Wall Street Webcasting Presents: Wells Fargo Securities: “A Late Summer of
Discontent - or a Temporary Pause in Risk Taking?”
NEW YORK -- August 6, 2014
Wall Street Webcasting has prepared and provided for you an exclusive
broadcast of Wells Fargo Securities own, Rich Gordon. Gordon is highly
recognized for his weekly narrates regarding the fixed income strategy at
Wells Fargo Securities (NYSE:WFC). This week, Gordon turns his attention to
last week’s influential global economic data.
There was a spike in volatility, which investors’ who found themselves on the
wrong side of the re-pricings, were not too thrilled about. The concern is
whether the risk off trade over the past few weeks is a result of a mid-summer
slump, or just the beginning of more re-pricings. Wells Fargo analysts’
believe it to be a temporary cease in risk taking.
Geopolitical events last week did not have a positive impact on high beta risk
assets. For starters, Argentina officially defaulted on an interest payment,
making this the fourth default for them in 32 years. Secondly, a major
Portuguese bank gave some indication of heightened stress. Also, the EU moved
closer to imposing meaningful sanctions against Russia for the role they
played in the strike on the civilian jet liner. Wells Fargo analysts’ believe
sanctions would induce a decrease in both Europe’s and Russia’s GDP during the
later quarters of 2014. Finally, the cease-fire between Israel and Hamas was
unsuccessful. The conflict has been governing news coverage and leaves a
negative impression on collective crowd psychology.
Since all of these events seemed to happen all at once, some investors began
to take precautions. The S&P had a consistent bull run since the beginning of
February, but it appears to have finally taken a turn. The VIX Index rose by
almost 400 basis points last week, which was its second largest increase of
the year. Wells Fargo analysts’ are surprised to see that interest rate
volatility actually dropped; with all of the financial instability on the
To hear a more in depth explanation of the turning economic balance, please
tune into Wells Fargo’s latest video.
Please visit the following link to view the video:
Wall Street Webcasting
Heather Capizzi, 201-683-2100
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