CNBC: Just the potential for a U.S. recovery will bring the "enormous" amounts of under-invested cash back into the stock market and could send shares higher in the near term, Philip Manduca, head of investments at ECU Group told "Squawk Box Europe." "I do believe there is a sentiment out there, right or wrong, that the US is going to recover," he said. "There is this feeling that the worst is behind us in terms of the housing market … and there is a feeling that economic indicators that are coming out (of the U.S.) are less bad than they were estimated to be.""I know that there's an enormous amount of money on the sidelines that is under-invested… if you get any further rally in the US market it will self-propel," Manduca added. Inflation in the U.S. and Western Europe is not domestic, but imported and this may bring relief to investors who may expect central banks to embark on an easing cycle, Manduca added. But economic growth prospects are still gloomy and getting into the equity markets is still tough, he said. The current correction in the price of oil shows that speculators have driven the market for the past six months and they were allowed to do so because it was one of the few areas where banks were still making money, he said. But commodities prices will remain high, with the price of oil depending on how much Asia, and especially China, will slow down in the following months, Manduca added. "I don't think they can slow down. They need growth to stay in power in China," he said. "We're going to have to deal with high commodity prices for some time."MyTake: I must say technically, the S&P500 charts are showing some upside potential and could build up to be a short term rally within a bearish long term trend. However I dare not say for markets in HK and Malaysia. Is the worst really behind us? The crude oil prices have gone down more than USD30 or 20% while commodities prices are all at their lows. Although the latest GDP growth figures for most of the countries are lowered, many are seeing their CPI peaking somewhere in July. Can we safely say inflation is almost out of the way and Central Bankers should now just concentrate of economic growth and recovery? Will the markets rally on such scenario or will they firstly evaluate the extend of the damage of the housing maliase, subprime mortgage problems to the credit market and economy and slow down of economic growth and inflationary effects to the bottom lines of companies before rallying? Based on what has happened over the past 1 year, we should not be too happy yet even though commodity prices have gone down as it could be just temporary. We are still in an adverse economic condition which should be viewed as cyclical. Lets be patient and let the issues play themselves out..(similar for politics).
* Why did Russia attacked Georgia? Provoked, economic interest or wielding of power?
* Bloomberg: Australia's business confidence index remained unchanged at -9 pts in July, matching the weakest results since Sept 11, 2001... Central bank estimates growth this year will be at 2% (2007: 4.3%)... Australia's dollar continues to decline for the 11th day(longest losing streak since 1975) ...1AUD:USD87.88
* China's latest economic indicators-PPI for July 10% (June 8.8%)...CPI July 6.3%(June 7.1%)...Trade surplus July USD25.3b (June USD21.3b) Real improvement...sustainable???
* Top Cat: "Malaysia's growth for the 2nd half of the year won't be as good as the 1st half but it's still going to be positive and still a decent growth figure". On the coming Budget: "Won't be burdensome and would not be unfriendly to anyone" yah...blah..blah..blah..meow meow meow
* UBS losses USD329m(4th straight quarter loss) on subprime -related write downs. JP Morgan poised to write down the value of mortgage backed assets by at least USD1.5b this quarter after credit market turmoil and the US housing slump deepened.
* Redtone to roll out WiMax on August 20 in Kota Kinabalu only. GPacket already soft launched its WiMax 2 weeks ago...successful?
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