EURUSD Objetivo de EURUSD 1,30 cumplido. ¿Y ahora qué?

·         Tal como se indicara en el Reporte del 23 de Noviembre en la sección de Análisis Técnico sobre el euro, la divisa ha experimentado una notable tendencia hacia la baja habiendo alcanzado los niveles de EURUSD 1,3366 y de EURUSD 1,3020 (incluso penetrando hacia la baja el soporte psicológico de EURUSD 1,30).

·         Luego de un ligero rebote inter diario, el euro opera en la zona de EURUSD 1,3020 y la pregunta es ¿hacia dónde va su precio ahora?

·         Si bien no se descarta un rebote de corto plazo teniendo en cuenta como primera resistencia EURUSD 1,3150, existe la posibilidad de que a mediano plazo (1er trimestre dl 2012), la moneda mantenga una tendencia hacia la baja transándose entre EURUSD 1,2870 y EURUSD 1,2450 (ver gráficos adjuntos).

·         Los problemas de deuda en los países de Europa, la baja en la tasa de interés de referencia por parte del BCE, y las mayores probabilidades a una recesión en la región en 2012, son algunos de los motivos de la depreciación del euro frente al dólar.

·         La semana pasada Mario Draghi, bajó la tasa de interés de referencia en Italia a 1% desde 1,25% y 1,50% a principios de noviembre.

·         Cuando un país ajusta su tasa, se da una depreciación de su moneda.

·         Sin llegar al extremo de decir que el euro podría llegar a desaparecer, se puede afirmar que la misma se ha debilitado mucho en los últimos meses y que la tendencia es que continúe a la baja en el mediano plazo.

·         Ni siquiera ha ayudado la recuperación del petróleo a los niveles por encima de los USD 100 hace algunas semanas. Históricamente los precios del euro tenían una importante correlación positiva con la evolución del crudo. Últimamente no se está cumpliendo dicha relación.

·         La baja en los precios de muchos commodities (principalmente agrícolas) y muchos indicadores macroeconómicos positivos en EE.UU (y juegan a favor del dólar), contribuyen a la tendencia bajista en la paridad.

·         El fin de semana pasado las autoridades de la Eurozona llegaron a un acuerdo en la región que lejos estuvo de tranquilizar al mercado. En la última decisión del BCE, lo único que dio a conocer fue una serie de medidas para incrementar la liquidez de los bancos europeos, pero ante las presiones respecto a una acción radical para detener el deterioro de los mercados financieros de la Eurozona, el titular de BCE se abstuvo diciendo que no ve peligros de deflación y que un artículo en la Constitución de la Unión le impide salvar estados en particular.

·         El BCE sostiene que los gobiernos deben abordar la causa de la crisis, ya que se centra en conseguir préstamos de los bancos en lugar de aumentar las compras de bonos de naciones endeudadas.

·         Por otro lado, el viernes pasado los líderes europeos reunidos en Bruselas llegaron a un principio de acuerdo en cuanto a mayor disciplina fiscal, aunque todavía hay divisiones en lo referente a las formas en que será implementado y no incluye a los 27 países miembros de la Unión Europea (sólo a los 17 países de la Eurozona).

·         De todos modos, los acuerdos no sirvieron para alejar los miedos de los inversores y, por si esto fuera poco, las agencias calificadoras de riesgo volvieron a alertar hacia futuros recortes de los rating crediticio tanto de países de Europa como de los principales bancos de la región.

Figura 1

Credit Default Swaps (CDS): principales países europeos, precios al 14/12/2011

País	CDS	Variación diaria
Portugal	1.213	0.5
Irlanda	766	2.1
España	442	0.6
Italia	574	1.2
Francia	234	3.0
Alemania	102	0.5
Reino Unido	97	-2.0
Suecia	82	7.1
Noruega	47	5.5
Bélgica	329	2.1

Fuente: elaboración propia en base a información de Bloomberg

·         Si bien no se descarta un rebote de corto plazo, teniendo en cuenta como primera resistencia la de los EURUSD 1,3150 (luego hasta el 38% de Fibonacci de los EURUSD 1,3430), para el mediano plazo (transitando el 2012) la moneda tiene objetivos bajistas en los EURUSD 1,2870 y EURUSD 1,2450 (ver gráficos de más abajo). La situación de la región es más que delicada y una recesión de la Eurozona parece estar prácticamente descontada.

