By CentralBankNews.info
Indonesia’s central bank maintained its benchmark BI rate at 7.50 percent, as expected, saying its current tight policy stance should help steer inflation back towards the bank’s target corridor and reduce the current account deficit to a more sustainable level.
“Looking ahead, Bank Indonesia will continue to monitor risks emanating from the global economy, especially that triggered by the normalization policy of the Fed as well as the risk of an economic slowdown in China,” Bank Indonesia (BI) said.
BI, which raised its rate by 175 basis points in 2013 to curb inflation and defend its rupiah currency, said data showed “the global economic recovery is gaining momentum amid dogged uncertainty on global financial markets, ” due to robust economic growth in advanced countries, specifically the US and Japan, and this is expected to continue this year.
Economic growth in the fourth quarter of 2013 of an annual 5.72 percent exceeded the BI’s projections and growth for the whole of 2013 averaged 5.78 percent, down from 2012’s 6.3 percent.
For 2014, BI expects growth in the lower end of a 5.8-6.2 percent range with exports improving further while domestic demand continues to remain moderate.
Stronger exports in the fourth quarter of last year – helped by a decline in the rupiah which boosted exporters’ international competitiveness – also narrowed Indonesia’s current account deficit to only 1.98 percent of Gross Domestic Product from 3.85 percent in the third quarter.
“Exports are gaining traction on the back of increased exports from the manufacturing sector in line with growing demand from the US and Japan,” BI said.
Indonesia’s balance of payments is expected to improve further in 2014 on the back of a smaller current account deficit – helped by slower imports and higher exports – and a growing surplus in the capital and financial accounts. The country’s foreign exchange reserves rose to US$ 100.7 billion in January, up from $99.4 billion in December.
The improving economy has also taken the pressure of the rupiah, which only depreciated by 0.33 percent to the U.S. dollar in January, closing at 12.210, compared with a drop of 1.71 percent in December. The rupiah came under strong pressure last year, especially from the end of May until August, as capital flowed out of the country, with the currency down almost 21 percent from end-2012 to the end of 2013.
“Looking forward, Bank Indonesia will consistently maintain rupiah exchange rate stability in line with its fundamental value and supported by a variety of endeavors to deepen the foreign exchange market,” BI said.
Indonesia’s inflation rate has remained above the bank’s target of 4.5 percent, plus/minus one percentage point, since July when it rose due to a reduction in fuel subsidies. In January the inflation rate eased slightly to 8.22 percent from December’s 8.38 percent, with prices still high due to the impact on food prices from flooding, while core inflation rose slightly due to the impact of the rupiah depreciation on goods such as motor vehicles and electronics.
The central bank said it “will remain vigilant of inflationary pressures and risks looking ahead, including disruptions to the supply of food, electricity rate hikes and the impact of rupiah depreciation.”
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USDCAD Targets New High Above 1.0700 – Elliott Wave Analysis
USDCAD turned south two weeks back from above 1.1200 resistance region where we called end of a wave 3 that is part of an impulsive price action from 1.0170. We know that impulses are five wave pattern, and if we consider that larger trend on this pair is up, then we may suspect that retracement from the highs is probably just another correction within ongoing uptrend. With that said, we labeled a pullback as wave 4 that may send prices up in wave 5 in the next week or two. We expect new high as long as pair trades above 1.0700 invalidation level.
USDCAD Daily Elliott Wave Analysis
USDCAD Four Hour
USDCAD did not cross 1.1120 resistance yet, so it seems that pair is still moving south within incomplete wave 4. Wave 4 is a corrective leg which can now form a complex correction with 1.0950 test yet to come. From a larger perspective our bias is still bullish because bigger trend is still up, so we expect that sooner or later USDCAD will turn up into wave 5, but 1.1120 break would be needed as confirmation.
USDCAD 4h Elliott Wave Analysis
USDCAD One Hour
Another commodity currency that may turn bearish against the USD in coming days is Canadian dollar. On USDCAD price chart we see lower lows and lower highs which is identification of a downtrend, but because of overlapping structure we think that fall will not last long. We see a double zigzag, now moving south in wave (c) final leg in a corrective sequence that may find a support around 1.0900.
