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French Stocks To Drop 33% On Macro Recoupling

Tyler Durden's picture





 

The world's macro data is pointing a significant slowdown, and yet - as we noted here - stocks remain sanguine; buoyed by the promises of central planners everywhere that no harm will come to them. Deutchse Bank's Jim Reid, like us, is a little skeptical that this chasm of un-reality can remain for long. His perspective is from the correlation of PMIs and YoY changes in equities (based on data back to the 1990s). The current implied results for the US, UK, and the big 4 in Europe is more than a little worrying - with the French in most trouble.

 

US 10Y Yield vs The Dow vs ISM Manufacturing PMI

 

But Deutsche Bank does a little more work and regresses the factors over a longer period - based on changes in equity prices and changes in PMIs...

 

Via Deutsche Bank,

As we always stress this is a simple model but one that has over time proven to be a reliable guide to market performance. Rarely do the two variables stay out of line for long, something normally gives. At the moment the US equity market is 7% above where the ISM suggests it should be (was fair value last month before Monday's disappointment), with the UK, Spanish, German, Italian and French markets 13%, 13%, 14%, 19% and 33% above where their respective PMIs suggest they should be.

 

 

 

Source: Deutsche Bank

 


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Thu, 04/04/2013 - 11:31 | Link to Comment McMolotov
McMolotov's picture

Too bad the French don't have Le Bernank.

Thu, 04/04/2013 - 11:38 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Viva Monte Carlo!

CAC 40 X7 Short GR

QS0011223540 CAC7S
 

Thu, 04/04/2013 - 11:42 | Link to Comment malikai
malikai's picture

See my post below.

It looks (almost) over.

Thu, 04/04/2013 - 11:47 | Link to Comment DJ Happy Ending
DJ Happy Ending's picture

Ben will print a bid for them. No worries.

Thu, 04/04/2013 - 11:47 | Link to Comment Fleecer
Fleecer's picture

Where's the story about bitcoin being hacked last night?

Thu, 04/04/2013 - 11:49 | Link to Comment malikai
malikai's picture

That was Instawallet, not Bitcoin.

Thu, 04/04/2013 - 12:08 | Link to Comment Cursive
Cursive's picture

@malikai

mtgox was getting slammed with DDOS too

Thu, 04/04/2013 - 12:11 | Link to Comment malikai
malikai's picture

True, and once again Gox failed.

But DDoS's are about as common as 8AM gold.

Thu, 04/04/2013 - 11:39 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

If Christine just let her beard grow ....

Thu, 04/04/2013 - 11:49 | Link to Comment Cursive
Cursive's picture

@McMolotov

They do.  Have you seen the Fed's H.8?  Le BernanQE funneling Eurodollars to domestic subsidiaries of foreign banks.

 

http://www.zerohedge.com/news/2013-02-09/feds-bailout-europe-continues-r...

Thu, 04/04/2013 - 12:11 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

Bernanke Le Pew

Thu, 04/04/2013 - 11:34 | Link to Comment It is a bargin ...
It is a bargin my friend's picture

Fuck the French, arrogant ,smug, self interested wankers....thats all I have to say on the matter

Thu, 04/04/2013 - 11:45 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

Well, at least the French women have hair down there unlike the Kardashian baldie type trash here in the United Skanks of America........

Thu, 04/04/2013 - 17:25 | Link to Comment NihilistZero
NihilistZero's picture

First post I've ever seen in my time on the internetz extolling the virtues of "le pubes" LOL!

Thu, 04/04/2013 - 11:35 | Link to Comment jubber
jubber's picture

...But French 10Y Bonds hit an all time low today

Thu, 04/04/2013 - 11:40 | Link to Comment Rip van Wrinkle
Rip van Wrinkle's picture

The French Social Security Fund is piling in as I type. And when that fund dries up, it'll be the pension funds.

Thu, 04/04/2013 - 11:41 | Link to Comment Key-Rick
Key-Rick's picture

But the historical data don't include the one variable that we have now which didn't exist then - Uncle Ben's printing press running balls to the wall.

Thu, 04/04/2013 - 11:42 | Link to Comment SDRII
SDRII's picture

the death struggle is on to take the yen through the previous low. Doing yo mans work during US trade. pump pump pump pump

Thu, 04/04/2013 - 11:40 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

PMI, a quaint notion.

