Newsletter Archive


Imagine an economy that grows robust with minimal price pressure and low debts. Meanwhile the stock exchange trades at a super-low price/book ratio of 1.1. Sounds too good to be true, right?

With almost 40 million inhabitants, Poland is Eastern Europe's largest economy, and the country has become a textbook example of development theory. Poland has never experienced a recession since independence, and the country tops the stats over increase in GDP per capita.

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Norwegian high yield bond funds are down ten percent so far this year, and credit spreads in the bond market are on recession levels.

Risk premiums on US corporate bonds have risen sharply during the winter. Historically, the economy has been in recession ninety percent of the time when credit spreads were at current levels.

Is the bond market attempting to warn us that recession is right around the corner?

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Powered by a moderate upturn in share prices and steeply declining earnings estimates forward P/E on the Oslo Børs is rapidly approaching the highest level in fifteen years. How worried should we be?

The main problem right now in the Norwegian stock market is weak and declining earnings. Estimated earnings on the OSEBX index for the next twelve months is down nearly 30 percent since last year's peak. The Norwegian business sector is experiencing a severe earnings recession.

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Earnings growth is becoming an increasingly scarce commodity on the Oslo Stock Exchange. With the exception of fish farming, Norwegian Airline and a few tech companies, the earnings outlook for 2016 is rather negative.

The earnings season for the fourth quarter is nearing its end. The figures reported on the most influential western stock exchanges overall have been in line with the estimates. However, this is a meaningless measure.

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Is the prevailing stock market decline a buying opportunity? The answer depends on the oil price, central banks and the Chinese currency.

The oil price and the global stock markets have followed each other closely this winter. While it is easy to understand why the Oslo Stock Exchange and oil prices are correlated, it is difficult to see why it should have a negative effect for stock prices in Germany, as their main import commodity has become cheaper.

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