Month: April 2014

Article By RoboForex.com

Analysis for April 15^th, 2014

EUR USD, “Euro vs US Dollar”

After rebounding from the group of upper fibo levels, Eurodollar started new descending movement. Market hasn’t been able to eliminate Monday’s gap. Price may continue moving downwards during the day.

As we can see at H1 chart, closest target for bears is at local level of 61.8%. If pair breaks this level downwards, price will continue moving downwards.

USD CHF, “US Dollar vs Swiss Franc”

After rebounding from the group of lower fibo levels, market started moving upwards. Stop on my buy order is already in the black. After completing local correction, pair is expected to continue growing up.

As we can see at H1 chart, price broke local level of 38.2% and may try to test level of 50% during the day. If bulls are able to break it, their next target will be at level of 61.8%.

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.

By WallStreetDaily.com

MIT Technology Review just published its list of the world’s “50 Smartest Companies.”

The list is strictly a reflection of the companies having the biggest market impact through the sheer force of genuine innovation alone.

MIT’s list wasn’t concerned with which companies are 1) growing the fastest, 2) have the highest sales, or 3) tout the best stock performance. The list is solely concerned with which companies are the “smartest.”

And while I never agree with all 50, it’s always an enlightening article, as you can imagine.

But what’s even more interesting is the storyline BEHIND the list…

You see, as part of the economic recovery, there’s a secret revival afoot. One that other analysts and the press aren’t shrewd enough to realize is happening.

An “Accidental” Revelation…

To begin my yearly analysis of MIT’s list, the first thing I did was classify the companies by sector and industry.

No sweat, right?

Well, what I wasn’t expecting to find was the following…

Of the “50 Smartest Companies” in the world, 27 of them could easily be considered manufacturers.

As for the remaining companies on the list? They’re ALL making significant technological breakthroughs to reduce the cost to manufacture goods in the United States.

Do you realize what this means?

Manufacturing is making a big comeback!

I honestly can’t think of any better news to report on an otherwise ho-hum Tuesday.

This secret manufacturing revival bodes extremely well for both America’s economic future and stocks.

Manufacturing is essential for many reasons. According to the U.S. International Trade Commission and the Department of Commerce, manufactured products account for over 80% of the country’s exports.

Likewise, the presence of manufacturing facilities has a tremendous trickledown effect as a jobs multiplier. It’s estimated that there are four to five new jobs created for every ONE manufacturing job.

The emergence of cheap natural gas is factoring into the secret revival, as well.

All new U.S. manufacturing plants are being outfitted to benefit from the low cost of gas, which I expect to lead to the construction of even more plants.

I’m telling you, this is really exciting!

Still don’t believe me?

Well, the top three companies on MIT’s list give us all the proof we need.

World’s Smartest Company #1: Illumina, Inc. (ILMN)

San Diego-based Illumina is the market leader for analyzing DNA. Specifically, it develops, manufactures and markets integrated systems for large-scale genetics analysis.

Through innovation and strategic acquisitions, the company has vastly reduced the time it takes to crack a living tissue’s genetic code. It’s also ingeniously shrunk the costs involved, too.

Illumina is a profitable company with revenue of $387 million. While the current P/E is a bit high at 69, the market is so immense that I expect earnings to increase even further.

Buy on any dips.

World’s Smartest Company #2: Tesla (TSLA)

Backed by pure innovation, Tesla has overcome a ton of obstacles in order to design, construct and manufacture high-quality, battery-operated automobiles.

Since the metrics say that demand is ramping up, I flew to California to verify it myself. (Spreadsheets will never tell you everything.)

Sure enough, I noticed a fair number of Teslas on the road. More importantly, though, shopping malls with parking spaces equipped with free charging stations are popping up everywhere.

Still, though… in order to sell more cars, Tesla must get its sticker price down to the $30,000 range. Management has a plan to do it, too. But can it execute?

The plan calls for construction of a new Tesla manufacturing facility to produce the all-important battery system for the car. While I’m not convinced this alone makes the stock a “Buy,” I love that it will add 400 to 500 jobs to the economy.

World’s Smartest Company #3: Google (GOOG)

Google keeps pushing to increase revenue beyond the internet’s borders.

Even though it hasn’t been successful yet, the creation of Google Glass and the recent acquisition of Nest Products could change all of that.

I was lucky enough to get my hands on a developmental version of Google Glass, and I’ll concede that it’s really cool.

But under the old adage that “pioneers get slaughtered and settlers prosper,” these glasses aren’t ready to change the world anytime soon. And Google likely won’t be the company to ultimately win this niche of the market.

What about Google’s addition of Nest’s wireless smoke detectors and thermostats?

Well, they’re almost as cool as the glasses. (Even I plan to have them installed in my home. I mean, who doesn’t want to adjust the room temperature from a smartphone, right?)

But Nest’s boost to Google’s revenue is way too small to impact shares of such a behemoth company.

But no worries… in tomorrow’s issue, I’ll reveal my favorite company on MIT’s list of 50. Every portfolio should have at least a few shares! Until then!

Onward and upward,

Robert Williams
Founder, Wall Street Daily

The post MIT “Accidently” Reveals An Enormous American Secret appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: MIT “Accidently” Reveals An Enormous American Secret

Article by Investazor.com

The EURUSD doesn’t stop to amaze me. The quotation touched 1.3900 before the Friday close. During the past weekend Draghi had a speech in which he mentioned the possibility of quantitative easing because the Euro is pretty high and it will hurt EU’s economy. Exactly what we were talking in our last EURUSD Forecast and Price Action analysis.

