SocGen

James Mackintosh

Markets aren’t known for their patriotic fervour. Populated by cynics and motivated by money, there is little reason to expect local markets to support their national governments – particularly in the eurozone, where the response by the wealthy in crisis-hit countries has been to ship their cash to Germany or the UK.

But hang on! Perhaps brokers are more patriotic than popularly thought: it turns out that analysts tend to recommend shares in companies from their countries.

A nice piece of work by Charles de Boissezon at Société Générales global equity engineering and advisory unit looked at broker recommendations on German and Spanish blue-chips, the two markets tending to be reasonably domestically-exposed.

Not surprisingly there are more buy recommendations on German than Spanish shares, and more sells on Spanish.

But the breakdown is revealing: analysts at German brokers are much more positive about German companies than analysts working for Spanish brokers, and vice-versa:

Broker recommendations by country Read more

James Mackintosh

There’s been a lot of debate about the idea of a “great rotation” from bonds to equities, and every Wall Street strategist has a view (consensus: the equity bit will happen soon, but bond yields won’t rise yet as central banks keep on buying).

Alain Bokobza at SocGen has come up with a lovely chart to back up their view that money should be flowing into equity mutual funds, as indeed it has started to do. Read more

James Mackintosh

If you go down to the woods today, you won’t need a disguise: the bears are all at their annual picnic (OK, conference) in west London, led by uber-bear Albert Edwards of Société Générale.

He’s picked a good day to warn of looming disaster: yet another indicator suggests investor complacency is approaching danger levels thanks to the new year rally.

Short-term momentum indicators were flashing red in Europe last week, and even after falling back slightly remain very high. Read more