USDCAD 1h Elliott Wave Analysis
Written by www.ew-forecast.com
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Sweden maintains rate, 2014 prospects still “good”
By CentralBankNews.info
Sweden’s central bank maintained its benchmark repo rate at 0.75 percent, as expected, and confirmed that it does not expect to raise the rate until the beginning of 2015 with the outlook for the economy and inflation in line with the bank’s forecast from December.
The Riksbank, which cut its rate by 25 basis points in December 2013 and pushed back the time frame for any rate rise until early next year from late this year, also said the “recent financial market turbulence has had limited contagion effects and is not expected to prevent a recovery in the global economy,” with growth in the United States remaining high and the euro area recovering, albeit slowly.
The Riksbank described the prospects for the Swedish economy as “good,” with the labour market improving and confidence among households and companies rising to levels that are better than normal.
Despite the improving economy, inflation is expected to remain low in the coming year, which means that the repo rate “needs to remain at a low level until inflation picks up and the recovery is on firmer ground,” the Riksbank said, adding that “slow increases in the repo rate will not begin until the start of 2015.”
Sweden’s headline inflation rate was steady at 0.1 percent in December and November, and the Riksbank maintained its forecast for consumer price inflation to only rise by 0.6 percent this year, after zero growth in 2013, and then by 2.5 percent in 2015 and 3.0 percent in 2016.
The central bank targets inflation of 2.0 percent.
The forecast for economic growth this year was revised slightly down to 0.9 percent from the December forecast of 1.0 percent, while the forecast for 2015 was unchanged at 1.8 percent and 2016 at 2.0 percent. In 2013 Sweden’s Gross Domestic Product was estimated to have expanded by 0.9 percent. The latest data show that GDP in the third quarter expanded by 0.1 percent from the second quarter for annual growth of 0.3 percent.
Earlier this month the Riksbank said its survey of Swedish companies showed they first expected to be able to raise prices in a year due to improving demand but those price rises were still mainly minor.
Sweden’s monetary policy has for some time tried to balance the need for a low repo rate to push inflation back up toward the central bank’s target against the risks that households continue to accumulate more debt and are thus vulnerable to economic shocks and could face repayment troubles when rates start to rise.
The Riksbank said these risks had not changed much in recent months and high household debt – projected to reach 178 percent of disposable income by 2016 – still entails a risk, but several policy areas need to cooperate to manage these risks. The central bank was apparently referring to last year’s creation of the Financial Supervisory Authority (FSA), which has tightened some of the rules for borrowers and lenders.
Bob Moriarty’s Stock-Picking Tools for Gold Equities: A Blindfold and a Dart
Source: Karen Roche of The Gold Report (2/12/14)
According to Bob Moriarty, the force behind 321gold, the “fact that everyone hated gold in December is a good reason for rational people to love it now.” While he recommends physical gold as an essential insurance policy in any portfolio, tax selloffs, low equity prices and low gold prices mean many companies, now selling for “peanuts,” are the place to put investment dollars. And, as he tells The Gold Report, all you need to pick a winner is a blindfold and a dart.
The Gold Report: Bob, in the last few weeks, Argentina and Venezuela have devalued their currencies and the central banks in Turkey and South Africa hiked interest rates. The U.S. Federal Reserve cut its monthly bond buying by another $10 billion ($10B). What do you make of all this happening in such a short timeframe?
Bob Moriarty: In a way, I will take credit for having predicted it. The world is bankrupt, and not one government is talking about reducing expenses. They talk about austerity, but austerity means living within one’s means. Governments refuse to do that.
The Fed has three options: It can continue to taper, maintain the status quo or increase its bond buying. I think there’s a good chance it will take that third option. We need a big crash first.
TGR: What message does that send to the general market?
BM: It says we’ve run out of bullets, head for your bunker.
TGR: That can’t be the message the Fed wants to send.