Figura 2

EURUSD: últimos 10 meses, M.A. de 21 y 14 ruedas. RSI y MACD (paneles inferiores)

Fuente: cálculos propios con data de Reuters

·         La perspectiva del euro en el largo plazo muestra un comportamiento de altibajos en los precios entre los máximos del 2008 cercano a los EURUSD 1,6000 hasta los mínimos del 2010 y 2005 en entorno a los EURUSD 1,1800.

·         La delicada crisis que se vive en la Eurozona continuará presionando los precios en el mediano plazo con los siguientes objetivos y soportes bajistas: EURUSD 1,2873, EURUSD 1,2460 y EURUSD 1,1860.

·         El promedio móvil de 200 ruedas se muestra ya inclinándose hacia el lado negativo y bien por encima de la línea de los precios.

·         En cuanto a los osciladores técnicos, los mismos se muestran con pendientes negativas y aún lejos de las áreas de saturación.

Figura 3

EURUSD: últimos 7 años, M.A. de 200 ruedas. RSI y MACD (paneles inferiores)

Fuente: Cálculos propios con data de Reuters

Incertidumbre implica Volatilidad - Resumen semanal

Los mercados bursátiles continúan mostrando gran volatilidad y nerviosismo antes anuncios interdiarios sobre el estado de las distintas economías a nivel global.

A pesar del visto bueno de la mayoría de los países miembros de la Eurozona para aumentar el paquete de ayuda a Grecia, los inversionistas mantienen su preocupación los que se traduce en una inestabilidad de los mercados de capitales.

El temor a una recesión en EE.UU. que sigue mostrando un mercado laboral que no logra recuperarse genera gran preocupación a nivel mundial.  Aún así el dólar americano ha ganado camino frente a importantes commodities como el oro, la plata y el petróleo, así como también frente a divisas internacionales como el euro y el franco suizo. El aumento de las posiciones en dólares muestra el incremento de los miedos a una nueva crisis internacional.

El oro ha perdido en las últimas semanas casi -15% tras su máximo histórico en los USD 1.920. Por su parte, el petróleo continúa la tendencia bajista de corto plazo y cotiza cerca de sus mínimos anuales en los USD 80 por barril.

La semana que viene los mercados serán puestos nuevamente a prueba ante una serie de noticas importantes tanto en EE.UU. como en Europa. Se conocerán datos de empleo y del sector manufacturas en EE.UU. y lo más relevante de Europa serán los anuncios tanto del BCE como el BoE.

Breves Latino América

En Brasil, el Real tocó un mínimo anual frente al dólar cercano a los USDBRL 2,00. La depreciación no tiene que ver con la disminución en las tasas de interés de referencia y la expectativa de una posible reducción adicional de 50 puntos antes de fin de año (probablemente la próxima reunión del Consejo Financiero de Brasil el 18 y 19 de octubre), sino con la preocupación de una recesión económica a nivel global que pudiera implicar una salida neta de capitales en el futuro cercano.

En Argentina la semana pasada se anunció un nuevo superávit comercial de USD 640 millones  (inferior a lo esperado y menor que el mes anterior). Sin embargo el PIB del segundo Trimestre se elevó a 9.1%, lo que generó buenas expectativas económicas en el país Sureño.

La tasa de desempleo de Perú es ahora del 7%, por debajo de las expectativas de mercado.

El PIB de  Colombia creció 5,2% (YoY) en el 2do Trimestre del 2011, en línea con lo esperado.

En las próximas semanas se publicará la balanza comercial y el índice PMI de Brasil, así como las ventas minoristas y la tasa de desempleo en Chile.

