By www.CentralBankNews.info Romania’s central bank cut its policy rate by a further 25 basis points to 4.25 percent, as expected, saying a resumption of disinflation has allowed the central bank to continue easing its policy.
It is the third rate cut in a row by the National Bank of Romania (NBR), which has cut rates by a 100 basis points this year following last year’s cuts totaling 75 basis points.
Romania’s inflation rate fell to 3.67 percent in August from 4.41 percent in July due to lower food prices and the effect of the negative output gap, the NBR said.
“This trend, in line with the central bank’s forecast in the latest inflation report, strengthens the favourable outlook for the annual inflation rate to fall below the 2.5 percent target in the forthcoming period,” the central bank said, adding it expects disinflation to continue until the first half of 2014.
Last month the central bank lowered its inflation forecast for this year to 3.1 percent from 3.2 percent and economists expect the NBR to continue to cut rates further this year.
The pass-through of the central bank’s rate cuts to lending rates to companies and households is still moderate and taking place with a certain lag, but the ongoing adjustment of monetary conditions is aimed at preserving medium-term price stability while also paving the way for the sustainable recovery of lending to the private sector and thus restore confidence and lasting economic growth, the NBR said.
Economic activity in Romania has been mixed, with exports as the main driver having a positive impact on manufacturing output and the current account, offsetting the unfavourable impact of the slow recovery of consumption and investment on growth.
Romania’s Gross Domestic Product expanded by 0.5 percent in the second quarter from the first, for annual growth of 1.5 percent, down from 2.1 percent in the first.
The NBR said annual growth in loans to the private sector remain in negative territory but credit institutions have “considerable room for manoeuvre in cutting interest rates on lending to the real sector, subject to prudential rules.”
A balanced monetary policy stance and the new precautionary funding arrangement concluded with the International Monetary Fund will contribute to stabilize Romania’s economy and strengthen its resilience to external shocks, the bank added.
On Friday the IMF’s board approved a two-year $2.7 billion stand-by arrangement for Romania. Under the deal, Romania does not plan to draw on the funds but retain them as a buffer to reassure investors. Romania has committed itself to undertake structural reforms, including an update to its health system and sell state assets in the energy sector.
Senior Strategist: Political complications in both the US and Italy
The US government will face its first shutdown in nearly 20 years on Monday night unless the White House and Republicans can broker a last-minute deal.
In Italy Prime Minister Enrico Letta plans to hold a confidence vote on Wednesday, to seek the backing of Italy’s parliament. He was forced to make that move after five ministers from Silvio Berlusconi’s party stepped down at the weekend.
Senior Strategist, Ib Fredslund Madsen, predicts a negative week on the financial markets.
Video by en.jyskebank.tv
German Dax and EURUSD Could Turn Bullish Very Soon –Elliott Wave Forecast
Markets gaped on Sunday, particularly against the EUR after five ministers in Berlusconi’s party have resigned from the government coalition. Stocks futures are also lower, but based on German Dax wave structure and USD Index price action USD remains in downtrend while stocks could form a bullish reversal.
Last week we posted 4h bullish count for German DAX to our members and mentioned a possible retracement to open gap zone. Well, price is now lower and very close to that “reversal zone” so be aware of a move higher especially if we consider only a three wave pull-back from latest high which we think it was a wave four.
German Dax 4h
German Dax and EURUSD have a positive correlation as we can see on the chart below, so if European stocks will rally then EURUSD should find a bid based on latest data. Meanwhile of course USD is expected to fall further aagints other rivals as well, which is fine if we consider a bearish trend on USD Index.
EURUSD vs DAX
USD Index
Written by www.ew-forecast.com | Try EW-Forecast.com’s Services Free For 7 Days at http://www.ew-forecast.com/service
Euro Dragged Lower By Italy’s Turmoil
The euro currency declined 0.2% against the US dollar on Monday, as it was dragged down by the Italian political turmoil with the Italian Prime Minister Enrico Letta facing a confidence vote on Wednesday as Silvio Berlusconi’s party resigned from the cabinet.
The euro declined 0.21% to $1.3494 against the US dollar as of 7:56am GMT, while against the Japanese yen; the euro fell 0.73% to ¥132.19 against the yen and edged down 0.30% lower to £0.8360 versus the pound sterling at the same time.
“Several European Central Bank (ECB) members stressed that they are ready to offer another LTRO (long-term refinancing operations) if needed. However, as such dovish remarks combined with the Fed’s less hawkish monetary policy stance dragged market rates already lower, we see little scope for the ECB to become more aggressive as soon as this week,” analysts from Credit Agricole wrote in a note on Monday.