The currency pair opened this week with a negative gap which is not yet closed. Yesterday EU posted a lower than expected Industrial Production (0.2%), while US surprised with Core Retail and Retail Sales above estimates. Business Inventories for the United States were a bit lower, but insignificant for the US dollar rally. The price targeted 1.3800 and everything was in its favor.

See our last analysis for this currency pair: EUR/USD Forecast And Price Action For April 10^th;

Today the price continued to drop under yesterday’s low and reached 1.3800 before the most important releases of the day. Continue reading this article to see which are the relevant economic indicators for today and what is the price action analysis suggesting.

The following are expected today:

EU – German ZEW Economic Sentiment (10:00 GMT). Scheduled to be released in several minutes, the ZEW economic sentiment for Germany is one of the most important leading indicators for the EU. In March it dropped under 46.6, not well at all considering its expectations of 52.8. Today it is expected even lower, at 46.3. In line with the forecast or lower would be very bad for the European single currency. A release above 50 would trigger a rally for the Euro.

EU – ZEW Economic Sentiment (10:00). This is the European indicator from ZEW. It is considered to be a medium impact release. Last month it was published below expectations but well above the 50 level. For April it is expected to be 60.7.

US – Core CPI (13:30). As we know inflation is very important for the economy, especially in this period. US’ Core CPI is expected to be again 0.1%. A positive surprise would trigger a rally for the US dollar, while a negative surprise or in line with its forecast would trigger a 10 to 20 pips in favor for the EU.

US – Fed Chair Yellen Speaks (13:45). The Federal Reserve Chairman Janet Yellen is expected to deliver opening remarks at the Federal Reserve Bank of Atlanta’s Financial Markets Conference in Stone Mountain, via satellite.

US – TIC Long-Term Purchases (14:00). For this month the TIC is expected to be around 31.6B after it was published 7.3B last month. If the difference will be this big the dollar could be bought even more. Even if it is a medium impact indicator I would still keep an eye on its release.

These are the most important releases for today. I am very curious about the ZEW publications. If it will come as a positive surprise then we might see a bounce from 1.3800 back to 1.3825/30. If it will be released bellow expectation I would see a continuation of the drop towards 1.3744 or lower.

EUR/USD Price Action

The price of the EURUSD opened with a negative gap this week and continued a down trend towards the 200 EMA. A break below this indicator would clearly be a negative signal. I am expecting though a short bounce from 1.3800 before continuing this trend.

The post EUR/USD Forecast And Price Action For April 15th appeared first on investazor.com.

By MoneyMorning.com.au

Over the past 80 years or so governments have been expected to provide more and more social services. That means bigger and bigger bills for the taxpayers of this generation and generations unborn. Since governments almost constantly run in the red, they often resemble cocaine addicts desperately looking for the next fix. The fix, in the case of governments, is the perpetual need for more money, no matter how much wealth the engine of a strong economy may be generating.

One of the delusions of any democratic government is the “other guy will pay” syndrome. Usually, in mature welfare state democracies lawmakers look toward election cycles and understand that there is never enough money to back their promises. So they pass the bill problems to the future by money printing and issuing bonds that won’t come due until after their elections have been won.

However, in most democracies, to quote former pro football coach George Allen, “the future is now.” Tens of millions of people in the United States, Europe, and Japan are retiring now after a lifetime of paying taxes into flawed government retirement funds. Democracies are facing problems keeping all the promises of former pols, most of whom now enjoy fat government pensions while the taxpayers struggle to pay the bills they left behind. So paying the bills is a perpetual problem for pols facing the next election.

For example, in the United States Social Security and Medicare “trust” funds surpluses have been arrogated over the years by both right- and left-wing governments. They used them to pay off political debts and make deficits seem smaller. However, President Bill Clinton implicitly conceded the scam. At the end of his presidency he was urging lawmakers “to save” Social Security. Why did it have to be saved? Where had years of high payroll taxes gone?

Luckily, for pols most voters don’t seem to understand that the overspending of the past now threatens their lifestyles and the value of their currencies. The scam goes on as governments look for new taxes to make good the promises of past governments. So today the latest fiscal gimmick is a rehash of an old scheme: “The rich will pay.”

The implication of this game is that the rest of us will enjoy a free, or low cost, ride, while a vast fortune of wealth goes into government coffers. Government services — everything from supposedly free medical services to free quality education to superb transportation services and on and on — will be provided at little or no cost because the rich — whoever they are — will pay.

Here in New York City, a new mayor with strong teacher union connections wants to extend pre-school public school programs by assessing a higher tax on those making $500,000 or more a year. At the national level, President Obama has stressed that those making $250,000 or more a year should pay higher taxes. The argument is also based on the idea that the government should step in and cure the problem of “income equality.”

Using this kind of thinking, one might bar certain teams from winning more championships (the New York Yankees, Real Madrid, the Green Bay Packers, the Boston Celtics) because they’ve won many more championships than most other teams so that’s unfair. The logic of the rich must pay pols is that league or the government must correct inequalities.

