Archive for Financial News – Page 180

06 Oct

Markets are expecting a strong Nonfarm Payrolls report. Natural gas prices jumped to an 8-month high

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) decreased by 0.03%, while the S&P 500 Index (US500) lost 0.13%. The NASDAQ Technology Index (US100) closed negative 0.12% on Thursday. Weekly jobless claims rose less than expected, a sign of a strengthening labor market that is hawkish for Fed policy.

The US weekly initial jobless claims rose by 2,000 to 207,000, a sign of a resilient labor market versus expectations of 210,000.

Today, market attention will focus on the monthly US Nonfarm Payrolls employment report, which is expected to show a 170,000 increase and a 0.1 decline in the September unemployment rate to 3.7%. A stronger-than-expected reading would indicate a strong and resilient labor market. In turn, this would emphasize the Fed’s stance of “holding rates longer,” and this would directly pressure risk assets such as the euro, pound, stock indices, and even gold. But any hints of a slowing labor market or any unexpected jumps in unemployment will be seen as a negative interest rate impact by the economy, which will weaken the dollar, lower government bond yields, and put confidence back into risk assets, gold, and indices.

Markets are currently pricing in a 22% probability that the FOMC will raise rates by 25 bps at its next meeting on November 1 and a 35% probability that the rate will be raised by 25 bps at its December 13 meeting.

The Canadian dollar rose in September despite the overall strengthening of the US dollar. Given that the Bank of Canada (BoC) left the rate unchanged in early September and expressed concerns about the sustainability of core inflation, it is clear that the Bank of Canada has a desire to keep the possibility of an additional rate hike alive.

Equity markets in Europe traded flat on Thursday. Germany’s DAX (DE40) fell by 0.20%, France’s CAC 40 (FR40) closed around the opening price, Spain’s IBEX 35 (ES35) added 0.67%, and the UK’s FTSE 100 (UK100) closed positive by 0.53%. ECB Vice President de Guindos said yesterday that with inflation still high, it is “premature” to discuss the possibility of cutting interest rates. Economists regard this stance by the ECB as hawkish. German exports fell by 1.2% m/m in August, worse than forecasts of 0.6% m/m. Imports in August also unexpectedly fell by 0.4% m/m vs. expectations of 0.5% m/m growth. Germany’s construction PMI for September fell by 2.2 to 39.3, the sharpest decline since the data series began in 2020. The economic outlook for the Eurozone’s largest economy remains sluggish.

Oil and gasoline prices continued to fall on Thursday, with oil falling to a 5-week low and gasoline falling to a 9-month low. Oil prices have been falling on concerns that slowing global growth will reduce energy demand and consumption. But a weaker dollar on Thursday limited the decline in energy prices. Tension in the oil market is expected to continue as the OPEC+ agreement to cut production is extended. Saudi Arabia recently said it will maintain its unilateral 1.0 million BPD oil production cut through December. The move will keep Saudi oil production at around 9 million BPD, the lowest in three years.

Natural gas prices jumped to an 8-month high on Thursday amid a smaller-than-expected rise in weekly natural gas inventories at the EIA. EIA natural gas inventories rose by 86 Bcf, below expectations of 94 Bcf. The natural gas market is also supported by forecasts that cooler temperatures in the US will increase demand for gas for heating. As of October 2, European natural gas storage inventories were 96% full, above the 5-year seasonal average of 88% for this time of year. The US natural gas inventories as of September 29 were 5.3% above the 5-year seasonal average.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) increased by 1.80% on Thursday, China’s FTSE China A50 (CHA50) will not trade for the rest of the week due to holidays, Hong Kong’s Hang Seng (HK50) added 0.10%, and Australia’s ASX200 (AU200) was positive by 0.51%.

S&P 500 (F)(US500) 4,258.19 −5.56 (−0.13%)

Dow Jones (US30) 33,119.57 −9.98 (−0.030%)

DAX (DE40)  15,070.22 −29.70 (−0.20%)

FTSE 100 (UK100) 7,451.54 +39.09 (+0.53%)

USD Index  106.35 −0.45 (−0.42%)

News feed for 2023.10.03:
  • – Australia Retail Sales (m/m) at 03:30 (GMT+3);
  • – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3);
  • – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
  • – US Unemployment Rate (m/m) at 15:30 (GMT+3);
  • – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Waller Speaks (m/m) at 19:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
05 Oct

Big 3 Automaker Stellantis Invests $90M in Lithium Triangle Explorer

Source: Streetwise Reports  (10/4/23)

Shares of this lithium explorer jumped after an announcement that big-three automaker Stellantis is investing US$90 million in the company. One analyst said other major companies are watching.

Shares of lithium explorer Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE) jumped 111% after it announced that big-three automaker Stellantis (formerly Chrysler) had invested US$90 million to acquire shares in the company.