European Central Bank (ECB) press conference is scheduled Wednesday.
Italy’s Turmoil
Over the weekend, Silvio Berlusconi announced that his ministers were leaving the People of Liberty party due to the country’s Prime Minister’s coalition government as he called for new elections.
Last week, Italy’s Finance Minister Fabrizio Saccomanni announced he would step down if the coalition government violates European Union deficit limits in favor of tax cuts, “Promises must be kept or I am not staying,” said Saccomanni.
Mario Draghi’s Speech
On Wednesday, the rate decision is expected to be released from the European Central Bank. Investors will be closely watching the press conference for any hints the President of ECB Mario Draghi could drop.
US Budget
The US Congress is expected to increase the debt limit, while pointing out that Obama’s administration has faced the prospect of bankruptcy six times in the past three years.
Treasury Secretary Jack Lew notified Congress policymakers that the government will exhaust its borrowing authority by October 17. Investors are worries over the US possibly facing a government shutdown as soon as October 1, first day of the new fiscal year.
To find out more on our product offerings, visit www.hymarkets.com and start trading today with only $50!
The post Euro Dragged Lower By Italy’s Turmoil appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
European Equities In Red As US Government Shutdown Weighs
European equities started the trading week in red as market traders continue to worry over the US budget.
The European Euro Stoxx 50 was seen 1.17% lower at 2,882.56 points, while the German DAX dropped 1.14% lower at the market open. At the same time the French CAC 40 lost 1.18% to 4,138.89 points, while the British FTSE 100 declined 1.14% opening at 6, 44.57 points.
European Equities – US Government Shutdown
There is a high chance that the largest economy in the world could face its first government shutdown since 1996. President Barack Obama’s healthcare law has been postponed by the Republican dominated house by a year.
The Congress has to agree on the US budget spending before October 1, to avoid a government shutdown.
Meanwhile analysts are worried over the possible government shutdown, analysts are expecting Congress to increase the debt limit and point out that Obama’s administration has faced the outlook of bankruptcy six times in the past three years.
On Friday, the House Minority Democratic leader Nancy Pelosi said that “House Republicans’ astonishing disregard for the stability of our economy goes well beyond their threats to shut down the government services for the American people.”
“Threats and willingness to default is a luxury that the American people cannot afford,” Pelosi added.
Germany’s retail sales
In Germany, the Federal statistical office (Destatis) posted the country’s retail sales, which showed a rise of 0.3% in August, compared to the previous rise of 2.9% in the same month last year. The indicator grew by 0.5% on a monthly basis.
China Manufacturing PMI
China’s HSBC Purchasing Managers’ Index (PMI) came in at 50.2 points in September, lower than the estimated 51.2 points but slightly higher than the recorded 50.1 points in the previous month.
“The September HSBC China Manufacturing PMI edged up slightly from August. New orders remained flat from the previous month, while external demand improved,” Hongbin Qu, chief economist at HSBC China said.
“Manufacturers restocking process continued but remained relatively slow. Growth is bottoming out on Beijing’s mini-stimulus. We expect continuous policy efforts to sustain the recovery,” he added.
Interested in trading In the European Market?
Visit www.hymarkets.com and find out how you can start trading today with only $50.
The post European Equities In Red As US Government Shutdown Weighs appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
Introducing the Income Inequality Trade
We’re living in a world of haves and have-nots. It’s the 99% versus the 1%, as the Occupy Wall Street Movement likes to put it.
While I have a hard time believing that anyone truly thinks the rich are the enemy of the poor, there’s no denying the discrepancy.
Based on the latest IRS data, the income gap between America’s top earners and bottom earners hasn’t been wider since 1928.
But I’m not here today to make a political statement. (Other than saying that America is the land of the free. And in such a society, a degree of income inequality is inevitable.)
Instead, I’m here to share an investment strategy to capitalize on the obvious trend.
Just the Facts, Ma’am
Again, I’m not going to refute that an income or overall wealth gap exists. Not when there’s so much data to confirm it.
The top 1% of Americans now own about 40% of the country’s $54 trillion in wealth. They also earn about 19% of the country’s income, up from a low of 7.7% in 1973.
Moreover, a new study by economists at UC Berkeley, the Paris School of Economics and Oxford University found that real incomes of the 1% grew 86.1% from 1993 to 2012. In contrast, real incomes of the 99% only increased 6.6% over the same period.