BM: The message it intends to send is one thing; the message it actually sends is something else.
Events in 2008 were only the opening act. The financial instability and the pressures in the markets are far worse today than they were in 2008. We had the chance to fix things back then, but Ben Bernanke, Alan Greenspan and Tim Geithner panicked and made the situation far worse.
TGR: You sent me an article by James Gruber titled, “Welcome to Phase Three of the Global Financial Crisis.” In it, he writes, “The system broke down in 2008 and again in Europe in 2011 and now in the emerging markets in 2013 and 2014. The market reaction to the latest events has been abrupt and violent, particularly in the currency world. In my experience, markets generally cope well when there is one crisis but when there are multiple spot fires like last week, most markets don’t cope well.” Is there more to come?
BM: Of course things will keep getting worse until somebody understands that the real issue is debt. There are $694 trillion in derivatives. That is financial debt that can never be paid off. The world has been a giant casino for the last 20 years, and it’s all coming to a head.
TGR: How does devaluing their currencies help Argentina and Venezuela?
BM: It doesn’t. Every government in the world is spending money it doesn’t have. The only solution is to stop spending money. Everyone refuses to do that because governments gain power by spending money. They will spend money until they’ve bankrupted all of their citizens.
TGR: In Greece and in Spain, the European Union (EU) has implemented mandatory austerity programs to pay off their bonds. Shouldn’t Greece and Spain be seeing economic improvement now that they’ve implemented those severe austerity programs?
BM: There is no economic improvement. It’s all smoke and mirrors. It’s similar to climbing to the top of a 50-story building and jumping off. Once you’ve jumped, it doesn’t matter what you do on the drop down. You’re going to hit the ground. They need to crash so they can rebuild on a solid foundation.
Calling it austerity is using semantics to play with the citizenry. If one honest politician stood up and said, “We’re spending more money than we have. We need to stop,” that would put us on the way to curing the problem. But the politicians keep pretending there are other solutions.
President Obama’s charade in the State of the Union message was interesting. He was a Constitutional law professor before going into politics, yet in his speech he said the president of the U.S. can unilaterally change the minimum wage. Did he ever read the Constitution?
TGR: Apparently, he does have the ability to change it, but only in upcoming, new federal contracts.
BM: There are three separate branches in the American political system: the executive, the legislative and the judicial. The president of the U.S. does not make laws; he enforces them. His ability to do something is not the same thing as it being legal. All federal financial bills have to start in Congress. The president of the U.S. simply cannot change the minimum wage. It’s not part of his job.
TGR: Wages earned by low-wage workers aren’t increasing at the same rate as inflation. As a result, the minimum wage today doesn’t give the same amount of purchasing power as it did when it was first implemented. Should the minimum wage be hitched to inflation or should it just be abolished?
BM: If you make the minimum wage $10.10/hour, people who are gainfully employed at $8.50 have lost their jobs. All minimum wage laws do is eliminate jobs.
If minimum wage laws worked and helped people, we should pay everybody $100/hour. But as soon as you say $100/hour, everybody says, nobody can afford that, which is true. There are people who cannot afford $10.10/hour. There are workers not worth $10/hour.
In the EU, seven countries do not have minimum wage laws, 20 do. In the seven countries without minimum wage laws, the unemployment rate is just over 8%. In the 20 countries with minimum wage laws, the rate is over 11%. Minimum wage laws, no matter how well intentioned, cost an economy jobs.
The economic stability of any country is based on the number of people in its middle class. There are rich and poor people in every society. That is as true as it is meaningless. The key to economic and political stability is the size of the middle class.
The policies of George Bush, which have been compounded by Barack Obama, have destroyed the middle class.
TGR: How have they done that?
BM: First, people can’t save money. If you save money at 0.25%, you’re insane; inflation robs you of your real wealth. Second, taxes have increased. There are something like 48 separate taxes in Obamacare that have nothing to do with healthcare.
