Short comment
The start of new year is not bad. S&P500 is rising targetting 2,600, but the markets are not that easy. Minus one percent of the index keeps intimidating market participants. The super-stars like J.P. Morgan, Morgan Stanley or UBS are trying to comfort the clients by suggesting the rosy prospect, but the clients are still in discomfort. Hedge funds, the banks' main customers, are going through worst months since 2011. Their discomfort is not just about loss from held equities, but also about to loss opportunity.
Right Now could be the bottom of the markets for a coming year. We do not know what will happen tommorow, but sure thing is the discomfort is giving brokers trading fee. The volatility in the stock markets is not limited to the stock markets. Usually, The volatility is contagioned to Equity-related derivatives, Bonds and Currencies.
First half of this year would be the best quarters for Sales & Trading divisions in the banks, specially US. In fact, other regions' trading volume are not following the US markets. I do not know reason, so I will just follow the markets. If you believe 'Fundamental Investment,' please watch the US brokers like Morgan Stanley.
The start of new year is not bad. S&P500 is rising targetting 2,600, but the markets are not that easy. Minus one percent of the index keeps intimidating market participants. The super-stars like J.P. Morgan, Morgan Stanley or UBS are trying to comfort the clients by suggesting the rosy prospect, but the clients are still in discomfort. Hedge funds, the banks' main customers, are going through worst months since 2011. Their discomfort is not just about loss from held equities, but also about to loss opportunity.
Right Now could be the bottom of the markets for a coming year. We do not know what will happen tommorow, but sure thing is the discomfort is giving brokers trading fee. The volatility in the stock markets is not limited to the stock markets. Usually, The volatility is contagioned to Equity-related derivatives, Bonds and Currencies.
First half of this year would be the best quarters for Sales & Trading divisions in the banks, specially US. In fact, other regions' trading volume are not following the US markets. I do not know reason, so I will just follow the markets. If you believe 'Fundamental Investment,' please watch the US brokers like Morgan Stanley.
I am not sure about other regions, but I am sure that we should avoid buying stock of European banks. European banks like Barcap or Deutsche Bank are going through hard time with the 0% interest rate, low energy regional financial markets and sluggish regional economy.
Among the hardships, the 0% interest is the biggest problme for the performance of the banks. There are too many factors why German Bund should be in bullish momentum for a long time. Simply, there are decreasing US T-Note yields, possible change of stance of ECB and continued reinvestment from ECB. The 0% interest rate could lead to decreasing trading volume in the interest rate markets like it has been being in Japanese market. We do not need to say about the loan business.
Please do not fall in the trap of "low valuation." As always, Low-PBR does not prove anything.