Month: April 2012

Article by Investment U

In focus this week: Can MSFT take on AAPL, the first sign of the coming blood bath in bond funds, and of course, the SITFA.

First Up, MSFT

A recent Journal article described MSFT as gearing up to take on AAPL. According to a former employee, MSFT may be making the Xbox, a game console, the new primary focus of the company.

The Xbox, you head me correctly. A gaming console folks play games on.

It seems many Xbox users are already using the device to stream Netflix on their TVs now, and this little giant seems to have all kinds of possibilities in the media area.

Remember, media is where AAPL is headed next with AAPL TV. So maybe this isn’t as far-fetched as it seems.

If MSFT can market the new Xbox 720 as a media center PC, not just a game console, we may have something here. The Journal article says they could have the market to themselves.

MSFT moved their operating system genius David Cutler to the Xbox division in January. Cutler is the person responsible for Windows 2000 and everything at MSFT since has stemmed from the Windows 2000 program.

If MSFT can produce a branded computer like AAPL’s Mac, the box industry could get very interesting, very quickly.

This one definitely deserves to be followed very closely. Put it on your bogey boards.

The First Crack in Bond Funds

If you follow me here or in the IU Daily articles, you know I’ve been warning folks for some time to get out of any bond fund with leverage or with maturities over five years; both, in fact. Well, the first indication of what you can expect hit the markets in the past few weeks.

The 10-year bond yield jumped a meager 0.25%. It was no big deal; it went from 1.97 to about 2.23, peanuts in the big scheme of things. But it was a real shocker to bond funds.

The iShares 20-year Treasury fund plunged 4.1%. That’s like the Dow crashing 500 points. That was from a minor blip in the 10-year. What do you think will happen when rates run up a point or two? And it is going happen…

A 500-point equivalent drop on just a 0.25% increase on just the 10-year Treasury. The Fed hasn’t budged!

One reader who wrote into the Journal said he lost the equivalent of two years of income on this dip… two years of income. And this isn’t limited to treasuries.

The Nuveen Municipal Fund, one of the oldest and most respected in the business, its share price fell 6.3% in four days when the yield spiked on the 10-year.

The reasons for the losses now and in the future haven’t changed; long maturities to help boost the yield of funds to attract investors and leveraging to boost the yield even further to, of course, attract rate pigs, which most people are.

You can hold bonds, but you cannot hold leveraged bond funds or long maturities, they’re the kiss of death. You must buy individual bonds so you can control the maturities and not have any leveraging in your portfolio. I write about this type of investment all the time at IU.

If you think a 6% drop is big, you haven’t been around long enough. Look for the shares of very heavily leverage funds to drop 50% and 60% when things really get rolling. Most of it will never be recovered.

In 1994, I watched billions disappear, forever, and we’re in a much more threatening environment now than then. We are at 0% rates; I have never seen 0% rates in the 30 years I’ve been in the markets.

This rate environment guarantees one thing; rates will move up. The only issue is when and how quickly.

Make the move now. If you’ve been in bond funds for a while, you should have a very hefty profit. Take it now or forever hold your peace.

This will be a silent blood bath because there’s almost no coverage of the bond market and most people don’t even understand what drives it up and down. Silent but deadly!

Get out now!

Here’s a quick follow up to a story I did a few months ago on IGT, International Game Technology.

At that time they had just paid a bundle for an online gaming company in a bid to capture the at-home gambler who wants to play poker and black jack online.

Well, the numbers since then have been really good. Casinos are opening all over the U.S. and IGT has a 50% market share of the most profitable part of the whole gambling world, slot machines.

Ohio alone is opening four casinos this year. Morgan Stanley estimates casinos will add 20,000 new slots this year alone.

IGT has 50% of the almost one million slot machines in the U.S. and expects 40% to 50% of the new orders this year. Overseas they have a 10% to 20% share.

Slots produce 70% to 80% of casino revenue and IGT leases their machines to the casinos for a percentage of the revenue.

But the stock is well below its historic multiples. The PE has historically run around 20 and sits at about 14 now, well below its expected 20% earnings growth for next year.

MS has a $20 price target on it this year and cites increasing unit sales, increasing market share in Asia and a stock buy back, $100 million this year, as reasons to own it.

IGT, this one isn’t a one-arm bandit!

And yes, the reason you folks really watch this video, the SITFA.

I wanted to thank all the folks at the IU Conference in San Diego last week for all the nice comments about the SITFA. I’m glad you all enjoy it so much.

This week’s cheek smacker is delivered by a Princeton physicist to President Obama and all the other folks who have been running around screaming about global warming.

