Month: April 2012

By TraderVox.com

Tradervox (Dublin) – The Swiss National Bank Interim Chairman Thomas Jordan have had a hard time explaining the SNB’s commitment to upholding the 1.20 cap put there by his predecessor Phillip Hildebrand. On his April 10 Zurich press briefing, Jordan said that the fears about the SNB resolve is misplaced and that it was prepared to make unlimited foreign purchases to ensure that the cap is upheld. However, the demand for Swiss assets have increased to a point that investors were willing to get negative yields at a six-month government bills auction last week due to the increasing Spain’s borrowing cost similar to the one that led to the bailout of Ireland, Portugal, and Greece.

Currency strategists are saying that the current risk aversion linked to the euro is the main driving force for the demand of safe haven currencies and the Swiss is the best option for traders. They are citing that the CHF has a high liquidity and is tradable throughout all time zones; further, the economy is resilient hence many traders will want to buy the franc. However, the current pressure on the franc will ease in the coming months as analysts are forecasting the franc to weaken to 1.23 per euro in coming three months.

The franc has so far increased against 14 of the 16 most traded currencies in the first quarter. The gains against the euro have been limited to 0.4 percent but the Swiss currency has advanced by 8.2 percent against the yen and 3.5 against the dollar. The currency has pared its gains against the euro by 0.1 percent to exchange at 1.2027 per euro. The franc was exchanging at 91.95 centimes per dollar which is 2 percent lower than its December level.

Some analysts believe that the franc is overvalued against the euro and they are expecting EUR/CHF pair to trade at 1.35 in a year’s time. Survey data from Societe Generale is showing a decline in confidence on the SNB’s ability to hold the cap beyond June.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Article by Investment U

In focus this week: Steve Jobs’ lesson for the solar energy industry, U.S. as a LNG exporter, money in mobile phone payers and the SITFA

The first companies in do not always dominate the industry.

That was the message in a Journal article this week about solar energy and the development of the computer mouse.

When solar costs drop to the point they can compete with carbon power generation, demand in the industry will explode.

Xerox it seems invented the mouse, but Steve Jobs and Apple made it a household item, and made the money on it. The earliest computer pioneers, Xerox in this case, are now only also rans.

According to the Journal, the recent carnage in the solar energy industry is following the same pattern as the computer industry.

The 12 biggest solar manufacturers have dropped in total market value from $70 billion to $6.4 billion, and First Solar, one the kings of early development, has dropped from $20 billion to around $2 billion.

Much of the drop has to do with what the Journal calls structural changes in the industry. The caps on carbon emissions didn’t work out and all of the subsidies, both here and abroad, that allowed the industry to reduce production costs, have either dried up or have become much more difficult to come by.

The result is dropping prices for solar panels and a surplus of solar energy production capacity. Currently solar is on line to produce enough panels this year to generate 40gw of power, but the demand sits at 24gw.

The excess has resulted in a drop in panel costs of about 32% since 2007, almost exactly what computer memory has dropped since 1974.

The similarities between development stumbles in the computer and solar energy industries are eerie. Natural gas is also going through a similar over supply situation that has resulted in prices dropping to record lows, as well.

The Good News

When solar costs drop to the point they can compete with carbon power generation, demand in the industry will explode. But only bigger companies that can absorb the cyclical swings between here and there will be around to capitalize on it.

GE is the only name the Journal mentioned, but it is hardly a pure play. The solar energy industry is still in its infancy. Watch for the suppliers to the manufacturers for the best plays. Think disc and memory manufacturers in the 90s.

The U.S. could be the biggest LNG exporter in the world as soon as 2017; that’s five years, if, and this is a big if!

Barron’s reported this week that the U.S. is in line to be the king of LNG if politics don’t get in the way.

Cheniere, symbol LNG, already has deals with the U.K., Spain and India to export LNG, and it this hasn’t even gotten off the ground yet.

Not only is demand for LNG enormous and growing daily, Asia of course would be the biggest buyer, but our gas surplus has prices at around $2 per million BTUs while the equivalent price compared to oil is around $17 per million BTUs.

That means oil is eight times more expensive than natural gas at current market prices! That’s the kind of advantage the U.S. has as an exporter.

Asian markets pay around $15 per million BTUs for LNG and the demand there has grown by 6% to 8% for the past 10 years and it is expected to continue to grow indefinitely.

Here’s where the big if comes in; the Energy Department has put a moratorium on exporting licenses for LNG. Even Obama estimates LNG exports could create two million jobs but the Energy Department wants to make sure this in the best interest of the American people.

Are you kidding me?

Can you imagine if the auto industry and the grain industries were told there was a moratorium on their exports. This is insane.

We finally have the wherewithal to become a driver in the energy game and Washington puts on the brakes.

Fear not, this will come to pass as soon as the thieves in Washington get their share, and that’s all this moratorium is about.

