Worth Watching This Week
- Emerging Markets Stabilization? - For the week of February 14-18, the Brazil Bovespa Index was the best performing major global equity index at +3.51%. The Hang Seng was second at +3.36%. Third, the Toronto Stock Exchange Composite Index at 2.59%.
- Bahrain Economy- The economy of Bahrain centers around banking and financial institutions. On Sunday, February 20 the Central Bank of Bahrain reported all domestic banks are operating normally and the currency, the dinar, is trading unchanged.
- Bahrain Contagion Risk - Bahrain has a majority Shiite population. Its neighbor, and close ally, Saudi Arabia has a minority Shiite population and is majority ruled by Sunni. However, the risk is sympathy protests by the minority Shiite population which is concentrated in the oil producing eastern region of Saudi Arabia. Keep in mind the Iranians are Shiite-led.
- Gold - U.S. budget battles, global Inflation concerns, and Middle East protests have returned the bid in gold. The CFTC Commitment of Traders report as of February 15th showed gold futures long positions increased $0.8 billion and short positions decreased $0.2 billion for a net long increase of $1.0 billion. Year-to-date gold futures are down -2.459%. However, entering the week of February 21, gold is positioned to challenge this year's $1426.30 high which rests slightly below the all-time high from 12/7/10 at $1434.10.
- Lousy U.S. Housing Data - Housing remains absent of participation in the domestic recovery. This week, existing home sales, new home sales, and S&P Case-Shiller Home value reports are expected to report continued weakness in the housing sector. Consensus estimates for are for a 2% decline in combined purchases of new and existing homes. Home values are poised to fall 2.5% according to consensus estimates. Rising private sector borrowing costs will do little to prevent continued weakness in the sector.
- Robust U.S. Manufacturing Data & GDP - Durable Goods Orders last month were reported down -2.5%. Estimates for Thursday morning's release expect a reversal in fortunes +3.0%. Friday, a second estimate on 2010 Q4 GDP may show the economy grew slightly faster at a 3.3% rate versus last month's first reported 3.2% rate.
Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.