According to Dr. William Happer, all of the computer models that have been predicting global doom from rapidly rising temperatures are just wrong, again.

Happer say most of the warming of the atmosphere that followed the little ice age at the beginning of the nineteenth century occurred in the early part of the nineteenth century before we started pouring CO2 into the atmosphere.

In fact, in the past 10 years, there has been no increase in temperature at all. Not just that, but this past February when many parts of the U.S. saw higher than average temps, an event we also saw in 1942, according to Happer, the satellites that record the earth’s temperature actually recorded a slight decrease in temp of about 0.12 degrees Celsius.

How can so many people in Washington be so wrong, so often, about so much, not just our weather? Sometime these folks seem really dumb. It’s scary.

Article by Investment U

London Gold Market Report
from Ben Traynor
BullionVault
Monday 2 April 2012, 08:45 EST

SPOT MARKET gold prices jumped to $1669 per ounce ahead of Monday’s US trading, broadly in line with where they ended last week, though they remained below the Asian session peak touched briefly following the release of positive Chinese manufacturing data.

“Gold [is] still respecting the long-term uptrend,” says the latest technical analysis note from bullion bank Scotia Mocatta.

Silver bullion prices hovered around $32.50 per ounce – 0.5% up on Friday’s close – while stocks failed to hold onto early gains.

Commodities were broadly flat and US Treasuries ticked higher.

Physical precious metals markets reported quiet activity Monday morning, with Chinese markets closed until Thursday for the Qingming Festival and Indian jewelry dealers still on strike.

“There is no business in gold and silver,” Kumar Jain, vice president of the Mumbai Jewellers’ Association, which covers ten thousand jewelers, told Reuters.

“The whole value chain has shut.”

Imports of gold bullion by India, the world’s largest gold consumer last year, fell by 55% last month, according to Bombay Bullion Association president Prithviraj Kothari, as jewelers shut their shops following an announcement by India’s government that they were doubling the duty on gold imports and taxing gold jewelry sales.

“Sales have dipped drastically as almost 80 to 90 per cent of the jewelers have joined the protest against duty hike,” says Kothari.

In New York meantime, the net long position of so-called speculative gold futures and options traders on the Comex – measured as the difference between bullish and bearish contracts – rose 15% in the week ended last Tuesday, according to data released at the end of last week’s trading by the Commodity Futures Trading Commission.

Open interest however hit its lowest level this year on a Tuesday – the day of the week for which the CFTC publishes its Commitments of Traders reports. Data from CME Group show it fell further towards the end of last week.

“Gold [lacks] sufficient investment enthusiasm to be able to sideline the physical market as it did earlier in the year,” says a note from Barclays.

“Prices are struggling to gain momentum.”

“Recently prices have been driven strongly by speculative sentiment and it is not surprising to see those pullbacks,” adds Eugen Weinberg, head of commodities research at Commerzbank.

“But in the longer term, we still stay very confident that the upward trend in gold is still very constructive…I think in the longer term, gold will perform even more like a currency, and be less dependent on the jewelry sector.”

Here in Europe, Eurozone finance ministers agreed Friday to allow the roughly €300 billion already committed from the temporary bailout fund, the European Financial Stability Facility, to run alongside the €500 billion European Stability Mechanism, the permanent bailout vehicle due to become operational in July.

However, uncommitted funds from the €440 billion EFSF will not be available once the ESM comes in, capping the amount available for new rescues at €500 billion.

European leaders were told at February’s G20 meeting that they needed to do more to solve the Eurozone crisis before they asked for extra money from the International Monetary Fund.
“Europe has done its part,” said French finance minister Francois Baroin after Friday’s talks. The IMF is due to meet on April 20.

Some European banks meantime are planning to repay loans from the European Central Bank’s longer term refinancing operations two years early to avoid needing to raise money at the same time as many other banks, the Financial Times reports.

Banks borrowed over €1 trillion at the two LTROs in December and February.

Elsewhere in Europe, Eurozone manufacturing activity continued to fall last month – and at a faster rate than February – according to purchasing managers index figures released Monday.

Eurozone manufacturing PMI fell from 49.0 in February to 47.7 in March, with a figure below 50.0 indicating sector contraction. The unemployment rate in the Eurozone meantime rose to 10.8% last month, up from 10.7% in January, official data showed Monday.

In Germany, manufacturing PMI fell from 50.2 in February to 48.4 last month
By contrast, the latest data show the UK’s manufacturing sector continued to grow last month, with March’s PMI reported as 52.1, up from 51.5 in February.

