Euro PIIGS Starting To Squeal Again

The stock markets of the so-called PIIGS are breaking down on an absolute and relative basis – not a positive development for global markets.

The PIIGS are starting to squeal again in Europe. No, not the kind that produces pancetta or linquica or bangers. We are talking about the continent’s debt-laden, economically-challenged countries known by the acronym PIIGS, namely, Portugal, Ireland, Italy, Greece and Spain. These nations are essentially economic dead weight for Europe considering their plight. That said, all financial markets are cyclical – nothing straight-lines. And indeed, despite the apparent inevitable downfall that awaits the Eurozone as a result of the PIIGS, the associated equity markets have actually been quite buoyant for the better part of the last 4 years. Not so anymore.

We have posted before a composite that we constructed consisting of equally-weighted portions of each of the PIIGS’ stock markets. We call it…the PIIGS Composite. The composite starts in 2006 and hit an all-time low in June 2012, amid the Europe/PIIGS near-meltdown. Following Mr. Draghi’s “whatever it takes” moment, the PIIGS Composite shot up off the mat, rallying nearly 75% in 3 years before peaking in May of last year. Since then, the composite has gradually leaked lower. Around the start of the year, the leak turned into a gusher. As of this week, the PIIGS Composite is at near 3-year lows, approaching levels last seen in 2012.

The Composite weakness is not just significant on an absolute basis. As the chart shows, it is also breaking down on a relative basis versus the DJ Euro STOXX 50, a proxy for the more established, “blue chip” stocks in Europe. Like all higher-beta sectors, stock market bulls want to see the PIIGS outperforming the lower-beta blue chips. That can be an indication of a willingness of investors to take on risk, a healthy condition for a bull market. In other words, when the PIIGS are outperforming, it is symptomatic of a “risk-on” environment. Conversely, when they are lagging, it is a sign of “risk-off”.

As the chart indicates, risk-off is decidedly the case at present as the PIIGS:STOXX 50 Ratio just broke sharply lower, through a shallow year-long uptrend. Looking at prior trend breaks in the ratio, e.g., mid-2008, late-2009, and mid-2014, we see that substantial bouts of weakness ensued throughout European markets, particularly in the PIIGS. These also led to scares among some or all of the PIIGS pertaining to their economic viability.

On an individual basis, the PIIGS markets are each sucking wind to varying degrees, from hyperventilation to suffocation.

By far, the winner has been Irish stocks. The Irish ISEQ Index was at a 52-week high as recently as early December. It then ran into, and bounced precisely off, the 61.8% Fibonacci Retracement of the 2007-2009 decline. It has fallen since, recently accelerating to the downside to near 52-week lows. Should the global equity selloff get worse, this market is in danger of playing “catch-down” as investors sell what they can instead of what they want.

Since breaking its post-2012 Up trendline, Italy’s FTSE MIB Index has dropped to almost a 3-year low now, recently breaking the key 61.8% Fibonacci Retracement of the 2012-2015 rally.

Spain’s IBEX 35 is telling a similar story.

In the suffocation category, Portugal’s PSI 20 Index is within spitting distance of a 20-year low.

And the biggest loser among the PIIGS? It’s Greece, whose Athex General Index is at a 25-year low.

This is not a pretty situation shaping up for the Eurozone once again. Whatever benefit that accrued as a result of “whatever it takes” may have largely run its course. Again, it will not be a straight line lower. However, the absolute and relative breakdowns in the PIIGS Composite suggests that the post-2012 run-up is over. Thus, while the PIIGS rally of the past several years may have tasted like Jamon Iberico and Prosciutto di Parma to investors, they may have to settle for scrapple and spam from any rallies in the near future.


More from Dana Lyons, JLFMI and My401kPro.

The commentary included in this blog is provided for informational purposes only. It does not constitute a recommendation to invest in any specific investment product or service. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

hepurifies asked:

☱ pew pew kid

 a coin to the shrine.  // inbox ☱ for a diary entry about your muse.

  he is not like the others. not foolish, not without or expertise of their origins. he is cunning & will not fall for their traps, their plots & shrewd ideas. for he is as knowledgable as those of old ——— monks & priests & those who believe they know more than kindred themself. more of the stars & the heavens above & those who speak tongues unknown to mortal mouths. he ——— he knows better than the rest.

  (  ✉   )  PENNED, 1:02 ASA. To say we are frightened would be a lie. Gods do not shake in the mere presence of those below them. We have no sense of doubt that Lucian is well - versed in the world of undeath, of that which is otherworldly & unseen of this plane. That he wishes to know of our origins & how we came upon here, how we came to be.

