Quick View on What’s on Investors Mind and in their Portfolios

Source: Pixabay

Merrill issued its latest Fund Manager Survey last week, right after the sell-off in equity markets. The message to take out is: don’t buy on dips (well my view is that you always have to think long term, understand the fundamentals of any asset class and have a view on valuation, otherwise, don’t invest at all – but that’s not the point here, I think this survey is useful to gauge market sentiment).

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Putting Recent Market Sell-off in Perspective

Source: Pixabay

Markets have been unnerved by rising interest rates in the US, with ripple effects around the world. The most staggering event has happened on the VIX market with a number of funds/ETNs making the headlines after having lost tons of money. What should investors take from these events ? A couple of reflections and interesting comments seen here and there. Continuer la lecture de « Putting Recent Market Sell-off in Perspective »

Unibail Rodamco-Westfield: 2 Views from the same Broker

Unibail Rodamco (UL) announced a friendly takeover offer for Australia-based Westfield (WFD) in a deal that values the Australian mall operator at c$25 bn (on EV basis).

Interestingly, Bank of America Merrill Lynch has analysts covering both companies. Following the transaction, the team covering UL has maintained its Buy rating while the one covering Westfield has moved to « Not Rated », arguing that « WFD is no longer trading on the basis of fundamentals. » Continuer la lecture de « Unibail Rodamco-Westfield: 2 Views from the same Broker »

Oil & Gas: A Primer (Sort of)

(Most of the data points/comments are extracted from a Primer published in Oct 2016 by Bank of America Merrill Lynch. Comments and financial data at the end are my own).

After a number of underperforming years, European oil & gas companies have been staging their comeback: they have cut into capex and opex to generate more cash flow or reduce debt and be able to maintain their payout/dividend payment.

The market has bearly started to notice, but oil & gas companies are leaner and in better shape to leave in a world where oil price would stand around 40-60$/barrel. Continuer la lecture de « Oil & Gas: A Primer (Sort of) »

In The Mood for TIPS – BofAML

Investors are getting nervous about inflation. Per BofAML « Flow Show » weekly report released today, TIPS recorded their 3rd highest weekly inflows (chart) while getting out of High Yield ($9.8 bn outflows over past 4 weeks). With $1.2bn, it’s one of the highest level of inflows since Nov 2016.

Source: Bank of America Merrill Lynch

Altice: Credit Suisse Stays Neutral, ABN Amro Buys

Altice seems to be in a precarious financial conditions and has lost the faith of investors. Shares have lost 48%, mainly due to the deteriorating KPIs and financial indicators at SFR.

At a recent conference, Patrick Drahi took the helm to try to calm investors but so far, little results. And brokers seem to have conflicting views.

To comfort Altice, ABN Amro’s analysts have issued a « Buy » recommendation on the shares, but not all are convinced. The same day, Credit Suisse also published a report with a Neutral rating, which comes a couple of days after BofAML downgraded the stock.

Here are their arguments.

(DISCLAIMER: This information is not an investment recommendation. It is just given as an information, not an advice. You need to do your own due diligence to see if an investment fits in your Investment Policy Statement, provided you have one).

Continuer la lecture de « Altice: Credit Suisse Stays Neutral, ABN Amro Buys »

Altice: Prefer the Credit to the Equity, says BofAML

Per Bank of America Merrill Lynch report published Nov 21:

« Altice shares have lost 50% of their value post results, while the CDS on the holding have increased by 300bps. Management took action with: 1/ the resignation of the CEO and the return of Patrick Drahi to full control of operations, 2/ admission of poor execution in France, now the #1 focus, and 3/ a priority on debt reduction, involving non­core assets and towers disposals. However, ATC also significantly rebased its mid­term expectations on France. Although the steps taken should comfort credit holders, we think the case for the equity is balanced, with long­ term upside on execution, content monetization and domestic consolidation, but unclear valuation support on our reduced forecasts, and a recovery that remains largely dependent on external competitive forces. Unlike Glencore in 2015, we don’t see material value­enhancing options to drive mid­ term outperformance and downgrade to Neutral with a PO of €11. Our credit analyst Nick MacDonald is positive on the credit »

Eurozone Equities Favored Despite French Election

Investors hold firm to their Eurozone equities despite growing worries about the outcome of the French presidential election, according to the latest poll on investor positioning published by Bank of America Merrill Lynch.

