Moody’s Downgrades Brazilian and Mexican Giant Financial Institutes

Continuing with its strategy to Globally review Financial Institutions, Moody’s has downgraded 11 Financial Institutions up to three notches. The main reason of this evaluation is related to their exposure to public debts

Affected banks include, but is not limited to, giants such as BRADESCO, Banco do Brasil, Banco Itau and Santander.

http://www.moodys.com/research/Moodys-reviews-Mexican-and-Brazilian-banking-and-insurance-groups-for--PR_238792

Stay Risk Off - Greece failed again to form a coalition Government

Because Greece failed again to form a coalition Government, they are going to have elections again next month, on June 17th, but most analysts and investors (including myself) believe that now than ever, they are closer to leave Eurozone and that the results on next month elections are going to be pretty much similar to previous one. Important to take a time to think what that would mean to Europe markets and countries, and of course consequently, to your financial investments and health. Even though Angela Merkel and new France President have both said they agree they want to keep Greece in the euro zone, the European Central Bank has already stopped providing liquidity to some Greek banks and millions of euros have already flew from Greek banks as well, Greece short-term foreign currency has been downgraded to “C” while long-term foreign and local currency has been downgraded to “CCC”. Country Ceiling has also been revised, which complicates much more their economic situation. Pay attention and take a risk off attitude for your financials safety.

Greece On Spot Again

Pay close attention to the next three days when left politician side of Greece will be struggling to form a new Government after the center-right failed to form a coalition last Sunday. Important to remember that the left side is opposed to austerity (as the new France President also is) and next days can be decisive to determine if Greece will or will not continue being part of the Euro Zone. Take care of your portfolio as impacts are already perceived.

The impact of Francois Hollande as president of France

With the victory of Francois Hollande as president of France, the austerity plan designed by Angela Merkel and supported by Nicolas Sarkozy is at risk. Hollande considers that the plan cannot be something inevitable and that without growth there will be no Europe economy recover. Although Merkel agrees with the need of growth, discussions now are around how much Government debt should be involved in those growth needs.
The impact for us is more instability in Europe markets and consequently in Asian and EEUU markets due to their worries in Europe economy. Give special attention this week to Hollande visit to Germany, the talking between Merkel and Hollande and market reaction. Good investments!!!!

The power of BRICS

If you have not paid attention to the BRICS (Brazil, Russia, India, China and South Africa together), we recommend you to do so. At least huge economies such as EEUU and Europe are connected with decision madden during this week in Delhi, where they are met to discuss important subjects such as the creation of a BRICS development bank, that should help to develop infrastructure of participant countries and also could give them more autonomy then even before. The reason why they really matters is not only because of their sizes now (together they represent 40% of Global population), but also because projections say that by 2018 their PIB together would surpass EEUU PIB and by 2025 they would represent 50% of Global PIB. Additionally, they can make great business together as their power are complimentary. A good example is that Brazil and Russia are great exporters of raw materials, while China and India have their strength as low cost service providers and huge importers of Raw Materials.

Take a look on recent news and get connected to this Global power to the best of your investment decisions.

Spain………. Too Big To Fail???? That’s not what a Citigroup’s note says!!!

Take your time to read this interesting article, where a Citigroup economist clearly states that Spain situation is worse now than in the beginning of the crisis. Also take your time to review some news on CNN, Yahoo Finance, Financial Times and other news channel, as most of them talks about this year impact on Spain debt crisis. Good reading!!

http://www.forbes.com/sites/steveschaefer/2012/03/28/citi-rings-warning-bell-on-spanish-debt/

Increased life expectancy is another great reason to have dividends in your portfolio!!!

We have been talking about the importance of having dividends in your portfolio. There are several reasons for this recommendation, and we can recap some such as the financial crisis, the economic slow down around the world including in emerging markets, the reduction in investments profit margin, and as you will see in this video the increased life expectancy. The head of Fundamental Equity at BlackRock came with a great speech on this matter. Click in the link to check by yourself!!!!

http://video.ft.com/v/1491335137001/Active-and-passive-dividend-strategies

Pay attention to the markets today!!!!!

Dear followers, pay attention to the market today!!!! It is set to fall today and next ones till the end of this week and redefine market levels, especially in USA and Europe. Dow Jones future has already drastically declined (around 100 points). Be connected to its opening and to news and movements during the day and week. Be vigilant!!!!

Amazing Wall Street Journal Article about Wealth Index!!!

