Week: 20-26 Apr 2015

World Happiness Report 2015

The World Happiness Report 2015 nominates Switzerland as the happiest country in the world Report

Lucerne, Switzerland (26 Sep 2014)

Lucerne, Switzerland (26 Sep 2014) Large

The top 10 countries, out of 158 countries ranked by happiness indicators, are:

  1. Switzerland (7.587)
  2. Iceland (7.561)
  3. Denmark (7.527)
  4. Norway (7.522)
  5. Canada (7.427)
  6. Finland (7.406)
  7. Netherlands (7.378)
  8. Sweden (7.364)
  9. New Zealand (7.286)
  10. Australia (7.284)

The U.S. is the 15th happiest country of the 158 covered by the survey, which obtained its data primarily from the Gallup World Poll. That puts the U.S. just behind Mexico (14) but ahead of Brazil (16), Britain (21), Japan (46), Russia (64), China (84), and Iran (110).Bloomberg

The happiness index is made up of 7 components:

  • GDP per capita
  • social support
  • healthy life expectancy
  • freedom to make life choices
  • generosity
  • perceptions of corruption
  • dystopia

Greece update

Happiness index: 4.857, ranked 102 between Swaziland (101) and Lebanon (103). The World Happiness Report ranks Greece as having the world’s greatest reduction in happiness since 2005-2007. Report

Correct call: Greece will not be able to deliver an authorised list of reforms

We made this call last week, and were proven right: Greece failed to deliver. We think Greece’s “redlines” on issues they refuse to negotiate, and opposition within SYRIZA and the Greek Parliament will prevent Greece from delivering the reforms sought by the Eurogroup, ECB and IMF, and having those reforms agreed by those Institutions and (where required) funding legislated by creditor Parliaments before 30 Jun 2015.

Greek Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis are counting on the reluctance of some EU leaders to create a precedent for an exit from the eurozone in order to gain new funding without compromising its anti-austerity electoral promises. However both have been criticised by EC, EuroGroup and ECB leaders for their tactics. In Friday’s Eurogroup meeting, eurozone finance minsters said “Varoufakis’s handling of the talks was irresponsible and accused him of being a time-waster, a gambler and an amateur.Bloomberg

Eurogroup President Jeroen Dijsselbloem said on Friday that there is no chance of a partial disbursement of funds to Greece until Greece meets the commitments of the 20 Feb 2015 agreement. Reuters

And after 30 Jun 2015? Dijsselbloem said “as time runs out and we get near to June and the end of the (MFFA) extension, we must start talking about what happens after that. But first we must talk about these four months (Feb – Jun 2015), before we can talk about the future.Reuters

Our new call: Greece fails to earn an extension and exits the Eurozone

The scenario we consider most likely is that Greece will fail to deliver the reforms the Eurogroup requires for an extension of the current agreement. For the same reason the Eurogroup will not be inclined to discuss a new agreement – especially given the Greek government’s vow not to seek a third agreement. The scenario will be confirmed at the 18 Jun 2015 meetings of the Eurogroup and Governing Council of the European Central Bank and the 25-26 Jun 2015 meeting of the European Commission. On 30 Jun 2015 the Master Financial Assistance Facility Agreement (MFFA) will expire, and there will be no agreement for further funding for Greece.

The Eurogroup, ECB, IMF and EC will state that the cause of the situation is Greece’s failure to deliver the list of reforms promised on 20 Feb 2015.

An orderly exit will be negotiated, with limited funding support for a transition.

For the reasons outlined by Wolfgang Schäuble on Friday 24 Jun 2015 this scenario, or any similar scenario, could not be discussed before 18 Jun 2015.

Possible complications

The most likely complication would be an election in Greece. The impact of this depends on timing of the announcement and the election. However it may lead to a suspension of negotiations.