The Stellantis umbrella includes iconic brands like Chrysler, Alfa Romeo, Citroen, Dodge, Fiat, Jeep, Maserati, and Peugeot. Under the agreement, Peugeot Citroen Argentina SA, a Stellantis subsidiary, will own 19.9% of the company’s issued and outstanding shares, and Argentina Lithium will own 80.1%.

Argentina Lithium President and Chief Executive Officer Nikolaos Cacos said it highlights the shortage approaching for the metal needed for electric vehicle (EV) batteries.

Stellantis is reaching down to exploration companies like Argentina Lithium to make sure they have the lithium needed “for the electric vehicle transition, which is coming fast and furious,” Cacos said in an interview with Proactive Investors.

Research Corp. analyst Sid Rajeev rated the stock a Buy with a fair value target price of CA$0.52.

The lithium market is expected to grow globally from US$37.8 billion in 2022 to US$89.9 billion in 2030, according to a report by Fortune Business Insights.

“The growing adoption of hybrid and electric vehicles (EVs), high-drain portable electronics, and energy storage systems has had a huge impact on the growth of the overall market,” the report said.

LIT’s share price went from CA$0.23 to CA$0.485 on the day of the announcement.

The news is also bound to attract the attention of other major companies.

“As LIT’s projects are close to well-known projects held by majors, the company can be subject to M&A events if it is able to delineate a resource in one or more of its assets,” noted Fundamental Research Corp. analyst Sid Rajeev while initiating coverage on the company in July.

Rajeev rated the stock a Buy with a fair value target price of CA$0.52.

After an advance late in September 2022, Technical Analyst Clive Maund noted that “something is going on” with the stock and that it should see a larger move.

The Catalyst: Fueling the New Green Economy

Cacos said having a partner like Stellantis validates the projects and the exploration work that Argentina Lithium has done so far in the Lithium Triangle to find the battery metal that could fuel the new green economy.

The company has acquired resource properties across the Americas, with a considerable focus on Argentina and the Lithium Triangle. Its current projects include Rincon West, Antofalla North, Pocitos, and Incahuasi.

After an advance late in September 2022, Technical Analyst Clive Maund noted that “something is going on” with the stock and that it should see a larger move.

The Rincon West Project includes three mining concessions covering 3,742 hectares at the Rincon Salar, west and north of Rio Tinto Plc’s (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) adjacent Rincon Project.

At its Antofalla North site, the firm controls 10,050 hectares 25 kilometers west of Salar de Hombre Muerto, the “Salt Pan of the Dead Man.”

The Pocitos property includes 26,000 hectares, the company said, and the company’s Incahuasi Project involves a 100% interest in 25,000 hectares of granted mineral rights properties in the Incahuasi Salar basin in Catamarca Province, Argentina.

Funding to Advance All Projects

Stellantis’ investment “allows us to not think about funding anymore as an exploration company,” Cacos said. “I think we can advance all our projects over the next three years, right up to the announcement, define resources and pre-feasibility studies just before, … (and) announcing making a decision or going forward and commercial production.”

After the issuance of exchange shares and at the close of the transaction, on or about October 4, Stellantis will own at most 19.9% of the common shares (on an undiluted basis) of Argentina Lithium, the company said.

The exchange agreement also provides Stellantis with observer rights to attend Argentina Lithium’s board meetings for as long as Stellantis owns at least 10% of the company and allows it to nominate one director to the Board of Directors.

The companies will enter into a lithium offtake agreement in which Stellantis will buy up to 15,000 tonnes per year of lithium produced by LIT over a seven-year period. The agreement may be extended by the companies.

The supply obligation of the agreement is conditional on the start of commercial lithium production at one or more of Argentina Lithium’s projects, as well as other terms, including Stellantis having a first right of first refusal on the sale of lithium products to third parties after production starts.

North American Demand to Drive Lithium Shortfalls

Lithium is a major component of EV batteries, where it is used as a cathode and electrolyte. The soft, silvery metal with highly reactive and flammable properties is also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

Analysts from Eight Capital predicted that lithium market deficits will widen this decade, and the shortfalls will be driven by demand in North America.

The United States’ EV penetration of 6% lags China’s 26% and Europe’s 20%, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a recent research note. But President Joe Biden’s administration has committed to a target of 50% of new vehicle sales being EVs by 2030

“We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS),” Prihar and Riazanov wrote.

Streetwise Ownership Overview*

Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE)

Retail: 63%
Strategic Investors: 37%
63%
37%
*Share Structure as of 9/29/2023

 

“Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it’s still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust.”

Ownership and Share Structure

The company doesn’t officially share any information regarding management or institutional ownership, but Reuters reported that about 37% was owned by strategic institutions in the most recent reporting.