                                                     flourish of hand, digits tapping knees. rest.

  (  ✉   )  PENNED, 1:11 ASA. But to state that we do not worry, to insist upon no action be taken ——— that ——— that would be the biggest lie of them all.

                     ink stains heart & hands. it has been a long day.  //  more rest will be to come. in due time.

anonymous asked:

I'm ENTP, seventeen, still living with my parents. I feel like I have decent self control, but when I'm given the choice on mature decisions, I seem to end up doing the "wrong" thing. My logic tells me to make the mature choice, but I feel like I need to make my own choice rather than my parents choice which I feel is forced on me by them giving me the choice and knowing a bad choice will restrict my freedoms again. Would you mind analyzing this please? Please add ewp-entp-q in the tags as well.

Hey, fellow ENTP!
To me it sounds like your functions are all acting up a little, even though this kind of behavior is not too unusual for someone your age.

I’d say it’s your Ne that makes you want to feel free without any resterictions from your parents. Ne is the function which doesn’t like being controlled and which is aiming for freedom.
Then your Ti and Fe are in a conflict with each other, too. Ti is the function that tells you which choice is correct and mature. But Fe takes other people into consideration. In your case in a pretty defensive way. You prefer not to make a choice, simply because it’s what your parents would choose for you. Your Fe needs some more development but you are only 17 and you have plenty of time for it to develop.
For now, just question yourself once again. Is it really logical to avoid a decision you think is right simply because it’s what your parents’ choice? Wouldn’t it be way better for you to just do what you think is best, no matter who else says so? :)
- Shireen, ENTP

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La Bolsa de Santiago baja un 0,14 % y termina en 3.651,39 puntos

Santiago de Chile, 8 feb (EFE).- La Bolsa de Comercio de Santiago anotó hoy una bajada de un 0,14 % en su índice principal, el IPSA, que marcó 3.651,39 puntos.
Por su parte, el Índice General de Precios de Acciones (IGPA), registró una caída de un 0,12 % y cerró en 17.963,23 puntos.
El monto de las acciones negociadas llegó a 18.182.858.899 pesos chilenos (unos 25,60 millones de dólares) en 3.550 negocios.
Las mayores alzas de la jornada correspondieron a las acciones de Schwager (4,64 %), Lan (3,73 %) y Enjoy (3,08 %), mientras que las principales bajas afectaron a Intc (-18,73 %), FB (-12,53 %) y EWP (-10,29 %).
El Inter-10, que mide el rendimiento local de los títulos que se transan como ADR (American Depositary Receipt) en Nueva York y que son un componente importante del IPSA, anotó esta vez un alza de 0,05 % y quedó en 4.281,62 puntos. EFE

Why IBM Is Increasingly Focused on Its Interactive Experience

IBM Continues to Buy Companies for ‘Strategic Imperatives’ in 2016

(Continued from Prior Part)

IBM launched new studios to cater to worldwide audience

Previously in this series, we discussed IBM’s (IBM) recent acquisitions of Germany-based Ecx.io and Aperto, as well as Resource/Ammirati. Apart from these acquisitions, IBM iX announced the launch of new design studios in Warsaw, Prague, and Dubai, which allows it to expand and cater to a broader range of global customers.

With Ecx.io and Aperto under its umbrella, IBM is trying aggressively to tap the German (EWG) market as it already has a presence in the UK, France (EWQ), the Netherlands, Spain (EWP), Poland, and the Czech Republic.

According to Matt Candy, Europe lead for IBM iX, Eastern Europe is a rapidly growing market for digital marketing and customer experience software. In September 2015, Candy noted that Poland’s Alior Bank engaged IBM and Apple (AAPL) to build a mobile banking app that would help its private banking employees interact more quickly with their customers.

According to the Adobe (ADBE) and Econsultancy report and as the chart above shows, customer experience, after Big Data provides the most important opportunity for all sectors, as measured in terms of % in the survey.

IBM’s iX domain expertise and employee base

Apart from enhancing IBM’s iX (Interactive Experience) in the digital agency space, Ecx.io and Resource/Ammirati should boost IBM’s iX design expertise. This currently has approximately 1,100 designers and 10,000 employees, which should result in considerable improvement in its design expertise.

Ecx.io and Resource/Ammirati plan to add 200 and ~350 creative professionals, respectively, to IBM’s iX design team. Resource/Ammirati should also broaden the company’s studio presence with its ~30 global locations.

Commenting on IBM’s recent acquisition of Resource/Ammirati, Jay Wilson, an analyst with Gartner, stated that Resource/Ammirati should broaden IBM’s offerings. These services include creative, media, and account management, which are usually provided by conventional advertising agencies.