The Affordable Care Act, Obamacare, is the nail in the coffin of the middle class. It is a giant payoff to the insurance companies. The insurance companies are protected under law. They are allowed to collude and do things no other industry can. As a result, the U.S. has one of the least effective healthcare systems in the world and the most expensive. We need to burn the healthcare system down and start all over again. The insurance companies have the American public’s throats in a death grip and they’re killing us.
TGR: Following on the general topic of insurance, you’ve talked about using precious metals as an insurance policy in a crisis. Do you mean the metal, the equities or a combination of both?
BM: I see the physical metal as an insurance policy. Once investors have that policy in place, the equities are what they do with their investments. There are some wonderful companies selling for peanuts now that will do well no matter what happens—inflation or deflation.
TGR: How much of a portfolio needs to be in precious metals to have a good underlying insurance policy?
BM: That depends on the person and the amount of money available. Everybody has a different level.
If my total worldly assets were $1,000, I would put all of it into silver or gold coins. If I had $100,000, I’d probably put half of it into silver and gold. If I had $1 million ($1M), the percentage would be 5–10%.
I was recommending metals even when gold was $268/ounce ($268/oz) and silver was $4/oz. All investments go up and down, and investors have to be prepared for that, but that doesn’t change the fact that metals are the best insurance policy.
TGR: I have my insurance policy; I have my gold and silver coins. Where should I look for precious metals stocks?
BM: You need two things: a blindfold and a dart.
TGR: But you just said there were some really special companies selling for peanuts.
BM: Yes, but the way to pick them is with a blindfold and a dart. Let me give you a really good example. I visited and know the management of True Gold Mining Inc. (TGM:TSX.V), which is going into production in Burkina Faso. Mark O’Dea is the brains behind True Gold. He shares management with Pilot Gold Inc. (PLG:TSX). He is a master at monetizing assets and raising money. He announced a $36M bought deal and the stock dropped 14% in a day. That’s how stupid people are. True Gold is going to go into production. It has a return on investment of 57%. It is in a safe environment. The president of the company is absolutely fabulous. The chairman of the board is the smartest guy I know in mining. I don’t think that you can lose your money in True Gold.
I don’t think you can lose your money in Pilot Gold or Gold Canyon Resources Inc. (GCU:TSX.V) or in 50 or 100 other companies. There are some really wonderful opportunities. The fact that everybody hated gold in December is a good reason for rational people to love gold now.
TGR: Are some opportunities better than others, or do you believe the entire sector will improve? After all, some analysts say that part of the sector needs to go bankrupt.
BM: I can name five or six people who said, in the last three weeks, that we’re at a bottom and it’s safe to buy.
My questions to them are: 1) What were they saying in April 2011 when silver was at a very clear top? 2) What were they saying in June 2013 when it was clear to some of us that the metals were at a bottom?
Bottoming processes last a long time. Silver and gold were at a bottom from the middle of 2000 until the end of 2011. Any one date in that 18-month period was a bottom.
I have a bunch of stocks that are up 50% since Dec. 1, 2013. I think it’s clear that we’ve had a major bottom. This is an incredible opportunity, and the longer people whine about how gold could go lower, the better it is. It’s called climbing the wall of worry.
TGR: You have stocks that have gone up 50%, yet True Gold is down 14%. Doesn’t that make this market a bit frothy still?
BM: No, because trading volume has gone from, say, 200,000–300,000 shares per day to 4M shares per day. People are using it as a liquidity event. They are taking profits. I don’t think that that’s a bad thing.
TGR: You also are excited about copper. Why is that?
BM: A lot of people think the copper price will go down with the rest of the base metals. I disagree. I’ve seen some incredible copper projects in the last six months—very high-grade projects that are reasonably priced to go into production. There are 10 or 20 companies that had projects of low-grade that were going to cost a lot of money. At least 6 to 10 are in the Middle Cauca belt in Colombia, which has enormous resources that, unfortunately, will always be uneconomic.