China also reported accelerating growth in its manufacturing sector, with March’s official PMI reading 53.1, up from 51.0 the previous month.

“Keep in mind that in March the official PMI always rises 3 percentage points from its February level,” says Zhang Zhiwei, chief China economist at Nomura.

“Compared to the past, the official average PMI is about 56, whereas this month, it`s only 53. It’s still very much lower.”

Economists at Societe Generale however counter that even adjusting for seasonality, China’s PMI remain above 50, while “the ‘seasonality’ this March was not especially large relative to the same month in previous years,” adds SocGen interest rate strategist Christian Carrillo.

Over in the US, the first three months of 2012 saw the US Mint record its lowest first quarter sales figures for gold coins in four years.

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 CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators raised their overall US dollar long positions last week while Japanese yen positions decreased sharply to their lowest level since 2007.

Non-commercial futures traders, including hedge funds and large speculators, increased their total US dollar long positions to $19.58 billion on March 27th from a total long position of $11.67 billion on March 20th, according to the CFTC COT data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

Individual Currencies:

EuroFX: Currency speculators decreased their sentiment for the euro currency following two consecutive weeks of improvements in the euro positions. Euro net short positions or bets against the currency rose to 89,129 contracts on March 27th from the previous week’s total of 82,954 net short contracts. Euro contracts on March 20th were at their best position since November 22nd when short positions totaled 85,068 contracts.

The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions saw improvement last week for a second consecutive week and brought pound positions to their best placement since August. British pound positions saw a total of 11,110 net short positions on March 27th following a total of 15,852 net short positions registered on March 20th. British pound sterling positions continue to be on the short side but are at their best level since August 30th when positions equaled 444 long contracts.

JPY: The downtrend continued last week in the Japanese yen speculative contracts as positions fell to their lowest level since 2007. Yen positions dropped sharply to a total of 67,622 net short contracts reported on March 27th following a total of 25,821 net short contracts on March 20th.

CHF: Swiss franc speculator positions declined last week after improving the two previous weeks. Speculator positions for the Swiss currency futures registered a total of 15,096 net short contracts on March 27th following a total of 11,191 net short contracts as of March 20th.

CAD: Canadian dollar positions declined after previously trending higher for seven consecutive weeks and rising to their highest level since May 2011. Canadian dollar positions fell to a total of 23,737 net long contracts as of March 27th following a total of 42,315 long contracts that were reported for March 20th. CAD positions on March 20th were at their highest position since May 3rd 2011 when long contracts equaled 54,041.

AUD: The Australian dollar long positions rebounded after falling sharply the previous week. Australian dollar positions increased to a total net amount of 59,574 long contracts on March 27th after dropping to 45,191 net long contracts reported as of March 20th. The AUD speculative positions on March 20th had declined to their lowest level since long positions totaled 32,637 on December 27th 2011 before turning around last week.

NZD: New Zealand dollar futures speculator positions edged lower and decreased for a fifth consecutive week after they had risen for nine straight weeks through February 21st. NZD contracts dropped to a total of 3,984 net long contracts as of March 27th following a total of 4,210 net long contracts on March 20th. This is the lowest level for New Zealand dollar contracts since January 3rd when contracts equaled 2,436 net long positions.

MXN: Mexican peso speculative contracts rebounded rather sharply following a sharp dip the previous week. Peso long positions increased to a total of 82,833 net long speculative positions as of March 27th following a total of 24,329 long contracts that were reported for March 20th.

COT Currency Data Summary as of March 27, 2012
Large Speculators Net Positions vs. the US Dollar

EUR -89129
GBP -11110
JPY -67622
CHF -15096
CAD +23737
AUD +59574
NZD +3984
MXN +82833

Other COT Trading Resources:

Trading Forex Using the COT Report

Source: ForexYard

Both Gold and Silver prices did not perform much during the last couple of weeks despite seeing some sharp movements in that time.By the end of March Gold prices lost 2.3 percent while Silver saw bigger losses of 6.23%.

Precious Metal movements this week should revolve mainly around the U.S Labor report and the whether it will be be another good month for employment.Currently gold and silver prices are showing some slight downward movements, but there are a number of economic reports due to come out today which could interfere with the metal’s movements including the U.S ISM manufacturing PMI,Euro Area Unemployment Rate and Australian Retail Sales.

The ISM Manufacturing PMI will refer to the monthly development in the manufacturing sector during March 2012. During February, the index dropped to 52.4 percent showing that the sector is still gorwing, but at a slower pace. The result could possibly affect the currency markets and potentially crude oil.

