January 2016

[admin]

Here is another one we're considering:

We like to think that most of the selling in China is now behind us so there is a good chance for a bounce now that we are at $41 and on support of the rising channel. However, two things are holding us back:

• Ctrip would suffer from a Chinese devaluation (which is why we preferred JKS, which would benefit)
• This years profit expectations are actually considerably lower than last year's, which we find both surprising and disappointing

Surprising because Ctrip has done a great deal of investing in their platform and are now supposed to reap the benefits from that, in a secular growing market. On top of that, there has been a great deal of consolidation in the industry, which should lead to better pricing power.

[admin]

Here is another one, but this one we've already gotten into:

“As has been the trend for some time now, fashion running sales were robust, but performance running sales weighed on overall performance,” Weiner noted. Casual athletic shoe sales ended the week with a hefty 21.5% year-over-year gain.

Steph Curry's Under Armour Shoe Sales Sprint Past LeBron's Nike | Stock News & Stock Market Analysis - IBD

The strong dollar might mar the picture at least a little, but they're off almost 50% from the high set last August..

[admin]

Well, at first sight we were right waiting for the Amazon results (see a previous entry here), as they missed earnings by quite a margin..

[admin]

China slowing? Maybe not..

China is not slowing. It is picking itself up slowly after a "recession" in early 2015. Car sales give us a steer. They collapsed early last year and touched bottom at 1.27m in July. Sales have been rising every month since, surging to a record 2.44m in December thanks to lower taxes. New registrations were up by 37pc for GM and 36pc for Ford and Mercedes. House prices have been climbing for three months. The nationwide index was up 1.6pc in December. Shanghai rose 15.5pc and Shenzhen 47pc. Even the "Tier 3 and 4" cities are coming back from an epic glut.

Hysteria over China has become ridiculous - Telegraph

A short-term economic rebound is already baked into the pie. Fiscal spending jumped 30pc in October and November. New bank loans and local government bond issuance - together, the proper measure of credit - reached a 12-month high of 14.4pc in December. It is stimulus as usual. The Politburo is back to its bad old ways. "Despite talk of deleveraging, credit growth continues to expand far more rapidly than GDP growth because, quite simply, they are not willing to tolerate any slowdown," said Prof Christopher Balding from Peking University.

Hysteria over China has become ridiculous - Telegraph

[admin]

It seems at least part of the Chines capital outflows that create such havoc in the world economy (raising the specter of a substantial Chinese devaluation) are benign:

The Achilles Heel is capital flight. The authorities botched their switch from a dollar peg to a trade-weighted currency basket in August, and botched it again in December when they fleshed out the details. The result was an exodus of money in two big bursts. Both Chinese and foreign investors concluded that this was camouflage for devaluation. Fang Xinghai, a top adviser to president Xi Jinping, admitted in Davos that communications had gone horribly wrong. "We're learning," he said. He vowed that the Party is absolutely committed to the defence of its new basket. "It is the decided policy of China," he said. The facts bear him out. JP Morgan estimates that the authorities spent a record $160bn defending the yuan in December, a colossal mobilisation of resources.

Hysteria over China has become ridiculous - Telegraph

So the vital question is the scale and make-up of the capital outflows. Fresh data from the Bank for International Settlements show that the foreign liabilities of Chinese companies and investors dropped to $877bn in September from a $1.1 trillion peak in September 2014. Short-term debts have dropped from $858bn to $626bn, and have undoubtedly fallen much further over the past three months. In other words, the Chinese are paying off dollar debts and unwinding the dollar "carry trade" as fast as possible in advance of further rate rises by the US Federal Reserve. Bhanu Baweja from UBS said the repayment of foreign debts accounted for almost all the capital flight in the third quarter. It is therefore arguably harmless, potentially a one-off effect that will play itself out.

Hysteria over China has become ridiculous - Telegraph

If true, this would be very good news..

[admin]

Some instant gratification here with the Micron (MU) purchase yesterday, up 10% today, rather exhuberant, for as long as it lasts..