Cheniere by the way was a pick by The Oxford Club’s Dave Fessler at least a year before the big run-up. When this export situation is settled after the election, and it will be, LNG exporters will be the only place to be.

Making Money on Mobile Buyers and Payers

Transactions on mobile phones are estimated to grow 56% a year to $1 trillion by 2015, that’s just three years. But making money on this monster could be a little risky.

Google and Arm Holding, ARMH, are both in the game now but neither is a pure play. One pure play option mentioned in a Barron’s article last week was Monitise, a U.K. software group.

Monitise is a micro, micro cap stock, about a $461-million company. Their revenue is doubling annually and 300 financial groups are running their software and they have six million users out of 300 million mobile banking users worldwide.

This is far from a done deal.

BofA Merrill Lynch estimates if they only capture 1% of the market, and have a similar PE and margin to their competitors, Global payments, GPN, and Wisecard, their stock price could double.

This is a risky play but the industry has virtually no limits at this point and is well worth a second look. At $.54 per share it may be worth a little play.

Finally, the SITFA

This week Nordstrom’s gets the slap in the kisser.

Nordstrom’s, you know where a $79 pair of shoes costs $500, well, it just had a record year; 10.5 billion in sales in 2011.

But despite a record year their executives don’t get the perks we have come to expect from Wall Street.

Most of the executive perks at Nordstrom have come in the form of discounts on purchases at, you guessed it, Nordstrom’s. In fact, of $85,867 in perks last year, $62,000 of it was from the discounts.

That’s pretty tight! A $10-billion year and the perks only total $85,000 and change and most of that is in their own store. I’m sorry, that’s a slap in the face of what must be an excellent executive team.

I wonder how much of the $65,000 in merchandise will show up for sale on eBay?

Article by Investment U

Source: ForexYard

Overall this year, the Bullion market has failed to impress with gold and silver showing more losses then gains over the previous few months. Last week saw the two metals start off well but changed direction towards the end of the week as the U.S dollar gained momentum.

Even though there is a positive correlation between gold and silver, the latter has declined more frequently and on a weekly scale.

The fresh concerns over the future of the Euro-zone and a possibility that the U.S Labor market could be slowing down, were tow major factors that pushed metal prices up in the beginning of last week. In regards to the U.S economy, there are a number of key financial reports due for release this week that could have an impact on the greenback, and consequently, gold and silver.Reports such as Philly Fed, Housing Starts ,Existing home sales and Initial jobless claims are scheduled for this week. If the reports release positive results, its possible that the dollar will strengthen and push the metals in the opposite direction.

Reports in Europe are also due for release this week including staements from the European Central Bank, German ZEW economic sentiment report and German Business Climate Survey expected on Friday.Positive data from the Euro-zone could push bullion prices up, especially if Germany continue to show signs of growth.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by Investment U

Lately the market has been wilting like last week’s roses, drooping in one session after another. Is the bull finally headed out to pasture?

The market had a strong first quarter this year. The S&P 500 rallied 12% on the heels of an 11% gain in the fourth quarter of 2010. In fact, it has more than doubled from its bottom on March 9, 2009.

But lately the market has been wilting like last week’s roses, drooping in one session after another. Is the bull finally headed out to pasture?

Don’t count on it. While no one can forecast the short-term zigs and zags in the market, there are three good reasons to believe there’s still life in this bull:

1. History shows that pullbacks don’t generally follow a strong first quarter. The S&P 500 has soared 10% or more in the first quarter eight times since 1945. According to Standard & Poor’s, the market rose three-quarters of the time in the following quarter. And the one other time the market rose 10% or more in both the fourth and first quarters, stocks gained 5% the next quarter.
2. First quarter profits are likely to be another record. Don’t forget that corporate profits have hit all-time records in each of the last eight quarters. And – while the reporting season is just getting under way – this time isn’t likely to be any different. Yes, the gains will be more modest this time thanks in part to higher oil prices and tougher year-ago comparisons, but we’ll almost certainly see more all-time record profits for the first quarter and a few big surprises could send stocks higher again.
3. Investors are still afraid. That’s actually a good thing. As John Templeton declared, “Bull markets are born on pessimism, grow on skepticism, peak on optimism and die on euphoria.” You talk to anyone lately who’s euphoric about the economy and the stock market? Me neither. And people aren’t investing their money that way, either. According to The Investment Company Institute, investors yanked $1.2 billion out of stock funds in February after taking out $423 million in January. History shows a near perfect correlation between equity fund redemptions and stock market performance. It’s when investors starting throwing cash at the market that you need to worry. And we’re a long way from that.

When you look at the fundamentals, it’s surprising just how negative the average investor is. After all, we’re enjoying low interest rates, low inflation, expanding markets overseas (especially in the developing world) and all-time record corporate profits.