Continue to Next Part

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Spain’s Manufacturing Activity Touched an 8-Month High in January

Global Manufacturing Remained Subdued at the Start of 2016

(Continued from Prior Part)

Spain’s manufacturing PMI rose to 55.4 in January

The Spanish economy contributes about 2.0% toward global gross domestic product, and the manufacturing sector accounts for 13% of the country’s economy.

According to Markit, Spain’s manufacturing PMI (purchasing manufacturers’ index) increased to 55.4 in January, a rise of 2.4 points from December’s reading of 53.0.

Though Spanish manufacturing grew, global manufacturing remained subdued in January. As a result, the iShares MSCI Spain Capped ETF (EWP) fell 5.6% over the past month as of February 1.

Spanish ADRs (American depositary receipts) Telefónica (TEF), Grifols (GRFS), Banco Santander (SAN), and Banco Bilbao Vizcaya Argentaria (BBVA) fell 3.5%, 8.8%, 14.0%, and 11.9%, respectively, over the past month as of February 1, 2016.

Sharper rises in output and new orders

Spain’s output and new business saw solid jumps in January, mainly due to a rise in orders from both domestic and foreign clients. The backlog of work also grew with the rise in new orders.

Stocks of purchases and finished goods rose

With a growing orderbook, the rate of job creation picked up in January. Spanish manufacturers increased their purchasing activity to meet rising demand. Pre-production inventories and finished goods inventories were higher in January.

During the month, vendor performance continued to deteriorate, with shortages of stocks on the supplier end.

Input and output costs fell in January

Falling commodity prices, especially for steel, helped to keep cost inflation low. Sale prices fell as manufacturers passed the savings on to their customers.

A boost in new orders and output growth may help to revive Spain’s manufacturing activity.

The UK manufacturing PMI was recently released. We’ll cover it in the next article.

Continue to Next Part

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The Competitive Landscape Is Evolving for Netflix

Netflix Reported $1.1 Billion in Domestic Revenues in 4Q15

(Continued from Prior Part)

Competitive landscape

Competition is intensifying for Netflix (NFLX) in the United States. Netflix faces stiff competition from Amazon (AMZN) Prime Instant Video, Hulu, and other media companies’ direct-to-consumer offerings, such as Time Warner’s (TWX) HBO NOW.

Netflix’s management stated in an interview with Benjamin Swinburne from Morgan Stanley (MS) and Peter Kafka from Re/code on January 19, 2016, that the company considers Time Warner’s over-the-top (or OTT) offering HBO NOW to be a “formidable global competitor.” HBO NOW is rapidly expanding around the globe to geographies including Spain (EWP), Nordic countries, and some countries in Latin America.

Netflix was responding to a query regarding the possibility of a spin-off of HBO from Time Warner. We discussed the possibility of Time Warner being up for sale in an earlier series.

Prime Instant Video

Netflix also stated that it has not yet observed a significant number of people opting for Amazon’s Streaming Partners Program through its consumer research, and as of now, it has no intention to offer the service as part of an OTT bundle.

Amazon is also producing original content and has signed Woody Allen to direct its first exclusive television series in 2016. Amazon has also entered into content-licensing deals with Viacom (VIAB) and HBO.

Late last year, Amazon announced the Streaming Partners Program, an OTT streaming subscription program. Under this program, Amazon has partnered with around 20 media companies. The new service will be available exclusively to Amazon Prime members. An Amazon Prime membership costs $99 per year, or $8.25 per month. The Streaming Partners Program provides viewers with free trial subscriptions.

Some of the content partners in this program, including CBS (CBS), Showtime, and Starz, are also offering special pricing for Prime members. A Showtime and Starz subscription will be available at a special price of $8.99 per month for Prime members in addition to the price of Amazon’s Prime membership.


Early this month, Hulu entered into a content licensing agreement with Sony (SNE) to show older content from the Sony Pictures library on its SVOD (subscription video on demand) platform. Hulu has also started offering an ad-free option plan for its users at $11.99 per month. Currently, Hulu’s free service is ad-supported, while its $7.99-per-month service provides content with fewer ads.

Hulu also offers Showtime for $8.99 per month on top of the $7.99 per month charge for a Hulu subscription.

Comcast (CMCSA) has also entered the OTT market. Early this month, Comcast launched its OTT platform, Seeso, priced at $3.99 per month. It offers primarily comedy programming.

Netflix makes up 0.97% of the PowerShares QQQ Trust Series 1 ETF (QQQ). If you’re interested in exposure to the television and radio sector, QQQ has 4.4% exposure to that space.

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