#UK CREDIT SUISSE: This is the most bearish we’ve been on stocks in 7 years (DIA, SPY, SPX, QQQ)

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Andrew Garthwaite

The US stock market is trading near fair value for the first time in five years, argue the analysts at Credit Suisse.

With valuations offering little upside and a myriad of risks offering plenty of downside, Credit Suisse thinks now’s a good time to cut back on your portfolio’s exposure to stocks.

“We reduce our weighting in equities to a small overweight, our most bearish strategic stance on the asset class in seven years,” Credit Suisse’s Andrew Garthwaite said in a new note to clients.

In investing, being “overweight” an asset class means that you have a greater percentage of your portfolio allocated to that asset than what is seen in a benchmark. In other words, you’re taking a more aggressive position because you have more conviction in the upside the asset returns. So, to be “small overweight” means you’re overweight, but only a little. In short: Credit Suisse is telling you that being just a little bullish is the most bearish they’ve been since 2008.

“Consequently, we reduce our mid-2016 target for the S&P 500 to 2,150 (from 2,200), and introduce a 2016 year-end target of 2,150,” Garthwaite wrote.

The S&P 500 closed at 2,102, implying that Credit Suisse sees market going up no more than 2.2% in the next year.

Like most strategists, Garthwaite’s top worry for US stocks is the prospect of tighter monetary policy from the Fed and all of its consequences.

“Our concerns are: increasing macro headwinds (deflation exported by China, the first Fed rate rise in 9.5 years); US equity valuations are now at fair value; there are several warning signals (credit spreads widening, buybacks as a style underperforming, M&A activity reaching problematic levels, a decline in market breadth, earnings momentum at a 4-year low); the shift of power from capital to labour; and conventional business models are being disrupted,” he said.

So, why not be more bearish?

Among other things, Garthwaite observed that even though the S&P 500 is “fairly valued,” stock prices tend to peak when they are “significantly overvalued.”

valuation

“The US equity market has tended to peak on valuations around 1.2 standard deviations above their 10-year average (1.8sd during a bubble period), while the S&P is currently trading on a P/E multiple 1.0sd above its 10-year average,” Garthwaite said.

Currently, the S&P 500 is trading at a P/E multiple of around 16.6, which is higher than average, but less than the 1.2 standard deviations away from the peak that we’ve seen historically.

valuation

SEE ALSO: THE END IS NEAR: A top Wall Street strategist believes the global bull market will end in 2017

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#UK Un-Nooh! Thai snooker player in costly maximum blunder

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In snooker, a maximum break requires a player to pot 15 red balls, each time followed by the black, before finishing the coloured balls in order, ending on the black to give the highest possible score of 147

Bangkok (AFP) – What’s worse than fluffing a maximum break in snooker on the very last ball? Discovering that mistake just cost you $66,000. 

That was the cruel fate that befell Thailand’s aptly named Thepchaiya Un-Nooh during a tournament in Britain late Tuesday when a rushed final pot saw the black ricochet off the cushion.

Thepchaiya could barely believe his misfortune, returning to his seat crestfallen, his head in his hands.

But the poor player’s disappointment was compounded after the match against Australia’s Neil Robertson when he was informed a successful maximum break would have netted him £44,000 from the tournament organisers.

“£44,000? I wish you’d told me before the black,” Thepchaiya replied. “There was too much pressure.”

In snooker, a maximum break requires a player to pot 15 red balls, each time followed by the black, before finishing the coloured balls in order, ending on the black to give the highest possible score of 147. 

It’s an incredibly rare moment in the sport with only a handful of professional players boasting one to their name.

“I think that he had pressure because it was on live with many cameras around,” Borrirak Jongchotchatchawal, manager of the Hi-End snooker club in Bangkok where Thepchaiya often practises told AFP. 

“I feel bad for him more that he missed the chance to make a maximum break rather than the money — he can make money later,” he added.

Other Thai snooker fans sent messages of support on Facebook. 