It’s important to note that the discrepancy is materializing irrespective of geography or political persuasion. Or as The Washington Post’s Brad Plumer notes, “The Deep South, as well as New York and California, saw the fastest growth in income inequality over time.”
So this isn’t a red or blue state thing, or an East or West Coast phenomenon. In fact, if you want to see how indiscriminate the spread of income inequality in America has been, check out this fascinating visual put together by John Voorheis, a graduate student at the University of Oregon. (As income inequality within a state increases, the color in the image changes from red to green.)
Sentiment Matters
Naturally, the difference in fortunes in America is leading to differences in sentiments between the “rich” and the “poor,” too. And nowhere is this more evident than the latest Consumer Confidence readings.
In addition to the main reading that’s widely quoted in the financial press, the Conference Board also measures confidence based on income. Sure enough, the confidence gap between Americans making more than $50,000 versus Americans making $35,000 to $50,000 has never been wider, according to Bespoke Investment Group.
Put simply, wealthier people – as defined by the Conference Board’s income levels – feel more confident than poorer people right now. That difference is naturally going to manifest itself in spending patterns.
And therein lies the opportunity for us…
The Perfect Time for a Pairs Trade
Pardon the sweeping generalization. But it’s nevertheless true.
The have-nots patronize Wal-Mart (WMT), the world’s largest discount retailer.
Meanwhile, the haves patronize LVMH Moet Hennessy Louis Vuitton SA (LVMUY), the world’s largest luxury goods company. (Its stable of high-end brands includes Moët & Chandon, Dom Pérignon, Louis Vuitton, Fendi, Donna Karan, Marc Jacobs, TAG Heuer and Bulgari.)
Reflecting the broader income trends, the sales results for the former have been much weaker than the latter. And that makes this an ideal situation for a pairs trade.
What exactly is a pairs trade? Pioneered in the 1980s by Morgan Stanley (MS), it involves taking a long position in one stock and a short position in another. At the same time.
The way this two-stock strategy sets us up to profit is simple:
Scenario 1: The two stocks we own both go up. But the stock we’re long goes up more and faster than the stock we’re short.
Scenario 2: The two stocks we own both go down. But the stock we’re short drops faster and farther than the stock we’re long.
Scenario 3: The stock we’re long goes up and the stock we’re short goes down. The end result? Maximum profits.
In this case, we’d go long LVMH and sell short Wal-Mart.
As you can see in the chart below, doing so would have been profitable over the last year. Wal-Mart’s stock struggled to stay in positive territory. Whereas shares of LVMH are up almost 30%.
Bottom line: Given that the income and wealth gap isn’t expected to narrow any time soon, I’m convinced this pairs trade will continue to work in the months and quarters ahead.
Ahead of the tape,
Louis Basenese
The post Introducing the Income Inequality Trade appeared first on Wall Street Daily.
Article By WallStreetDaily.com
Original Article: Introducing the Income Inequality Trade
The Gold Market’s Overlooked X Factor
Goldman Sachs created a stir recently when it forecasted that gold would fall to $1,000 an ounce by the end of 2014, as the firm expected the Federal Reserve to reduce its bond buying program. Goldman also suggested that gold miners might want to hedge their output, locking in 2013 prices.
HSBC analysts have also been bearish on gold, although the firm admits that lower gold prices tend to draw out tremendous demand from emerging markets, especially China. Because of that demand, HSBC believes gold will end 2014 at around $1,435 an ounce, says MarketWatch.
Keep in mind that ‘Goldman Sachs does things that are good for Goldman, not you,‘ says Byron King from Agora Financial. Things can change quickly in the gold market, as investors saw when, only days after Goldman’s assertion, the Federal Reserve surprised everyone by announcing it would continue purchasing $85 billion worth of bonds. Gold investors cheered as the precious metal shot up the most in 15 months.
Unlike many commodities, there are many shades to gold, such as the Love Trade’s buying gold for loved ones and the Fear Trade’s purchasing gold as a store of value. An additional ‘shade’ investors need to be aware of is how the Fed interprets the recovery of the US economy.
I had a few reasons to believe Ben Bernanke was going to pull the rug out from under the market’s feet. Before word came out, I told Canada’s Business News Network that the ending of quantitative easing was not going to be abrupt because it’s not a black and white issue.
Consider the lack of significant job growth in the US, as many of the jobs that have been created in recent history were part-time positions. Investor’s Business Daily (IBD) links this lackluster employment situation to President Barack Obama’s Affordable Care Act.
