Why big American businesses fail in China (via GlobalPost)HONG KONG — If Tolstoy had written a history of foreign corporations in China, it might have started something like this: “Companies that succeed in China do so for similar reasons; every company that fails, fails in its own way.” Since China…
By The Sizemore Letter
So much for the wisdom of markets. It’s hard to recall a time that so many smart people on Wall Street misjudged the Fed’s intentions this badly. Not only will tapering not be starting in September, it may not starting under Bernanke’s chairmanship. We will have “QE Infinity” until Bernanke or his eventual successor sees material improvement in employment.
So, the markets get to benefit from $85 billion a month in quantitative easing for at least another several months. That’s good news for bondholders and investors in dividend-paying stocks and REITs for the short-to-medium term. But it doesn’t really change the longer-term picture. I expect the 10-year yield to bounce around in a fairly tight band of about 2.3% to 2.7%, and I expect U.S. stocks to drift choppily higher. Can you make money is a market like that? Of course, but I see better opportunities overseas.
Let’s take a look at Europe. As I wrote recently, Greece—the country most associated with the Eurozone crisis—looks to have finally turned a corner. As hard as this is to believe, the government is actually running a primary budget surplus, and the economy—while still shrinking—is shrinking at the slowest rate in two years.
iShares MSCI Europe vs. SPDR S&P 500 ETF
Greece is too little to matter, of course. But the improvements there point to a general easing of crisis conditions across the continent. Not surprisingly, European equities have been outperforming their American counterparts. The return on the iShares Europe ETF (IEV) has been roughly double that of the S&P 500 since July 1.
I expect Europe’s outperformance to last for at least the remainder of this year for several reasons:
Action to take: Overweight Europe. You can use a broad ETF like IEV, or you can choose the individual country ETFs you expect to outperform. I am still very bullish on Spanish and French stocks and recommend the iShares MSCI Spain (EWP) and iShares MSCI France (EWQ) ETFs. Plan to maintain this overweighting through early January and perhaps later. Use a stop loss appropriate for your trading style. I recommend something along the lines of a 10%-15% trailing stop.
Disclosures: Sizemore Capital is long EWP and EWQ. This article first appeared on TraderPlanet.
Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter and the chief investment officer of investments firm Sizemore Capital Management. Click here to learn about his top 5 global investing trends and get your copy of “The Top 5 Million Dollar Trends of 2013.”
This article first appeared on Sizemore Insights as After the Taper Tantrum: Time to Buy Europe?
Former BlackBerry executive to lead the development and delivery of industry-leading brokerage’s world-class products and services
TORONTO – September 23, 2013 – OANDA, a global provider of innovative foreign exchange trading services, is pleased to announce the appointment of Graeme Whittington as the company’s new Chief Technology Officer (CTO). A former BlackBerry executive, Mr. Whittington is responsible for leading the development and delivery of OANDA’s products and services.
“Graeme boasts a world-class track record in designing and developing highly scalable software products and services,” said K Duker, CEO, OANDA Corporation. “Graeme’s proven strengths in leadership and quality execution are in strong alignment with OANDA’s mission to be a technology leader and the most trusted broker in forex and CFD trading services.”
Mr. Whittington joins OANDA from BlackBerry, where he held a variety of senior positions including roles in product management and software with a focus on infrastructure systems. He also brings with him global market experience, including work with telecom regulatory bodies, during his tenure with the Canadian-based mobile device maker. Prior to his role at BlackBerry, Mr. Whittington was part of IBM Canada’s consulting arm with a focus on business and information technology strategy.
“OANDA is a highly-respected, global financial technology company with a solid track record of innovation and transparency in the products and services it provides; I am honored to join the team,” said Mr. Whittington. “OANDA was built on a true foundation of technological engineering excellence, and my aim in this role is to help to continue a legacy of delivering industry-leading desktop and mobile trading platforms that delights our clients.”
For more information, please visit: www.oanda.com, and follow us on Twitter, Facebook or YouTube.