Government’s cash grab

A legislative decree making it mandatory for the governors and mayors to transfer their cash reserves to the Bank of Greece for use by the government was due to be voted through Parliament Friday night after two days of intense and, at times, combative debate. Outside the Parliament 50 mayors from various Greek cities gathered to protest against the legislative order. At the same time, nurses and doctors also protested in the Greek capital. Kathimerini Greek Reporter After furious opposition and debate the motion was passed. Kathimerini

The government is also eyeing the EUR 850 million in cash reserves belonging to the five listed state corporations in its mission to secure enough liquidity to cover its May obligations. Kathimerini

Timetable

Schedule Event / activity
30 Apr 2015 Greece payment of salaries and pensions: around EUR1.7 billion. The government is expected to be able to fund this payment as well as some upcoming IMF payments using money pooled from local governments and other state bodies. Reuters
30 Apr 2015 Final date (set on 20 Feb 2015) for approval by the ECB, IMF and Eurogroup of Greece’s schedule of reform proposals. Statement – However the Greek government did not meet deadlines for earlier meetings of the Eurogroup, IMF and ECB that would have led to this approval. So this milestone is here for record only.
1 May 2015 Greece repayment to IMF EUR 200 million.
1 May 2015 Greek Labor Day (May Day) bank holiday.
6 May 2015 Governing Council of the ECB: non-monetary policy meeting in Frankfurt.
8 May 2015 Greece must roll over EUR 1.4 billion of 26-week Treasury bills (2.00%).
11 May 2015 Eurogroup meeting. This is the second last meeting of the Eurogroup (the next being 18 Jun 2015) before the existing financial support agreement ends on 30 Jun 2015.
12 May 2015 Greece repayment to IMF for 601 million SDRs: EUR 774 million. This is a loan from the IMF’s first bailout loan in 2010.
14 May 2015 Greece must roll over EUR 1.4 billion of 26-week Treasury bills.
20 May 2015 Governing Council of the ECB: non-monetary policy meeting in Frankfurt.
3 Jun 2015 Governing Council of the ECB: monetary policy meeting in Frankfurt.
5 Jun 2015 Greece repayment to IMF for 240 million SDRs: EUR 310 million.
12 Jun 2015 Greece repayment to IMF for 270 million SDRs: EUR 348 million. This is a loan from the IMF’s first bailout loan in 2010.
12 Jun 2015 Greece must roll over EUR 3.6 billion of Treasury bills. This is made up of EUR 1.6 billion short term Treasury bills (2.70%) and another EUR 2 billion in short-term Treasury bills (2.15%).
16 Jun 2015 Greece repayment to IMF for 451 million SDRs: EUR 581 million. This is a loan from the IMF’s first bailout loan in 2010.
17 Jun 2015 Governing Council of the ECB: non-monetary policy meeting in Frankfurt.
18 Jun 2015 Eurogroup meeting. This is the last meeting of the Eurogroup before the financial support agreement for Greece ends on 30 Jun 2015.
18 Jun 2015 General Council meeting of the ECB in Frankfurt.
19 Jun 2015 Greece repayment to IMF for 270 million SDRs: EUR 348 million. This is a loan from the IMF’s first bailout loan in 2010.
19 Jun 2015 Greece must roll over EUR 1.6 billion of Treasury bills (2.70%).
25-26 Jun 2015 European Council meeting.
30 Jun 2015 Master Financial Assistance Facility Agreement (MFFA) expires EFSF Agreement. Unless there is an extension or a new agreement with the European Financial Stability Facility (EFSF), this milestone will cause an exit of Greece from the Eurozone. Wolfgang Schäuble (15 Apr 2015): “The (financial support program) program has been extended twice. It now runs through June 30. If Greece wants to avail itself of the remaining funds in this program the solution must be found, by June 30 … the deadline of the program.
1 Jul 2015 Governing Council of the ECB: non-monetary policy meeting in Frankfurt.
10 Jul 2015 Greece must roll over EUR 2 billion of 26-week Treasury bills (2.30%).
13 Jul 2015 Greece repayment to IMF for 360 million SDRs: EUR 462 million. This is a loan from the IMF’s first bailout loan in 2010.
16 Jul 2015 Governing Council of the ECB: monetary policy meeting in Frankfurt.
20 Jul 2015 Greek EUR 3.5 billion bond held by the ECB matures. This is made up of EUR 2.096 billion of bonds held by ECB exempted from the 2012 default (3.70%), EUR 1.361 billion bonds held by national central banks exempted from the 2012 default (3.70%) and EUR 25 million bonds held by the European Investment Bank exempted from the 2012 default (3.70%). On 4 Feb 2015 Greece said it had enough money to last up to this point (but not including these payments). FT
5 Aug 2015 Governing Council of the ECB: non-monetary policy meeting in Frankfurt.
7 Aug 2015 Greece must roll over EUR 1 billion of 26-week Treasury bills (2.75%).
20 Aug 2015 Greek EUR 3.88 billion bond held by the ECB matures. This is made up of EUR 3.020 billion bonds held by ECB exempted from the 2012 default (6.10%) and EUR 0.168 billion bonds held by national central banks exempted from the 2012 default (6.10%).
20 Aug 2015 Greece must repay EUR 8 billion 5-year bonds.