According to the publication’s scorecard, ‘more than 300 employers have cut work hours or jobs, or otherwise shifted away from full-time staff, to limit liability under ObamaCare.‘ While providing affordable health care to Americans sounds honourable, the loss of full-time jobs seems to be an unintended consequence from the onerous regulations placed upon a business.
Take a look at IBD’s chart, which shows the accommodations industry’s average weekly hours that nonsupervisors put in since 2000. During each recession, in 2001 and again in 2008 to 2009, the hours dropped.
But since ObamaCare was signed into law, which mandated that employers would need to provide health care coverage for staff who work more than 30 hours a week, the average plummeted. As of July, the accommodations industry workweek hit 28.8 hours, ‘at a record low,‘ according to IBD.
It’s not only about job growth. Housing is also not rebounding as strongly as some people think. I told Reuters that many people don’t realise that the real estate market boom has been narrowly focused.
According to USA Today, almost half of the homes purchased in July were bought with cold hard cash. In places like Florida, ‘nearly two-thirds of home sales were completed without a mortgage loan,‘ says USA Today.
In Nevada, about 65 percent of buyers paid with cash, followed by Maine, where nearly 60 percent of house sales were cash. Perhaps regulation in the banking industry has made the process of getting a mortgage too burdensome for families?
Housing is one of the biggest multipliers for jobs, where $1 spent in housing results in about $16 in related economic activity. When interest rates are low, more people apply for mortgages. They build houses, employ moving services and buy new furniture, which in turn employs more people in multiple industries.
But after interest rates rose quickly, the housing market came to a halt. People who once qualified for a mortgage to build a new home no longer qualify at the higher rates, meaning a potential inventory of new housing may quickly build.
At the same time, big banks are announcing layoffs in mortgage lending. Wells Fargo announced it was going to lay off 1,800 employees as refinancing activity continues to slow. The company had already told 2,300 workers to stop coming to work as rising interest rates curtail demand for new mortgages and refinancing.
So instead of the Fed quickly tapering its bond purchases and raising rates, this process will likely be very gradual. I believe the government will have to keep interest rates low to stimulate the economy.
And that’s positive for equity markets as well as for gold. If interest rates remain low, real rates could remain in negative territory.
In my presentation on opportunities in resources and emerging markets, I told the crowd at the Toronto Resource Investment Conference that 2% has been the tipping point for gold. Historically, gold and silver performed well in a low or negative real interest rate environment.
Regardless of where analysts think the gold price will be a year from now, we believe gold and gold stocks can be an excellent portfolio diversifier. We’d rather hold quality gold companies that are experiencing a growth in resource base, growth in production and growth in cash flow instead of trying to time the market.
Frank Holmes
CEO and Chief Investment Officer, U.S. Global Investors
[U.S. Global Investors, Inc. is an investment management firm specialising in gold, natural resources, emerging markets and global infrastructure opportunities around the world. The company, headquartered in San Antonio, Texas, manages 13 no-load mutual funds in the U.S. Global Investors fund family, as well as funds for international clients.]
Publisher’s Note: The Gold Market’s Overlooked X Factor originally appeared in The Daily Reckoning USA
Why Stock Prices Need More Than a ‘Money Torrent’ to Rise…
‘Japanese savers are poised to pump $690 billion into stocks to benefit from new tax breaks as the government tries to avert a retirement cash crunch in the nation with the world’s oldest population and lowest interest rates.‘ – Bloomberg News
That’s a heck of a lot of cash.
In fact, it’s so much that it’s the equivalent of 21% of the Japanese market’s entire market capitalisation.
With that much cash ready to pour into the market, it’s inevitable that stock prices will go up…or is it?
As a stock market bull our answer may surprise you…
Unless you open our daily letters to you and then ignore everything we have to say, you should know by now that we’ve put a 7,000 point price target on the S&P/ASX 200 index.
That’s about as bullish a forecast as we’ve seen anyone make for the Australian market. But as we always like to say, you shouldn’t expect the market to climb in a straight line. There will be bumps and periods of mind-numbing boredom along the way.
In the next few weeks we’ll lay out our position on why and how the market will advance to 7,000 points between now and 2015. The first target is for the main Aussie index to hit 6,000 points by early next year.
But that’s for another day. First up, what about all this cash ready to flood the market?
Beware the ‘Weight of Money’
We have no doubt that central bank money printing has boosted stocks. In our mind it’s undeniable. You only have to look at the charts of the US, UK, and Japanese stock markets to see the impact:
Source: Google Finance
The US S&P500 index is up nearly 150% since the March 2009 low.