Preocupación por Grecia y estado de Economía en USA y Europa

Las mayores preocupaciones económicas vienen de los países de la Unión Europea. La incertidumbre acerca de un potencial default en Grecia son cada vez mayores y los inversores toman nota de la situación. De ocurrir el default, los bancos europeos están muy expuestos a la deuda de Grecia en aproximadamente EUR 300 mil millones, que potencialmente podrían perder producto del default.

Por otro lado, la Reserva Federal decidió el miércoles aplicar una nueva medida para impulsar a una economía de EE.UU. que no está lejos de una recesión. La “Operación Twister” consiste en comprar activos de largo plazo por USD 400 mil millones y vender activos de corto plazo por la misma cuantía. Lo que se busca es aumentar la tasa de interés de corto plazo y bajar la de largo plazo. Cabe destacar que esta medida se aplicó con éxito en los años 60, cuando la economía Norteamericana era muy distinta a la que se tiene ahora en el siglo 21.

A pesar de un tibio rebote hoy en la mayoría de las bolsas del mundo, los mercados accionarios finalizarán la semana con una importante baja cercana al -7%.  Ayer los mercados financieros experimentaron uno de los días más negativos del año, con pérdidas diarias superiores al -5% en muchos mercados emergentes.

Tanto el Oro como el petróleo, han sufrido importantes ajustes esta semana ubicándose ambos en su menores niveles en dos meses (USD 1.680 y USD 80,30 respectivamente). Esta baja en los commodities se debe a un rescate de sus cuotapartes en los Hedge Funds por parte de los inversores, antes que las pérdidas se potencien aún más.  En otras palabras, muchos Administradores de fondos han tenido que hacerle frente a coberturas de margen de sus cuentas y se han visto obligados a vender posiciones. Nuevamente el exceso de crédito hace de las suyas.

La semana que viene será importante en lo que respecta a informes macro. En EE.UU., lo más relevante tendrá que ver con la confianza del consumidor, las ventas de viviendas pendientes, la tercera estimación del PIB del 2ºT11 y las órdenes durables.

La tolerancia al riesgo de los inversores ha disminuido considerablemente y la precaución debe primar a la hora de tomar decisiones de inversión. Ahora más que nunca es importante consultar a expertos antes de tomar decisiones de inversión.

Economic uncertainty: How did we get there and how do we get out of it

To put a label on the state of the economy has become somewhat of a pastime for many economist. Is it a slowdown, a correction or a recession? Because of how we got to this state of commotion, it is perhaps more appropriate to refer to the situation as a “Reality Check”.

How did we get where we are today?

According to The Heritage Foundation Index of Economic Freedom, Greece ranked 81^st in the world and second in the European Union (after Poland) with the lowest Index of Economic Freedom. But was known for having one of the highest “human development and quality of life indices in the world” (The Economist Intelligence Unit's quality-of-life index -2005). And that is impressive for a country with an economy based primarily on tourism, shipping, food and tobacco but not a strong industrial production. How did they do it? Simple, Greece issued sovereign bonds with a high yield return, thus receiving a great deal of cash that would help pay for many of their social programs.

In other parts of Europe, the aging and retired population outnumbered a smaller younger work force that had the burden of paying for a social security system that was rapidly accumulating massive deficits. The idea of investing in a sovereign bond with a high yield was appealing, it would provide a “cash flow” that would help cover costs.. After all, who would have thought that an EU country would ever face default? But it happened. And not only Greece was in trouble but also countries that purchased the bonds were about to lose their investment and their capacity to meet the needs of those that were counting on the Social Security benefits. Thus a “Reality Check” in Europe: Social Security must be reformed.

In the US, a similar situation has been brewing.  The “pay as you go” Social Security system is collapsing. With taxes as low as they (yes they are low), and over 9% unemployment it is very difficult for government to keep up with the demand for social benefits with less money feeding into the fund. This is a time bomb rapidly ticking away. The “stimulus packages” created by the Federal Reserve was needed after excessive spending by most financial institutions, but now the system has enough cash.

So, how do we get out of this mess?

