Macro
The Economic Fundamentals of Volatility
It’s Friday so I’m going to keep this light-hearted and keep it brief. I just have a couple of things to show you.
Firstly, Bloomberg’s exceptional interactive piece which illustrates how certain economic variables (in particular Debt) and their trends provide a good fundamental support volatility. This is very easy to use just click on anything which is green to interact and expose more information. I’d encourage you to take a look at this.
One of the potential sources of volatility comes from sovereign risks, another source is China’s policy actions which affect us all over the World, whether we choose to believe it or not. Perhaps the most hotly debated is the Renminbi currency peg. Yesterday Roachie says that Talk of Overheated China Economy is ‘Overblown’. Interestingly, he implies that a certain overcapacity in office space is needed to accommodate the massive rural to urban migration still occurring in China.
Lastly, just to end on a philosophical note, here is a talk I love from Daniel Kahneman, the father of Behavioral Economics. This talk has nothing to do with finance or economics – it’s about happiness. Worth a listen, if you have a few spare moments on a Friday.
Macro Data to Watch:
- Japanese Industrial Production
- Indian Industrial Production
- Spanish Inflation
- Canadian Jobs
Markets
I’m not sure if you’ve seen this as the luster of Gold gets all the attention but Platinum is back to its highs again. It’s been slowly creeping up there for the past few weeks.
Another big rally from Citigroup – that stock is up 18% in 3 days on 3 billion shares volume. Time to sit up and take notice – Citigroup’s market cap is now $120 billion.
Source: Bloomberg
Global Stocks to Watch:
- Keep an eye on Citi and the financials in general going into the weekend – can we hold on to all those gains?
- Earnings:
- Taiwan: Formosa Petrochemical and Hon Hai Precision
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