Julius Baer: sobre la estrategia a seguir en el mercado, los PMIs y el platino y el paladio

Redacción - Miercoles, 02 de Septiembre

• 
• 
• 
• 
• • 
  • 
  • 

CHIEF STRATEGISTS VIEW: It takes time to heal (continuation to yesterday)

Exactly a week ago we stated: “This is a reminder of how bottoming phases happen post shocks: it will take time to heal, and more zig-zagging may be ahead than many would like to have.” The last 24 hours in financial markets gave another example of how bottoming attempts take place. In particular the energy complex is completely upside down these days – with 8%-9% pull-backs after +15% performance into the close last week. The silver linings are that Chinese equity markets are (finally) behaving and smart money has returned lately when looking at the related indicators. And there may be more ahead after the large US investors will come back to markets after Labour Day next week.

Still a choppy market with the energy complex in spot-light. The silver linings are a decreed calming in China and smart money flowing back in. Yet, stick with quality into the weeks ahead.

Christian Gattiker, Chief Strategist and Head Research, Julius Baer

*

 

ECONOMICS: Manufacturing PMIs - intensifying global growth angst

On balance, more drops than rises were noted in the August Purchasing Managers’ Indices (PMIs) for the manufacturing sector, reported yesterday across the globe. Although not looking overwhelmingly pessimistic, they intensified market fears of a stalling global growth backdrop. While among the ‘big 4 economies’ Japan and the eurozone came in broadly unchanged against their respective flash estimates, published two weeks ago, readings from China and the US did not help to alleviate global growth concerns. In China, the official PMI at 49.7 dropped below the break-even threshold of 50, confirming the continued slowing of manufacturing, also on an ‘official’ basis and suggesting that the authorities have not yet put sufficient measures in place to halt the downturn. Later in the afternoon, the US ISM Manufacturing PMI dropped to 51.1, pointing to the slowest pace of expansion since May 2013, contrasting with recently more robust cyclical US data.

 

As a consequence, equity markets tumbled across the globe yesterday. On the positive side was Switzerland, which at 52.2 confirmed recent surprisingly positive Q2 growth data and Monday’s strong KOF Barometer, raising conviction that the Swiss economy has very successfully digested the franc shock so far. A negative outlier was Norway, where weak oil prices keep cyclical risks elevated. The PMI of 43.3 will clearly keep the Norges Bank biased for cutting rates again later this month.

 

With the most important leading indicators for economic activity slowing unexpect-edly in the US and pointing to contraction in China, markets reacted panic-fuelled. However, we would call for a more realistic interpretation: Activity levels are still expanding in most economies and the latest changes lie within the usual volatility range – we therefore see no reason to trim our already conservative forecasts for economic growth.

David A. Meier, Economist, Julius Baer

*

COMMODITIES: Platinum and palladium suffer despite solid car sales

Another weak economic reading out of China put commodity markets under pressure yes-terday. Oil prices gave away the gains made on Monday while platinum and palladium suf-fered despite solid car sales during August. Sales growth remained the strongest in Europe, up more than 10% in France and Italy, still exceeded by Spain with more than 20%. Sales in Japan continued to recover while in the United States, in August they reached the second-highest level in more than a decade. However, developed market car sales are out of focus currently as the markets remain concerned about a severe slowdown in Chinese car sales. They will be reported later this month.

 

As China’s economic backdrop has deteriorated, we expect sales to be sluggish in the short term but do not think that the structural growth trend is broken. Adding increasing pressures on the supply side, we believe the longer-term outlook for platinum and palladium is positive but clouded by current concerns. We advise against selling on current levels but also believe that the risk and reward speak against bot-tom-fishing. Ongoing selling in the futures markets and a spillover into physically backed products is the key risk to watch while short-covering in the futures market could trigger a relieve rally.

Concerns about a severe slowdown in Chinese car sales outweigh solid readings in the developed markets, putting renewed pressure on palladium prices. As the long-er-term outlook remains positive but is clouded by current concerns, we believe the risk and reward speak against bottom-fishing.

Carsten Menke, Commodities Research Analyst, Julius Baer

[Volver]