The Weekend Wrap-up 6.11.11

Americas:

• Financial stocks led US indices into the red again, chalking up another week in the negative and the sixth straight week for the Dow. Equities did rally before the Ben Bernank’s speech though, but dropped significantly afterward when there was no mention or hint to a third stimulus program. To be honest I didn’t think his speech was that strong to produce such a reaction, omission isn’t a categorical denial so QE3 Is still a possibility. Especially after reading this. Whether or not I believe it’ll happen though I’ll save for after the weekend. Interestingly, the USD – S&P correlation seemed to wither as well, signaling that the two may be trading on their fundamentals now.

• US exports are at an all time high and gasoline prices fell to a two month low. Whether or not it will have any impact in consumer sales and confidence however has yet to be seen, and so far all signs point to no.

• Brazil raised their key interest rates again, now up 25 bps to 12.25%. I remember reading somewhere that Brazilians, particularly those from the favelas, have gone credit card crazy and are starting to rack up serious debts. I couldn’t recall the exact figures but nevertheless, if that keeps up then Brazilian financials should be something to keep in mind over the next few years.

Europe:

• European indices were pretty meh, with the FTSE and the DAX ending the week flat while the CAC and the IBEX ended in the red in preparation for the ECB and BOE rate announcements come Monday. The BOE is expected to keep rates at 0.50%; same with the ECB at 1.25%, although Trichet did say they were “vigilant”. (click here to know what I’m talking about)

• Greece is back in the headlines with what has got to be the biggest bailout shitshow ever. Whatever their intentions, Germany going against the ECB does not bode well for the entire Eurozone – especially for Greece, who we found out might have an even weaker economy than expected. If this posturing keeps up, by the time they get to an agreement I’ll have a few more Grecian ruins to visit on my honeymoon next year. 2 yr Hellenic yields rose to 26%, PIIGS CDS’ are at their highest and the Euro fell against the Greenback even more. I kiss my shorts.

• The Swiss franc was also softer ahead of next week’s SNB meeting. Consensus so far is that they’ll keep rates steady since things are somewhat OK there. Whatever happens though, I’m still very bullish on the Swissie.

Asia:

• Asian indices ended the week mostly down with only the ASX posting gains. The Nikkei, KOSPI, HANG SENG and the Taiex all fell between 0.6% to 1.2%.

• The biggest loser however was Shanghai B, which at one point fell over 2% in a day. It’s now down 27% since April and 13.6% since last week. Chanos must be killing it.

• The HK property bubble reared its ugly head again after HKMA trade secretary called the property market “abnormal” and hinted on issuing stronger mortgage policies on the horizon. HK monkeys, is buying a home there easy? Last time I was in Hong Kong the locals said that despite the astronomic prices, buying a home on credit wasn’t easy, so I doubt a mortgage rate led collapse will be catastrophic. Then again that was just a few guys so I could be wrong.

That’s enough for today, here’s my clip of the week:

Enjoy the weekend monkeys.