“What a shame really on the last ball,” wrote follower Vitoon Sunakerd. “This was a big game for him and we are supporting you.”

Thepchaiya went on to lose his match to world number three Robertson at the UK Championship in York.

“Poor Thepchaiya,” the Australian said after the match. “That prize would have meant a lot to him.”

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#UK New AP test: Rio’s Olympic water consistently contaminated

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In this Nov. 10, 2015 photo, trash litters Rodrigo de Freitas Lake in Rio de Janeiro, Brazil. A new round of testing by The Associated Press shows the city’s Olympic waterways are as rife with pathogens far offshore as they are nearer land, where raw sewage flows into them from fetid rivers and storm drains. (AP Photo/Leo Correa)

RIO DE JANEIRO (AP) — The Olympic waters in this city are more widely contaminated by sewage than previously known and pose a greater threat to athletes’ health ahead of next year’s games, according to new results from tests commissioned by The Associated Press.

Expanded analysis of Rio’s waterways shows that high viral and in some cases bacterial counts are found not just along shorelines where raw sewage runs into waterbodies, but far offshore where athletes will compete in sailing, rowing and canoeing.

That means there is no dilution factor in the bay or lagoon where events will take place.

“It’s going to increase the exposure of the people who come into contact with those waters,” said Kristina Mena, a U.S. expert in waterborne viruses. “If we saw those levels here in the United States on beaches, officials would likely close those beaches.”

In July, the AP reported that its first round of tests showed viruses causing stomach and respiratory illnesses and more rarely heart and brain inflammation at levels up to 1.7 million times what would be considered highly alarming in the U.S. or Europe.

The report prompted sports officials to promise they would do their own viral testing. Those pledges took on further urgency in August, after pre-Olympic rowing and sailing events in Rio led to illnesses among athletes nearly double the acceptable limit in the U.S.

Nevertheless, Olympic and World Health Organization officials have flip-flopped on promises to carry out their own viral testing in the wake of the AP’s July report.

At issue are two kinds of testing.

Brazilian, Olympic and WHO officials now say Brazil needs only to conduct testing for bacterial “markers” of pollution to determine water quality. That’s the standard for nations around the globe to monitor waterbodies, mostly because it’s been historically easier and cheaper.

“The health and safety of athletes is always a top priority and there is no doubt that water within the field of play meets the relevant standards,” the Rio 2016 Olympic organizing committee said in an emailed statement Tuesday. “Rio 2016 follows the expert advice of the World Health Organization, whose guidelines for Safe Recreational Water Environments recommend classifying water through a regular program of microbial water quality testing.”

However, in recent years technological advances have made it simpler and less expensive to monitor viral levels, too.

Studies dating back decades have shown little to no correlation between the levels of bacteria pathogens in water, which quickly break down in salty and sunny conditions like those in tropical Brazil, and the presence of viruses, which have been shown to last for months, and in some cases years.

Rio’s waterways, like those of many developing nations, are extremely contaminated because most of the city’s sewage is untreated, flowing into Guanabara Bay, the Rodrigo Freitas Lagoon and the famous Copacabana Beach.

Rio won the right to host the Olympics based on a lengthy bid document that promised to clean up the city’s scenic waterways by improving sewage sanitation, a pledge that was intended to be one of the event’s biggest legacies.

Brazilian officials now acknowledge that won’t happen.

The AP’s first published results were based on samples taken along the shores of the lagoon where rowing and canoeing events will be held. Other samples were drawn from the marina where sailors enter the water and in the Copacabana Beach surf, where marathon and triathlon swimming will take place. Ipanema Beach, popular with tourists and where many of the expected 350,000 foreign visitors will take a dip during the games, was also tested.

Since then, the AP expanded its testing to include offshore sampling sites inside Olympic sailing courses in Guanabara Bay and in the middle of the lagoon where rowing and canoeing lanes were located during recent test events.

