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☆ When the chips go up: Big banks bet on S. Korea, Taiwan stocks for 2023
▼ + stars: | 2022-12-01 | by ( Harish Sridharan | ) www.reuters.com time to read: +5 min

Goldman Sachs says South Korean stocks are the bank's top "rebound candidate" for 2023 due to low valuations, made cheaper by a nosediving Korean won, and as companies benefit from an expected recovery in Chinese demand. "We think (Korean stocks) sold off too much in September and August." Morgan Stanley downgraded its view on Indian exposure in October, when it upgraded its recommendation for South Korea. Like South Korea, Taiwan (.TWII) is another heavily-sold and chip-maker dominated market - though tensions with China make some investors a bit less enthusiastic. Meanwhile, Taiwan and South Korea are both geopolitical flashpoints - but analysts argue at least some of that is already in the price.

☆ Russian oil is still flowing in huge volumes even as EU sanctions and a price cap are less than a week away.
▼ + stars: | 2022-11-30 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

European governments still can't agree on a price cap for Russian oil even as the December 5 deadline is less than a week away. Poland, for example, is committed to a $30 price cap. Even with a price cap of, say, $65, it's unclear whether that can really make an impact, given that Russia's flagship crude oil — Urals grade crude — is trading 20% below that level already. Despite the West's repeated condemnation of Russia and President Vladimir Putin, Russia remains Europe's largest single refined oil products supplier. A) The West agrees to a price cap above $40B) The West agrees to a price cap below $40C) The West does not agree to any price capLet me know on Twitter (@philrosenn) or email me (prosen@insider.com).

☆ Societe Generale's car leasing unit ALD wins EU nod for LeasePlan buy
▼ + stars: | 2022-11-25 | by ( ) www.reuters.com time to read: +1 min

BRUSSELS, Nov 25 (Reuters) - EU antitrust regulators cleared with conditions French car leasing company ALD's (ALDA.PA) bid for Dutch rival LeasePlan on Friday after the Societe Generale (SOGN.PA) unit agreed to divest some businesses across Europe to address competition concerns. ALD announced the 4.9-billion-euro ($5.1 billion) deal in January, which would give it ownership of the biggest electric vehicle fleet in Europe. The European Commission said ALD agreed to sell its operational leasing businesses in Ireland, Norway, Portugal and LeasePlan's businesses in the Czech Republic, Finland and Luxembourg to address competition worries. It will also provide access to tech services and its used car sales platform for up to 2 years. "These commitments remove the overlaps existing between ALD and LeasePlan's activities in the national markets for operational leasing where the Commission had identified competition concerns," the EU competition watchdog said in a statement.

But you have to go back centuries in some cases to get anything nearly as bad as 2022 for 'safer' sovereign bonds. "2023 will be the year of the bond," claimed Chris Iggo, chair of the AXA IM Investment Institute. "Road to recession - bullish bonds and quality credit," was how SocGen entitled their view. And while stock volatility makes forecasters nervy, there's a clear attraction for long-term funds in seeking both the fixed income as well as the lift to bond funds when sub-par price discounts disappear into maturity for most high-quality names. "Long high quality bonds in the U.S. and Europe seems like an obvious strategy for 2023," said hedge fund manager Stephen Jen at Eurizon SLJ Capital.

☆ The window is closing on corporate 'greedflation.' It's another sign that inflation is cooling off.
▼ + stars: | 2022-11-24 | by ( Jacob Zinkula | Madison Hoff | ) www.businessinsider.com time to read: +7 min

"US profit margins surged after the recession. "Greedflation" — the idea that companies are using inflation as an excuse to raise prices and boost profits — could be part of the explanation. But they have also taken advantage of circumstances to expand profit margins," said UBS Chief Economist Paul Donovan. To what extent soaring corporate profits are to blame for high inflation remains uncertain, but as inflation slows down, the negative CEO sentiment suggests some companies' profits are set to fall as well. In September, Federal Reserve Vice Chair Lael Brainard said retailers' profit margins "have risen significantly more than the average hourly wage that retailers pay workers."

Societe Generale's contrarian strategist Albert Edwards said Britain's reawakening of the fabled 'bond vigilantes' would "reverberate around financial markets for years to come." And many read across to ebbing liquidity in U.S. Treasury markets for a take on Fed parameters this time around too. Bank of America's October survey of global fund managers, released on Tuesday, certainly backs that up. Register now for FREE unlimited access to Reuters.com Registerby Mike Dolan, Twitter: @reutersMikeD. Charts by Bank of America, Vincent Flasseur and Lewis Krauskopf; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

Whacked further by a soaring dollar, indices of overseas sovereign bonds in dollar terms are down almost 24% - even worse than then S&P500's (.SPX) 19% year-to-date reversal. Far from portfolio buffers, these sorts of moves make bonds meat and drink for hedge funds. And even though equity prices have fallen and cheapened on many models, their relative value versus bonds has not. It trimmed expected equity returns by a quarter point. Reuters poll-U.S. treasury yield outlookRobeco Chart on Asset Allocation HistoryThe opinions expressed here are those of the author, a columnist for Reuters.

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