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Julius Baer: sobre la liquidez, Japón, las renta fija high yield y las materias primas
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    <strong>Artículo publicado en <a href="http://www.lacartadelbolsa.com">La Carta de la Bolsa</a> el Viernes, 28 de Agosto en la sección: Al Día</strong>
    <h3 class="titulo_articulo">Julius Baer: sobre la liquidez, Japón, las renta fija high yield y las materias primas</h3>
    Redacción
    <p><strong>THE WEEK THAT WAS: Cash was king and so was IT</strong></p>

<p><br />
A week to remember: after a flash-crash-like move in risk assets on Monday, a choppy trading pattern ensued. The losses were hard to be recouped fully, hence there were only two asset classes which made it back in black by Thursday: cash (not surprisingly) – and information technology (IT) stocks. It is quite a surprise to see a perceived high-beta sector holding the ground, maybe investors were simply too desperate looking for growth in these dire straits?</p>

<p><br />
<strong>Landslide Monday reminded investors of systemic fragility these days. It was interesting to see extremes such as cash and IT stocks meeting in performance terms though.</strong></p>

<p><br />
Christian Gattiker, Chief Strategist and Head Research, Julius Baer</p>
    <p><strong>ECONOMICS: Japanese consumption data signals a rebound in private consumption</strong></p>

<p>Today’s various releases of Japanese key macroeconomic indicators for July contained positive messages. After a weak second quarter with negative economic growth, concerns about another negative quarter have diminished with the release of the real household spending and retail sales data, which rose 0.6% and 1.2% compared to June. This strengthens the outlook for a positive contribution of private consumption to economic growth in the third quarter, which is a main component of GDP. Moreover, inflation surprised to the upside. Core inflation remained flat at 0% against expectations of falling into negative territory. However, inflation is likely to fall further as drops in electricity and gas prices are still coming through. Third, employment indicators looked good overall, with more firms looking to hire, thereby confirming the strength of the labour market.</p>

<p><br />
<strong>Consumption data for July indicate that the Japanese economy will likely return to a slow recovery path in the third quarter after a dip in the second quarter. Inflation remained flat, but will likely slow further given lower oil prices.</strong></p>

<p><br />
Susan Joho, Economist, Julius Baer</p>

<p>*</p>

<p><strong>FIXED INCOME: US and eurozone consumer confidence, will they care about China?</strong></p>

<p>The big topic in the financial markets these days is the likelihood of more monetary support. While the Federal Reserve (Fed) continues to weigh the need for a normalisation of its interest rates, some commentators call for another programme of Treasury purchases to support the stock market. We still do not share this argument, given the re-cent strength of economic indicators. Later today, the University of Michigan will publish the final reading of consumer sentiment.</p>

<p> </p>

<p>The EU Commission will also publish the consumer and industrial confidence indicators for August later this morning. In both cases, consensus expectations are for a slight decline. It is possible, however, that consumers are less affected by the Chinese stock market woes than the economists who make the forecast. Therefore, there is room for upside surprises. A firmer oil price helped some US energy issuers to recover some ground, thus the average yield of US speculative-grade issuers declined from 12% to 11.6% and the overall speculative-grade bond yield declined from 7.6% to 7.4%.</p>

<p><br />
<strong>Incoming data is supportive of an interest-rate hike later this year. We stay in USD high-grade bonds but are increasingly warming to the idea of returning to the high-yield market with yields close to 8%.</strong></p>

<p><br />
Markus Allenspach, Head Fixed Income Research, Julius Baer</p>

<p> </p>

<p>*</p>

<p> </p>

<p><strong>COMMODITIES: Heady gains as growth fears wane</strong></p>

<p>Fears over global growth gave way to short covering yesterday, resulting in a dramatic reversal in commodity markets. Crude oil prices saw the greatest gains, rising more than 10% while palladium rebounded by more than 5%. Although upwardly revised economic growth numbers out of the United States appeared to ease global growth concerns, with the exception of copper there was little by way of change in market fundamentals. Low prices and a global oversupply led to an announcement yesterday of copper mine closures in the United States which help send prices more than 4% higher.</p>

<p> </p>

<p>Copper producers in the United States have come under pressure as in contrast to many of their competitors in emerging markets, they did not benefit from a weaker currency alleviating cost pressures. On the whole, excessive supply growth and cost deflation pressures should continue to hold commodity prices in a pattern that is lower for longer. Despite the recent rebalancing of market sentiment, we therefore maintain our neutral outlook for commodities as an asset class and advise against broad-based bottom-fishing for now.</p>

<p><strong>Global growth fears gave way to short covering and heady gains on commodity markets yesterday. That said, little has changed fundamentally and we advise against broad-based bottom-fishing for now. Prices will stay lower for longer.</strong></p>

<p><br />
Warren Kreyzig, Commodities Research Analyst, Julius Baer</p>

<p>**</p>
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