Not only has the AP testing since August found the waterbodies to be consistently virus-laden throughout, but it also captured a spike in the bacterial fecal coliforms in the lagoon — to over 16 times the amount permitted under Brazilian law.

Athletes have made efforts to avoid falling ill, from bleaching rowing oars to preemptively taking antibiotics, which have no effect on viruses, to simply hosing off their bodies the second they finish competing.

Despite that, athletes at test events in August still fell ill. The World Rowing Federation reported that 6.7 percent of 567 rowers got sick at a junior championship event in Rio. The International Sailing Federation said just over 7 percent of sailors competing at a mid-August Olympic warm-up event in Guanabara Bay fell ill.

By comparison, the U.S. Environmental Protection Agency’s maximum illness rate for swimming is 3.6 percent — which many experts say is too high.

Offshore water samples taken by the AP for the past three months were 30,000 times higher than what is considered alarming in the U.S. and Europe — at a point 600 meters (yards) offshore and within the Sugarloaf sailing race course; at a spot 1,300 meters (yards) off the shore within the Naval School course; and at a point 200 meters from the shoreline in the Olympic lagoon where rowing lanes are located.

The high levels of sewage-linked pathogens found in the offshore sailing courses “show that … there are many, many points where sewage enters the bay,” said Brazilian virologist Fernando Spilki, coordinator of the environmental quality program at Feevale University in southern Brazil, who is conducting monthly tests for the AP.

“These pathogens we’re looking for, especially the viruses, are able to migrate in the currents in a big way,” he said.

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Online:

Interactive, summary findings and methodology of AP’s study: http://ift.tt/1TtA0Yj

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Associated Press sports writer Stephen Wade contributed to this report.

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#UK Apple’s smaller iPhone could launch in February (AAPL)

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iPhone 5c colours

Apple’s smaller iPhone, rumoured to be called the 6c, could be announced in January 2016 ready for a February launch, according to Chinese blog TechWeb (via 9to5Mac) which cites “Foxconn insiders.” 

Apple held a January “Special Event” in 2010 which saw the unveiling of the iPad but has shifted its focus towards the middle and end of the year ever since, choosing to unveil new iPhones in September. KGI Security’s analyst Ming-Chi Kuo, who has a good track record on Apple rumours, backed up the early 2016 claim

The 6c would follow on from the 5c, an “unapologetically plastic” device that the company killed last year. Both iPhone models — the 6S and 6S Plus — have large screens which some users find hard to use. 

The device would feature an all aluminum design, making it light and, most importantly, putting it in-line with Apple’s higher end iPhones.

Ben Thompson, an independent analyst who writes the Stratechery blog, has previously claimed in his “Daily Update” emails that the iPhone is seen as a status symbol in many countries and the plastic iPhone 5c failed because it appeared cheaper than the top-line models. 

Beyond the aluminium body, the 6c would be unlikely to support 3D Touch, the headline feature of the iPhone 6S, according to the report. The device could support TouchID and Apple Pay. 

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#UK Gary Neville named Valencia coach

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Gary Neville made over 600 appearances for Manchester United

Madrid (AFP) – England coach and Manchester United legend Gary Neville has been named Valencia boss for the rest of the season, the Spanish side announced on Wednesday.

“Valencia have reached an agreement with English coach Gary Neville for him to be coach of the first team until June 30, 2016,” the club said in a statement.

“Neville will officially begin his work on Sunday, December 6 ahead of the Champions League match against Lyon which will take place at Mestalla on Wednesday, December 9.”

Neville’s brother Phil has been at the club since the start of the season, working as an assistant to Nuno Espirito Santo before he left the club after a poor run of results on Sunday.

“I am very excited and feel very proud to have received this great opportunity with Valencia,” Neville told the club’s website.

“It is a huge club of immense prestige and I remember well from my time as a player the great passion and loyalty of their fans.”

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#UK Here are the high-tech weapons Britain’s RAF could use to destroy ISIS

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RAF Tornado

The British Parliament is voting on Wednesday on whether to expand the bombing of ISIS by the Royal Air Force (RAF) into Syria. The RAF is already targeting ISIS in Iraq.