Its largest shareholders are Lithium Investment Partners LP with 17.68%, Jack Yetiv with 15.24%, Joseph J. Grosso with 3.05%, and the CEO Cacos with 1.04%, according to Reuters.

Its market cap is CA$59.83 million, with 130 million shares outstanding. It trades in a 52-week range of CA$0.60 and CA$0.19.

 

Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Argentina Lithium & Energy Corp.
  2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  3. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

For additional disclosures, please click here.

Financial News Stock Market News
05 Oct

Interest rates: Monetary policy is always political as central banks opt to back the financial sector

By Dan Cohen, Queen’s University, Ontario; Emily Rosenman, Penn State, and Martine August, University of Waterloo

As the Bank of Canada prepared to announce its decision on interest rates in early September, Tiff Macklem, the bank’s governor, received imploring letters from premiers spanning both the country and the political spectrum.

New Democrat David Eby of British Columbia wrote to the Bank of Canada, followed by Ontario’s Doug Ford, a Conservative, and by Liberal Andrew Furey of Newfoundland and Labrador.

In their letters, the premiers urged the bank against raising rates again and to think of the “human impact of rate increases” on Canadians already burdened by rising mortgage payments and financial pain.

When Macklem announced he was holding the rate at five per cent, Finance Minister Chrystia Freeland called the decision “a welcome relief for Canadians.”

Facing subsequent accusations from economists and journalists that she was meddling, Freeland made clear a few hours later that she respected the independence of the Bank of Canada.

Social impact of monetary policy

But the criticism raises important questions. Is monetary policy really outside the realm of politics? What are the social ramifications of our current monetary policy system?

The view that central banks should be independent of politics has shifted many times over the history of central banks.

While central bank decision-making is independent from government, the banks follow mandates set by governments. These mandates vary in different countries.

The United States Federal Reserve (the Fed), for example, has a dual mandate: to manage inflation and pursue maximum stable employment. The Bank of Canada’s mandate, by contrast, is focused entirely on managing inflation, with an arbitrary target of two per cent.

In theory, central banks pursue these goals without interference from government.

But we don’t believe political debates over monetary policy should be off limits.

Ties between politics and monetary policy

In the 1970s, Fed chairman Paul Volcker famously used monetary policy — specifically a campaign of rapid interest rate increases — to erode the bargaining power of labour as a means of taming inflation.

That decision had wide-ranging effects — including a reduction in union membership — that continue to have an impact on American society and placed the burden of fighting inflation onto the working class.

This logic continues, crudely captured in a recent viral video when Australian real estate developer Tim Gurner argued:

“We need to see unemployment rise, we need to see pain in the economy … to remind people that they work for the employer, not the other way around.”

In more polite language, Phillip Lowe, outgoing governor of Australia’s central bank, recently acknowledged that the effects of monetary policy are “felt unevenly across the community.”

The scene in Canada

According to our research, monetary policy likewise has an impact on wealth inequality in Canada by supporting the financial sector over other parts of the economy.

Indeed, the overt goal of monetary policy is to stabilize the financial system, a priority that disproportionately benefits those in the financial sector.

This has become clear in recent decades, beginning with the 2008 global financial crisis and continuing to the COVID-19 pandemic, when central banks around the world began to use “quantitative easing” to stimulate the economy.

While monetary policy had previously centred on setting the rates at which regulated banks could borrow, central banks expanded their role by undertaking massive asset purchasing campaigns via quantitative easing.

Central banks began supporting not just regulated banks but investment funds, hedge funds and other “non-bank financial intermediaries” — also known as shadow banks — that are largely unregulated.

This involved tactics like purchasing corporate bonds to stabilize the corporate debt market.

Investors benefit

These new Bank of Canada policies grant “infrastructural power” over how monetary policy is implemented to the financial sector, buttressing the profits of investors with public dollars. This allows investors to determine how the capital provided by the bank will be invested — with little regulation or public oversight.

Acknowledging this shift, Bank of Canada deputy governor Toni Gravelle said the bank has moved from its traditional role as “lender of last resort” to “liquidity provider of last resort,” promising to “resolve market-wide stresses when the financial system cannot find its footing.”

When the working class cannot “find its footing,” however, the Bank of Canada doesn’t extend a helping hand. In 2022, for example, Macklem told employers not to increase wages despite rampant inflation, and told unionized workers not to ask for a raise.

The central bank’s decision to support the financial sector is, in fact, political. It benefits some — financial sector executives and investors — at the expense of others, and tilts economic decision-making in their favour.

When a public institution buys hundreds of billions in assets as the Bank of Canada did in March 2020, Canadians are right to ask questions about its impact, and politicians should respond.