Listen Kevin Henry, if you want to enjoy this summer out in the Hamptons, you better start hitting the BUY button.

The Mitzubishi Zeros have already done their bit this morning.

Thu, 04/04/2013 - 11:41 | Link to Comment hugovanderbubble
hugovanderbubble's picture

Jubber, easy cos they are buying France selling Spanish Italian and Portuguese ones.

Thu, 04/04/2013 - 11:41 | Link to Comment malikai
Thu, 04/04/2013 - 11:43 | Link to Comment Monedas
Monedas's picture

"A snake is an animal .... which, in theory .... has the capability .... to eat itself !" .... Monedas   1929   Comedy Jihad World Tour

Thu, 04/04/2013 - 11:44 | Link to Comment gjp
gjp's picture

yeah the U.S. is this most reasonably priced market.  Sure, that makes sense.

The U.S. and the UK have the biggest trade deficits, the lowest manufacturing share of GDP, and the biggest concentration of financial fraud.  I think those facts are more meaningful than indexes of economic reports from government statisitcal departments.

Thu, 04/04/2013 - 11:46 | Link to Comment fonzannoon
fonzannoon's picture

It's cool Jack Bogle said the US would have two 50% drops in the next decade and at the same time stocks will return 7% per year avg.

Thu, 04/04/2013 - 11:48 | Link to Comment Jason T
Jason T's picture

hence why they call these things "corrections"

Thu, 04/04/2013 - 12:14 | Link to Comment americanspirit
americanspirit's picture

Merde! Allons enfants du patrie - le deuxieme revolution est arrive. Ou sont les guillotines?

Thu, 04/04/2013 - 13:27 | Link to Comment Key-Rick
Key-Rick's picture

Ils ne sons pas ici!  Sacre bleu!!

Thu, 04/04/2013 - 14:54 | Link to Comment Free_french
Free_french's picture

Some typo...

 

Merde ! Allons enfants de la patrie. La seconde (not deuxième because there is no such thing as a third) révolution est arrivée. Où sont les guillotines ?

Thu, 04/04/2013 - 14:00 | Link to Comment ydderf1950
ydderf1950's picture

the best way to short the cac?

Thu, 04/04/2013 - 14:50 | Link to Comment Free_french
Free_french's picture

There is a fly in the ointment...

They consider a Y/Y change !

 

What about a CAC undervalued a year ago ?

But I would be happy with a 33% drop...

I would buy... l'enculé de "creux" avec une sacré nom de dieu de putain de louche...

Thu, 04/04/2013 - 15:20 | Link to Comment lolmao500
lolmao500's picture

Meh. This was the old world order. Now? ISM and the stock markets have nothing in common... the stock market is in an alternate universe.

Thu, 04/04/2013 - 15:58 | Link to Comment Free_french
Free_french's picture

I don't know if you are following the french news in the USA... But two days ago we had a big "choc" learning than cahuzac was a liar, a TimmyTurboTax cheater and corrupt... But to to add insult to the injury has been discovered today that François Hollande's responsible for the fund raising during the campaign has got some participation and interest in two firms in the caïman (and it seems that how it is managed stinks....  with french income tax book...) More news to come...

 

http://www.lefigaro.fr/flash-eco/2013/04/04/97002-20130404FILWWW00353-un...

 

Hollande is under 30% of people's trust... as our dumbass at the head of the state...

Nobody trusts him anymore ;-) and that's a good thing...

 

http://tempsreel.nouvelobs.com/topnews/20130404.REU1137/le-couple-execut...

 

You have here a recent poll : (he was there at 27%)

 

http://www.tns-sofres.com/_assets/files/2013.04.03-baro-figmag.pdf

 

Some people begins to feel the pain, now... They begin to roll over from the social safety net...

Two people tried today to burn themselves alive... (unfortunately they are not bankers)

 

http://www.leparisien.fr/lyon-69000/rhone-alpes-deux-hommes-tentent-de-s...

 

Today it seems also than Hollande knew in december than Cahuzac was cheating and a damned liar...

 

http://www.lepoint.fr/fil-info-reuters/l-elysee-a-t-il-ete-informe-des-d...

 

So they all have problem... they have to deny these allegations... As the offical speech was that they have learned as us two days ago the news... Le rétropédalage ne va pas être évident à faire...

 

On va rire...

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