Countries including the United States and France are already using their air forces to attack ISIS in Syria. If Britain joins them, it will be using some pretty sophisticated equipment that could make a big difference to the campaign.

Here are some of the best military hardware Britain could be bringing to the fight.

 

 

The Tornado GR4 jet was designed in the 1960s, but is still the UK’s principal ground attack aircraft. It has a reputation for great reliability and carries all​ the latest weapons systems.

The Tornado’s will carry Brimstone missiles that are capable of hitting fast moving targets such as cars with great accuracy. They are reputed to be better than the air-to-ground missiles being used by the other countries currently fighting ISIS.

It might not look like much, but the RAPTOR Reconnaissance Airborne Pod underneath the Tornado is really important; it can provide a highly detailed live video feed of day or night. This information can be shared with other militaries.

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#UK FIFA discusses reforms amid new sponsor attacks

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The crisis at FIFA has been mounting since May 2015, when US and Swiss authorities launched criminal investigations into corruption allegations

Zurich (AFP) – FIFA’s leadership held talks on reforms Wednesday as sponsors who provide hundreds of millions of dollars demanded independent leadership of changes to football’s scandal-tainted governing body.

The FIFA executive committee — with president Sepp Blatter and vice president Michel Platini both suspended — is holding two days of talks to discuss reforms proposed by top sporting official Francois Carrard who was named by the world body.

But top sponsors Anheuser-Busch, Adidas, Coca-Cola, McDonald’s and Visa said reforms should be “subject to independent oversight”.

The multi-nationals are reportedly angry that they have not been given places on FIFA’s reform committee. They have in the past threatened to review their football deals. 

– Reform doubts –

In October, Carrard’s panel proposed limiting president terms at 12 years and barring those over 74 from serving on the executive. It also suggested the pay package of top officials be published annually and independently audited.

The executive committee will decide whether to send the reform package for adoption at a special FIFA congress on February 26, when Blatter’s replacement will be chosen.

The meeting is being held on the fifth anniversary of the 2010 vote that controversially awarded the 2018 World Cup to Russia and the 2022 tournament to Qatar.

That decision set off a cascade of allegations of corruption and political skullduggery.

Swiss authorities are investigating the 2010 votes and have also charged Blatter with criminal mismanagement at FIFA. Platini is named in the investigation over a two million dollar payment made for FIFA advisory work for which there was no contract. 

In parallel, US authorities have charged 14 FIFA officials and sports business executives over more than $150 million in bribes paid for marketing contracts. Seven officials were detained at a FIFA congress in Zurich in May.

Sponsors are not the only group to express concern over the reform measures being undertaken by FIFA.

“We urge you to embrace positive changes and also recognise that this is just one step toward creating a credible future for FIFA,” the sponsors said in a letter to the world body.

“Transparency, accountability, respect for human rights, integrity, leadership and gender equality are crucial to the future of FIFA. Reforms can set the proper framework for these characteristics, but a cultural change is also needed.”

A FIFA spokesman said in response that sponsors had already played “an important part” in the FIFA reform committee and that they would “continue to play an important role in the reform process.”

Other groups also doubt the Carrard panel, dominated by officials nominated by regional confederations, will be able to press through convincing reforms.

“What is actually needed is an independent set of executives that have no ties in world football, walking in and cleaning this place up,” said Declan Hill, author of “The Fix: soccer and organised crime”.

The Transparency International activist group’s chief Cobus de Swardt predicted Carrard’s committee “will likely avoid taking some hard decision about changing the way FIFA does business”, because doing so could affect the committee members themselves.

Meanwhile, Jack Warner, a central figure in FIFA corruption accusations, faces a hearing in Trinidad and Tobago on whether he will be extradited to the United States to face bribery charges.

Warner, a businessman, politician and former kingpin in Caribbean football and in the American confederation, is accused of taking millions of dollars in underhand payments from various sources.