But inequalities among humans are many and are impossible to define since every individual is unique. Yet these kinds of policies not only don’t work, they hurt the US economy. They have been discussed and in some cases tried. In effect, they tell the successful: “You’re doing too well. We must do something about you.”

It reminds me of post-World-War-II tax policy. That’s when progressive tax policy dominated the system before the Kennedy administration tax cuts of the early 1960s. In the United States in the 1940s and 1950s, we actually had marginal tax rates of 94%. Think of that. If you reached a certain point and you were only able to keep six cents of every additional dollar you made. Why would you make that extra dollar? This is what happened in the 1940s and 1950s. High-income people would stop working late in the year when they were coming close to the 94%.

How did that help anyone?

Obviously, it hurt the US economy as talented people, in a modified Atlas Shrugged scenario, withdrew for part of the year. What about the rich? I want the same of them that I want of everyone else. I want them to continue to spend and invest as much as they want without worrying about what J.S. Mill called “a success tax.” Whether they consume or help build production by starting businesses that generates the “jobs” that our pols are perpetually baying for during these days of high unemployment and weak job growth.

But what about the rest of us — those making $250,000 or less? I doubt that raising taxes on the rich, who make up a small percentage of society, will make much of a difference. Consider many Western governments are running deficits in the hundreds of billions of dollars each year. The whole concept of soak the rich is silly and counterproductive. First, let us consider the people who already have wealth. If governments keep raising taxes when they reach a certain level these people can stop working just before the penalty rate is triggered. Unlike the rest of us, the rich don’t have to work for taxable wages. They already have substantial wealth.

And for the rest of us, middle and low income, does anyone actually think that, once the government collects still more higher taxes on the big earners that the new money will go to our central governments and they will give all the rest of us a break on taxes?

You can stop laughing now.

The counterargument to the rich-will-pay syndrome is thus: First, even the highest marginal tax rates on the rich will never generate the amount of money the government expects. As taxes go up people don’t work as hard, or in the case of people with modest incomes, they will work under the table. That’s a tremendous problem in a high tax nation such as Spain. Second, the history of so many central government programs is that, even when they generate a lot in taxes, tremendous amounts of the proceeds are eaten up in administrative costs.

Bureaucracies at the highest levels of governments are damn expensive to maintain. That is true whether one is speaking of aircraft carriers or Social Security. Indeed, in the case of the latter, I once heard an economist, Jeffrey Burnham, say at a conference that whenever Social Security has had a big surplus, governments have helped themselves to it. Here’s another example of the you-send-it-and-we’ll-spend-it-and-then-some philosophy that dominates democratic governments. In the 1980s in the United States there was a demand that toxic waste dumps be cleaned. The government, through its taxing power, raised hundreds of billions of dollars. What happened to the dump sites? Few of them were cleaned up.

What happened?

Most of the money was spent in administrative costs. The government shouldn’t raise taxes on the rich, or the rest of us. It should cut taxes by closing down whole departments of government and selling government assets. Let people, all people, take home more of their hard-earned money. With Social Security and other government welfare programs facing incredible funding gaps, it is more important than ever that people have private savings and investments. I mean assets under their control, not dependent on a government program that can change the payment levels with the stroke of a pol’s pen.

Let people not depend on the other guy, or of vote-hungry pols, to pay their bills. Let people build their own assets and take control of their lives through a remarkable system — more private property.

Gregory Bresiger
Contributing Editor, Money Morning

Ed. note: This article was originally published in Laissez Faire.

From the Archives…

Why I Never Bought David Jones On The Australian Share Market
12-04-14 – Shae Smith

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By MoneyMorning.com.au

By MoneyMorning.com.au

Since the NASDAQ fell 7.4% in three weeks, many headlines are suggesting this is the sign that tech stocks are in a bubble.

Time magazine declared ‘Every reason you should be worried about a destructive tech bubble.’

An expert talking to Bloomberg is convinced the technology sector is frothy, ‘Shiller: Looks and feels like a bubble in Tech.’

And Bloomberg Businessweek warns that it’s not time to party like its 1999, ‘Silicon Valley Hears Echoes of 1999.’

The thing is, the NASDAQ overall is down only 3.7% since the start of the year. However, compared to this time last year, it’s still up a massive 21.39%…

As Kris noted in his World War D speech two weeks ago, many contrarian investors are too busy looking for a bubble or market crash. Rather than focusing on good investing opportunities, they focus on trying to avoid a bubble.

This reluctance means they miss on investment ideas.

Kris called it paralysis by analysis.

Like it or not, a share’s price at any given time is what the market thinks its worth.

There’s no denying tech stocks are very hot right now. Even some of the two most recently cloud based stocks have seen their prices soften a little.

Take Amber Road [NYSE:AMBR] for example. Amber Road made its market debut at US$16.95, which was well above the IPO price of US$13. Yet, in three weeks, it dipped 15% to US$14.41.

Another recent had-to-have cloud company was Rubicon Project [NYSE:RUBI]. It’s initial price was quoted from US$15-$17. It commenced trading at US$21.02, only to fall 2% since then.

Initial trading may have seen some speculative investing in these companies, but this doesn’t mean there’s a bubble brewing in the NASDAQ.

No Tech Bubble Here

The NASDAQ isn’t in a bubble.

Let me explain.

It’s still trading 26% below its May 2000 peak of 5,408.

And unlike 1999 and 2000, there are fewer initial public offerings (IPOs). During this time, 794 tech stocks went public on either the NASDAQ or the New York Stock Exchange.