I visited Hot Chili Ltd. (HCH:ASX) in Peru. This company has the best plan for production that I know of. Under the radar, it has been getting permits and increasing the resource. I think it needs $1.2B to put the thing into production, but it has really good management and a really good story. Hot Chili is nestled right in the middle of half a dozen low-cost producers in Peru. The biggest copper producer in the world is Chile, but there’s a good chance that Peru could be a bigger producer in the years to come.
I went to Papua New Guinea in December and saw what appears to be a very large, high-grade porphyry system owned by WCB Resources Ltd. (WCB:TSX.V) in an area that had been in production until 10 years ago. Papua New Guinea and Indonesia are home to 6 out of the 10 biggest copper-gold projects in the world, right there on the Ring of Fire. And all of them are high grade.
I was in Albania last week, where I visited Arian Resources Corp. (ARC:TSX.V; 0GT1:FSE). Arian has a joint venture with a Chinese company looking for gold where the Chinese finance the whole thing. Arian just announced purchase of a prior producing volcanogenic massive sulfide mine with incredible grades. The company could be shipping 2–4% or higher ore for under $10M. I went over to a likely looking rock, busted it in half and opened it up. It was 6% copper. That stock has doubled in the last few weeks.
TGR: Copper is the canary in the coal mine. If we’re going to have a deflationary environment and economies are contracting, it would seem more logical for the price of copper to go down. What makes these particular copper projects good investments?
BM: If copper goes down, they’ll be more valuable. Because these are all high-grade projects, a lower copper price is good for them, because a lower price will drive the marginal producers out of business. The ideal situation is a company that will make money no matter what the cost of copper is.
TGR: What about some other names?
BM: Revolver Resources Inc. (RZ:TSX.V) is a copper/gold play. The company is coming out with its drill results shortly, so we will have to see what the drilling shows. A drill is called a truth detector. Revolver has an exciting prospect in northern British Columbia near where Colorado Resources Ltd. (CXO:TSX.V) drilled a great hole last year. Revolver could do the same thing with its stock that Colorado did, going from $0.16 to $1.60/share.
TGR: Bob, thanks for your time and your insights.
Bob and Barb Moriarty brought 321gold.com to the Internet more than 10 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Bob was a Marine F-4B and O-1 pilot with more than 820 missions in Vietnam. He holds 14 international aviation records.
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DISCLOSURE:
1) Karen Roche conducted this interview for The Gold Report and provides services to The Gold Reportas an employee. She or her family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: True Gold Mining Inc., Pilot Gold Inc., Hot Chili Ltd. and Revolver Resources Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Bob Moriarty: I or my family own shares of the following companies mentioned in this interview: Revolver Resources Inc. and Arian Resources Corp. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: True Gold Mining Inc., Pilot Gold Inc., Arian Resources Corp. and Hot Chili Ltd. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.
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Australian Dollar Decline as Unemployment Rate Climbs
The Australian dollar dropped against the US dollar on Thursday, following the reports from the statistics office which showed the Australian labour market worsened, with the jobless rate rising to its highest in ten years.
The AUD/USD currency pair was trading around $0.9029, but later dropped 0.98% to $0.8937 after the report was released.
Australian Dollar – Australia’s Jobless Rate rises
The report released revealed that the unemployment rate climbed to 6.0% in January, compared to 5.8% seen a month earlier and exceeding analysts’ forecast of 5.9%, rising to the highest in ten years.
In January, approximately 7,100 full-time jobs were lost and 3,400 part-time jobs were added.
RBA Holds Benchmark Rate
Last week the Reserve Bank of Australia (RBA) said it would keep its benchmark rate as it is despite the weak labour market.
“Looking ahead, the Bank expects growth to remain below trend for a time yet and unemployment to rise further before it peaks,” according to a statement made by the RBA Governor Glenn Stevens.
“In the Board’s judgment, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.”
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The post Australian Dollar Decline as Unemployment Rate Climbs appeared first on | HY Markets Official blog.
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Crude Prices Slides from Four-Month High
Crude prices slid from a four-month high on Thursday as reports from the Energy Information Administration (EIA) revealed the US oil stockpiles climbed.
