Happy New Year. I hope your holidays were fabulous!
US equity markets are opening strong this morning after the ISM posted an inline result (57.0) suggesting continued manufacturing expansion. The prices paid index was above consensus at 72.5 vs. 71.8 and the prior period at 69.5. Construction spending declined to 0.4% from 0.7%, but was ahead of the consensus of 0.2%. Oil and commodities are rising again today while bonds continue their weakness. The dollar is also up this morning after being weak most of the past 10 days. The risk is that stronger economic growth will either defer the Fed’s QE2 or that the Fed will continue and create inflationary pressures.
Bank of America announced they would pay $2.6 billion to resolve claims by Freddie Mac and Fannie Mae regarding loan sales with faulty documentation. The company had faced at least $13 billion in unresolved put back demands prior to the settlement, about half due to Freddie and Fannie. Most of the loans at issue were originated by Countrywide.
2011 could see a resurgence in the IPO market as private equity firms, long shut out of the equity markets, look to unload inventory from ’04-’07 vintage deals. If the equity markets can maintain their strength, watch for a deluge of sponsored IPO’s in the first half of the year.
Small caps led returns last year, and typically signal an economic recovery is underway. The smalls tend to be more dependent upon US demand and, according to Bloomberg, have preceded faster economic growth during the past 20 years.
Nike turned some heads last week by guiding to roughly 150 bps of margin pressure over the next 2 quarters due to cost inflation. Management does not expect to offset much of the mid-single digit cost inflation in the near term but stated they are not in panic mode because they believe that Nike's market leadership, scale, and leverage with suppliers and retailers ultimately gives it the ability to raise prices and share the pain.
The Port of Charleston’s container volumes increased by more than 14% in November, resulting in the 11th consecutive month of growth for the port. Through the first 11 months of 2010, Charleston container volume was shown to be up 17.5%, while container volume over the past five months was up 15.9%.
Asian markets were mixed while European markets are also strong this morning.
Have a great day
Ned
skip to main |
skip to sidebar
Stock Market Commentary
Posts
Follow Me On Twitter
My Daughter's Blog
The Author
- Ned Brines
- Ned presently manages money for Andell Inc, the family office of one of North America’s dynastic families. He also is the founder and CIO of Montelena Asset Management, a California based RIA. Prior to founding MAM, Ned was the manager of the Provident Investment Counsel Small Cap fund. He began his money management career in 1994 at Roger Engemann & Associates where he managed the Aggressive Growth Fund, Focus Growth Fund, and Private Client business. Before entering money management, Ned spent six years as an investment banker, focusing on mergers and acquisitions and corporate restructuring. He has an MBA from the University of Southern California, a BS in Physiology from San Diego State University, and has achieved the Chartered Financial Analyst designation. He is a member of Beta Gamma Sigma, a national honor society, and Beta Theta Pi. He is a frequent speaker and lecturer in the financial community, serves on numerous non-profit boards, and has extensive media experience in television, print and radio. He presently lives in California with his wife and three children.
Recent Speaking Engagment
I will be speaking at the Crossroads Lecture Series March 11, 2011 in Orcas Island, WA. Click here to view a link to the lecture series: http://orcascrossroads.org/
No comments:
Post a Comment