China manufacturing hits six-month high: HSBC (via AFP)China’s manufacturing activity expanded in September to a six-month high, HSBC said Monday, a further sign that a rebound in the world’s second-largest economy is gaining momentum on improving demand. The British banking giant’s preliminary purchasing…
Just like any other business or anything you decide to invest into, the importance of ensuring you invest into a safe and secure business is very important and when it comes down to forex Trading, there is no difference. The forex market is the largest financial market in the world with over $4 trillion being traded daily; several brokers would approach you to ask you to trade with their company. As investors it’s important to know and be careful of the forex scams you could come across and how you can avoid them.
As an investor that wants to make large profits in the forex market, the investor need to first make sure the safety and security is the first aspect to check before investing. With the forex broker ensured and registered, a trader can be more confident with their trades, however each broker security and safety is stronger than the other.
Working with only regulated brokers, is the first step towards doing business with a safe and secured forex broker. When a forex broker is regulated, it means the forex broker is registered to a financial authority, whereby every trading and financial activity is regulated by the financial authority.
When a broker is not regulated, it’s an indication of an unsecured and unsafe broker, which is very risky and the trader can fall into fraud and lose their investments. Another important factor is to know which country the forex broker you choose to do business with is located and if they are regulated in the country located.
Every regulated broker need to record and document every deposit, transactions and every other financial activity to the authority it’s registered to.
Another helpful factor to help you select a safe and secured forex broker is looking into the company’s capitalization. It’s wise to ensure the broker you choose is well capitalized to reduce the risks of loosing trades and funds if the broker happens to go bankrupt or when you win a trade. Most regulated companies are well capitalized.
Finding a suitable and dependable trading platform is really important and another helpful tip to consider when looking for a reliable forex broker. It’s important you choose a trading platform that doesn’t crashes or freezes while trading, especially during the global economic events are taking place.
It’s important to be aware of the stability of your platform as a trader to have a safe & secure trading experience.
A good Customer Service and support is a very important key to selecting a suitable forex broker. Is important you check how you can contact the customer service team? How many languages does the trading platform offer? How fast does the customer service team responds?
These are important questions you need to ask and consider .You can check and test the customer service team/ representative to know how fast they respond to you.
The forex broker should be able to assist their clients when they need assistance, anytime of the day.
Visit www.hymarkets.com and find out more about our product offering and how you can start trading with only $50.
The post Safe and Secure Trading appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
The pace of growth of the Eurozone’s manufacturing PMI slowed to 51.1 in September from previous record of 51.4 in August, while the flash services PMI was seen advancing to an unexpected 52.1, according to the preliminary Purchasing Managers’ Index (PMI) data from Markit Economics.
The flash PMI Composite advanced to 52.1 in September from previous recorded 51.5 in August. Eurozone manufacturing rose above the 50-level for the third month in a row, assisted by strong performance by some of the largest economies in Europe.
“An upturn in the euro zone PMI in September rounds off the best quarter for over two years, and adds to growing signs that the region is recovering from the longest recession in its history”, Chris Williamson, chief economist at Markit, said on Monday.
“It is particularly encouraging to see the business situation improved across the region. Although the upturn continued to be led by Germany, France saw the first increase in business since early-2012 and elsewhere growth was the strongest since early-2011″, he added.
In Germany, the PMI for the country’s manufacturing sector edged 51.3 higher in September, a preliminary report by Markit Economics confirmed. The report shows the reading of 51.8 in August, came in below analysts’ forecasted 52.0.
In France, the activities in French manufacturing slowed in September as the preliminary figure compiled by Markit Economics confirmed, while the service sector showed an improvement.
France Manufacturing PMI rose slightly to 49.5 in September, from the previously recorded 49.7 in August. The services PMI rose from 48.9 in August to 50.7 September.
“A return to expansion for the service sector counterbalanced a weaker manufacturing performance, but new business trends were broadly flat across both sectors,” Jack Kennedy, Senior Economist at Markit said.
Visit www.hymarkets.com for updates,news and more information on how you can start trading with the award-winning broker today with only $50 .
The post Eurozone’s Manufacturing PMI Growth Pace Slows appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
EURUSD closed above 1.3500 figure last week which suggests more upside in this week. The reason for bullish outlook in the short-term is a sharp rally from 1.3320 low which appears to be a third leg within a third based on the personality of the move. Recently a third leg has stopped in 1.3565 so we suspect that current contra-trend movement is wave iv) that could look for completion around the upper trendline of a base channel. Keep in mind that larger trend is up and that uptrend could resume soon into wave v) of (iii) towards 1.3620. This outlook remains valid as long as 1.3384 level is not breached.