Enriching the already rich

The premiers’ letters to the Bank of Canada, while described as unprecedented, expose how monetary policy involves fundamentally political questions about the distribution of wealth in our society.

As we demonstrated in our research, the Bank of Canada’s quantitative easing tactics during the pandemic had a vastly uneven impact, driving up house prices and enriching already wealthier homeowners, while lower-income households and renters faced higher rents and precarity.

It also helped investors who took advantage of cheap capital and rising asset values to scoop up multi-family apartments and houses in Canada.

The impact doesn’t stop at housing. As inflation rose, central banks hiked interest rates, assuming that would boost unemployment, reduce labour costs and slow the economy so that inflation would fall.

But at a time when the causes of inflation are highly contested (there are ongoing debates around supply chain disruptions and “sellers inflation,” for example) choosing to focus on wages is political.

What should central banks do?

Where does this leave us in terms of the politics of monetary policy and central bank independence?

While central bank decisions may need to be independent of government influence, the factors banks consider are determined by our political systems.

Central banks could consider factors that benefit workers and people who don’t own assets — from maximizing employment to promoting housing affordability and addressing climate change risks.

European Central Bank president Christine Lagarde, for example, has said climate change should factor into central bank decision-making.

Others argue monetary policy can be used to fund the green transition, building on the European Central Bank’s practice of using targeted loans to influence the financial sector rather than leaving decision-making in the hands of financial institutions.

Given the connection between monetary policy and inequality, it’s time for a serious debate on why central banks use public institutions to support private finance — and what they should be doing differently.

The authors would like to acknowledge and thank research assistant Yun Liu for her work on this article.The Conversation

Dan Cohen, Assistant Professor, Queen’s University, Ontario; Emily Rosenman, Assistant Professor of Geography, Penn State, and Martine August, Associate Professor, School of Planning, University of Waterloo

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Bonds Economics & Fundamentals Financial News
05 Oct

USDInd: Can dollar bulls sustain momentum?

By ForexTime

  • USDInd textbook uptrend approaches weekly resistance
  • 4 potential targets, if uptrend persists
  • Warning: Bearish divergence spotted
  • Bullish scenario is invalid if prices go below 105.672
  • Upcoming US jobs data may dictate USDInd’s next moves

The bulls in the USD Index on the D1 chart have been riding high.

The underlying US dollar index has climbed by 3.2% so far in 2023, with this textbook uptrend evident since mid-July as it posted consecutive higher tops and higher bottoms.

Although the bears are currently busy with a correction wave within that uptrend, the bulls seem to be gathering in numbers already.

Will they be able to sustain their momentum and start a new impulse wave?

 

Let us use the fractal nature of the market structure and look at the H4 chart to see what the market is saying.

The H4 chart reveals more details, with the most glaring being the bearish divergence between USDInd’s price chart and the MACD (Moving Average Convergence Divergence) Oscillator.

  • Looking at prices, note the higher top at ”a” followed by another higher top at “b”.
  • Meanwhile on the MACD, note that the ‘d’ top is lower than the top at “c”.

This suggests that a warning light might be flashing.

However, with the price being above the 50 Linear Weighted Moving Average, along with Momentum as well as the MACD Oscillator that are still in bullish territory, the uptrend may well prevail on the H4 timeframe.

Attaching a modified Fibonacci tool to a trigger level at 107.371 and dragging it to a stop loss just below a last proper swing at 105.672, four possible targets can be established:

  • Potential Target 1: 108.051
  • Potential Target 2: 108.390
  • Potential Target 3: 109.070
  • Potential Target 4: 109.919

However, take note, if the price at 105.672 is broken, this upward-looking scenario is no longer relevant.

 

From a fundamental perspective …

The incoming US jobs data could also influence this US Dollar index’s price movements going into the weekend:

  • Thursday, October 5th:
    US weekly initial jobless claims (forecast: 210k; higher than prior week’s 204k)
  • Friday, October 6th:
    US September nonfarm payrolls report (forecast: 170k; lower than August’s 187k)
    US September unemployment rate (forecast: 3.7%; lower than August’s 3.8%)
    US September average hourly earnings (forecast: rose 0.3% between August till September; higher than August’s 0.2% month-on-month)

 

Potential Scenarios

  • The USDInd may resume its uptrend if shown stronger-than-expected US jobs data, that allows the Fed to trigger another rate hike by end-2023 and keep benchmark US rates higher for longer.
  • However, the USDInd may pare recent gains if shown weaker-than-expected US jobs data, that prevents the Fed from another rate hike by end-2023 while perhaps paving the way for an eventual rate cut in the second half of 2024.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Forex and Currency News
05 Oct

Weak ADP employment data supported stock indices. Australia has seen an increase in exports

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) increased by 0.39%, while the S&P 500 Index (US500) added 0.81%. The NASDAQ Technology Index (US100) closed positive by 1.35% on Wednesday. Stocks closed modestly higher on Wednesday as lower bond yields temporarily eased interest rate concerns and supported gains in equities. Bond yields fell after the monthly ADP employment report showed fewer jobs than expected, a dovish factor for Fed policy.

