Weekly newsletter v.37 ”Höstuppgången has already begun…!”

We wrote last week that, with regard to a strong development of the global economy and base metals are not thought on any major fall in equity prices in Europe and Sweden. However, we felt that it was probably too early to be aggressive on the purchase page, and that there was a risk of further kurspress.

During the latter part of september, however, we saw a good opportunity to stock exchanges in Europe and Sweden, could be bottoming out. Already the day after we published the above analysis, we amended the opinion and realized that we have been too negative in our assessment. The reasons for this change are clear and rational.

European stock markets have, since the beginning of may, had a weak, but stubborn negative slope, while the long-term trends, despite this, remained positive. This type of behaviour can be regarded as a steel spring that slowly pressed together and when the pressure down the well releases so arises a palpable backlash on the upside. The market can then, with amazing speed to change the behavior from lethargy to vibrant energy and move quickly and unexpectedly upward.

Europe

Our assessment was that the utbudsnivåer created during the nedgångsfasen would be difficult to overcome and that the rise we have now seen would be a few more weeks. The upturn has been strong enough to break the negative trend that has been prevalent in four months even though most european exchanges including Sweden, now is temporarily overbought and should be dampened by profit-taking and slight recoils. The reason for our newfound optimism is our assessment that the surge is not a temporary bounce up to the first movement of a larger uppgångsfas.

In symbiosis with the Europe has the broad u.s. market changed behaviour and swung its way up to the new caps. Last week we talked about the börsläget in the united states as doubtful and springy. We went no far-reaching conclusions, but saw the development of the S&P 500 as one of the major risks of stock market situation. As well as in Europe, the united states has surprised on the top and the recent strength confirms that the underlying börstrenden remains positive with potential for further rise in the current överköptheten have vädrats out.

THE US S&P 500

In Asia continues, China to persistently strive upwards in symbiosis with Hong Kong and India have, after a moderate rebound gained momentum and is approaching toppkurserna from the end of July. Singapore släntrar after, but both south Korea and Taiwan are striving to the north. Although Japan has piggnat to in tune with that the dollar has stopped falling and instead indicate some tentative strength against the yen.

After that the Euro touch 1,21 against the us dollar this valutarelation stabilized around the 1,19 and the Swedish krona has had a similar development, and after a minimum listing on 7,88 is now the price is around 7,97. The trend of the Euro is still in a positive trend against the us dollar, but we will not be surprising if the trend changes to a sideways movement and that the SEK/USD may stabilize at around 8 dollars.

Our forecast for the price of gold was a possible rise to around 1360 dollars and with a listing on the 1357 dollars, the movement has been met. With regard to our clearly positive view on global stock markets appear to be gold thus less interesting. The raw material after 15 months of törnrosasömn instead sailing up as a favourite is the oil, which shows clear indications that a rebound past januaritoppen of 57 dollars is fully possible. Since the beginning of June last year, oil prices have moved sideways between a minimum of 44 to as high as 57 dollars and been very difficult to project with regard to its noticeable hiccups.

Oil Brent

Since midsummer, however, the price trend changed in nature and exhibit a significantly more stable and positive development. Price level/range just above 52 dollars have been considerably difficult to pass, but this threshold is overcome and is now waiting for the really hard test, i.e. to break the over 55 dollars. The first attempt failed, a new attempt is already begun and we see a real possibility that this can succeed, which in this case can lead to continued rise up against the 60 dollars.

In the current börsläge we see a rise in the price of oil as positive. Several oil companies among the world’s largest listed companies at the same time as a rise in oil prices will give the market reason to expect increased investment from the oil industry.

There is a need of a break/rebound both in Europe and the united states, but we are now seeing a coordinated global stock market, with the support of both the rising base metals and oil prices, while the currency relations is entering a calmer phase. Our assessment thus becomes that the Swedish stock market (OMXS30) can pass åshögsta about 1660 points before the end of the year, i.e. a rise by 100 basis points or by 6-7% from the current level.

Sweden OMXS30

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