Compare that to 2012 and 2013. As the NASDAQ slowly marched towards 4,000 again (the first time in 14 years) only 86 tech firms listed.

And although I declared this year, ‘the year of the cloud’ for stock listings in the US, so far only 10 companies have begun trading this in 2014.

It may seem that the valuations of tech companies are out of hand. Adding to the perhaps irrational exuberance when it comes to buying of tech stocks. But that’s not the case either.

During 2012 and 2013, over US$30 billion was invested in new public companies. However, that’s nothing compared to the US$82 billion invested in 1999 and 2000.

This year, barely US$1.6 billion in tech stocks have listed.

In spite of this, over at Reuters, they reckon the sign of a bubble brewing is the imbalance of voting rights of shareholders.

‘The best description of the stock being harked in this way is “coattails equity”. It offers little beyond a chance to tag along with entrepreneurs from Wall Street, Silicon Valley and China. Buyers of shares in IPOs such as those of Box, Grubhub, Moelis & Co, Virtu Financial and Weibo – and probably the $100 billion-plus giant Alibaba – must give up the rights that have traditionally accompanied the ownership of common shares, like a representative voice in corporate decisions.’

What Reuters mean, is a dual class share system.

Now this isn’t actually uncommon. Many companies, especially tech ones have often favoured Class A and Class B shares to ensure control remains with the founders of a company.

However, the frequency which companies are choosing this option is changing. Rather than happening occasionally, most new tech firms listing are going with a dual class system. 

Take Box Inc’s recent filing to list. It’s offering two classes of shares, Class A and class B. In this case, Class A shareholders will get one vote per share, and Class B shareholders will get 10 votes per share.

Google is the same. The Class B shares have ten times the voting rights of Class A shareholders.

Recently, Google [NASDAQ:GOOGL] they spilt the stock and created another non-voting Class C stock [NASDAQ: GOOG].

The short of it is, this spilt was all about giving the Google founders, Sergey Brin and Larry Page a greater portion of control over its company.

Facebook [NASDAQ:FB] did the same thing with its IPO.  The class system was skewed in Mark Zuckerberg’s favour.

It appears that the founders of the companies want to tap the market for funds, without handing over control. This isn’t a bad thing though.

When you buy tech stocks, a lot of the time you’re buying into the founder’s idea.

Becoming a shareholder means in one way, you support the founder, creator or investor of the technology. In addition, it means that you believe in their dream to take the company one step further with the technology or the product.

Reuters may think this further sign of a bubble. I disagree.

It’s more a case of company founders keeping control of their project.

After all, if you don’t like the direction a firm is taking, you can always sell your stake in it.

Shae Smith+

PS. If you haven’t seen technology analyst Sam Volkering’s latest report, I recommend you watch it here. In it, he explains why he believes the tech sector is the best place to invest your money today, and reveals a little about the four companies he’s backing for big gains over the next three years. Click here to watch it now.

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By MoneyMorning.com.au

Source: JT Long of The Gold Report (4/14/14)

An overinflated equities market could be good news for metals and mining stocks. In this interview with The Gold Report, Morning Notes Publisher Michael Berry shares two scenarios that could follow an imminent crash and four gold companies that could be perfectly positioned to take advantage of a reset credit market.

The Gold Report: Mike, you’ve been watching the stock market and, by extension, the precious metals markets very closely for signs of a larger equity market blow-off that could send gold higher. What makes you think the Dow Jones Industrial Average and the NASDAQ are in a bubble? What are the signs that a crash might be imminent?

Michael Berry: I have been watching bubbles since 1987. In September of that year I correctly predicted the 25% crash of October 19. We have been blowing through mini and maxi bubbles for 30 years; this one is nothing new.

The solution to our macroeconomic issues has been to inflate new bubbles, to inflate asset values to soften the blow from the last bubble, all the while creating the conditions for the next one. That is how we ended up with the current equity market bubble. It is driven solely by the Federal Reserve’s liquidity. Always remember that liquidity begets liquidity. I also see a debt market that I consider to be a bubble. These markets are just not sustainable. I can’t say when, but we have an equity market decline coming, maybe a severe decline.

TGR: The housing bubble and the tech bubble were, by definition, confined to certain niches initially and then the impact reverberated to other sectors. Are you predicting a market-wide crash where everything falls or will it be confined to certain sectors?

MB: The correction will impact everything. As of April 8 I’m measuring the Dow technically, fundamentally and behaviorally, and I see a clear top by all three measurements. The top is not quite as clear for the Standard & Poor’s 500, but it’s certainly there. A major event could cause this bubble to burst and the markets turn down. I think it’s imminent, probably this year. With the Federal Reserve pulling back on its quantitative easing, I can’t see the equity market being able to sustain itself.

TGR: Are there any specific indicators that might tell when a crash is about to happen or will we only know after it happens?

MB: The money multiplier, M1, which is a measure of how well the banking system is working, is at its lowest level ever—0.69, according to the St. Louis Federal Reserve. (It usually has been above 1.0). It has continued to decline for the last five and a half years. That is the sign of a disabled banking system, a coming bear market and a severe recession or worse. There’s no doubt about that. The velocity of money has been in a decline for quite some time. These indicators mean our banking system is not working properly. These conditions were last this serious during the Great Depression. Even Milton Freidman acknowledged this when he suggested the Fed’s problem will be dealing with its own drastically expanded portfolio. Freidman claimed that the Great Depression was the result of a falling multiplier and the failure to increase the money supply. That has not been the case this time but we are still in serious trouble.