The ADP US employment change for September came in at an 89,000 increase, weaker than expectations of 150,000 and the lowest increase in 2.5 years. The ISM Services Business Activity Index for September fell from 0.9 to 53.6, stronger than expectations of 53.5. Factory orders in the US for August rose by 1.2% m/m, stronger than expectations of 0.3% m/m.

Alphabet (GOOGL) closed higher by more than 2% after introducing the new Pixel 8 and Pixel 8 pro phones, as well as the new Pixel Watch. The company also said it will release a version of its Bard artificial intelligence-powered virtual assistant. Palantir Technologies (PLTR) closed higher by more than 5% as the company emerged as the top bidder for a contract to modernize the UK’s National Health Service.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) added 0.10%, France’s CAC 40 (FR 40) closed at its opening price, Spain’s IBEX 35 (ES35) fell by 0.58%, and the UK’s FTSE 100 (UK100) closed down by 0.77%. Eurozone retail sales fell by 1.2% m/m in August, weaker than expectations of 0.5% m/m and the largest decline in 8 months. The eurozone goods and services price index came in at a record drop of 11.5% y/y in August after 7.6% y/y in July, which was in line with expectations.

ECB President Lagarde said yesterday that future ECB decisions “will ensure that interest rates are set at sufficiently restrictive levels for as long as necessary.” Investors viewed this ECB stance as hawkish.

On Wednesday, Saudi Arabia and Russia announced they would maintain their oil production cuts through the end of the year. But oil prices fell by nearly 6%, marking the biggest one-day sell-off since September 2022. The collapse in oil prices on Wednesday came amid several factors. Chief among them was concern about the state of the global economy, especially the most vulnerable Europe versus the relatively robust US economy. Another driving force behind Wednesday’s drop in oil prices was the seasonal slowdown in US demand, a fact that seems to have been missed by those betting that the last quarter’s oil rally would continue indefinitely.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 2.28% on Wednesday, China’s FTSE China A50 (CHA50) will not trade for the rest of the week due to holidays, Hong Kong’s Hang Seng (HK50) fell by 0.78%, and Australia’s ASX200 (AU200) was negative 0.77%.

The Australian Bureau of Statistics released the trade balance data for August, which showed a significant increase in Australian exports (+4% for the month while -2% was expected), which may provide temporary support to the Australian dollar (AUD). Why temporary? Because the AUD is being dovishly supported by the Reserve Bank of Australia (RBA).

S&P 500 (F)(US500) 4,263.75 +34.30 (+0.81%)

Dow Jones (US30) 33,129.55 +127.17 (+0.39%)

DAX (DE40)  15,099.92 +14.71 (+0.10%)

FTSE 100 (UK100) 7,412.45 −57.71 (−0.77%)

USD Index  106.78 −0.21 (−0.20%)

News feed for 2023.10.03:
  • – Australia Trade Balance (m/m) at 03:30 (GMT+3);
  • – German Trade Balance (m/m) at 09:00 (GMT+3);
  • – UK Construction PMI (m/m) at 11:30 (GMT+3);
  • – Canada Trade Balance (m/m) at 15:30 (GMT+3);
  • – US Trade Balance (m/m) at 15:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – Canada Ivey PMI (m/m) at 17:00 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
  • – US FOMC Member Daly Speaks (m/m) at 18:30 (GMT+3);
  • – US FOMC Member Barr Speaks (m/m) at 19:15 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
04 Oct

Investing: What You Can Learn from Mom and Pop

“The highest commitment to stocks since the record levels of early 2000”

By Elliott Wave International

We all love Mom and Pop and cherish the valuable lessons about life they’ve given us along the way.

Yet, when it comes to investing, Mom and Pop may need to learn some lessons of their own.

Keep in mind that the American Association of Individual Investors’ (AAII) weekly survey is said to be representative of “Mom and Pop” investors, well-known for being quite cautious.

The August 2021 Elliott Wave Financial Forecast, a publication which provides analysis of major U.S. financial markets, discussed their behavior as the stock market was staging a significant rally:

In July [2021], the five-month average AAII stock allocation increased to 70.6%, a high level for this normally skittish cohort of investors. … This is the highest commitment to stocks since the record levels of early 2000.

This sentiment indicator is not meant for precision market timing, and, indeed, it seemed like these normally cautious investors had made the right decision. The rally persisted for the remainder of 2021. But, by early January 2022, the Dow Industrials and S&P 500 hit their all-time highs and have traded lower since.