We have to start by acknowledging a reality: We became too greedy to fast. And I have to say that Politian’s have not help in these past years.  

Now that the financial system has cash, it is not a matter of another “QE” round. The issue is what to do with the money and how to create jobs. So here are few suggestions that might solve several problems:

1.        CUT taxes on CORPORATIONS, but RAISE taxes on INDIVIDUALS. Companies create jobs, not people, so if you give corporations a real stimulus, they will most likely create jobs. On the other hands, as jobs are created, people will be getting a taxable paycheck that will help government with the Social Security debt.

2.       Modify the Social Security system to one similar as in Chile (for example), a mix between private offer and government sponsored, were both would compete for customers

a.        Individual capital Accounts would be created and managed by the private sector;

b.      The government would have to “compensate” those that switched from the “old” system to the “new’ one, via the issue of a bond with a real rate of return and in an amount equivalent to contributions already made by the individual to the “old” system. The effects of this are:

                                                               i.      Increase in domestic savings and investment;

                                                             ii.      Increase in formal employment.

1.       Financial institutions for example will need more people for this to work well;

2.       The money collected every month from individuals has to be invested somewhere, so financial institutions will start lending out to new projects.

                                                            iii.      A strengthening of the capital and financial markets.

3.       Housing. Financial Institutions should assume their losses in the mortgage sector, write them off, price the properties to their real current market value, cut all the foreclosure or “short sell bureaucracy and put them back on the market for sale making sure this time that proper mortgage procedures are followed.

Spending and supply side economics is not working because this is the 21^st Century and traditional Keynesian models must be updated. Savings, investing and valuing properties accordingly will create jobs and move the economy in the right direction. And please, keep Politian’s out of this; get real economist and financial experts on board.

Capital Sources: Venture capital deals are up in South Florida

A quarterly survey shows that venture capital outlays in Florida totaled $192 million in the first half of the year, 27 percent more than in the same period last year and the biggest six-month total since 2007.

Mike Seemuth

2011-08-17 12:00:00 AM

Scientist and serial entrepreneur Leonard Pinchuk runs a medical device company that attracted $2 million of fresh venture capital this year and could have gotten much more — part of a broader increase in VC investments statewide.

A quarterly survey shows that venture capital outlays in Florida totaled $192 million in the first half of the year, 27 percent more than in the same period last year and the biggest six-month total since 2007. The survey by the National Venture Capital Association and professional services firm PcW shows that venture capital sources invested an average of $6.85 million in 28 Florida deals from January through June.

One of those VC deals was engineered by Pinchuk, co-founder and chief executive of Innfocus, a Miami company that is developing a drug-eluting stent inserted in the eye to treat glaucoma.

"We think we have the world's best treatment for glaucoma," he said, and some VC investors apparently agree.

Pinchuk said after he made a presentation at an investment conference last January, several venture capital firms offered to pay $10 million to $15 million for control of Innfocus. "The venture community began to realize that we were going to win this war on glaucoma, so they started throwing money our way," Pinchuk said. Innfocus is working closely with the Bascom Palmer Eye Institute at the University of Miami on clinical development of the company's glaucoma treatment device, which could be approved for sale in Europe before the end of the year.

But rather than sell control of Innfocus for more money, Pinchuk agreed to a $2 million follow-on investment by Saints Capital, a San Francisco-based venture capital firm that already had invested in the private Miami company. Pinchuk said he and other Innfocus insiders personally invested $300,000 in the company at the same time. Pinchuk said the company declined offers from other VC firms because they wanted to "dilute you by 75 percent and then fire you and your vice presidents … We decided not to take their money."

Deal Velocity on Rise

Along with institutional VC firms that seed Florida enterprises, some individual investors of venture capital, commonly known as "angel investors," are becoming more active, too.

New World Angels, an angel fund with about 40 individual investors in South Florida and the Tampa area, recently led an $8.3 million Series A capital raise for VirtualWorks, a private Boca Raton software company. VirtualWorks is led by Edward Iacobucci, co-founder of publicly held business software developer Citrix Systems in Fort Lauderdale.

