consensus building through legislation that is agreeable to both sides such as boosting the economy. More talk of the Chinese market becoming a bubble with the indices up again at the start of the week. With many in China thinking this is a Government led rally in stocks, very few are hesitant to lever up and enter into the marketplace. The amount of investments that the Chinese people have are limited so you can see more pronounced moves asset classes such as housing, and now stocks. Should the government look to allow more freedoms in the investment landscape there could be a flight out of the country to other locations in search of safer returns and to eliminate country risk. This could be the cause for a drop in prices there that could cause margin calls and investors to stumble on each other to get out of the market at once. US markets brought in another down day, nearing the break even point for the DOW and S&P for the year. This comes from alot of the good news spooking investors that a rate increase may come along this year as opposed to the recent view of not until 2016. This puts investors in the conundrum of good economic growth raising the equity markets and the Fed raising rates, pushing alot of speculative capital out of US equities to put elsewhere.
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June 2020
CategoriesAll Chinese Debt Commodities European Disunity Inflation Policy US Earnings |