What does this have to do with today?

Here’s an interesting chart and commentary from the August 2023 Elliott Wave Financial Forecast:

This chart shows a jump in the AAII bullish percentage to 59.5% on July 21. … These mom-and-pop investors are traditionally cautious, so big moves and extreme readings generally reflect important capitulations.

Let me emphasize again that sentiment indicators are important yet you may not want to use them for market timing.

That said, when you combine time-tested sentiment indicators with Elliott wave analysis, you get a much clearer picture.

If you’re unfamiliar with Elliott wave analysis, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

When after a while the apparent jumble gels into a clear picture, the probability that a turning point is at hand can suddenly and excitingly rise to nearly 100%. It is a thrilling experience to pinpoint a turn, and the Wave Principle is the only approach that can occasionally provide the opportunity to do so.

Our friends at Elliott Wave International are sharing with you a special free report ($80 value).

Using 5 must-see charts, “Are Bulls Headed for a Rude Awakening? 5 Market Warning Signs — Revealed” focuses your readers’ attention on 5 key sentiment areas:

  1. Foreign stock buyers’ behavior: a red flag
  2. See what the crowd’s attitude towards tech stocks shows
  3. Tech stocks vs broad equities: What’s the message here?
  4. Corporate insiders — are they buying or selling?
  5. Artificial intelligence: See what previous technology fevers signaled

Read “5 Market Warning Signs — Revealed” now, FREE ($80 value) >>

P.S. From the inverted U.S. Treasury yield curve to the second-largest U.S. bank failure in history (care of the March Silicon Valley bank collapse) — 2023 has been a year of eerie callbacks to the 2008 financial crisis. See what the rest of the year is likely to bring via our special report >>

This article was syndicated by Elliott Wave International and was originally published under the headline Investing: What You Can Learn from Mom and Pop. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Financial News Stock Market News
04 Oct

Ichimoku Cloud Analysis 04.10.2023 (GBPUSD, USDCHF, BRENT)

By RoboForex.com

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is correcting within a Triangle pattern. The instrument is going below the Ichimoku Cloud, which suggests a downtrend. A test of the Kijun-Sen line at 1.2080 is expected, followed by a decline to 1.1965. An additional signal confirming the decline will be a rebound from the upper boundary of the descending channel. The scenario can be cancelled by a breakout of the upper boundary of the Cloud with the price securing above 1.2175, which will mean further growth to 1.2265. Meanwhile, the decline could be confirmed by a breakout of the lower boundary of the Triangle pattern with the price securing under 1.2040.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is testing the resistance level. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the upper boundary of the bullish channel at 0.9195 is expected, followed by a rise to 0.9285. An additional signal confirming the rise will be a rebound from the lower boundary of the bullish channel. The scenario can be cancelled by a breakout of the lower boundary of the Cloud with the price securing under 0.9125, which will mean a further decline to 0.9035.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

Brent is declining within a bearish channel. The instrument is going below the Ichimoku Cloud, which suggests a downtrend. A test of the lower boundary of the Cloud at 90.95 is expected, followed by a decline to 87.95. An additional signal confirming the decline will be a rebound from the upper boundary of the bearish channel. The scenario can be cancelled by a breakout of the upper boundary of the Cloud with the price securing above 92.25, which will mean further growth to 94.65. Meanwhile, the decline could be confirmed by a breakout of the lower boundary of the bullish channel with the price securing under 89.65.

BRENT

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News
04 Oct

The yields of government bonds continue to update the maximums. RBNZ left the rate unchanged

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) was down by 1.29%, while the S&P 500 Index (US500) decreased by 1.37%. The NASDAQ Technology Index (US100) closed negative by 1.87% on Tuesday. The S&P 500 (US500) and Dow Jones Industrials (US30) indices fell to 4-month lows as the dollar index and government bond yields surged to 16-year highs. Hawkish comments from Fed Chair Cleveland Mester and Atlanta Fed Chair Bostic pushed 10-year T-note yields to a 16-year high as they voiced their support for keeping interest rates higher. Economic data on the labor market also supported the dollar. The US job openings rose by 690,000 from the previous month to 9.61 million in August, well above the market’s consensus forecast of 8.80 million and indicating a robust labor market. Investors fear that the Fed will raise the rate once again this year (the probability is already over 40%).

JPMorgan Asset Management warned that there is a risk of further stock market declines due to rising interest rates, “We didn’t expect this rate hike. This is something that will at least slow or even reverse the progress of stock markets.” Airbnb (ABNB) stock prices fell more than 6% and topped the list of losers on the Nasdaq 100 index after KeyBanc Capital Markets downgraded the company’s stock to sector Perform from Outperform. Goldman Sachs (GS) was down more than 3% and topped the list of losers in the Dow Jones Industrials after Morgan Stanley cut its target price on the stock to $329 from $347.

