1. “We make money the old-fashioned way, by working hard at it, every day.”
DEVELOPMENTS
There have been plenty of discussions about currency policy: the US blames China for keeping the Yuan too
low whereas the Emerging Markets point to the US on the quantitative easing measures which cause the
EM currencies to rise in value. A pre-meeting of the G20 ministers did not provide much clarity on this
matter. The only fact that all countries agreed on was that nobody will benefit from a trade war. The US
dollar has further declined in value, albeit at a slower pace than in September.
Europe
Last month the two tier market developed further: Germany is clearly pulling ahead given that all its
indicators are showing positive signs. At the same time the problems for Ireland only seem to be growing.
The ECB is wary of letting banks become too dependent on cheap central bank funding, but is also
wondering if it should continue to buy sovereign bonds if other central banks (like in the US or Japan)
continue their expansionary policies. But there are also some positive signs: interbank lending is picking up
and 3rd quarter corporate results are generally good.
USA
Last month the 700 bln TARP program ended. Only half of this total available funding has been used and it
seems that the government will only suffer a small loss on the investments. Producer indices are pointing
towards continuous growth and consumer sentiment is stable. The FED is not convinced about the
progress made and will continue their purchases of assets (i.e. the famous quantitative easing). Given
historically low utilization rates, inflation will not be an issue for the time being.
The housing market is stabilizing at best. Some banks went into foreclosure procedures too early or
without proper legal backing and are now being sued. Claims can amount to several billions of dollars in
total.
Far East/Emerging Markets
China created some publicity around their purchase of Greek bonds and indicated that it will continue to
invest in Europe. The weak position of some countries is a great opportunity for China to increase its
influence. The latest PMI indicators are a good sign for future growth.
Given the strong GDP developments in the region, countries like India, Korea and China have raised their
interest rates in order to cool down the economies a little. These fast growing countries have secured an
increase of their representation within organizations like the IMF.
Brazil has a new president but as she was already a member of the preceding government, the policies will
not change much.
Expectations
The US elections and also the FED decision on further easing contained few surprises. We expect markets
to continue their current pattern where the focus will remain on the Emerging Markets. Our investment
sentiment remains in neutral territory, but slightly more positive than the previous month.
NEWSLETTER
OC T O BE R 2010
OUR SENTIMENT INDEX EVOLUTION
The decisions linked to anyone’s wealth are often complex and sensitive. Orbit Private Asset Management relies on a rich
experience and a strong global network to assist you in this mission and without any conflicts of interest.
Discover how we can help you on www.orbitpam.com
Disclaimer. Within the five risk profiles the risk part moves in between tactical target areas. Mentioned gross returns of the Orbit Private Asset Management model managed portfolios are gross of management fees and costs and these returns can vary from returns as realized in
individual portfolios in the same period. Reasons for the difference can be attributed to costs but also specific agreements on the asset allocation, size of the portfolio, attributions or redemptions to the account, etc. Please note that past returns are no guarantee for future returns.
Confidential. For pre-qualified investor use only. Not for redistribution. These materials do not constitute an offer to sell or a solicitation of an offer to buy securities. © 2010 Orbit Private Asset Management S.A.
INVESTMENT SENTIMENT
OUR PERFORMANCES
RELEVANT INDICATORS
17,23% 32,58%
15,75% 28,13%
14,49% 23,32%
12,21% 17,85%
11,57% 15,22%
YTD
OCT 2010
2009
World MSCI World 7,41% 23,87%
Europe MSCI Europe -1,45% 22,50%
DAX 10,81% 23,85%
CAC 40 -2,61% 22,32%
FTSE 100 index 6,97% 31,42%
AEX 0,57% 36,35%
Far East Nikkei 3,66% 13,23%
MSCI Asia (ex-Japan) 14,91% 60,97%
VS Dow Jones I.A. 9,48% 15,92%
S&P 500 8,96% 20,44%
Other DJCS Hedgefund index 5,56% 18,57%
Commodities DJUBS index 8,77% 15,82%
Eur. Govt. Bonds 4,71% 6,95%
Neutral
Conservative
Defensive
INTERNATIONAL INDICES (in €)
RISK PROFILE
YTD
OCT 2010
2009
Offensive
Dynamic
Oct '10 Q3 '10 Q2 '10 Q1 '10
US Employees on Nonfarm Payrol ↙ ↗ ↗ ↗
ISM Manufacturing PMI SA ↙ ↙ ↙ =
University of Michigan Survey = ↗ ↗ =
IFO Pan Germany Business Expec ↗ ↙ = ↗
EC Manufacturing PMI Overall I = ↙ = ↗
European Commission Consumer C = = = =
China Manufacturing PMI SA ↗ ↗ ↗ ↙
Brazil Purchasing Managers Man ↗ ↗ ↙ =
US Durable Goods New Orders To ↗ ↗ ↙ ↗
Adjusted Retail Sales Less Aut ↗ = = =
US New One Family Houses Sold ↗ ↗ ↙ ↗
South Korea Exports YoY ↗ ↙ ↙ ↗
China Fixed Assets Investment = = ↙ ↙
China Export Trade YoY ↙ ↙ ↗ ↗
China Import Trade YoY ↙ ↗ ↙ ↙
India Merchandise Exports Incl ↗ ↗ ↙ =
BALTIC DRY INDEX ↙ = ↙ ↙
MARKIT ITRX EUROPE 06/15 ↙ ↗ ↙ =
CBOE SPX VOLATILITY INDX ↙ = ↙ ↗
Japan Tankan Survey Business C ↗ ↗ ↗ ↗
S&P/Case-Shiller Composite-20 ↙ ↙ ↗ ↗
US Exports Total NSA ↗ ↙ ↙ ↙
OECD Total Composite Leading I = = ↗ ↗
Department of Transportation S = ↗ ↗ ↗
↗ Pos; = Neutral; ↙ Neg
-30
-20
-10
0
10
20
30
40
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10