EURUSD 4h Elliott Wave Analysis
Written by www.ew-forecast.com | Try EW-Forecast.com’s Services Free For 7 Days at http://www.ew-forecast.com/service
While September 2013 is shaping up to be a month to remember, none of us will ever forget September 2008.
How could we? In a single month’s time, the entire financial world imploded…
American International Group (AIG), Fannie Mae and Freddie Mac all needed to be bailed out by the government to survive.
Lehman Brothers collapsed… Washington Mutual declared bankruptcy… And Merrill Lynch & Co. and Wachovia were sold at rock-bottom prices to avoid the same fate.
As we all know, these unprecedented events sparked a global selloff. One that ultimately erased $11 trillion in equity values in the United States alone.
Five years later, scars remain.
Case in point: Although the S&P 500 Index has rebounded and gone on to trade at record levels, financial sector stocks remain 47% below their 2007 highs. That’s more than any other industry, according to Bloomberg data.
As John Carey at Pioneer Investment Management Inc. says, “This crisis is certainly something that still troubles investors.” Indeed!
What’s worse, we could be on the brink of yet another collapse, according to former Treasury Secretary, Henry Paulson.
He told Germany’s Handelsblatt that “the world should prepare for a new financial crisis.”
Michael Lewis, author of The Big Short (which gave us an inside look at the conditions that preceded the last crisis), agrees.
When asked by BusinessWeek earlier this month if there was another threat likely to strike soon, he said, “The answer is yes, but I can’t talk about it yet, because I’m in the middle of a book about it.”
Way to protect your own interests, Mr. Lewis!
I refuse to be similarly selfish. So what could possibly spark the next global financial crisis?
First, let me tell you what it won’t be.
The Real Threat is Never the Obvious One
Most investors fear that Wall Street banks will cause the next financial crisis. After all, at its core, Wall Street is overrun with greed. And greed can’t be contained.
Sheila Bair, former Chairwoman of the Federal Deposit Insurance Corp., seems to think so, too. Even after five years of policy changes designed to rein in risk taking, she says, “Large financial institutions still have way too much leverage.”
As I’ve shared before, though, if banks were truly a threat, credit default swap (CDS) prices would be tipping us off. And that’s not happening.
Default risk for the major financial firms around the world has been trading sideways, based on Bespoke Investment Group’s Bank and Broker CDS Index. Even in the face of the August selloff, default risk didn’t budge, indicating that there’s no imminent threat.
So what could the ultimate danger possibly be? All we have to do is follow the money.
Since 2008, fresh capital has been pouring into one industry in particular “on a scale not seen before,” according to the chairman of one of this industry’s most iconic firms.
So much so, that he fears the capital could become “detached from the underlying transaction of risk.”
Translation: The same trap that ensnared Wall Street’s biggest banks is being set again. Only this time, it’s targeting a different industry.
Stayed tuned for my next column, where I’ll reveal this unexpected threat – and, more importantly, the stocks we should be avoiding (before it’s too late).
Ahead of the tape,
Louis Basenese
The post Should We Be Fearful of Another Epic Financial Collapse? appeared first on Wall Street Daily.
Article By WallStreetDaily.com
Original Article: Should We Be Fearful of Another Epic Financial Collapse?
By Profit Confidential
There continues to be excellent activity in domestic oil and gas stocks, especially in the small- and micro-cap categories. Bakken oil stocks are pushing the valuation envelope even further, as many companies are hitting new highs with stronger production and oil prices.
Recently, in this column, I looked at Triangle Petroleum Corporation (TPLM), which bolted higher on the stock market after reporting exceptional growth in production and in its financials. (See “Why the Street Is So Bullish on This Junior Oil Producer.”)
The stock is very expensive, but the price momentum continues; this illustrates the appetite institutional investors have to bid these companies in a rising spot price environment.