A former FIFA vice president, he was banned for life by the world body in September.

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#UK 2 suicide bombers kill at least 6 in northern Cameroon

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YAOUNDE, Cameroon (AP) — Two teen female suicide bombers detonated explosives in a north Cameroon town, killing at least six people, the governor of Cameroon’s Far North province said Wednesday.

Soldiers killed a third suicide bomber before she could attack in the town of Waza late Tuesday, said governor Midjiyawa Bakary.

“We have reliable information the attackers came from Nigeria,” Bakary said. Senior military official Col. Jacob Kodji on Wednesday said Nigeria’s Boko Haram extremists have been using teenage suicide bombers and planting land mines.

Two Cameroonian soldiers were killed Monday by a land mine planted by militants in the village of Gangse in northern Cameroon, Kodji said.

Boko Haram’s 6-year uprising has killed some 20,000 people. The Islamic extremist group has expanded attacks into Cameroon, Chad and Niger — all countries contributing troops to a regional force intended to wipe out the extremists.

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#UK Here’s a super quick guide to what traders are talking about right now (YHOO, BABA)

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Traders work on the floor of the New York Stock Exchange April 14, 2015.  REUTERS/Brendan McDermid

Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about on Wednesday morning:

  • Spoos up small. YHOO in focus on headers about spinoffs, BABA stake and MM Tenure.
  • Euro Stocks were stronger early, but with the ECB’s cuts built in, it’s a “Sell the News” event.
  • Shanghai Composite was up 2.3% – Banks surged – CITIC Bank, Beijing Bank and Ningbo Bank leapt by the daily limit of 10%. Industrial Bank, Ping An Bank and Huaxia Bank rallied more than 6%.
  • Aussie GDP stronger, but weakness in Miners weighed.
  • Most EM Markets closed red into 2 appearances by Yellen the next few days.
  • DXY headed back to 12Y highs as the Euro drops on weak inflation figures.
  • Gasoline giving back some of yesterday’s EPA related surge.
  • Oil off 1% as API figures showed a build of 1.64M, with Cushing inventories up 453k – DOE today at 10:30 (Street looking for a 800k draw).
  • Iron Ore new decade lows, but most metals are higher – even Gold despite the higher $/

Ahead of us today, we have Fed’s Lockhart (2015 Voter) speaking on U.S. Economy at 8:10, while Yellen Makes Welcoming Remarks at 8:30, right when ADP Employment and Nonfarm Productivity hit. ISM New York posts at 9:45, just before the Bank of Canada Rate Decision at 10am. We get DOE data for Crude at 10:30 – then all eyes on the Fed, with Yellen speaking to the Economic Club of Washington at 12:25, the Beige Book release at 2pm, and Fed’s Williams (2015 Voter) delivering a Outlook Speech at 3:40. Down in Washington – Senate meets at 9:30am; to consider budget reconciliation legislation that would repeal key parts of Obamacare, bar any federal funds for Planned Parenthood and its affiliates, while the House meets at 10am; to consider reauthorizing education programs through fiscal 2020.

SEE ALSO: 10 things you need to know before the opening bell

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#UK Cop pays thief’s tab for stolen birthday cake ingredients

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PORTSMOUTH, N.H. (AP) — A New Hampshire police officer dispatched to the scene of a shoplifting incident paid the thief’s tab after learning a woman stole the items to bake her child’s birthday cake.

The Portsmouth Herald reports (http://bit.ly/1NGYDlB ) Officer Michael Kotsonis, a 19-year member of the Portsmouth force, responded to a call last week at the Ocean State Job Lots after a woman had stolen cake mix, shortening and “a couple things of frosting.”

After investigating the theft and learning the woman’s identity, Kotsonis went to her home to recover the items. It was there that he found that the woman was a mother who wanted to bake her child a birthday cake.

Kotsonis says the mother’s actions weren’t right, but he wasn’t going to take away a child’s birthday cake.

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