Note: Financial obligation details are sourced from:

  • Greek Public Debt Management Agency website
  • WSJ website: “Greece’s Debt Due: What Greece Owes When” WSJ

Market indices Impact

Index 24 Apr 15 Week 17 Apr 15 Month 31 Mar 15 Year 31 Dec 14
S&P 500 2,117.698 +1.75% 2,081.18 +2.41% 2,067.89 +2.86% 2,058.90
DJIA 18,080.14 +1.42% 17,826.30 +1.71% 17,776.12 +1.44% 17,823.05
NASDAQ 5,092.08 +3.25% 4,931.81 +3.90% 4,900.88 +7.52% 4,736.05

The shape of the week

US market indices this week (Chart: Yahoo Finance)

US market indices this week (Chart: Yahoo Finance)

A week of Nightly Business Reports

Monday Tuesday Wednesday Thursday Friday

PORTFOLIO

Long term (52-week) performance Impact

AUD denominated indices over the last 52 weeks (Chart: Bunting)

AUD denominated indices over the last 52 weeks (Chart: Bunting)

This week’s performance Impact

Index 24 Apr 15 Week 17 Apr 15 Month 31 Mar 15 Year 31 Dec 14
USD Index 2.083 +5.34% 1.977 +5.18% 1.980 +19.60% 1.741
Valuation rate 0.78752 +0.54% 0.78328 +2.75% 0.76641 -4.14% 0.82153
AUD Index 2.644 +4.78% 2.524 +2.36% 2.583 +24.77% 2.119

Portfolio stocks this week

The shape of portfolio stocks this week (Chart: Yahoo Finance)

The shape of portfolio stocks this week (Chart: Yahoo Finance)

Portfolio stocks in detail

Apple AAPL +4.43%

AAPL share price performance this week (Chart: Yahoo Finance)

AAPL share price performance this week (Chart: Yahoo Finance)

Amazon AMZN +18.52%

AMZN share price performance this week (Chart: Yahoo Finance)

AMZN share price performance this week (Chart: Yahoo Finance)

Ebay EBAY +6.11%

EBAY share price performance this week (Chart: Yahoo Finance)

EBAY share price performance this week (Chart: Yahoo Finance)

Facebook FB +0.93%

FB share price performance this week (Chart: Yahoo Finance)

FB share price performance this week (Chart: Yahoo Finance)

Google Class A GOOGL +7.68%

GOOGL share price performance this week (Chart: Yahoo Finance)

GOOGL share price performance this week (Chart: Yahoo Finance)

Google Class C GOOG +7.83%

GOOG share price performance this week (Chart: Yahoo Finance)

GOOG share price performance this week (Chart: Yahoo Finance)

  • Friday close: $565.06 +7.83% from $524.05.
  • P/E (historical): 26.67 Change from 24.92
  • P/E (1 year fwd): Not quoted Change from 23.43
  • Target (1 year): NASDAQ consensus $627.5, range $600 ↔ $650.
  • Analyst recommendations: 8 strong buy, 1 buy.

Linkedin LNKD +2.84%

LNKD share price performance this week (Chart: Yahoo Finance)

LNKD share price performance this week (Chart: Yahoo Finance)

Visa V +4.59%

V share price performance this week (Chart: Yahoo Finance)

V share price performance this week (Chart: Yahoo Finance)

VMware VMW +3.71%

VMW share price performance this week (Chart: Yahoo Finance)

VMW share price performance this week (Chart: Yahoo Finance)

FX: USD/AUD

Exchange rate Chart: xe.com

The AUD rose a little against the USD this week (Chart: xe.com)

The AUD rose a little against the USD this week (Chart: xe.com)

Australian economic indicators Trading Economics