Among large, integrated oil and gas producers, the stock market action is much more subdued because of production issues—declining barrels of oil due to field depletion. Dividend yields are fat, but top- and bottom-line growth is becoming a real issue in the face of declining production numbers. The action for risk-capital traders is definitely in the burgeoning junior producers.
But like all hot stocks in resources, the action revolves almost 100% around the spot price. This is especially the case with precious metals, where even the most exciting growth stories won’t experience a rising share price if spot prices of the underlying commodity are subdued. This is a built-in investment risk with all resource stocks, and it is a disincentive for betting on companies as opposed to the spot price itself.
The price of oil is holding up exceedingly well, considering the tapered geopolitical tensions regarding Syria. Whatever the reasons why prices are nudging $110.00 for West Texas Intermediate (WTI), financial metrics become a lot rosier for junior producers as benchmark prices rise.
Illustrating the kind of growth available from the Bakken region, Kodiak Oil & Gas Corp. (KOG) is producing from the Williston Basin in North Dakota and Montana, as well as the Green River Basin in Wyoming and Colorado.
According to the company, in its second quarter (ended June 30, 2013), oil and gas sales were $173.5 million. This is way up from sales of $85.8 million in the comparable quarter last year.
The company said it sold 2.1 million barrels of oil equivalent (MMBOE) in the second quarter of 2013 for a gain of 103% comparatively. Crude oil revenues accounted for about 94% of total sales.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were $131.1 million, compared to $67.7 million last year. Net cash provided by operating activities during the second quarter of 2013 was $118.3 million, for a year-over-year gain of 165%.
But there are no free passes when it comes to genuine economic growth. Kodiak isn’t as pricey as other Bakken oil plays, but it’s still expensive. And institutional investors are all over the position, which means that any earnings misses are going to result in a mass exodus.
Kodiak is now a $3.0-billion company. In July of this year, it was a $2.0-billion company.
For the investment risk, a little exposure to the domestic oil and gas boom is worthwhile. Just remember that everything follows spot prices. Right now, the upward trend for these burgeoning energy companies is intact, but investors still need to keep an eye on the underlying commodity.
Article by profitconfidential.com
By Profit Confidential
The stock market got what it wanted; the easy money will continue to flow into the economy and will help to support and possibly drive the stock market higher.
But while the economy continues to move along, the low interest rates and desire of the Federal Reserve to keep long-term rates down will give a boost to companies.
Small companies, which generally react quicker to changes in the economy and operating environment, will remain at the center of the Fed’s move.
While the stock market will face some tough upper resistance following its record breaks on Wednesday, it will not be easy to break through, as traders are likely feeling more anxious at the higher levels.
As I have said on many occasions, small-cap stocks remain the place to be this year, and they’ll likely stay that way into 2014 and 2015, as the economy picks up steam.
The small-cap Russell 2000 index continues to drive the gains this year, up an impressive 27% as of Thursday.
Some of the gains we have seen are staggering. The momentum in this market along with the easy money have fueled a massive appetite for assuming risk, which has pushed small-cap stocks higher, reaching record after record.
While you can earn steady returns from blue chips and big-cap stocks, for the quicker money, you need to have small-cap stocks in your portfolio. I’m not talking about the OTC/Pink Sheet stocks or those languishing under a dollar, waiting for a promoter to push them. When I look at potential small-cap stocks, I’m looking for real viable businesses with sound fundamentals.
These small-cap stocks are where you see double-digit revenue and earnings growth, unlike the muted growth you often see from much larger companies.
Of course, with the added risk-to-reward, you are also assuming more risk. The probability to the downside is higher and shifts are quicker with small-cap stocks.
Yet if you can manage to find one of those small-cap stocks that are firing on all cylinders, the return on investment could turn out to be significant.
And my feeling is that as long as the economy grows, small-caps will outperform.
Look at the following chart of the Russell 2000. The index has recorded three straight bullish flag formations, as shown by the downward-sloping, parallel blue lines, and has made another breakout around 1,060, based on my technical analysis.
Chart courtesy of www.StockCharts.com
At the beginning of the year, I favored small-cap stocks and technology, and my opinion hasn’t changed. These areas continue to be my top areas to make money going forward. (Read “High Risk to Start the New Year.”)
Article by profitconfidential.com