Futures for the West Texas Intermediate (WTI) for March delivery dropped 0.67% lower at $99.70 per barrel on the New York Mercantile Exchange at the time of writing, while the European benchmark Brent crude for March settlement declined 0.31% to $108.44 per barrel on the London-based ICE Futures Europe exchange.
Crude – US Oil Inventories
On Wednesday, the Energy Information Administration (EIA) released reports which revealed stockpiles at Cushing, Oklahoma declined by 2.6 million barrels last week, as a pipeline helped to move oil away from the largest storage hub in the US.
The reports from the EIA also revealed crude inventories climbed by 3.27 million to 361.35 million barrels in the week ended February 2, exceeding analysts’ forecast of a rise of 2.63 million barrels.
Distillate stockpiles declined by 731,000 barrels to 113.1 million in the week ending February 7, reports from the EIA confirmed.
On Tuesday, reports from the American Petroleum Institute (API) showed that US crude oil inventories rose by 2.13 million barrels last week.
Crude – OPEC Global Demand Estimates
The Organization of Petroleum Exporting Countries (OPEC) released a February issue of its monthly oil market report, in which the OPEC increased its forecast for global oil demand by 50,000 barrels a day to 1.09 million barrels a day.
Other News
The Russian government predicted that its oil production would reach approximately 525 million tons or 10.54 million barrels per day this year, according to Russia’s deputy minister, Alexander Novak.
Meanwhile in Libya, protesters closed the oil and gas pipelines in the Wafa oil field, according to the National Oil Corporation.
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USDCAD: Bearish, Risk Points Lower On Further Weakness.
USDCAD: Bearish, Risk Points Lower On Further Weakness.
USDCAD: Our outlook on USDCAD remains lower with eyes on further weakness following its continued bearishness. Support lies at the 1.0967 level, its Feb 2014 low where a break will aim at the 1.0900 level, its psycho level. Below here will turn attention to the 1.0850 level. Its daily RSI is bearish and pointing lower supporting this view. Conversely, the pair will have retake the 1.1089 level to reverse its present downside pressure and bring further gains towards the 1.1121 level, its Feb 06 2014 high. A violation will aim at the 1.1223 level, its Jan 31 2014 high with a turn above here if seen setting off additional strength towards the 1.1300 level. All in all, USDCAD continues to face further downside threats.
Article by www.fxtechstrategy.com
Fibonacci Retracements Analysis 13.02.2014 (EUR/USD, USD/CHF)
Article By RoboForex.com
Analysis for February 13th, 2014
EUR USD, “Euro vs US Dollar”
Euro continues reaching both bearish and bullish stops. During correction, I opened buy order again with stop placed at minimum of last long candlestick. Targets are still the same: upper fibo-levels near 1.3810.
At H1 chart, market is moving close local maximums. Closest target is near several fibo-levels at 1.3740. According to analysis of temporary fibo-zones, this target area may be reached during the day.
USD CHF, “US Dollar vs Swiss Franc”
After reaching all stops yesterday, Franc started falling down. Most likely, market will reach new local minimum in the nearest future. Main targets are still in lower part of the chart.
At H1 chart, market is moving below level of 78.6%. Most likely, pair will continue falling down towards next target at level of 0.8875. According to analysis of temporary fibo-zones, price may reach this level during Thursday.
RoboForex Analytical Department
Article By RoboForex.com
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
A Forewarning? Gasoline Prices Crash in Tiny Illinois Town
Last weekend, motorists in Illinois got the bargain of a lifetime when a computer glitch caused an impromptu sale on unleaded plus fuel for one penny per gallon.
Instead of paying about $40 to fill up a 12-gallon tank, they only had to fork over $0.13.
Naturally, word spread quickly. Cars piled up. And somebody called the cops to shut it all down (party poopers).
While this situation was an anomaly, the mad dash for cheap gas points to a broader issue facing consumers – and investors…
Lost in the Shuffle
In the midst of an emerging markets selloff, high-profile social media earnings reports and activist squabbles with Apple (AAPL), no one seems to be paying attention to the steady climb in oil prices.
