Market Update

On a regular basis, we keep our clients updated through email by publishing Market Update, Portfolio Update and Quarterly Update. Here you can read the latest Market Update:

Week 26 July – 30 July 2010

 US T-Bond 10 year yield: 2.923% (last Friday 2.967%)
MSCI: 1,128.23 (week + 0.94%, YTD -5.14%)
WTI Crude $: 77.39 (week -1.92%, YTD -8.80%)
GOLD $/Oz: 1,172.6 (week -1.47%, YTD +4.54%)
Dollar Index: 81.75 (week -1.06%, YTD +5.44%)

This week the market drew a sigh of relief when the Committee of European Banking Supervisors (CEBS) released the much anticipated stress test of the European banking system. Only 7 out of the 91 European banks flunked the test, a result that the market has been satisfied with.
The EUR/USD has seen volatile trading during the week, with fluctuations in the interval 1.28 – 1.31, with a major resistance point around the 1.31 mark.
The question is whether the stress test will mark a turning point, or whether the result only deliver a short-term relief.

We are at the top of the reporting season here in Europe, with earning-results coming out better than expected, defying the sluggish European growth.

Siemens AG, German engineering giant, reported Thursday a 12% rise in 3rd quarter profit from EUR 1.26bn to EUR 1.41bn., signaling that the industrial sector in Germany is rebounding, in line with the surging German business climate index (IFO).

Telefonica SA, Europe’s second largest phone company also came out much better than expected with 2nd quarter profits up 16%. The positive report was accompanied by a successful bid on a partial ownership of the Brazilian cell-phone operator Vivo. The combined news has traded the equity up almost 7% over the week.

Both Siemens AG and Telefonica SA are components in JGAM’s equity portfolio.