Not much in terms of data releases, but Asian markets continue to worry about China slowing economy. Just to go over it again, China's retail sales underperformed expectations - as investment and exports have both rapidly slowed, consumption has to compensate to keep the economy on even keel. Our take is that the govt will probably do a fiscal stimulus of some sort to guard the growing risk of a hard landing. On the monetary side we do not expect anything other than reserve ratio cuts, as even though inflation may have topped out, authorities are reminded that fundamentally it is sticky. On the immediate horizon, markets across Asia, US and Europe are still in correction or consolidation mode, lacking catalyst for further gains.
Beyond the immediate, over the short to medium term, we have been saying that stocks face a strange win-win underlying scenario, with corrections likely used to add positions: if economic data is strong, stocks will of course rise; if economic data is weak (as we think it will be), corrections will likely give way to a wave of policy induced buying. This policy safety net has however been a bit weakened: Bernanke omitted QE3 from his last testimony and the ECB's latest message was that it was looking to reverse its wave of liquidity. China remains the more likely prospect of a policy announcement. Overall, the safety net has been partially removed, and markets will have to place greater reliance on outperforming global economic data to push higher. On Tue, Mar 13, 2012 at 12:38 PM, Mihir Desai <[email protected]>wrote: > Shares of Mahindra & Mahindra continued to slip lower as sentiments > turned bearish after the company cut tractor production for 4-5days during > March 2012 on account of a slowdown in demand > > > -- > CA Mihir Desai > > -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
