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Notes to myself, possibly of interest to others.
-- Bill Northlich

Wednesday, March 14, 2012

Unusual optimism from a trader

What Jamie Dimon did yesterday cannot be IGNORED. In the face of the FED (and they were upset, wanted to give a go-head) he raises dividend and buys back 9% of float. We are no longer clamoring on the every word of Bernanke (he will come with Sterilized Bond purchases in June, mind you). Private market forces are at work, banks are the healthiest they've been in 30yrs. Privates (Corps) will be clamoring for finance (M&A, Lending, Job growth, Small biz) and rates will move higher (allocation in works, money up the risk curve, expansion). U.S is an economy in early growth, she will lead. I do not care about China (relative, 7.5% will suffice), will be pulled by the U.S (Consumption). 

Furthermore Europe has ALWAYS been a function of trading partners growth. The commodity super cycle is closing (China Fixed asset investment has waned), we're no longer watching copper. We're in the infancy of a Consumption cycle. Corporates are Lean, earnings trajectory is up, FCF is north of 10%, they are CHEAP (14.4x for S&P); and we've had 64 C-bank easings since Q4. Will rates Rise - sure - they always do when economies heat up. S&P 1400 in the blink of an eye, with no resistance to 1450... 
---Prop. source

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