While investing, do you follow-up the Dow Jones Industrial Average figures by itself or do you manage your portfolio by considering also the dividends paid and the inflation of the specific period. Do you know how much you have gained or lost considering those three indicators together? If you are like me who closely manage your figures and periodically re-balance your allocation, you should not miss this great Wall Street Journal article about a kind of Wealth Index, which considers Dow Jones, Inflation and Dividend!!! Not to lose!!! Enjoy your reading!!

http://online.wsj.com/article/SB10001424052970204571404577257373285657442.html?mod=rss_markets_main

This week you should pay carefully attention to Brazilian Government and emerging markets Central Bankers’ news

We have been talking about the importance of Brazil in the emerging markets, especially considering the upcoming opportunities due to events such as World Cup and Olympic Games as well as the current economic situation. Even affected by economic crisis in Euro zone and USA, Brazil has just reported stronger February manufacturing results with PMI index increasing to 51.4. Also Government announced measures to contain US dollar currency devaluation, extending from 2 to 3 years the IOF (financial transaction tax) to loans, which should support local producers and manufacturing to continue being competitive in Export and also in local market as dollar weakness increases the competitiveness in both sides.

Now, we should pay attention to this week news, as Brazil should report next Tuesday, the 06th the GDP figures for fourth quarter and full year as well as on next Wednesday, the 7th The Brazilian Central Bank is expected to lower the SELIC target rate from 10.5 to 10.0%.

Get to know those numbers that will help us to understand how Brazil is being affected by the Global economic crisis and the actions taken to continue supporting their growth, so we can understand possible (if any) impact in our emerging markets portfolio.

Central Bankers / Government of Colombia, China, Korea, Peru and Indonesia are also set to release news on rates and economic situation for consumers / producers this week. Good listening !!!!

Greece Parliament makes its homework but the bailout package is still under discussion!!

Greece Parliament was able to approve, late last night, the austerity package that includes, but is not limited to, thousands of Government jobs cut as well as cuts in minimum wages, pension funds and health care. Although that was a mandatory requirement for them to have approved prior to start receiving the more than USD 170BB rescue package loan, the Euro zone leaders are again discussing the details involving the loans amount and sustainability, which clearly does not put an end in the Greece bailout matters and show Euro countries lack of full consensus so far. Keep an eye on this discussion!!

Keep a close watch on Greece at least for the next 08 days

After Greece bailout and the agreement with Euro zone leaders about the austerity measures and the external supervision on Greece finance, the pressure in the market and Europe in general could breathe relieved. Is that true??? Well partially. For sure the agreement on releasing the bailout is a good news but we need to have at least three important subjects on our mind when thinking about our investment portfolio.

1) The first one is the fact that Greece has only about a week to approve and implement the austerity measures in order to be given the first part of the approved bailout. A fail in meeting this target would clearly shake the market.

2) Banks and financial institutes that had lent money to Greece will receive much less now than previously agreed and it was already noticed by the market in their stock values. Also they may stop paying dividends in a drastic case which would directly affect preferred stocks and/or bonds.

3) for Greece to be able to sustain the austerity measures and to promote growth in the future to their country, they would need the support and commitment of the all population, which is not happened right now (see example of Korea that lived similar situation in the past). So, in summary, even after the bailout, keep Greece in your mind and closely watch their actions, especially during this week, being conservative in your portfolio for investments that may be affected by their crisis.

China vice president in Hollywood to unveil a large joint Venture with DreamWorks Animation

Just a quick follow-up to the article we wrote about the growing presence of China and Japan in big USA and Europe companies, the vice president of China is set to unveil today in Hollywood a large joint venture between two Chinese state-owned media companies and DreamWorks Animation, well known through its famous Shrek, Kung Fu Panda and Madagascar films. Number involving this negotiation are speculated to around 2 billon dollars and include a new studio facility to be built in Shangai.

Are China and Japan buying Europe and United States?

They say NO. They say they have no intention and no means, but the fact is that in 2011, China investments in Europe increased by two times and are over US$ 6.0BB. Both China and Japan are buying giant companies in Europe and USA, taking advantage of the great liquidity Asian markets have, differently from the other two Regions that are struggling with a terrible economic crisis. There are groups of Asian investors coordinating trips to EUA and Europe to search and close good business. That’s maybe an opportunity for you too, as you can make your homework and study which companies are receiving Asian investments and how / if they would fit to your portfolio. Do not forget that it is important to make the whole study and carefully analyze financial results prior to make any decision. All of us know that China and Japan are willing to support Europe and USA and to continue having government debt of those two Region, even increasing the amount already owned, but so far no concrete action was defined on this direction while the purchase of companies is a reality rapidly increasing since last year. Good search!!!

