Month: January 2012

In trading on Tuesday, metals & mining shares were relative leaders, up on the day by about 2.6%. Leading the group were shares of Usec (USU), up about 13% and shares of Denison Mines (DNN) up about 12.4% on the day.

In trading on Tuesday, general contractors & builders shares were relative laggards, down on the day by about 1%. Helping drag down the group were shares of Standard Pacific (SPF), off about 2.4% and shares of Meritage Homes (MTH) down about 2.2% on the day.

Jan. 17 (Bloomberg) — Wang Tao, a Hong Kong-based economist for UBS AG, talks about the China economy and the nation’s central bank monetary policy. China’s economy expanded at the slowest pace in 10 quarters as export demand moderated and a prolonged campaign against consumer and property-price gains cooled growth. Wang speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

The Bank of Canada held its target for the overnight rate at 1.00%.  The Bank noted on the Canadian economy: “While the economy had more momentum than anticipated in the second half of 2011, the pace of growth going forward is expected to be more modest than previously envisaged, largely due to the external environment. Prolonged uncertainty about the global economic and financial environment is likely to dampen the rate of growth of business investment, albeit to a still-solid pace.  Net exports are expected to contribute little to growth, reflecting moderate foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.  In contrast, very favourable financing conditions are expected to buttress consumer spending and housing activity. Household expenditures are expected to remain high relative to GDP and the ratio of household debt to income is projected to rise further.”

Jan. 17 (Bloomberg) — Nobel Prize-winning economist Joseph Stiglitz talks about China’s economic growth and Europe’s sovereign debt crisis. He also discusses the U.S economy and the credibility of credit-rating agencies. He speaks in Hong Kong with John Dawson on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)

Source: ForexYard

A positive Chinese GDP report, combined with a better than expected German ZEW Economic Sentiment figure led to some investor risk taking throughout today’s trading. The euro received a significant boost against its safe-haven currency rivals as a result of the news. Against the US dollar, the euro rose as high as 1.2807 before retreating during the evening session. Still, the EUR/USD remains well above the 17-month low reached last week at 1.2624. The EUR/JPY, which recently hit an 11-year low, shot up well over 100 pips before hitting resistance during the afternoon session.

Analysts continue to warn that any gains the euro makes for the foreseeable future are likely to be short lived. The problems surrounding the euro-zone debt crisis are too big to ignore and are likely to grow unless significant action takes place in the near future. At the moment, investors remain concerned that Greece will have to default on its debt, while it is widely expected that the EU will cut interest rates in the near future. While positive global data is likely to boost riskier currencies like the euro in the short-term, they may not be able to help them stage a long-term recovery.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Investors will be ringing in the new holiday shortened trading week cautiously assessing the impact of the S&P European downgrades. Good morning and Happy New Year, this is Sayoko Murase with the Week Ahead Market Report for Tuesday January 17, 2012.

London Gold Market Report
from Adrian Ash
BullionVault
Tues 17 Jan., 08:45 EST

The WHOLESALE MARKET gold price reached new 5-week highs as Asian trade ended and London opened on Tuesday, while global stock markets and commodity prices also rose after stronger-than-expected growth data from China.

The world’s second-largest economy, China reported annual growth of 8.9% for the end of 2011 – the weakest level since mid-2009 but stronger than analysts forecast and almost 5 times the pace of US growth at last count.

The Shanghai Composite stock index jumped 4.2%. Copper led base metal prices by rising 2.6%.

Silver bullion re-touched last week’s 2-month high above $30.50 per ounce, despite news of a sharp hike in Indian import duty which also affects gold.

The gold price peaked on Tuesday mornng at $1667 per ounce, more than 9.4% above the 5-month low touched in late December.

US crude oil contracts jumped back to $100 per barrel after Saudi oil minister Ali al-Naimi said the Opec-cartel member is now targeting that level – “a new line in the sand” substantially above the previous “fair price” of $75 according to Standard Bank today.

“Gold price action is becoming increasingly indifferent to physical trade and far more susceptible to broader market headwinds,” says a note from Japanese conglomerate Mitsui’s London team today.

“Everything is rising because of China,” says one commodities analyst in Frankfurt to Bloomberg. “It’s general market sentiment.”

“Simply put,” reckons China economist Ting Lu at Bank of America/Merrill Lynch in Hong Kong, “Beijing will continue its policy easing which was started in mid-October, though we should not expect a big-bang stimulus.”

Beijing cut the required reserve ratio which banks must keep back from lending for the first time in three years last November, easing it back half-a-percentage point from a record 21.5%.

Analysts now expect a further two percentage-point cut in 2012, reports Reuters, “with many banking on one in the run-up to next week’s Lunar New Year holiday.”

