Nomura Securities on Global Investment Banks: 3Q11 Capital Markets Review - 4Q11 Off to an OK Start, but Macro Matters Most
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Rating Summary:
31 Buy, 11 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Nomura Securities on Global Investment Banks: 3Q11 Capital Markets Review - 4Q11 Off to an OK Start, but Macro Matters Most
Nomura analyst, Glenn Schorr, said, "4Q11 Off to an OK Start with Equity Markets and High Yield Bonds Up: On the positive side, global equity markets are up 5-10% on decent volume (U.S. cash volumes +9% y/y) and high yield bonds have rallied around 5% (healthy issuance; positive bond fund flows). On the flip side, elevated volatility has led to continued outflows from equity funds, dampened IPO activity, and kept significant cash on the sidelines. This elevated volatility has investors vacillating between a “risk-on” and “risk-off” mindset, which seems to change on a nearly daily basis. We think this backdrop will persist in the near term and keep capital markets activity choppy in 4Q11, and don’t forget the usually slower holiday period is on the way."
"Financial Stocks Are Plenty Cheap, but Macro Headline Risk Remains: We see attractive value in Citi (NYSE: C), JPMorgan (NYSE: JPM), Goldman Sachs (NYSE: GS), and UBS (NYSE: UBS) (all Buy-rated) as the market is baking in very low economic and earnings expectations. Financials remain very under-owned among large actively managed U.S. equity mutual funds, but despite the low valuations we think macro concerns will likely keep buyers on the sideline in the near term. However, when positive macro news/pronouncements occur, the lack of current ownership can lead to meaningful rallies in financial names."
Nomura analyst, Glenn Schorr, said, "4Q11 Off to an OK Start with Equity Markets and High Yield Bonds Up: On the positive side, global equity markets are up 5-10% on decent volume (U.S. cash volumes +9% y/y) and high yield bonds have rallied around 5% (healthy issuance; positive bond fund flows). On the flip side, elevated volatility has led to continued outflows from equity funds, dampened IPO activity, and kept significant cash on the sidelines. This elevated volatility has investors vacillating between a “risk-on” and “risk-off” mindset, which seems to change on a nearly daily basis. We think this backdrop will persist in the near term and keep capital markets activity choppy in 4Q11, and don’t forget the usually slower holiday period is on the way."
"Financial Stocks Are Plenty Cheap, but Macro Headline Risk Remains: We see attractive value in Citi (NYSE: C), JPMorgan (NYSE: JPM), Goldman Sachs (NYSE: GS), and UBS (NYSE: UBS) (all Buy-rated) as the market is baking in very low economic and earnings expectations. Financials remain very under-owned among large actively managed U.S. equity mutual funds, but despite the low valuations we think macro concerns will likely keep buyers on the sideline in the near term. However, when positive macro news/pronouncements occur, the lack of current ownership can lead to meaningful rallies in financial names."
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