Europeans are now concerned about deflation, the slowing of the economy and the falling of prices. The “D” word is actually spoken. The International Monetary Fund is particularly concerned. We’ve certainly seen falling prices in the metals markets over the last year and a half. China’s tightening and slowing along with the U.S. tapering its quantitative easing mean the economic winds are in our face, not at our back. Those are the things I am concerned about.

TGR: So when this bubble does burst, how might the different metals—gold, silver, copper—respond differently to a market crisis?

MB: That is a good question. The answer is it depends. If we don’t fix the broken credit cycle and deal with exploding government debt, we will probably begin to see disinflation and deflation. Then prices will fall. Gold, copper, silver, tin, lead and zinc will decline, but probably less than the valuations in the macroeconomic economy. That will be the time to buy metals because we will recover once we see a new credit cycle. However, it could be a three- to five-year hiatus. The Fed and others will have to deleverage. Only then will the economy be able to recover and break out of it torpor. We’ll see a new bull market in the commodities then.

On the other hand, if we were to inflate out of the crisis, which the Fed would prefer, we will see gold achieve very high prices. I wish I could give you a very clear answer. Personally I think deflation is much more likely.

TGR: If we experience inflation, and the gold price goes up, will the equity prices follow?

MB: Absolutely. When we have inflation—and we will as soon as a new credit cycle is in place—then we are going to see gold miners take off. A lot of them are really struggling—Barrick Gold Corp. (ABX:TSX; ABX:NYSE), Newmont Mining Corp. (NEM:NYSE), Goldcorp Inc. (G:TSX; GG:NYSE) are all down 50%. They are reacting to a lower gold price. We will see Goldcorp back up to $50/share, but right now there isn’t a bottom on the price of these stocks because if gold goes much below $1,250 an ounce ($1,250/oz), then the cost of producing gold is going to be a problem for the big gold producers. These stocks have been punished and are close to their bottoms now. People interested in precious metals and who are patient ought to be buying these on any declines in their current share prices.

TGR: Are some mining stocks going to come back faster than others?

MB: Yes. A lot of the big-cap miners are highly leveraged with debt. They need to deleverage, and that’s difficult to do in this environment. I look at a company like Goldcorp and I think it will recover much faster. Its balance sheet looks pretty good. It has a good set of assets. So I think investors want to be buying the big stocks that are not highly leveraged, and Goldcorp is certainly one of them.

The midtier producers have a real problem because they’re really not big enough to go to the next level in this kind of a capital market environment. We are going to see that quite a few of them will be taken out. Goldcorp made a bid and just upped its bid for Osisko Mining Corp. (OSK:TSX). We may see more of that.

The juniors and explorers have been decimated. It’s a bloodbath. There’s no other word for it right now. These stocks are trading anywhere from $0.07 to $0.40/share. They are worth a lot more, but not in this environment. I have a number that I follow that have good management and good assets, and the ability to sustain themselves over the next year or two until we see a recovery. Sustainability will be very important.

I like Pershing Gold Corp. (PGLC:OTCBB), especially its management. Steve Alfers is CEO and running Pershing. It is a derisked near-term production story. It has about 552,000 oz gold Measured and Indicated and 165 oz gold Inferred, and is building a very nice gold resource.

I like NuLegacy Gold Corporation (NUG:TSX.V; NULGF:OTCPK). Barrick is its partner in the Cortez Trend. It has done a couple of recent financings, which is a significant feat. NuLegacy is going to be drilling based on a fully funded exploration program. I think it has a real chance.

I like Terraco Gold Corp. (TEN:TSX.V). I like its proximity to Midway Gold Corp.’s (MDW:TSX.V; MDW:NYSE.MKT) Spring Valley project and, of course, the Barrick interest in Spring Valley helps. Barrick has invested $53 million ($53M) into Spring Valley.

TGR: Do each of these companies have the capital to stay in business until the price of gold goes up?

MB: I have a 10-point Discovery grid. The factor the market is valuing most right now is sustainability. The No. 2 factor is the quality of the asset and No. 3 is the strength of management.

Pershing scores well on all three. I like its shareholder base. Dr. Phil Frost is a big shareholder in the company. The management team will have access to capital. I also like the asset. The Relief Canyon mine property already has three open pits on the property and a finished processing facility. It has a good chance of being successful.

Over at Terraco Gold, I really like CEO Todd Hilditch’s view of the world. He saw this mining economy coming a long time ago. He acquired the royalties on Spring Valley, where Barrick has put more than $50M into development while showing significant gold reserves. That makes the royalty worth a lot more because I think Barrick, which has now earned in, will develop Spring Valley. So by waiting and focusing on the royalty play, Terraco management has been very shrewd.

Nulegacy is on the Cortez Trend. I like it because Roger Steininger is the COO, and he’s done a great job of exploration. He’s a brilliant guy. Barrick is the partner there and will probably take NuLegacy out eventually for a nice payoff.

TGR: Any other companies you think could benefit when precious metals prices take off?