Jonathan Cole, a co-founder and director of New World Angels, said the investor group also plans to close a $3.5 million investment in another South Florida company and a $1.2 investment in a Gainesville business by year-end.

"We have seen an increase in deal flow, which means we have seen an increase in the number of applicants and an increase in the quality of the applicants," said Cole, senior partner in the Fort Lauderdale office of law firm Edwards Angell Palmer & Dodge. Like other funds that provide venture capital, New World Angels is likely to hold onto equity positions for years. Investors in the fund "are looking for a liquidity exit within five to seven years," Cole said.

Mature companies may be attracting more venture capital than young startups.

"There is so little capital available for early-stage investment in Florida," Cole said. "There is more money available for expansion capital."

An investment in expansion could happen later this year at CareCloud, which sells information technology services to small businesses in the medical services industry. Started in 2009, Miami-based CareCloud has raised about $8 million from angel investors and has expanded its operations to 20 states.

Albert Santalo, CEO of CareCloud, said the company plans eventually to operate in all 50 states and to finance growth by raising another $8 million or more from an institutional venture capital firm.

"There is a lot of interest right now from the venture capital side," Santalo said. "There will probably be an institutional investor here shortly … We're bringing on states very quickly."

FoxyP2 Inc., a Miami company that provides English instruction online, got a $4.25 million follow-on investment in the spring from Flybridge Capital Partners, a Boston-based VC firm. FoxyP2 is "in a growth phase. The revenues are growing nicely," said John Karlen, general partner of Flybridge Capital. "This capital is being used for a couple of purposes: to fill out the [management] team and to expand aggressively across Latin America."

Karlen said five-year-old FoxyP2, doing business under its trade name Open English, is one of many technology-oriented companies in the Sunshine State that could qualify for further VC investment: "I probably am in Florida every two months, three months, meeting with companies. I just view it to be a really interesting market."

Karlen will be one of the speakers at a venture capital conference that Florida International University will host in November. More than 300 people are expected to attend the second annual Americas Venture Capital Conference Nov. 16-17 at the Biltmore Hotel in Coral Gables.

Money seekers and sources also will convene next Jan. 31 to Feb. 1 at an annual statewide venture capital conference in Naples organized by the Florida Venture Forum, a not-for-profit group.

Stanley G. Jacobs, a shareholder in the Fort Lauderdale office of law firm Greenberg Traurig, said participants in the Florida Venture Forum conference earlier this year were more optimistic than they were in 2010 and 2009 because the pace of VC deal-making has picked up.

"There is a lot of momentum toward getting [venture capital] deals done," said Jacobs, whose practice centers on VC investments and other types of financial transactions.

"I'm seeing a lot more early-stage companies come back to the market and look for capital," Jacobs said, citing venture capitalists' interest in companies that focus on "social media, health care and anything that's a business in the 'cloud,' as they call it."

Robin Lester, executive director of the Florida Venture Forum, said more investors have accepted venture capital investment as a viable alternative to holding such mainstream portfolio assets as stocks, mutual funds and real estate.

At the same time, however, many venture capital firms appear to be taking a more incremental approach to investment.

"A lot of people are playing it safe … The old $5 million round [of venture capital financing] is now a $3 million round," Lester said. "The old $10 million round is probably a $7 million or a $5 million round."

Lester said economic uncertainty and volatility in securities markets also have rattled some individual investors: "I had an angel investor who told me, 'You know, I used to be able to write a check for $50,000. But now I have to ask my wife for permission.' And I think that says a lot about what has happened to all of our 401(k)s."

the pace of VC deal-making has picked up

A quarterly survey shows that venture capital outlays in Florida totaled $192 million in the first half of the year, 27 percent more than in the same period last year and the biggest six-month total since 2007. The survey by the National Venture Capital Association and professional services firm PcW shows that venture capital sources invested an average of $6.85 million in 28 Florida deals from January through June.

venture capital conference that Florida International University will host in November. More than 300 people are expected to attend the second annual Americas Venture Capital Conference Nov. 16-17 at the Biltmore Hotel in Coral Gables.

