Research (ČP Invest)
Investor's window  |  March 12, 2013 19:55:40

Optimism in the markets for no reason


Despite the current optimism in the markets remain only two possible ways of solution. Be the Germans to give more money to rescue the euro or the eurozone breaks. Why?

In January, stock markets showed turgid growth. Stock index S &P500 even reached the best result since January 1989. The reason was to reduce investor risk aversion due to partial resolution of a fiscal cliff and also postpone debt ceiling in the U.S., half of May.

Further optimism in the market contributes to European aggregate index of activity in the manufacturing PMI, which showed a slowdown for January production slump, rising 47.2 points from December to January's 48.6 points. Investors in peace risks relegating to the background and deploy your pink glasses. Optimism and according to various indicators of sentiment or surveys reaches the same values ??as in 2007, when we were on the verge of financial crisis. Optimism also help emerging articles on finance sites, for example, predict the growth of the index DJIA 20,000 points. Another rewarding and legitimate it is subject   Europe reflecting from the bottom and prediction of economic growth in Europe in the second half of the year because of PMI activity index in production.

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PMI Activity Index (January)

Value

Max / min in months

Ireland

50.3

Max 9M

Netherlands

50.2

Max for 4 m

Germany

49.8

Max for 11 meters

Austria

48.6

Max for 2 m

Italy

47.8

Max for 10 meters

Spain

46.1

Max for 19 meters

France

42.9

Min at 4 m

Greece

41.7

Max for 2 m

 

Consider the activity index in more detail. The attached picture shows the January PMI Activity Index in production in selected European countries. In six countries, there was an increase in the x-month highs. It is necessary to point out, however, that values ??below 50 indicate contraction points still production. Contrast values ??of 50 points are expanding production. So, only the Netherlands has an expansion of production and at the same time new highs.

It is interesting to note that Italy and Spain reach highs while France is in a spiral bound precipitously. No wonder, when the local Socialist government is not in favor of the private sector. Moreover, Spain and Italy are still in contraction, which only slowed in recent months.

Another issue is the ongoing performance of Germany. For an idea of Germany is the historical minimum unemployment at 6.8 percent.However, Germany would not slow down, if there were in Europe for economic recovery? After all, it was said that in the years 2010-2012 was Germany grew at the expense of the periphery. This should not happen now back to the transfer of production to Italy and Spain at the expense of Germany? There is nothing of the sort. Peripherals into it and now we can count and France is due to malfunction or uncompetitive. absence of a compensatory mechanism has always been the weakening or strengthening of the local currency.

Who started the first to speak about the positive outlook for the second half of the year, is already about know. But the financial media and experts have embraced this fact with gratitude. They are thus able to partially explain the current stock rally and decreasing risk aversion.

  Personally, no significant progress in Europe see it. Hot potato in the form of a financial panic cold and politicians are now nothing more pressured to perform system changes. Instead, we are witnessing the appalling economic steps of French politicians. The French economy is in poor condition and it was for the benefit of Germany, where it has moved part of its production.The only positive is coming off perhaps the French rooster comb and the French perhaps begin to learn languages ??in the world, which has long ceased to be the French. And the rest of us with them we will be able to communicate.

Spain reportedly sees light at the end of the tunnel. When I hear these phrases, I do not know whether I cry or laugh. Problems Spain has more than enough and without international assistance, long ago went bankrupt. In Catalonia won the election by separatists who want to hold a referendum on the separation of the most powerful region of Spain. Banks receive international financial assistance. The central government is likely to get respite from the EU to comply with budget deficits.Unemployment exceeds 26 percent. Outstanding loans amounted over 11 percent of the total loan portfolio.

Despite the current optimism in the markets of Europe still remain only two possible ways of solution. Be the Germans give the rescue euro respectively. problematic states more money. The additional amount must be far-fold higher than the current contribution of Germany to the ESM. Here is a question whether the Germans will be willing to pay more. The second variant is a partial or complete collapse of the eurozone.

Michal Valentík

Michal Valentík

Působil jako senior makléř a proprietary trader, nyní je hlavním investičním stratégem investiční společnosti ČP INVEST. Vystudoval VŠE v Praze se specializací na finance a ekonomické teorie. Absolvoval stáže na Hongkong University of Science and Technology a Friedrich-Alexander Universität Erlangen-Nürnberg. Ve svých článcích a analýzách se zabývá především aktuálním vývojem na kapitálových trzích, investováním a ekonomickými teoriemi. Ve volném čase se věnuje horolezectví.

Logo ČP INVESTČP INVEST investiční společnost, a. s., je spolu s mateřskou Českou pojišťovnou, a. s. součástí mezinárodního finanční skupiny Generali PPF Holding B.V., která působí ve 14 zemích střední a východní Evropy, kde poskytuje služby více než 13 miliónům klientům a spravuje aktiva ve výši přes 15 miliard euro.

ČP INVEST poskytuje služby v oblasti kolektivního investování. Základní nabídku investorům tvoří 12 podílových fondů ČP INVEST vedených v CZK, které jsou projektovány pro široké spektrum klientů. ČP INVEST je zároveň celosvětově výhradním distributorem EUR fondů Generali PPF Invest. Správa portfólií fondů ČP INVEST i Generali PPF Invest byla svěřena společnosti Generali PPF Asset Management, která disponuje velmi silným analytickým zázemím a je největším správcem investic v České republice.

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