MB: The final one I want to mention is U.S. Precious Metals Inc. (USPR:OTC). Nobody knows about it. I just visited its property in the state of Michoacán, Mexico, which is on the Pacific Coast roughly parallel to Mexico City. It has a 37,000-acre property. I actually call it my “pregnant virgin” because the gold and copper systems are visible, but it has never been properly explored. The Spanish were there in the 1500s and 1600s and there were adits from the Spanish but no real production records. You can pick up copper float on the ground so it is definitely pregnant. It is a huge mineralized system. We just don’t know how big it is yet. It’s a $0.12 stock. I don’t own it yet, but I will probably take a position in it at some point.

What’s really interesting about U.S. Precious Metals is that the management is using satellite-generated, ground-penetrating radar to identify the mineral composition of the anomalies. It also will be using a thermal process based on plasma torch for extracting the ore—eventually.

TGR: Tell us about the processing. How will this new technology make the project more profitable?

MB: Just as hydraulic fracturing revolutionized the oil industry and may make us energy independent in the next 30 years, I think plasma arc processing, developed here in New Jersey at Princeton University by Dr. Edgar Choueiri, could revolutionize mining. Plasma arc will be used to propel satellites. It’s the fourth state of matter, a state of ionized gas. This process increases the recovery of the ore significantly and with much less environmental impact. This is the most efficient way to separate minerals from waste. It could well be transformational for the mining industry. My understanding is that at present there is a pilot plant in operation at 29 Palms in California.

TGR: The other three companies that you mentioned were all in Nevada, a fairly safe jurisdiction. What are the risks of being in this part of Mexico?

MB: Whenever you talk about mining in Mexico, you worry about illegal activities. U.S. Precious Metals has decided put together a security force mainly because there’s a lot of gold that can just be panned from the dry riverbeds on this property in the Tierra Caliente region. So management has decided to provide its own security. But U.S. Precious Metals and its associates are very close to the Mexican government, so I believe the risks are minimized. When I visited the property I saw a road being built to the property by the Mexican government.

Mexico is still a country that has to be mined in spite of the new 7.5% tax. A lot of good players are there: Coeur Mining Inc. (CDM:TSX; CDE:NYSE), Hecla Mining Co. (HL:NYSE), Endeavour Silver Corp. (EDR:TSX; EXK:NYSE; EJD:FSE). U.S. Precious Metals is likely to become a big copper-gold play with a silver byproduct. I think management has really done a good job of minimizing the risk with respect to the cartels and the exploration risk.

TGR: Is this a long-term investment? When might the thesis for the processing and the thesis for the asset be proven?

MB: The plasma arc technology is proven. U.S. Precious Metals is the first to license it for processing the ore. The company is not yet in mining operations. Its property contains 37,000 acres in one land position and only several hundred acres have been explored.

So it is early days at U.S.Precious Metals, but a good investment for those people who like early exploration plays on potentially world class assets. Let’s face it, you do not find properties like this easily.

TGR: The silver market is more volatile than gold. What companies are worth looking at in that space?

MB: I love silver. I’m on the board of a couple of companies that have big silver plays. But the silver market is volatile; it’s a much smaller market and an industrial, as well as a precious metals, market. Gold is down 27%, but silver is down almost 45% from its October 2012 top. We produce about 800 million ounces (800 Moz)/year silver globally, and we basically use it all for everything from electronics to medical technology. The price can’t stay at $20/oz for very long because new silver mines are going to be required. Tahoe Resources Inc. (THO:TSX; TAHO:NYSE) has a new mine down in Guatemala, which I think will be a very good producer. But you don’t find new silver mines every day. So I’m very bullish on silver.

Right now, I think you have to look at Coeur and Hecla as two companies that are self-sustainable, generating cash, and are going to be around. I should point out Goldcorp itself produces a lot of silver from Peñasquito. So, it, too, has a significant upside as silver goes from its current $20/oz level to where it should be, $50/oz, which would not surprise me in 2014 or 2015.

Then there are companies that are midtier, and I think they are probably takeout candidates eventually. First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE) would be one. It produced 11 Moz silver last year. It has five mines, and is an $11 stock. It will likely produce 12 Moz this year.

Then there is Endeavour Silver. It produced about 6.8 Moz silver last year, and it has three operating mines.

Silver investors must be believers today. They must live with the volatility of the market and believe the price of silver will appreciate eventually. If you believe in silver and you believe in the ultimate limited supply/excess demand dynamic, then I think you ought to own a portfolio of these companies, put them away and let silver do its thing, because it will over time.

TGR: Would that same advice go for the other metals?

MB: Not exactly. Copper is a totally different market. I like copper a lot. I’m on the board of a company that has a big copper play. It is becoming increasingly difficult for companies to bring big mines on line. The Indonesians have done some things that hurt both Newmont and Freeport-McMoRan Copper & Gold Inc. (FCX:NYSE) by disallowing them to ship ore overseas. Freeport actually declared force majeure in Indonesia. The Chileans and other South Americans have had some problems. There are problems in Mongolia with BHP Billiton Ltd.’s (BHP:NYSE; BHPLF:OTCPK) big copper facility there. That makes North American copper plays in Arizona, Nevada, Canada and, to a lesser degree, Mexico, a great place to be right now. Copper could go below $3/pound, but with the rest of the world growing a new middle class of consumers, we’re going to need more copper and that means more copper mines. It takes a long time to bring a copper mine into production, so I think copper is also very cheap today and should be considered selectively.