In regards to the Australian Retail Sales, the report will examine the developments in  the nation’s retail sales for February 2012.The report could affect the movements of the Australian Dollar.

To conclude, the two metals did not do much during the previous few trading weeks , however things may begin to happen again especially if the speculation regarding another stimulus plan by the Federal Reserve comes back into play.The economic reports that are scheduled to be released today will show progress of the U.S economy and if the figures continue to increase, it could lower the possibility of another QE program and as a result, lower gold and silver prices. Continue reading “Bullion Outlook For The Week”

Source: ForexYard

Crude Oil prices dropped further today as there has been some speculation over strategic supply releases.The Price of Crude on NYMEX fell 0.5% to $102.48 per barrel, cancelling out the modest gains made during the Asian trading session.

Crude Oil ended the quarter with a 4.2 percent gain as the commodity rose 0.2 percent on Friday’s trading.The Price of crude dropped to $102.13 on March 29th which was its lowest rate since Mid- February.Overall, Crude prices dropped 3.8 percent for March. A bearish tone was lingering in the Crude Oil market during last week due to the speculation regarding the release of emergency oil supplies from a number of developed nations.

We should see Crude prices move this week as there are a number of significant and highly anticipated reports to be published. The ADP estimate of US non-farm payrolls will be released on Wednesday followed by the Non -farm payrolls report coming out on Friday.

Apart from these two reports,this first week of April hold several economic events and decisions which could stir up the financial markets. Among the reports be to released are the U.S Manufacturing PMI,GB Rate Decision,FOMC Minutes,GB manufacturing  production,RBA cash rate decision, the EU unemployment rate and the G7 Meeting.

The most anticipated news event of the Month will be the Non-Farm Payrolls. The fiigures will be released on Friday 6th April at 13:30pm. In the recent March report regarding  February 2012, the labour market continued to improve as Non-farm employment rose by 227,000 whilst the U.S unemployment rate remained unmoved at 8.3 percent. This report could affect the U.S dollar and from that, could go on to affect commodity prices such as Gold, Silver and Crude Oil.

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.

By TraderVox.com

Tradervox (Dublin) – Euro opened up by 20 pips but soon closed up the gap during the Asian session. The Euro recovered during the late European session to print a fresh high of the day at 1.3380. But during the European session, the pair started losing the levels and has printed a fresh low for the day at 1.3323.

It is currently trading near the low at 1.3328, down about quarter of a percent for the day. The support may be seen at 1.3325 and at 1.3280. The resistance may be seen at 1.3360 and at 1.3400 levels. PMI from Germany came at 48.4 against 48.1 expected value while PMI from EMU came in line with expectation at 47.7. 

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

By TraderVox.com

Tradervox (Dublin) – The yen closed its first quarter at its lowest since 1995 against major currencies. This resulted from the Bank of Japan’s decision to continue with its plan of asset purchases. This has been a much talked about operation with the Bank of Japan governor indicating that this was always an option for the country. The BOJ deflation efforts have worked so far with the currency falling by 10.4 percent in the first quarter of the year.  

Against the dollar, the yen has fallen 7.8 percent over the last three months to trade at 82.87. The yen dropped 10.9 percent against the euro to settle at 110.56 yen per euro. The euro has also gained against the dollar rising by 3 percent over the first three months of the year to settle at $1.3343. The yen drop has been anticipated as the data from Commodity Futures Trading Commission in Washington showed.

According to Carl Forcheski who is a director at Societe Gemerale SA in New York indicated that the yen is driven by the Bank of Japan’s decision to embark on a monetary easing program. Further, the US labor market is performing beyond expectation. On April 6, the labor department is expected to release data showing that the job market grew for the fourth month with more than 200,000 Americans getting into jobs.

The sharp drop for the yen came after the Bank of Japan indicated that it would increase its asset purchases program to 30 trillion yen from the current one of 20 trillion. The BOJ is targeting an inflation rate of 1 percent currently. Apart from this, the yen has also dropped as demand for safe haven currencies dropped after the European finance ministers settle to expand the region’s crisis fighting power on Friday.

Other factors that have been identified as the reasons for the fall include Japan’s current account data that came negative in January making it the first time this has happened since 2009. The negative reading is as a result of Japan’s increase in the purchases of liquefied natural gas as it tries to recover from the earthquake and Tsunami.

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

The coming week is a shortened trading week due to Easter holidays. Nevertheless heavy on economic data from the US.

Senior Strategist Ib Fredslund Madsen expects a negative tendency on the equity market.

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Video courtesy of en.jyskebank.tv

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.