Money seekers and sources also will convene next Jan. 31 to Feb. 1 at an annual statewide venture capital conference in Naples organized by the Florida Venture Forum, a not-for-profit group.

The downgrade: A political matter, not economic

One advice many of us got as we started a family was that we should never argue or vent our differences in public or in front of the children. Unless you are J-Lo or Marc Anthony, then your affairs can bring in a lot of money if published!

Since 1962, the debt ceiling in the US has been raised 74 times. President Reagan raised it 18 times, President Clinton 4 times and President Bush 7 times. Did you see a “great debate” then? Not that I recall.

There is only one other country in the industrialized world that has a debt ceiling, and that is Denmark. But it has been established so high that it is virtually impossible it will ever be reached. Its 2 billion Danish Kroner or 115% of the country’s 2010 GDP.

Think about it. Every time any government submits a budget proposal, isn’t it like asking for a raise in the debt ceiling anyhow? After all most governments have expenses that exceed income. The recent approval of the new US debt ceiling represents about 100% of the nation’s 2011 GDP. In Japan, debt is 228% of its GDP, and I don’t see credit agencies making a fuss about Japan’s credit rating. Let us not forget that these same agencies are the ones that in 2006 gave a AAA rating to bonds backed by subprime mortgages that later defaulted and started this economic mess.

Some “analysts” are now talking about other currencies as possible substitutes for the US Dollar. The Euro? Right! With all that are going on, and with real, true and meaningful downgrades of debt in some of the countries members of the Euro zone. Others have talked about the Chinese Yuan; do they know that the Yuan is a controlled currency that cannot be “exported” from China as stated by their Central Bank? Moreover, who has financed the Chinese factories or who buys most of what is produced in China? The US!  I challenge any one to travel oversees with Yuan’s (if they have them) or Euros and see which currency is widely accepted. It’s a no brainer, it will always be the US Dollar.

The question is not whether the US can pay its bills, but rather will our politicians be able to work for “the good of the people” and never forget that we are a “nation of many who stand as one”. That is why our credit rating was downgraded. Not because there is any doubt the US would not honor our debt, but because there is doubt our politicians would be able to work as a team, “E Pluribus Unum” (From the many, one).

My Grandfather used to tell me that a measure of the maturity of an individual lies in his/her capacity to pay the bills. And the US is a mature country; it will always pay its bills. No doubt we will overcome this mess, but it will take some time and effort by all of us.

Default...What Default?

According to definition, a Financial Default is when a debtor has “violated a loan covenant of a debt contract”. So in the case of for example Greece, yes the country will default its debt because it cannot pay its obligations to creditors despite all the aid it received.  Or what happened to Russia back in 1997 and Argentina later on as when the due dates came, these countries could not meet their obligations.

The credit rating agencies have threatened the US markets with a downgrade of the US debt. Remember, these are the same agencies that back in 2006 gave “sub prime mortgage backed securities” a AAA rating !!!!

The recent losses in the US Stock Market are mainly because of some disappointing corporate earnings reports and to a lesser degree because of a possible “default” by the government. We can conclude this because of the behavior in the price of Treasury Notes, where the 10 year has remained stable with a yield at around 3%. So we believe that fixed income investors have already discarded debt related problems

Who are the holders of Government Obligations? For starters US Institutions and Private Investors hold 42% of the national debt, followed by the Social Security Department with 18%, Civil Service and Military sectors have 8%, China 7.5% and the remainder is 24.5% is spread out amongst various other countries.  Is it possible that politicians would “default” on their own people that elected them?

And what about the budget, where does the money go? Well 23% goes to Medicare and Medicaid, 20% to Social Security, another 20% to Defense, 6% is for interest payments (yes only 6%!), and the reminder 31% pays government salaries.  Maybe Senator Boehner should look at reducing the salaries in Congress contributing to the needed cuts. To this date what has been said is that the US is at “risk” of a default. But what default are they talking about?

