Spoke to my old friend the head of research at a large NY bulge bracket about the markets. His sanguine view is that there is still a lot more upside as the actuaries start to tell institutions that they are underweight equities. In short don't fight the wall of money. We'll see.
US hotel occupancy rates fell to 57.8% down 12.6% from the year earlier period while the average daily room rate was down 10% to $98.33. Not a sector to be investing in just yet.
There are signs that the pace of decline in the global economy is moderating . In Taiwan after a 7.4% fall in Q4 the economy stablized and returned a fall of just 1.5% in Q1 2009. Y-o-y the Taiwanese economy contracted by 10.2% - or to put it another way the biggest recorded fall since 1952 when records began. We should see some signs of growth in the current quarter as Korea,Taiwan and Singapore see some recovery from the 35-50% decline in exports they've suffered. Stock levels around the globe are now at , or approaching a base level and will need to be built up.
Despite these green shoots we are still likely to find that global GDP has contracted by around 7-8% between October 2008 and the end of this quarter. In the US nominal wages have turned negative for the first time in 50 years while the only employer hiring staff was the government - the private sector continues to shed employees.Growth when it comes will be laggardly.
When markets wake up later this year to just how much money corporates and governments are going to need to repair balance sheets and fund spending the fun will begin. I'm still of the opinion that there is more uncertainty coming although this next time it may hit the government debt and currency markets harder. British Airways today announced a full year loss of £401m. That's a £1.3 bn profit reversal during the course of the year. Those low cost carriers are going to start hurting if fuel prices carry on rising north of $60.