“In terms of calendar year 2011, [gold demand from] India was ahead,” says Philip Newman, research director at Thomson Reuters GFMS, presenting the consultancy’s latest global data in London today but it does seem as though China, in terms of our data for the first half [of 2012], may just tip it.”

GFMS now forecasts a gold price peak of $2000 per ounce, sometime in 2012.

China’s domestic gold mining output – the world’s No.1, and currently subject to an export ban – rose sharply in December to end 2011 some 19% higher than 2010 at 731 tonnes, according to the National Bureau of Statistics today.

Across in India – the world’s hungriest gold consumer – the government today raised import duties on silver to 6% by value, and raised the duty on gold from 300 Rupees per 10 grams to a value tax of 2%.

That doubles the effective tax rate on gold, first deregulated as India moved away from a command economy in the early 1990s.

The gold price on the Multi Commodity Exchange (MCX) today rose almost 1% to INR27,760 per 10 grams, while shares in leading jewelry chains shed some 3%.

Over the last 12 months, the plunge in the Indian Rupee’s forex value has made the gold price rise over 10% higher than it otherwise would. Annual imports to India – which has no domestic gold mining output – declined by 9% from 2010’s record level, according to the Bombay Bullion Association.

Meantime in Europe on Tuesday, several governments including Greece and also the cross-border Stability Fund – downgraded from its “triple-A” credit rating on Monday by Standard & Poor’s – raised almost €11 billion in short-term bills, and at lower interest rates than last time of asking.

The Euro rallied 1.5¢ from last week’s 17-month low near $1.26.

The gold price rose faster, however, nudging cost of gold to Eurozone buyers above €1300 for only the second time since 8th December.

“Spot gold in Euros is about to touch the November peak at €1316.48 [per ounce],” reckons Axel Rudolph, technical analyst at Commerzbank.

“Should this level be surpassed a swift acceleration higher towards last year’s all-time high at €1359 should be seen.”

New data released Tuesday showed the pace of consumer-price inflation slowing last month across the European Union – the largest single export market for China.

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Can Intel Finally Penetrate This Elusive Market?

by Mike Kapsch, Investment U Research

Tuesday, January 17, 2012

For years now, ARM Holdings (Nasdaq: ARMH) has captured 100% of the smartphone and tablet semiconductor market.

But chip rival, Intel (NYSE: INTC) is on a mission to soon change that… At last week’s International Consumer Electronics Show, the company announced it had just finalized deals with Lenovo (OTC: LNVGY.PK), Motorola (NYSE: MMI) and China Unicom (NYSE: CHU) to begin providing processors for their mobile devices this year.

Intel also recently announced that it reached a deal with INSIDE Secure to license its near-field communications (NFC) technology. This is a strong signal that Intel is serious about moving into the mobile arena.

Neil Garner, CEO of NFC-technology firm Proxama, tells us that there are some interesting applications for NFC tech in PCs, such as being able to “share information with other NFC-devices by simply tapping them against a touch-point.”

That means instead of using cables to transfer any pictures, videos, or other data from a mobile device, you could simply tap it to your PC and everything you want would transfer.

But the main application for this technology appears to be for mobile wallets, such as Google’s (Nasdaq: GOOG) Wallet. Thus, Intel is most likely licensing this technology in order to compete in the mobile arena.

And for Intel, these deals couldn’t have come at a better time…

As The Guardian reports, “Many on Wall Street deem Intel at a crossroads, where it either has to carve out a share of the mobile market or risk becoming irrelevant in the long run as PC sales slow…”

Slowing PC Sales Threaten Intel’s Future Growth

According to market research firm IDC, 2011 was the second-worst year for U.S. PC sales in history. Gartner, another research company, expects this number to dip an additional 3.8% in 2012.

Intel relies heavily on PC sales to make money. Despite a bad year for the U.S. PC market, the tech firm still managed to grow its 2011 PC chip sales roughly 16%. It also earned a record high $54 billion in revenue for the year.

In fact, Intel’s shares climbed 17% as a result…

And although the company has been strong in enterprise IT, management knows Intel won’t be able to rely on just that and PC sales to grow its bottom line much longer…

Smartphones and Tablets Replacing PCs

Last year, for the first time ever, tablet and smartphone sales outpaced total PC sales. Smartphone sales were up an estimated 50% for the year. Tablets were up 207%.

Over the next 12 months, smartphone and tablet sales growth is set to slow… to 32% and 60% respectively. But revenue from these two devices alone are still expected to hit an astounding $1 trillion this year.

The bottom line is: Smartphones and tablets have put the future of the PC in jeopardy. That’s why Intel’s move into the mobile market can’t be overstated. It’s important to note that Intel hasn’t had much success in recent attempts to penetrate this market, but with some impressive products featuring its new chips set for release in 2012, it could finally make this jump.