They’re back above $100 per barrel again.
As we all know, where oil prices go, gasoline prices follow. And sure enough, since early November 2013, the national average price of gasoline has been creeping higher, too.
While the current price per gallon is still about 10% below last year’s levels, cash-strapped consumers can ill afford any more increases.
Want irrefutable proof? Look no further than the latest comments from Family Dollar Stores, Inc. (FDO).
The discount retailer concedes that even its bargain-priced goods are too expensive for low-income shoppers, which make up more than 50% of its customer base.
When the cheap stores aren’t, well… cheap anymore, we’ve got a problem.
The prospect of higher prices at the pump isn’t the only factor that promises to weigh on consumer spending in the months ahead, however…
A Perfect Storm of Negative Influences
For nearly two months now, we’ve been dealing with bone-chilling temperatures. Even typically warmer locales can’t escape the polar vortex.
For example, Reliant Energy, which supplies power to 1.5 million people in Dallas and Houston, says its customers have been forced to turn up the heat 40% to 50% more than last winter.
All told, the Energy Information Administration estimates that average heating bills will climb 17% to 23.5% this winter.
In turn, industry experts estimate that the rising costs will put a 6% drag on consumer spending.
I’m convinced those calculations are actually too conservative.
Either way, we’re talking about soaring utility bills adding to the burden on consumers.
But that’s not all…
The Number One Culprit
Get ready to blame the weather again for increased costs.
You see, once Old Man Winter goes away, we’re in for a hot and dry third quarter, according to Weather Trends International (WTI).
In case you didn’t know, California is experiencing a nasty drought right now. So more dry weather promises to exacerbate the situation.
The end result? “Limited water supplies for the start of growing season will likely limit crop production and therefore drive up prices for key food commodities,” according to WTI’s analysts.
Bottom line: Consumers are facing a triple whammy of cost increases for gasoline, heating bills and food.
That bodes terribly for consumer discretionary companies, especially those focused on low-income households and customers with fixed budgets – like Family Dollar, Dollar Tree, Inc. (DLTR), or even Wal-Mart (WMT).
Ahead of the tape,
Louis Basenese
The post A Forewarning? Gasoline Prices Crash in Tiny Illinois Town appeared first on Wall Street Daily.
Article By WallStreetDaily.com
Original Article: A Forewarning? Gasoline Prices Crash in Tiny Illinois Town
Ichimoku Cloud Analysis 13.02.2014 (GBP/USD, GOLD)
Article By RoboForex.com
Analysis for February 13th, 2014
GBP USD, “Great Britain Pound vs US Dollar”
GBP USD, Time Frame H4. Tenkan-Sen and Kijun-Sen formed “Golden Cross” (1) below Kumo Cloud; all lines are directed upwards. Ichimoku Cloud is going up (2), Chinkou Lagging Span is far above the chart. Short‑term forecast: we can expect support growth of the price.
GBP USD, Time Frame H1. Tenkan-Sen and Kijun-Sen intersected again above Kumo Cloud and formed “Golden Cross” (1). Ichimoku Cloud is going up (2), Chinkou Lagging Span is above the chart. Short‑term forecast: we can expect support from Tenkan-Sen, and growth of the price.
XAU USD, “Gold vs US Dollar”
XAU USD, Time Frame H4. Tenkan-Sen and Kijun-Sen formed “Golden Cross” (1). Ichimoku Cloud is going up (2); price is on Tenkan-Sen. Short-term forecast: we can expect support from Tenkan-Sen, and growth of the price.
XAU USD, Time Frame H1. Tenkan-Sen and Kijun-Sen are influenced by “Golden Cross” (1). Ichimoku Cloud is going up (2), Chinkou Lagging Span is below the chart, and the price is below Tenkan-Sen – Kijun-Sen, above Kumo Cloud. Short‑term forecast: we can expect support from Senkou Span A, and growth of the price.
RoboForex Analytical Department
Article By RoboForex.com
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