TGR: So these are long-term investments?

MB: Certainly. We are seeing a lot of private equity players now that are picking up properties for cents on the dollar. The private equity players can afford to sit with a property for two or three years until the commodity prices improve. Most junior mining management teams cannot do the same thing. Juniors are going to have to be able to survive over the next couple of years, so look for companies that can conserve resources. Some developers have stopped drilling. A few marginal producers have stopped producing. Everyone is, or should be, reining in costs, cutting costs. The Vancouver model of financing is broken right now. The capital market is telling us that nobody cares. If nobody cares, then it’s time to tread carefully in the exploration space.

TGR: Thank you for your insights.

Michael Berry served as a professor of investments at the Colgate Darden Graduate School of Business Administration at the University of Virginia from 1982 to 1990, during which time he published a book, Managing Investments: A Case Approach. He was the Wheat First Professor of Investments at James Madison University. He has managed small- and mid-cap value portfolios for Heartland Advisors and Kemper Scudder. His publication, Morning Notes, analyzes emerging geopolitical, technological and economic trends. He travels the world with his son, Chris, looking for discovery opportunities for his readers.

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DISCLOSURE:

1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Pershing Gold Corp., Terraco Gold Corp., NuLegacy Gold Corporation and Tahoe Resources Inc. Goldcorp Inc. is not affiliated with Streetwise Reports. Streetwise Reports does not accept stock in exchange for its services.

3) Michael Berry: I own, or my family owns, shares of the following companies mentioned in this interview: Pershing Gold Corp., Terraco Gold Corp. and Goldcorp Inc. 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: Terraco Gold Corp. 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.

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By CentralBankNews.info
    Ukraine’s central bank raised its benchmark discount rate by 300 basis points to 9.5 percent to increase the attractiveness of the hryvnia currency and curb inflationary pressures amid a deterioration of economic confidence due to growing unrest in eastern Ukraine.
    The National Bank of Ukraine (NBU), which cut its discount rate by 100 basis points in 2013, also said it would double the overnight loan rate to 14.5 percent from 7.5 percent to help ease tensions in the money market and support liquidity.
    “In order to curb inflation and balance the situation in the money market, the NBU board deems it necessary to take steps towards increasing the intrinsic value of the national currency through the use of interest rate policy levers,” the central bank said.
    Ukraine’s headline inflation rate jumped to 3.4 percent in March from 1.2 percent in February. The central bank targets consumer price inflation of 4-6 percent this year and 3-5 percent in 2015.
    On Friday the hryvnia currency was down 32 percent against the euro since the start of the year and today it fell to 17.97 to the euro, down 8.1 percent on the day for a decline this year of 37 percent.

    The central bank said there were risks of higher inflation due to the lower exchange rate and the government’s plans for economic reform, and it would take other measures to increase the attractiveness of bank deposits.
    Elena Shcherbakov, director general of the central bank’s monetary policy department, was quoted as saying that “Ukraine has a rich experience of unusual situations in the money money market,” and the best course of action is to provide maximum liquidity support to banks so they can meet their obligations and increase the value of the currency to limit the speculative demand and help restore banks’ deposit base and thus ensure normal operation of the banking system and help maintain price stability.
    Ukraine’s banks have seen a steady stream of withdrawals since early February when political unrest first erupted in Kiev. The central bank has also seen its reserves drop as it has been intervening in foreign exchange markets to defend the currency’s decline.
    On February 7 the central bank introduced limits on foreign currency transactions but this only halted the decline in hryvnia temporarily.

    http://ift.tt/1iP0FNb

Bond yield Outlook from Jyske Bank with the Senior Strategist Ib Fredslund Madsen.

He explains the latest ups and downs on yields.

Winter has faded and that should also mean a strengthening of the economic data, especially in the US. Bond yields is also starting to see the thaw.

Jyske Bank’s main scenario is that short term interest rate increases should be moderate. Long term yields should rise.

Legal information

Video by en.jyskebank.tv

Article by Investazor.com

USDJPY had a downfall last week amid a selloff of the US dollar, pushing the quote again towards the 101.00 level. Even though the macro indicators from the Nippon economy were weak, the most important one, current account, managed to stabilize around a deficit of -0.04T which was the forecasted value, giving some force to the bullish investors. The event that basically led to the selloff of the US dollar and made the price to break the 103 support line was the BoJ Monetary Policy Statement and Press Conference.

Governor Kuroda left the monetary stimulus untouched and did not hint to any further additional one for the next period.  Also, last week we had some intensification of the US-Russia conflict that helped safe haven assets to soar, which of course benefited the Japanese yen. The week finished in a rosy tone for the US dollar and we will see in the following paragraphs if the USDJPY can stage a comeback next week.

Economic Calendar

Revised Industrial Production m/m (5:30 GMT)-Wednesday. This is the second version of the indicator and it has a low impact as the preliminary release is the earliest and thus tends to have the most impact on the markets. It measures the change in the total inflation-adjusted value of output produced by the manufacturers, mines and utilities. It is forecasted to have a fall of 2.3% for April.

BoJ Governor Kuroda Speaks (1:30 GMT)-Thursday.  He is due to speak at the Branch Managers Meeting in Tokyo. It is important to keep an eye on his speeches as volatility is often experienced during them as traders attempt to decipher interest rates clues.