Prospects for a reduction in global fuel supplies are lending support to oil. Late last month, Russia announced a ban on gasoline and diesel exports in an attempt to stabilize domestic fuel prices. The ban will reduce fuel supplies by about 1 million BPD, about 3.4% of total global demand. The OPEC+ country will meet today. No surprises are expected – the countries are forecast to continue their previously planned cuts.

Asian markets were mostly declining yesterday. Japan’s Nikkei 225 (JP225) decreased by 1.64% on Tuesday, China’s FTSE China A50 (CHA50) will not trade for the rest of the week due to holidays, Hong Kong’s Hang Seng (HK50) was down by 2.69% on Tuesday, and Australia’s ASX 200 (AU200) was negative 1.28%.

The Reserve Bank of New Zealand (RBNZ) left the interest rate unchanged at 5.5% and expressed a relatively soft stance on the future trajectory of the OCR in an accompanying statement. Key factors determining the likelihood and size of a November tightening will be third-quarter inflation data due on October 17 and labor market data on November 1.

Japan’s finance ministry conducted another currency intervention yesterday to support the exchange rate, although there was no official statement from officials. A spokesman for Japan’s finance ministry was not available to comment on whether Japan had intervened against the yen. But analysts pointed to other explanations, such as standing orders to sell dollars at the 150 level because of the threat of official action. Others speculate that there may have been a check by Japanese authorities on exchange rates at banks, a move often seen as a prelude to further official action.

S&P 500 (F)(US500) 4,229.45 −58.94 (−1.37%)

Dow Jones (US30) 33,002.38 −430.97 (−1.29%)

DAX (DE40)  15,085.21 −162.00 (−1.06%)

FTSE 100 (UK100) 7,470.16 −40.56 (−0.54%)

USD Index  107.06 +0.16 (+0.15%)

News feed for 2023.10.03:
  • – Japan Services PMI (m/m) at 03:30 (GMT+3);
  • – New Zealand Interest Rate Decision at 04:00 (GMT+3);
  • – New Zealand RBNZ Rate Statement at 04:00 (GMT+3);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
  • – Eurozone ECB President Lagarde Speaks (m/m) at 11:15 (GMT+3);
  • – UK Services PMI (m/m) at 11:30 (GMT+3);
  • – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
  • – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
  • – OPEC+ meeting at 13:00 (GMT+3);
  • – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
  • – US ISM Services PMI (m/m) at 17:00 (GMT+3);
  • – US FOMC Member Bowman Speaks (m/m) at 17:25 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
  • – Eurozone ECB President Lagarde Speaks (m/m) at 19:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
03 Oct

OPEC+ plans to maintain production cuts. The RBA left the rate unchanged

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) decreased by 0.22%, while the S&P 500 Index (US500) added 0.08%. The NASDAQ Technology Index (US100) closed positive by 0.57% on Monday. Rising T-note yields lent support to the dollar after the 10-year bond yield rose to a 16-year high of 4.701% on Monday. The US economic news released on Monday was mostly better than expected and was bullish for the dollar. The ISM manufacturing index for September rose by 1.4 to 49.0, beating expectations of 47.9. In addition, construction spending for August rose by 0.5% m/m, matching expectations.

Fed Chair Bowman’s hawkish comments on Monday were favorable for the dollar when she stated: “I continue to expect that further interest rate increases are likely to be needed to bring inflation back to the 2% level in a timely manner, as high energy prices could reverse some of the gains we have seen in recent months.” For today, markets are factoring in a 31% probability that the FOMC will raise the lending rate by 25 bps at its next meeting on November 1 and a 51% probability that the rate will be raised by 25 bps at the meeting that ends on December 13.

Goldman Sachs said on Monday that US large-cap tech stocks are likely to perform well in the third quarter after the recent sell-off led to lower valuations, and “the divergence between lower valuations and improving fundamentals represents an opportunity for investors.”

Equity markets in Europe were mostly down on Monday. Germany’s DAX (DE40) fell by 0.91%, France’s CAC 40 (FR40) lost 0.94% yesterday, Spain’s IBEX 35 (ES35) declined by 1.16%, and the UK’s FTSE 100 (UK100) closed down by 1.28%. On Monday, ECB Vice President Gindos said that keeping interest rates at current levels will help bring inflation down to the ECB’s 2% target and that talk of a rate cut by the ECB is premature. This is a negative for the European currency as the ECB is likely to end its tightening cycle.

