The market reacts to Paris
Hunter outlined that people have had 2 days over the weekend to react to the terror attacks before the markets have re-opened this week, and thus this extra time has softened the impact on financial markets. Nevertheless, he concluded that anything tourist related will be hit hard and also Dollar and Goldplays have increased as defensive bets.
Alarm bells for mining companies
Batsford highlighted that the Bloomberg Commodity Index was set up 15 years ago and the reading stood circa 100. Just prior to the financial crisis hit top gear in September 2008 it stood at 238.7. Today the Index stands at an all-time low of 82.07. That sends unprofitable and uncomfortable alarm bells for mining companies ringing. Breakeven has to surely be around circa 120! Is there worse to come? Hunter added that you would expect mining stocks to start to bottom but it is hard to judge as we still have unclear demand from China and India.
US and Japan economies
Hunter noted that prior to Friday evening in Paris, US retail sales were quite weak, and this reflected the end to a poor weak for data coming out of the US. In terms of Japan, he commented that the BoJ polices haven’t had the desired effect, and the weakness in China has resulted in further problems for the Japanese economy.