Given the above we can point out the following matters:

·         The US government reached the $14.3 trillion “ceiling” a few months ago, and is operating with surplus taxes collect.

·         The deadline of August 3rdd is approaching rapidly.

·         Congress must authorize a raise in the Debt ceiling.

·         Republicans what cuts with no new taxes and Democrats want new taxes. Frankly, no nation can function is taxes are not collected accordingly and government shows responsibility when spending OUR money.

·         We believe that a “default” is highly unlikely and there is about a 25% chance that the AAA Credit Rating will be lowered.

GLOBAL OVERVIEW July 21, 2011

GLOBAL OVERVIEW: The most important day for Europe has arrived. Futures in Wall Street are up by an average of 0.1% while in Europe bourses lose an average of -0.2%.
 
The Eurozone authorities are meeting in Brussels to discuss the economic troubles that have been lingering over the region for more than a year now. One of the main issues on the table is a second aid package for Greece.

The President of the Eurozone Finance Ministers, Mr. Jean Claude Juncker has indicated that despite a new rescue plan for Greece, a default cannot be discarded although great effort will be done in order to avoid this.

Mr. Juncker also indicated that he does not believe an agreement will be reached for new taxes for banks within the region. Furthermore, Presidents Sarkozy (France) and Merkel (Germany) are ready to allow a temporary default by Greece as part of a repurchase plan of bonds that would prevent the crisis from spreading to other countries. They also are opposed to the proposal of new bank taxes.

The corporate results of S&P 500 companies have become a driver for investors. For today we expect to get results from Microsoft (MSFT) and Philip Morris (PM).

Currencies:

The Euro is down at EURUSD 1.4170 while the British Pound is at GBPUSD 1.6170. The Yen remains stable at USDJPY 78.70.

International Indicators:

For today we should get the reports on Unemployment requests, the FHFA in the Real Estate sector and the Philadelphia Fed report.

Commodities:

The main commodities are in opposite direction, Gold gaining 0.2% and Oil losing -0.8%

Corporate News

Intel (INTC):  The Company reported better than expected positive results due to better sales within emerging markets. However price of shares were down after the announcement that the company expects lower sales of PC for the rest of the year. Earnings reached $0.59 per share versus estimates of $0.51.

LATIN AMERICA: Indicators and News

Brazil. In an effort to control inflation, the central bank indicated it will halt its rigid monetary policy after it raised interest rates for the fifth consecutive time this year.

The Monetary Policy Committee (COPOM) of the Central Bank unanimously vote to raise the Selic interest rate by 25 bases points to 12.5%, a move expected by the markets.

Greece: Two Steps forward and one backwards?

Most of you have heard the story about a frog trying to climb out of water well, where for every two steps the frog climbs, it falls back by one step, making its progress arduous. Thus the origin of the known phrase "Two steps forward one step back..."

Back in 1997, Russia came under great financial distress. Falling productivity, an artificially high fixed exchange rate between the Ruble and other foreign currencies, as well as an ongoing fiscal deficit created the perfect storm for a financial meltdown. Furthermore, a political crisis forced then Russian President Boris Yeltsin to replace the Prime Minister Viktor Chernomyrd. Internal debt was rapidly accumulating and in order to attract capital, interest rates were elevated to 150%. But because of “irregularities” in managing government funds, payment of internal obligations such as public employees’ wages, pensions, transportation and communal utilities became a bit of a lottery, some got paid and some didn’t. The IMF stepped in and provided $22.6 billion in aid.

But one year later, 1998 Russia was in even more trouble than the year before. And because the government was unable to implement any sensible economic reform that would solve its mounting fiscal problems, the end result was devaluation of the Ruble, default on its domestic debt obligations and a moratorium of payments to foreign creditors.

Back in 1998, Russian internationally traded bonds reached “junk bond” status and traded around 10% - 12% of their face value. However and thanks to recovering in the prices of oil, natural gas, wheat, mining and other needed commodities, as well as a devaluation of the Ruble and deep budget cuts, by 2000 Russia was well on its way to recovery.  A Russian Global Bond with a maturity in 2018, trades today (2011) at 140% of its face value, with a coupon of 11%, thus yielding around 4.25%.

