Elumen Från Goldwell.

of Angles

With the inspiration last week's stock markets be formally restored in the trend for the past one year.

The MSCI World is testing the maximum YTD levels, levels already exceeded by some European stock squares (Netherlands, Sweden, Switzerland and United Kingdom) and Canada but the impression is that the other indices should soon exceed this.

similar participation is also seen at the sectoral level with all indexes on the rise with the exception of the automobile. New highs for basic resources, food, pharmaceutical and Health, Industrial, Consumer Goods, Distribution, Technology.

also rising for all the commodities with fractional rise in the CRB index. The largest contribution comes from industrial metals, precious metals and energy commodities (oil this morning has exceeded the threshold of $ 82 a barrel), generalized reductions, however, between the colonial and agricultural commodities.

government debt and emerging

dollar slightly down (or € a slight recovery, depending on your point of view), slightly higher U.S. yields in recent weeks and yields EURO slightly down as a result of stringent measures taken by the government greek to overcome the crisis.

meanwhile continues the good performance of the market for government bonds issued by emerging countries, with particular interest in securities denominated in local currency.

I believe this remains the Assett class more interesting in the landscape bond.

still uncertain the economic climate

especially in the light of data on employment, good but not very good.

The latest data in fact suggest that the labor market is stabilizing in the U.S. (new requests for unemployment benefits increase less than expected, but up ...) while the situation is still critical in the euro area.

The readout of the ECRI weekly leading index is showing signs of weakness and there have been rumors alarmed. Nouriel Roubini all over, warns that at best the recovery in the United States is U-shaped (very slow), but it likely a relapse into recession.

monitor the recession

John Hussmann, a well-known hedge fund manager and former economist and university professor, suggests that four parameters to monitor in the past have proved useful to anticipate the peak of the business cycle:

1. widening of credit spreads between corporate bonds and government bonds than they were six months ago, and currently this difference is equal to 167 basis points while six months ago was around 170 basis points (and a year ago was 250 basis points);
2. The maturity spread falls below 0.25% is the spread between government bonds and securities at 10 years 3 months, is currently 3.58%, never so high in recent years
3. the S & P 500 falls below the level of the first six months, and currently we are at 1138 points against 1033 beginning in September 2009
4. The ISM Purchasing Managers Index drops below 50: The February reading was 56.6.

For now, the markets do not show so special concerns about the risk of relapse into recession.

Focus on profitability

The theme of the labor market, however, remains the center of attention of economists. David Rosenberg incorporates assessments of Paul Krugman arguing that to return to full employment levels, the U.S. economy will have to produce something like 12 million new jobs and, therefore, will required between 5 and 10 years with the result that, for the next year, deflation is likely to be the main topic of the next cycle to come.

To protect the portfolio from the effects of a deflationary period Rosenberg suggests some simple rules: 1

. focus on dividends 'safe', preferring to corporates issuers of good quality, not conditioned by the economic cycle, with good cash reserves and low debt;
2. preferred shares of companies with good growth prospects but are also a large dividend;
3. avoid at all costs, companies with high debt, the balance sheets and good capital ratios will be more important than ever;
4. focus on sectors and companies with these micro-features: low fixed costs, high variable costs, operating in sectors with high barriers to entry / low competition, lack of flexibility in the application (utilities, basic necessities, health)