The rally of the dollar index to a 10-month high on Monday had a negative impact on energy prices. The likelihood of further interest rate hikes could slow economic growth and energy demand. But comments from the United Arab Emirates energy minister on Monday lent support to oil prices as he favored maintaining OPEC+ oil production cuts, saying the alliance was pursuing the “right policy.” Tensions in the oil market are expected to continue as OPEC+ production cuts are extended. Saudi Arabia recently said it would maintain its unilateral oil production cut of 1.0 million BPD through December. The move will keep Saudi oil production at around 9 million BPD, the lowest in three years.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.31% on Monday, China’s FTSE China A50 (CHA50) will not trade for the rest of the week due to holidays, Hong Kong’s Hang Seng (HK50) was not trading yesterday, and Australia’s ASX 200 (AU200) was negative 0.22%.

Yesterday morning, minutes from the Bank of Japan’s meeting were released, discussing the move out of negative interest rates. One board representative expressed risk management concerns about a major policy shift, as the BoJ may have enough data to make a decision on negative rates in the first quarter of next year. The prospect of a move away from negative interest rates has led to another rise in yields on 10-year Japanese government bonds, requiring the bank to make unplanned bond purchases. Japanese officials have been warning markets against currency speculation for weeks now, with the Japanese yen reaching last year’s levels when the BoJ intervened.

China’s manufacturing PMI for September rose by 0.5 to a 6-month high of 50.2, exceeding expectations of 50.1. In addition, China’s non-manufacturing PMI for September rose by 0.7 to 51.7, exceeding expectations of 51.6.

The Reserve Bank of Australia kept its interest rate unchanged at 4.1%. At the same time, the central bank reiterated its warning that further tightening might be needed to contain inflation within a “reasonable time frame.”

S&P 500 (F)(US500) 4,288.39 +0.34 (+0.08%)

Dow Jones (US30) 33,433.35 −74.15 (−0.22%)

DAX (DE40)  15,247.21 −139.37 (−0.91%)

FTSE 100 (UK100) 7,510.72 −97.36 (−1.28%)

USD Index  107.02 +0.80 (+0.75%)

News feed for 2023.10.03:
  • – US FOMC Member Mester Speaks (m/m) at 02:30 (GMT+3);
  • – Australia RBA Interest Rate Decision (m/m) at 06:30 (GMT+3);
  • – Australia RBA Rate Statement (m/m) at 06:30 (GMT+3);
  • – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
  • – US FOMC Member Bostic Speaks (m/m) at 15:00 (GMT+3);
  • – US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
03 Oct

Bitcoin: Technical analysis favours more gains

By ForexTime

  • Bitcoin pulls back after soaring to 6-week high
  • Prices broke beyond neckline of “inverse head-and-shoulders”
  • $30k handle could be attained if pattern plays out
  • ADX, RSI indicators also suggest more immediate headroom

Bitcoin on Monday (Oct 2nd) surged to its highest levels since Aug. 17th!

Cryptos climbed as Ether futures exchange-traded funds (ETF) were launched in the US at the start of this week.

 

Along the way, Bitcoin broke through the neckline of an inverse head-and-shoulder pattern, to a high of $28604.38.

Bulls delivered a strong close above its 50-day SMA but gave up close to 50% of its rally for the day.

This “area of surrender” for Bitcoin bulls coincides with the resistance line of the upward-sloping channel, drawn from the September 1st high of $26,137.37.

 

Inverse head-and-shoulder pattern has measured move objective of $2,633.38.

Note that Bitcoin has been able to retrace its steps from that $24,871.78 inverse head’s intraday low on September 11th, back towards its neckline.

This suggests that a similar-sized move ($2,633.38) could materialize to the upside

In fewer words, should this pattern play out, Bitcoin may get to within touching distance of the $30,000 handle.

According to Thomas Bulkowski, in his book “The Encyclopedia of Chart patterns” this reversal pattern has a 9% failure rate and meets its target 51% of the time.

 

Broken neckline: retested

At the time of writing, Bitcoin is paring yesterday’s surge to move back closer to the broken neckline.

Failure to close back below the broken neckline or the significant 78.6 Fibonacci level at $27446.25, could embolden Bitcoin bulls to test the 100 Fibonacci level at $28147.19 with eyes set on the upper line of the ascending channel mentioned above.

The Fibonacci levels are taken from August 29th’s high at 28147.19 to September 11th’s low of $24871.78.

 

Technical indicators suggest limited immediate gains

The Average Directional Movement Index (ADX) – an indicator that displays directional trend strength – is showing a strong bullish strength as it is above its 20 threshold and pointing upwards.

Furthermore, we see the 14-day relative strength index (RSI) tethering on the edge of being overbought, with room for a marginal move to the upside.

 

Overall, Bitcoin bulls will be hoping that seasonality will kick in once more, given that Q4 tends to see double-digit gains for the world’s oldest and largest crypto.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

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