What’s keeping most investors at bay, of course, is volatility. And not just lately. Investors have been clobbered by two massive bear markets in 12 years. The 2000 to 2003 bear market took stocks down 49%. It was the worst market since the Great Depression – until the 2007-2009 bear market showed up. That ripped 57% from the leading market index.

Last year, the S&P 500 fell 3% or more six times, and on one gut-wrenching day in August, 6.7%. That made microscopic money market yields look attractive.

Of course, volatility is the price of admission in the stock market. If equity accounts rose as smoothly as bank accounts, everyone would be fully invested. But they’re not. Not even close.

Paradoxically, that’s another reason stocks actually look pretty good here.

Good Investing,

Alexander Green

Article by Investment U

Article by Investment U

If you’re the type of investor who likes to “set it and forget it,” DRIPs can be used as a great way to steadily grow your wealth.

You don’t always need a broker to get in on the world’s best and biggest companies.

In fact, you don’t always need to pay what the market does for a company’s shares, either.

Thanks to dividend-reinvestment plans (DRIPs), not only can you invest directly in companies like Exxon Mobil (NYSE: XOM), 3M (NYSE: MMM) and PepsiCo. (NYSE: PEP) without upfront fees, sometimes you can buy a company’s shares at a 3%, 5%, even 10% discount.

The Power of DRIPs

As the name suggests, DRIPs are only offered by companies that pay dividends. There are about 1,100 firms that offer these plans today.

If you’re the type of investor who likes to “set it and forget it,” DRIPs can be used as a great way to steadily grow your wealth.

For example, let’s say you’d like to get in on long-time dividend distributor Exxon Mobil’s DRIP.

To qualify, all you need to get started is to contact Exxon’s transfer agent Computershare and have a minimum investment ready of $250. This initial payment can be satisfied by buying $250 worth of Exxon’s shares all at once or by having $50 automatically taken out of your checking or saving account for five consecutive months.

After that, additional investment is up to you, as long as each contribution is at least $50 (with a maximum limit of $250,000 per year).

And as far as charges and fees go, Exxon does have a sale fee of $15 plus $0.12 a share.

But by investing in Exxon’s DRIP, you could save hundreds of dollars per year on the amount of fees you’d normally incur with your brokerage firm. Exxon charges nothing to set up a DRIP account and you can automatically reinvest your dividends and/or make additional purchases at no extra charge, as well. Plus, existing Exxon shareholders are even waived the initial $250 investment to start.

There are some other pretty cool advantages, too…

• Investing in Small Amounts: DRIPs allow you to purchase stock on a dollar basis as opposed to buying a certain number of shares. This enables investors to buy fractions of shares of a company. Some plans will even let you invest as little as $10 a month. And this could be in companies that otherwise cost $50, $80, or $100 per share.

• “Worry-Free” Approach: By only investing a certain amount each month, you’ll buy less shares of a company when shares are expensive and you’ll buy more shares when prices are cheap. This investing strategy, also known as dollar cost averaging, can take the worry out of trying to time a company’s performance.

• Discounts: There are about 100 companies that allow investors to purchase stock at discounts of 3% to 5%, sometimes even as high as 10%.

Of course, there are some downsides too.

Risks and the Final Word

But there are only a couple of things you’ll need to consider…

• Limited Companies: Out of all the publicly traded companies out there, only 1,100 offer DRIPs. This might be a limiting factor to be able to invest in the companies you really want to.

• Taxes: When you receive dividends from a DRIP, those dividends are taxable as income by the Internal Revenue Service. Furthermore, you’re also responsible for keeping track of your records. This record keeping can become a lot to track over the long term.

At the end of the day, the advantages of DRIPs over the long term outweigh the disadvantages.

For long-term dividend investors, I think they’re really a no-brainer.

You’re reinvesting dividends and “dripping” money into your holdings every month, without paying what you normally would in brokerage fees.

And growing and saving your money for the long term is what we at Investment U are all about.

Good Investing,

Mike Kapsch

Article by Investment U

By TraderVox.com

Tradervox (Dublin) – Euro may see pressure amidst rising Eurozone worries:

EURO/USD:

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

London Gold Market Report
from Ben Traynor
BullionVault
Monday 16 April 2012, 08:00 EDT

WHOLESALE gold bullion prices traded just below $1650 an ounce for most of Monday morning’s London session – well within the past month’s range – as European stock markets edged higher while commodities fell.

The Euro meantime sank to a two-month low against the Dollar, as investors turned their attention to rising Spanish government borrowing costs.

On China’s Shanghai Gold Exchange, contracts equivalent to around 7.3 tonnes of gold bullion changed hands in Monday’s trading.

“Current levels are by no means excessively weak,” says a note from investment bank UBS, “but the fact that average daily turnover sits at just about half of the 18 tonne all-time high seen last year is in itself confirmation that there is less gold fever in China this year versus last.”

