Salient to Investors:

Jim O’Neill writes:

  • Nothing has materially changed by the US election and the Chinese leadership handover.
  • The positive surprise in Korean exports in October indicates a pick up in world trade.
  • Japan reported its first seasonally-adjusted current account deficit following other generally grim economic news.
  • It is tough to see good news for the foreseeable future in the Euro area.
  • UK pension funds now hold 43.2% of their assets in gilts, 38.5% in equities.
  • Australia might not be a winner from the ‘New China’ due to its dependence on commodities.
  • The Chinese and US economies look notably better. The improvement in the US external deficit is starting to look more and more structural – the US is changing itself. Exports are now at 80% of the level of imports.
  • Chinese data is very encouraging and the Chinese economy is rebalancing.
  • Despite encouraging US data, market momentum has turned down. The S&P 500 is forming a negative chart pattern similar to early summer of 2012 and summer of 2011, when the spot price and its 21-day moving average had dropped below the 50-day moving average. A number of other market chart patterns suggest that ‘risk off’ is in charge.

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