Russia took “two steps forward one step back” and got out of the well!

It’s interesting how history has a stubborn way of repeating itself. Does the above resemble in any matter what Greece is going thru? Before you answer, behold there are great differences.

Greece has a labor force of about 5.05 million (versus 73 million in Russia). And the Greek economy is based mainly on tourism, shipping, industrial products, food and tobacco processing, textiles, chemicals, metal products, mining and petroleum refineries. As the world economy has slowed down, much of Greeks trade is at a deficit due to less demand. Also, Greece is tied to the Euro, and is unable to devaluate its currency, like Russia did in 1998. And most Greeks are used to getting a job in the public sector (about 1/3 of the population is employed by the government), they like to retire at the young age of 61 (the average in most European countries is retirement at 65), and pensions are high (Greece is considered to have the 22nd highest human development and quality of life indices in the world). Yet taxes are very low.

Holders of Greek bonds are mainly foreign entities and a default could have a “spill over” effect on other European countries, so clearly a “solution” will be found to assist Greece in avoiding a catastrophe. When measured against the rest of the world, the size of the debt is not unmanageable, $441 billion or 125% of its GDP (as an example, Japan’s Debt is 228% of its GDP). But the main question will remain: Can Greece eventually get their act together, clean up the fiscal deficit, repay their debt and get back on their own feet? Perhaps, but it will take help, especially from other EU countries as well as a lot of time since the world economy is at a slow down. Don’t expect this problem to go away soon and this means that the financial markets will experience volatility for some time to come.

Will Greece take two steps forward and one back or will the twisted “one step forward two backward” prevail? Certainly we all hope for the first to happen.

Mas acciones menos Bonos

A pesar del desastre natural en Japón, la guerra en Libia y la violencia en el Norte de África lo que llevaron al precio del petróleo a un elevado nivel, la Bolsa de Valores en Wall Street finalizó el 1er trimestre del año con un balance positivo. En estos primeros tres meses, el Índice DOW Jones aumentó un 5.09%, el NASDAQ subió 2.92% y el S&P 500 ganó 5.4%. Los volúmenes de transacciones diarias no estado por debajo de lo normal, lo que indica que a pesar del optimismo a la hora de invertir, esto se hace con cautela. Los reportes de desempleo que se darán hoy serán cruciales para determinar si el 2do trimestre será igualmente positivo.

Resulta interesante que recientemente la empresa PIMCO, especialista en negociar títulos de renta fija, vendió toda su posición que mantenía en Letras del Tesoro Americano. Las razones que su Directiva dio a conocer para ejecutar esta movida, fue que existían otras alternativas más atractivas en el terreno de renta fija. Se piensa que en la medida que la Reserva Federal disminuirá su programa de compra de títulos, esto hará subir las tasas de interés probablemente a partir del 2do. semestre de 2011.

Aún con un mercado inmobiliario que continúa deprimido, alzas en los precios de los combustibles producto de las revueltas en el Medio Oriente y la subida del petróleo, así como muchas de las materias primas subiendo incluyendo el de la comida, pareciera ser que muchas acciones a los actuales precios resultan una inversión más atractiva que una Letra del Tesoro y ni hablar de un CD bancario. Las empresas muestran buenas utilidades y al parecer los gastos a nivel privado se han mantenido controlado, por lo que no sería de extrañar que el 2do. trimestre se continúe observando márgenes de utilidad atractivos. Pero hay que ser cautelosos.

Al parecer, existe un gran optimismo que el reporte de Desempleo confirmará que la economía se encuentra en franca recuperación. Se deduce esto de los Índices Futuros en Wall Street, los cuales a la hora de escribir este reporte, se encontraban muy positivos, lo que indica una solida apertura hacia la alza. Igualmente el resto de los mercados a nivel mundial presentaba resultados muy positivos. Luce como que el 2do trimestre del año empezará con ánimo.