So, if central bank money printing can boost stocks, doesn’t it make sense that $690 billion worth of cash can boost the Japanese market? And what about all the cash supposedly sitting on the sidelines in the Australian market?
This is the ‘weight of money’ theory or the ‘Money Torrent’ as we prefer to call it. The idea is that there’s so much cash ‘on the sidelines’ that if it begins flowing into the stock market, the price of stocks will soar.
It’s a nice theory. And we don’t entirely disagree with it.
However, we have one caveat when it comes to the ‘Money Torrent’, it’s this: don’t forget price.
When it comes to the ‘Money Torrent’, most of those who back the theory completely ignore the impact of price. Yet price is arguably the most important factor for stock markets.
It’s price that makes an asset attractive or unattractive to investors. In order for an investor to pay a specific price for a stock (or any other asset) the investor needs to believe the price will rise or that the company can continue to pay or increase a dividend.
That’s because investors will always look at an investment in relative terms to another investment. If a stock is only paying a 4% dividend yield with no prospects of stock or dividend growth then the investor will most likely prefer the cash investment that’s paying (say) 5%.
Investors Won’t Buy Stocks if There isn’t Any Value
So, the ‘Money Torrent’ on its own isn’t enough. We know that because we heard the same ‘Money Torrent’ arguments during the last bull market from 2003 to 2007.
The story went that with 9% of workers’ salary pouring into superannuation every year it would ensure prices kept going up. Plus they said there wouldn’t be enough shares on the market to absorb this flow of funds.
However, those proponents forgot a couple of things. They forgot about price, and they forgot that companies can issue more shares in order to raise capital and expand. Like the housing market, it turns out there wasn’t really a shortage of shares.
That much was clear as the market topped out in 2007 and then fell 50% over the next year.
Even 9% of everyone’s wages going into investments couldn’t stop the market falling. That’s because investors didn’t have to buy shares. They looked at stocks relative to other investments and decided that stocks weren’t as attractive as (say) cash.
Our old pal Greg Canavan made this case over at the Daily Reckoning last week in response to billionaire investor Warren Buffett’s claim that the market looks fairly valued. Greg told readers:
‘Unlike your standard fund manager, who has a mandate to be fully invested at all times (or maybe has the discretion to go to a whopping 5% cash) [Warren] Buffett can do what he likes. If he can’t find value in the stock market, he holds cash and waits…
‘So is Buffett’s $49 billion cash hoard telling us a market peak is at hand? No, but it’s telling you there is a distinct lack of value in the market. And Buffett has pretty good form in equating lack of value with market tops. He cashed up in 1999 too, just six months or so before the market peaked in March 2000.‘
Bottom line, investors don’t have to invest in stocks. And if our old buddy Dan Denning is right, neither should they. Dan says the market is on the verge of seeing its first recession in 22 years.
Any investor who ignores that warning is asking for trouble.
That said, the ‘Money Torrent’ argument isn’t entirely without merit…
Don’t Ignore the Warnings, But Stocks Could Still Climb
Look, don’t get us wrong, we’ve played the ‘Money Torrent’ game hard over the past five years, banking on central bank money printing boosting stock prices.
But as we mentioned above, the market doesn’t go up just because there’s a lot of money on the sidelines waiting to flow into it. The market goes up because investors believe it represents good value.
However, despite what the investment pros may think, if investors believe the market is good value and that the ‘Money Torrent’ will boost stock prices then that could provide an extra boost to stocks.
We think back to the market in 2005 and 2006. By this point the market was already half-way to reaching its 2007 peak (although of course investors didn’t know that at the time).
After the market had doubled from the 2003 low, there were plenty of investors who thought the market had run up too far…and that the next move was down.
That proved to be an important lesson for investors – stock prices can go higher (and lower) than anyone expects. Even when valuations looked stretched, the market can still draw investors into buying stocks.
This is a big reason why we believe stocks will continue to rally through the end of this year, even if they take a pause in October. But despite our bullishness you shouldn’t ignore the warnings.
The question is whether a recession would have a negative impact on the market or whether it would give the Reserve Bank of Australia the excuse it needs to cut interest rates further…and perhaps begin a money printing program on a par with overseas central banks.
Cheers,
Kris+
Special Report: Are You Waiting for a Real Estate Crash That Isn’t Going to Come?