Investors consider a « Le Pen Win » might produce a 5-10% market correction, but the real risk would be a Europe disintegration in the case of « Frexit », which would have deeper and far more negative implications.

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« Be Fearful When Others Are Greedy » – Buffett Most Important Quote

Picked up in a BofAML’s note. The figures in the following quote should have investors reflect on Buffett’s mantra: « Be fearful when others are greedy. Be greedy when others are fearful. »

« The Fed’s bull market: March 9th 2009…VIX 50, HY spread 1873, SPX 676, BKX 20; March 8th 2017…VIX 11, HY spread 373bps, SPX 2363, BKX 97; the bull market catalyst…extraordinary, unprecedented central bank policies. »

Facts make Buffett’s mantra right to the point.

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Le « précipice fiscal » et son impact sur l’économie mondiale

Depuis plusieurs mois, l’attention des médias et investisseurs se tourne de plus en plus fréquemment vers le sujet du « précipice fiscal » au bord duquel vont bientôt se retrouver les Etats-Unis: dès l’an prochain, on devrait observer une baisse drastique des dépenses publiques et une hausse des impôts. Deux éléments qui, conjugués, auront un impact significatif sur la croissance américaine, estimé à 4,6% du PIB. Mais pas seulement. Continuer la lecture de « Le « précipice fiscal » et son impact sur l’économie mondiale »

Les actions de la zone euro retrouvent grâce aux yeux des investisseurs-BofAML

La dernière enquête auprès des investisseurs réalisée par Bank of America Merrill Lynch a été publiée aujourd’hui. Elle révèle que, pour la première fois depuis avril 2011, les investisseurs ont accru leur exposition aux actions de la zone euro. « Les investisseurs considèrent désormais que la crise de la dette souveraine en Europe est un risque de moindre ampleur (‘lower tail risk’) que le ‘mur budgétaire’ (‘fiscal cliff’). » Un risque amoindri, mais qui pourrait ressurgir en cas de difficulté et provoquer de violents arbitrages de la part des investisseurs, nuançons un peu le propos. Continuer la lecture de « Les actions de la zone euro retrouvent grâce aux yeux des investisseurs-BofAML »

Réactions aux annonces de la Fed

QE3, une politique accommodante jusqu’à mi-2015, des estimations de croissance revues en hausse, la Fed a multiplié les annonces pour affirmer son soutien à l’économie américaine, provoquant une vive réaction sur les marchés financiers (matières premières, actions émergentes, or ou devises). Voici quelques réactions et commentaires d’économistes suite à ces annonces (ce papier sera mis à jour au cours de la journée). Continuer la lecture de « Réactions aux annonces de la Fed »

OMT: la BCE achète du temps

Pour les économistes de Bank of America Merrill Lynch, le nouveau programme d’achats d’obligations souveraines de la BCE permet surtout d’offrir du temps aux gouvernements européens les plus en difficulté. Comme un certain nombre d’investisseurs, BofAML appelle l’Espagne à demander rapidement l’aide de l’Union européenne (FESF/MES)… Mais la baisse des taux espagnols ne pourrait-elle pas contrecarrer leurs attentes ? Continuer la lecture de « OMT: la BCE achète du temps »

Previews BCE

Grosse journée demain, pour la BCE et pour les marchés. Ces derniers attendent de Mario Draghi des annonces fortes en matière d’intervention de la BCE sur les marchés obligataires (« SMP 2.0 » selon Goldman Sachs). Mais comme à son habitude, la Bourse voit toujours trop grand trop tôt. Depuis le début de la crise, le temps des politiques et des responsables des autorités monétaires n’a jamais été plus rapide que celui des marchés. La déception pourrait provoquer un sursaut de volatilité, une rechute d’indices boursiers qui ont plutôt bien tenu ces derniers jours, et un repli de l’euro face au dollar. Continuer la lecture de « Previews BCE »