Saxo Bank A/S
Outrageous Predictions
2014
08-04-2015
EU Commission introduces 5-10% wealth tax proposal
“Many bad decisions will be made in the name of inequality and deflation”
2
Anti-EU alliance will become largest group in parliament
“May 22-24th EU Parliament Election becomes a cry for less Europe”
3
Deflationary pressure is a new name of the game
Barclays have estimated the chances of European
deflation as 50/50 chance using inflation linked
products, but being more subjective we will say that
next three to six month almost certainly will push
more and more European nations close to zero
inflation. Greece and Ireland already in deflation,
Spain, Sweden, Denmark very close, and even
Germans saw inflation decline from 1.4 to 1.2.
there is an ETF which tracks the deflation
risk called:
Powershares DB US Deflation.
HSBC Global Research, 6 December 2013
piece: ‘Lacking demand’ have two great charts
to illustrate this point - through looking at the
GDP growth and the Investment-to-GDP
ratio. Good growth is linear correlation
indicating investment return is positve
and creating growth. Bad growth is rising
Investment to GDP ratio while growth
trails....
Asia experiences lower growth as
reducing the shadow economy now
takes centre stage and the current
account deficit nations are all looking for
weaker currencies, lower import and
lower growth.
4
Germany in recession?
“The German miracle turned out to be a mirage…..”
5
Saxo Banks ‘Black Swan’ Trades for OP-2014
#1: Germany in recession
•Buy ComStage Commerxbank ETF (5x60:xetr @ 128.62) or buy bunds
#2: US 10 Yr. to retest all-time low
•Buy IEF:arcx @ 100.65 (Target: 110)
#3: US Housing market tanks in 2014 => QE 100% mortgage
•Sell Vanguard REIT CFD (VNQ:arcx) @ 66.00$)
#4: French Luxury is vulnerable
•Sell equal weight basket of Hermes(HRMS:xpar)@ 250.65€, Louis
Vuitton(MC:xpar)@129.65€ and Sotheby’s(BID:xnys)@ 51.91$ (Target: -50%)
#5: Fragile Five weakens 25%
•Sell equal weight basket of fragile five vs. USD (BRL: 2.3250), (ZAR: 10.33),
IDR(11974), INR(61.14) and TRY(2.0330)
6
Stock picking is where the capital goes..
2013 proved very well for equities. Our view for 2014 remain the same for
the companies with strong fundaments. Tapering and overall reduction of
support from CBs is already priced in. Unless unexpected shocks appear, we
remain positive on the US and EU stocks.
Split of GE Capital
Increased revenues from the serivices
Too much pessimism in 2013
Growth potential of 14.1%
The reccord number of orders in 2013
Expected margins improvement
Too much pessimism in 2013
Growt potenial of 7.3%
Still very low valuation
Replacement of CEO = new potential
Solid growth in 2013
Growt potenial of 28.9%
7
Very stable growth
Strong sales figures from H2 2013
Solid number of Patents registrations
Growt potenial of 22.9%
French banks should kick back
BNP is the best of them
Good earnings potential
Growt potenial of 8.3%
Tech’s ‘Fat Five’ may wake up to a nasty hangover in 2014
“The US information technology sector is trading about 15% below the
current S&P 500 valuation, however, a small group of technology stocks
trade at a huge premium of about 700 percent above market valuation,
almost defying the “Newtonian laws” of financial markets”
8
Commodities under pressure due to a high production
Oil needs to be cheaper
• High inventories
• Mexico, Lybia and Iran
• Shale gas
Agriculture negative momentum
• HFs don’t like them in 2014
• High inventories
• Flexible Production in place
• Hard times for Grains
• Good times for meet & coffee?
Metals in a tight range
• Precious Metals
• Copper up 13%+ in 2013
• Will China & India continue their imports?
9
Brent crude may drop to USD 80/barrel
“The global market will be awash in oil”
10
Thank you!
08-04-2015