Intel may find it slow going as it works to prove to investors it can adapt to a new tech landscape fueled by tablets and smartphones…

But with $15 billion sitting in its cash reserves and a mobile chip that already challenges ARM’s processors, Intel has plenty of capital and know-how to finally muscle its way into the soon-to-be $1 trillion smartphone and tablet market.

Good investing,

Mike Kapsch

Article by Investment U

“Powering” the Future of Transportation

by David Fessler, Investment U Senior Analyst
Tuesday, January 17, 2012: Issue #1688

If you poll 100 people and ask them, “What fuel did the first cars run on?” An overwhelming percentage of them would naturally pick gasoline.

But they’d be wrong.

Over 100 years ago, most cars ran on electricity. It’s a little-known fact. Alas, drivers quickly wanted more range than the electric vehicle (EV) batteries could deliver. Thomas Edison, actively involved in the nascent EV industry, began working on improved battery designs.

But out in Detroit, Michigan’s Henry Ford had other ideas.

In 1908, his Ford Motor Company drove the nail into the EV coffin, when it introduced the $250 Model T. All of a sudden, gasoline-powered cars were available to the masses. But the real killer was they could travel 10 times farther than their electric counterparts.

Ford ultimately sold over 15 million “Tin Lizzie’s,” as the car was colloquially known. At the time, that was more cars than all other manufacturers combined. And the world has been running on gasoline and diesel ever since.

But that simply can’t continue.

The Automotive Industry Comes Full Circle

Crude oil is a finite resource, and some industry experts believe we may have already reached the peak of world production. I’m not going to debate that here. Much sooner than anyone is anticipating, another means to power automobiles will have to be found.

The automotive industry is doing just that. It’s come full circle, and it’s reintroducing EVs.

Let’s face it, if you could buy a car that:

• Had no engine, gas tank, or tailpipe…

• Never had to visit a gas station…

• Cost the equivalent of $1.20 a gallon to fill the “tank”…

• Could go 100,000 miles between brake jobs…

• Never required an oil and filter change…

• Never needed a tune-up…

You’d buy one in a heartbeat, wouldn’t you? Of course you would. So would a lot of other Americans, Chinese, Indians and just about anyone else who’s experienced “pain at the pump.” Not to mention the endless auto repair bills and maintenance costs.

Well, you can purchase EVs today that meets those specs. So why aren’t people rushing out and buying them in droves?

Range Bound: The EV Show Stopper

There’s just one glaring problem: Most EVs travel 100 miles or less between charges. That’s fine for errand running, but forget long-distance commuting and weekend outings.

That’s the state of EVs today. It’s led to “range anxiety” among potential customers, who fear they might be left in the lurch somewhere without a really long extension cord. It’s the biggest stumbling block in the way of widespread adoption of electric vehicles.

I’ve decided to purchase a Nissan Leaf. Since I work mainly from home, most of my driving is local. Some days, I don’t drive at all. I’m not getting rid of my other vehicle, though. It’s a truck, and I’ll just use that for when I really need the utility of it.

But for millions of Americans, especially long-distance commuters, 100 miles on a charge just won’t cut it. A recent survey done by the U.S. Census Bureau estimates that of the 231 counties with populations greater than 250,000, the average commuter spends between 30 and 40 minutes driving each way to work.

Almost 6% of Americans who live near Baltimore and New York City spend 90 minutes or more getting to the office. EVs have been a non-starter for this group. But what if EVs could go 500 miles between charges?

Battery Technology Marches On

In a few years, if the research IBM (NYSE: IBM) has been conducting pans out, they’ll be doing just that. After three years of research, IBM’s developed what it thinks will make EV range anxiety evaporate: lithium-air batteries.

In theory, lithium-air batteries can store 1,000 times more energy than batteries made using current lithium-ion battery technology.

Checkout IBM’s diagram below, and you can get an idea as to how it works:

That three orders-of-magnitude jump in energy density could quintuple my LEAF’s range to 500 miles. Or if you’re lucky enough to have a Tesla Roadster, imagine being able to go 125 MPH for over 600 miles.

Now we’re talking. Who needs gasoline and gas stations when you’ve got that kind of range?

The reason these batteries aren’t in the LEAF I’m taking delivery of next month is that they’re chemically unstable. Right now, frequent charges destroy the battery in short order.

But IBM scientists believe they’ve found solutions that will fix both of those problems. They think they can have a working prototype by next year and commercial versions by 2020 or earlier.

Talk about a black-swan event. If IBM can pull this technology off, it could turn the automotive world upside down, and ultimately have gasoline and diesel vehicles headed the way of the Dodo bird.

And who wouldn’t enjoy the longer battery life in their cellphone and laptop computer, too?

Good investing,

David Fessler

Article by Investment U