Authorities in Beijing meantime have widened the Yuan’s trading band against the Dollar from a 0.5% maximum daily move to 1%.

Silver bullion fells to $31.22 per ounce – close to four month lows – before recovering some ground in Monday morning’s London trading.

“The key downside risks for silver,” says a note from Morgan Stanley, “are that the weaker economic outlook in 2012 and 2013 will cut fabrication demand, but not enough to take prices back to levels that would deter anticipated strong mine production growth and a rising surplus.”

Sovereign debt stresses in the Eurozone are expected to dominate this week’s International Monetary Fund meeting, where European officials are expected to ask the IMF to expand its lending capacity to combat a fresh potential crisis, newswire Bloomberg reports.

At February’s G20 meeting, European leaders were told Europe needed to do more before non-European nations would consider a bigger IMF contribution. There has since been agreement to increase the size of the Eurozone’s ‘firewall’ to €800 billion, although only €500 billion will be available for fresh rescue programs.

“I think Europe has done its part,” European Central Bank board member Joerg Asmussen told the Wall Street Journal over the weekend.

“Now you would expect other IMF shareholders to come forward and make their contributions to increasing IMF resources.”

Benchmark yields on 10-Year Spanish government bonds rose above 6% Monday morning – a level breached last week for the first time since December.

“After three months that were calmer than expected, the Euro crisis is back,” says Holger Schmieding, London-based chief economist at Berenberg Bank.

“The speed of the recent surge in yields has elements of a renewed market panic.”

Spain is due to auction 2-Year and 10-Year bonds this Thursday.

The ECB “should step up purchases of [government] bonds” said Jaime Garcia-Legaz, a deputy minister in Spain’s Economics Ministry, speaking last week.

The ECB began buying distressed government debt on the secondary market in 2010 under its Securities Markets Programme. It reactivated the SMP last August when Spanish and Italian yields spiked.

Spanish 10-Year bond yields hit 6.7% last November – while Italian 10-Year yields breached 7%.
Here in the UK, economic growth will be only 0.4% this year – half the official projected rate used by the government – according to a report published Monday by the Ernst & Young ITEM Club, a forecasting arm of the accountancy firm.

The report cites “corporate cash piles” worth an estimated 50% of GDP as one reason the economy is expected to “stall” in 2012.

“Business investment has picked up nicely in the US but UK companies remain extremely risk averse,” says Peter Spencer, chief economic advisor to the ITEM Club.

“[This] is sapping strength from the economy…until these companies stop stashing the cash and start increasing levels of investment and dividends, the economy will remain on the critical list.”

Over in New York, the so-called speculative net long position of gold futures and options traders on the Comex – measured as the difference between bullish and bearish contracts – fell for the second week running in the week ended last Tuesday.

The spec net long dropped 3.9%, Commodity Futures Trading Commission data published late Friday show.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By TraderVox.com

Tradervox (Dublin) – The Japanese currency has continued with its advance against major currencies after the Bank of Japan kept on hold the prospects of another easing. This is the second week the Yen has started high against the dollar and the euro. Further, debt crisis in Europe have further weakened the euro with concerns of spread filling the market. The euro has also decreased as most wagers placed their bets on the decline of the euro. Non-Farm Payrolls and increased Jobless claims led to the decrease of the dollar last week; positive reports from the US are expected to put a hold on the yen advance.

According to Eric Viloria, a Senior Currency Strategist at Gain Capital Group LLC in New York, the neutral stand the Bank of Japan has taken has given support for the yen as speculation of easing has ceased. He indicated that the main support for the low USD/JPY is the low US yield with 10-year bonds surging below 2 percent. The yen has increased by 4.5 percent over the last month making the best performer among the top 16 currencies. The dollar increased by 0.8 while the euro dropped by 0.6 in the same period.

The Bank of Japan decided to keep the interest rate unchanged as well as its asset-purchases program. This led to an upsurge of yen demand leading to its increase before the BOJ Governor intervened saying the policy makers were willing to make powerful easing to counter deflation of the currency. There is still expectation that the BOJ will do something to ease policy but the market is testing how far BOJ is willing to go with its utterances of asset purchases.

The yen advanced by 1 percent against the euro, to trade at 105.83 yen per euro. The EUR/JPY cross had gone as low as 105.45 on April 11 last week, which is the lowest it has been since February. The yen gained against the dollar by 0.9 percent to exchange at 80.93 yen per dollar, it was at 80.57 of April 11, which is the strongest it has been in six weeks.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Once again Spains debt problems draws negative attention and puts a damper on the financial markets with spanish 10 year bond yields crossing 6 pct.

Will the ECB help Spain and buy goverment bonds? One of this weeks many questions.

ECB-chief Mario Draghi speaks Thuesday.

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