USDCHF’s downward movement extends to 0.9021
USDCHF’s downward movement from 0.9455 extends to as low as 0.9021. Resistance is located at the downward trend line on 4-hour chart, as long as the trend line resistance holds, the downtrend could be expected to continue, and next target would be at 0.8950 area. On the upside, a clear break above the trend line resistance will indicate that consolidation of the downtrend is underway, then range trading between 0.9021 and 0.9137 could be seen.
Provided by ForexCycle.com
Video on Demand: Millions Up for Grabs in the Streaming Media Market
$13 billion is a lot of money.
That’s the market value of the initial public offerings (IPO) tipped to launch on the Aussie stock market in the next twelve months.
It’s not quite the heady days of 2007 when the figure hit over $60 billion, but it’s up on the year before.
The biggest IPO of them all is set to be Nine Entertainment at $3 billion, the biggest float since 2010.
For our purposes in today’s Money Weekend, we will not delve into the merits or otherwise of buying what the insiders are promoting.
But we are interested in the major selling point of Nine’s float – after all, it’s a continuation of a major trend…
A Big Trend to Follow
That trend is ‘video on demand‘ delivered over the internet to different devices. Right now it’s the fastest growing media market. And companies are on the move to tap into it.
Take this from The Australian this week:
‘A key component of the prospectus ahead of a float on the Australian Securities Exchange will be a plan to launch an online subscription video service, The Australian understands.
‘Nine is expected to make an announcement about a Netflix-style offering as soon as the government prepares to fast-track the rollout of the National Broadband Network, which will provide the necessary bandwidth to support a streaming service for programs and movies.‘
Netflix is an American company with over 30 million users worldwide. It has a 30% market share of US households. Its main business is streaming media like movies and TV programs over the internet. Users can decide what and when they want to watch something without the restriction of a set schedule.
As you can see, Nine wants to copy the model. It’s one of the few areas in its business plan that offers investors a compelling carrot of growth.
But Nine isn’t the only one that wants in on the action. Foxtel announced its own streaming service this week, called Presto. This will give users who take up a subscription on demand access to all 7 of Foxtel’s movie channels.
A snippet from the press release catches the main idea: ‘Presto’s launch, slated for later this year, aligns perfectly with the increasing appetite for movie content delivered over the internet across different devices.‘
Foxtel’s hoping this can help lift its current market share of just under 30% of Aussie households.
It doesn’t end there. The Media column in The Australian also argues Seven West Media has made a ‘Netflix-style service front and centre as the most important new weapon in the company’s arsenal.‘
Jeez, with everyone wanting to copy Netflix, it’s a wonder Netflix doesn’t set up here itself!
Maybe they will. Of course, there is also already existing small cap company Quickflix [ASX: QFX]. In fact, Quickflix is more of a direct comparison to Netflix because they both built their original customer base on DVD rentals through the post.
Quickflix has since spent its available resources on trying to capture the early market share in this ‘video on demand’ space, without yet turning a profit.
But there’s big money up for grabs for whoever captures the dominant position in this market…
Winners and Losers
Of course, it’s the free to air channels that will suffer as this market develops, because their share of audience numbers will decline.
Quickflix made an interesting point on that in its last analyst presentation. According to the company, currently US studios auction most of their content to the highest bidder from free to air and cable TV channels. As their market share declines, so does their buying power.
That could increasingly open up streaming services as a viable alternative to release new material. It will also spur the US studios to prevent internet piracy and act to prevent (from players like Quickflix’s perspective) billions in lost revenue and a competitive disadvantage.
Kris Sayce, over at Australian Small Cap Investigator, has been following this trend since the beginning of last year. We asked him for his take on these new market developments this week:
‘The shift towards what I call ‘Pull TV’ – where the consumer decides where, when, how and what they watch – is inevitable. It’s already happening in a big way in the US. So far the Aussie market has been slow to move, but that’s changing. I can already go online and watch live video streams of US and UK sporting events and US and UK commercial TV channels. But the big move will be when streaming content providers such as Quickflix and Netflix become direct competition for network TV. That move isn’t far off. The next 12 months could be the key period when the Aussie market finally catches up with the rest of the world.‘
Callum Newman+
Editor, Money Weekend
From the Port Phillip Publishing Library
Special Report: Are You Waiting for a Real Estate Crash That Isn’t Going to Come?
Daily Reckoning: How Much Juice can Australian Property Have Left?
Money Morning: Why the Next Commodities Boom Could Take Place in a Science Lab
Pursuit of Happiness: The Pope Has Got This One Wrong about Money