Consumer Confidence (06:00 GMT)-Thursday. This indicator is an index based on surveyed households, excluding single-person homes. It is important to watch it as financial confidence is a leading indicator of consumer spending, which account for a majority of overall economic activity. This month it is expected to rise from 38.3 to 40.2

Tertiary Industry Activity m/m (0:50 GMT)-Friday. This one is a medium impact indicator and measures the change in the total value of services purchased by businesses. It is also a leading indicator of economic health. For April it is forecasted a reduction from 0.9% to 0.2%, so it will be interesting to follow its publication because it can create some volatility.

Technical View

USDJPY, Daily

Support: 101.25, 100.70, 100.00

Resistance: 102.15, 103.00, 104.00

The daily view of the USDJPY chart still paints a pretty undecided image. We can see up and downs for the last two months, but the ups are getting more powerful in intensity than the downs. Last week also finished in the uncertainty mode if we look at the daily candlestick, but was a victory for the US dollar as the quotation was rejected by the support line from 101.25. The MACD Histogram presents an increase in the power of bears while Friday the bulls won the battle. Hence, it is a sort of a disconnection here which could hint towards a continuation of the selloff. Let’s go now to the hourly chart to see what it tells us.

USDJPY, H1

Support: 101.25, 100.70

Resistance: 102.15, 103.00

On the H1 chart there is drawn a reversal price pattern called falling wedge. After the abrupt downfall from Tuesday, the price managed to stabilize and to form the pattern mentioned. The MACD Histogram is like the silence before storm, so you should pay attention if the price make a breakout above the superior line of the falling wedge and closes as well beyond 101.70, because this could mean that the price could retest the resistance line from 102.15.

Bullish or Bearish

Overall, there are big chances to see a bullish movement for the USDJPY next week and the price to move again above the 102.00 level as the US dollar was seriously hit last week and a retracement is very likely. On the other hand, we should not underestimate a potential re-escalation of the US-Russia conflict that could give strength to the Japanese yen and other safe haven assets, so a moderately bullish outlook is the best way to approach the markets next week.

The post USD/JPT Forecast For April 14 – 18 appeared first on investazor.com.

Article by Investazor.com

The retracement we were talking about last week did not seem to matter too much for the NZDUSD bulls as the quotation broke the resistance level from 0.8700 and flied to a new annual high of 0.8745. Well, the macroeconomic data had its part as the good numbers that came from the economy showed that the recovery is stable. The NZIER Business Confidence had the same value as last month, while the Business NZ Manufacturing Index increased from 56.5 to 58.4, REINZ HPI indicators soared to 3.4% from 2.1% last month.

Also, the New Zeeland dollar took advantage of an international selloff momentum of the US dollar after the macroeconomic data from the United States economy fall short of the analyst expectations and it seemed that maybe investors did hurry up with the possibility of hiking the interest rates earlier than it has been forecasted.

Economic Calendar

Due to the fact next week is poor in macroeconomic publication from New Zeeland, I will add the most important indicators from the United States that could have an impact on the NZDUSD quotation.

USD: Core Retail Sales m/m- (1:30 GMT)-Monday. It is the version of the indicator that measures the change in the total value of sales at the retail level, excluding automobiles. Automobile sales account for about 20% of Retail Sales but they tend to be very volatile and distort the underlying trend. For April it is forecasted an improvement from 0.3% to 0.5%.

USD: Core CPI m/m (1:30 GMT)-Tuesday. This indicator measures the change in the price of goods and services purchased by consumers, excluding food and energy, which are volatile. Even though is a high impact indicator, in the last five months did not create too much surprise, being constantly at 0.1%, the value which is forecasted for April as well.

NZD: CPI q/q (23:45 GMT)-Tuesday. This indicator is released quarterly and even though this is extremely late relative to inflation data from other countries, it is the primary gauge of consumer prices and tends to create hefty market impacts. For the first quarter of the year it is expected a rise from 0.1% to 0.5%, so it will create some serious volatility if there will be any surprises.

USD: Unemployment Claims (1:30 GMT)-Thursday. It measures the number of individuals who filed for unemployment insurance for the first time during the past week. It will be interesting to follow this indicator as last week we had the best reading since 2007.

Technical View

NZDUSD, Daily

Support: 0.8620, 0.8500

Resistance: 0.8740, 0.8850

On the daily chart there still can be drawn a rising wedge, a bearish pattern, but the outlook is far from bearish right now. The Friday candlestick has a large inferior shadow that suggests the buyers were in control. The same story tells the MACD Histogram, that shows us how the bears are losing their power and it approaches a crucial point that could give the bulls some strength.

NZDUSD, H1

Support: 0.8510, 0.8620

Resistance: 0.8740, 0.8800

On the hourly we can see how the quotation bounced between the support line from 0.8620 and the resistance line from 0.8740, leaving behind an undecided picture. The MACD histogram is decreasing, but the two moving averages seems to point towards another wave of buyers, so we can see a continuation of the ascending trend next week as well.

Bullish or Bearish

As a final conclusion, I think the US dollar was oversold last week and we could see a retracement and an appreciation of the green buck in the week to come. On the other hand, the strength NZDUSD showed recently makes me to see a moderately bullish perspective for the New Zeeland Dollar and we could see a week in which the quotation will close on green, but by a narrow margin.

The post NZD/USD Forecast For April 14 – 18 appeared first on investazor.com.