The Weekend Wrap-up 7.31.11

Sorry for the delay guys, didn't really have the time to put this together yesterday but hey, better late than never.

Americas:

• Thanks to Washington, US indices are once again in the red with the S&P 500 dropping 0.6%, the Dow -0.8%, and the NASDAQ -0.4%.

• Daily holdings of GLD have risen to its highest since January and gold is ridiculous at $1,613 thanks to everyone scrambling for safe havens. Bond yields meanwhile have fallen across the board as well.

• Economy-wise, things aren’t looking so good. While the Case-Shiller index is showing signs of stabilization and pending home sales as well as credit are increasing, CFNAI figures point to a recession with its quarterly average dropping from -0.3 to -0.6 and GDP figures are below estimates. Mortgage applications also fell 3.8%, its third consecutive fall. On the plus side though jobless claims are finally below 400,000. Guess you can only lay-off so much people huh?

• The TSX also fell 0.8% while the BOVESPA and the MEXBOL both rose 0.2%.

Europe:

• European indices were also in the red starting with the FTSE down 0.6%, the DAX down 0.75%, the CAC -0.8%, and the IBEX -0.9%. While mostly due to the madness in Washington, earnings in the Eurozone were relatively weak and Moody’s placing Spain on review also exacerbated things.

• It’s always funny in EUtopia as Moody’s cited the mishandling of the Greek bailout as their reason in putting Spain on review. Moody’s has just downgraded Cyprus as well as six Spanish regions so with the Greek bailout still in technical limbo, more states might still be in jeopardy. Gotta love the Germans though, they refuse to give the EFSF a blank check and as a sign of tremendous support for their neighbors, Deutsche Bank dumps 88% of their Italian bond holdings.

• Meanwhile in the UK, despite lackluster figures as well as rumors of an untimely fate, Gilt yields have fallen below Treasury yields. Are Gilts safe havens again?

• The Swiss Franc has been high as hell lately with USD/CHF at 0.792 and EUR/CHF at 1.14. Someone correct me if I’m wrong but if I remember correctly I think it actually over performed gold in the past quarter.

Asia:

• Asian markets shared the same fate as the others with all indices ending the week at a loss. The NIKKEI slipped down 0.7%, same with the ASX, the TAIEX down 0.9%, while Singapore and Hong Kong fell 0.2% and 0.7& respectively.

• Chinese bank regulators were quoted saying that “Chinese banks can withstand a 50% drop in property prices.” Anyone care to refute this?

• Japan has been signaling a Yen intervention the entire week, trying to curb the Yen’s unconstrained strength. To be honest I highly doubt that they will, they’re still in reconstruction mode and one of the benefits of a stronger Yen are cheaper commodities – some comparable to 1980’s prices. Plus, if anything should happen to the US, a flight to safety would surely negate any pressures the BoJ could implement. Not to mention their decades long QE program has actually seen the Yen appreciate. Heh.

• The RBNZ held the KIWI at 2.5%, SGD has also been appreciating thanks to safe haven seekers.

And that is it, here’s my clip of the week:

It’s a bit long, but if you’re a fan of Jack Schwager’s Market Wizards series you might find this to your liking.

Hope you had a great weekend monkeys.