Petrobras Brazil changes its President – First woman to get this position

The giant Petrobras in Brazil has changed its president. After more than 6 years, Jose Sergio Gabrielli gives the position to Maria das Gracas Foster, who has been working at Petrobras for more than 30 years. She is the first woman to assume an energy company at this size and this economic importance. Take a look into your portfolio and see if you have Petrobras in it, through stocks or as part of funds major holdings. If this is the case make your research to see how and if you could be affected. Petrobras did not have a good performance in the stock markets since 2008 financial crisis, and recover under market expectations. Although after the announcement at the end of last January stocks have decreased a little its value, it is important to see what is in her plans for the future. Enjoy your research!!

Dragon Year – Good to invest in companies involved with assisted reproduction

2012 is the Dragon Year in the Chinese calendar and is consider by most Asian countries, such as Japan, China and Korea as the year of wealth and protection. Due to that lots of couples are running to get marriage and a plenty of them also travelled to countries in Latin and North America to go under treatments for assisted reproduction. The reason is that they believe that children born in the Dragon Year are more enthusiastic and have the energy and vitality to achieve great things and results in life. They also believe that get marriage in the Dragon Year brings protection, happiness and success.
All of this is not only mythology or believes. If you make your research you will see that the number of couples that have registered to get marriage in those countries, since Feb, 14th is increasing and expected to increase much more with Occidental Saint Valentine days. Also number of trips to countries where they can ask for assisted reproduction is higher compared with other years.
Hope that tip is helpful for you to look into your portfolio and see if you have some companies that fits to this increasing seasonal demand for 2012!

Dividends can be a safer heaven when market is turbulent

If you do not have any bonus, funds and or stocks in your portfolio which provide you dividends, you may have there a great opportunity to review and find some investments that fit to your profile and also bring to you some periodic dividends. It is especially important when we have turbulent markets and your portfolio may have ups and downs more frequently than you would manage it to do. Dividends can be paid monthly, quarterly, yearly or any other frequency, but independent on the periodicity, they are for sure a supplemental income for their owners. Consider that if you choose a financial instrument which pays monthly dividends you will have a better chance to quicker identify ups and downs and react faster than if you have longer period. On the other hand, if you have quarterly or longer dividend payments period, you may be able to better manage your taxes practices (such as sell dividend stocks before they pay their dividends instead of after it). Information on high yielding stocks and/or financial instruments can be easily found in sites such as Yahoo Finance!!, Morningstar, among others. So good search and study!!!

Infrastructure market in Brazil

Have you ever think about investing in Latin America Region? How about Brazil? Considering the beginning of the year and the great time to re-balance your portfolio, selling some positions and acquiring gains and even selling some with losses but you don’t think it will recover properly in the near future, you might take a look and study emerging markets and have in mind some important information regarding Brazil. Infrastructure market there is in a great time as they are going to host World Cup in 2014 and the Olympic Games in 2016. Lots of soccer play stadium being built and remodeling, lots of residential buildings and hotels also, plus investments in security, roads, etc. All about infrastructure. So if you have funds composed by stocks or even stocks related to infrastructure market in Brazil it might be a good adding in your studies and analysis to see what it going to be in and out of your portfolio in 2012. Also there are international players that are participating in these Brazilian opportunities through partnerships and/or public auctions. A good example can be the international airports auctions which the winners were some South Africa, French and Argentinean company together with Brazilians ones for the international airport of Brasilia, Sao Paulo and Campinas. Another good example is the construction market which is so saturated that is accepting workers from Haiti to be trained and then work on thousands of constructions around the country. Good search !!

USA banks are cheap and delivered great results

Have you ever considered USA financial institutes to invest in? Maybe this is a good time to think about it and see how it fits to your portfolio. They are cheap now and have presented very good 4th quarter results, most of them above analysts’ expectations. Important to remember that they were also into big trouble during 2011, especially with the foreclosures, so it is mandatory you make a very good analysis on their financial books/results to understand their debt level, actions to get more profitable and to overcome exposure foreclosures processes and claims. You need to understand internal actions (like bonuses and staffs reduction) as well as external ones, but I am pretty sure you can find great picks if they fit to your investor profile, portfolio and risk tolerance.

Portugal effect in your Portfolio

After a great January results in stock markets we feel it is a good time for you to review your portfolio and, in case you have European positions, to take a carefully look on them and ensure you are comfortable with the risks and financials involved in them. At this time you probably have recovered some of the losses involved in European crisis, so if you need to rearrange some of your investments you can make this decision without acknowledge losses or at least which much less exposure then if you were in the middle of second semester of 2011. From now on we understand that Portugal we play a more important role in the already tough pressure on European financial crisis due to its high debt level and its difficulty to get new loans with banks that are running to get financial insurance and be protected against similar scenarios they lived with Greece.