Month: March 2012

This morning, Deutsche Bank downgraded shares of Buffalo Wild Wings (BWLD) from buy to hold citing valuation. The stock is approaching the firm’s $100 price target and has less upside for new investors.

"Gina Martin Adams, a strategist at Wells Fargo, likes to look at a copper in comparison to another commodity known to have its own economic gauge… oil."

For years copper has been touted as the gauge for the world’s economic health, with many experts referring to it as “Dr. Copper,” stating it has a Ph.D. in economics.

Copper is rather inexpensive, tremendously abundant and has numerous useful properties.

As an excellent conductor of heat or electricity, and corrosion resistant, it is used in various industrial applications.

Any emerging or expanding industrial economy relies on copper from plumbing to electrical wiring, to air conditioners and radiators.

And during periods of economic growth you normally see the rise of large construction and telecommunication projects, infrastructure updating, medical and energy expansion, and technological developments all that entail the use of copper.

As demand for the copper goes up, so does it’s price.

The idea is simple, by watching the price of copper and what the globe is doing with it, experts can gauge if the world economy and emerging industries are healthy and growing.

Does the Gauge Always Work?

To put it simple… no.

The “Dr. Copper” rule is not a bulletproof theory. Yes, there are many times in the past when copper prices grew along with improved economic health, but there have been several times when this was the opposite.

And while copper can still continue to be one of the most useful gauges for detecting economic health, Gina Martin Adams, a strategist at Wells Fargo, likes to look at a copper in comparison to another commodity known to have its own economic gauge… oil.

Adams compares the ratio between copper and crude-oil futures to the S&P 500 to gauge the health of the global economy; she calls it the copper-to-oil ratio.

She notes that when copper is accelerating faster than oil prices, stock tend to do particularly well. But at times when oil prices outpace copper prices, economic growth tends to fade.

And recently Adams has seen the latter case of oil gaining on copper.

You can see in the chart above that since this year’s peak on February 6, the ratio has started to fall.

So while many can use the “Dr. Copper” theory to tout that copper has risen 12.5% in 2012 and will continue to rally with the economy, we also can use the copper-to-oil ratio to get another perspective.

Oil is used to transport goods all over the globe, and when the price of oil starts to rise, so do the cost of goods, which has a negative effect on the economy.

Comparing two different commodities that give insight to the health of the global economy gives investors a more rounded picture.

While oil has only risen around 3.5% to date (less than copper) the oil-to-copper ratio is losing steam, signaling that the 2012 rally in U.S. stocks could start to fade.

Investor should keep an eye on both copper and oil prices.  If copper continues to outperform oil the rally could continue, but if oil start to catch up to or outpace copper we could be in store for a slow down.

Good Investing,

Ryan Fitzwater

Article by Investment U

Walgreen (WAG) posted earnings of $683 million, or seventy eight cents per diluted share. Compared with the prior year’s quarter, the mild cough/cold and flu season impacted net earnings per diluted share by three cents, while the effect of no longer being part of the Express Scripts (ESRX) pharmacy provider network as of Jan.

Ontario Finance Minister Dwight Duncan says he’s willing to take his budget to voters if the opposition fails to support it and forces an election.

Source: ForexYard

For the second consecutive business day, both Gold and Silver saw sharp gains, reducing the overall losses the two metals have experienced throughout March.

The key report that may have been responsible for the sharp gains in the bullion market was Fed Chairman Ben Bernanke’s Speech on the labour market. Currently Gold and Silver prices are trading up.

There are certain news events coming up today that could possibly have an effect on the bullion market:

U.S Consumer Confidence: According to the recent report, the consumer confidence index increased in February compared with January’s result. The current expectations are that this index could possibly change direction and decline in March despite the U.S. economy’s signs of progress. this report might affect the direction of the US dollar and perhaps the bullion market as a result.

Bernanke Speech: The Chairman of the Federal Reserve will give another speech this week. The speech is part of a four piece lecture. The speech will be referred to as “The Federal Reserve and the Financial Crisis” Part 3″.

To conclude, both Gold and Silver prices showed resistance in the last couple of trading days as the two metals rallied. The recent speech of Fed Chairman Ben Bernanke could linger in the markets and possibly continue having an impact on the bullion market.Due to the metal’s recent gains, we could see investors leaning towards the Gold and Silver market which as a result, would push the prices up.

Traders should keep a close eye on the U.S Consumer Confidence Report, as there is a possibility that it may have an affect on the Greenback, and put pressure on the two metals

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.

London Gold Market Report
from Ben Traynor
BullionVault
Monday 27 March 2012, 08:00 EDT

THE SPOT MARKET gold price traded just below $1700 an ounce for most of Tuesday morning in London – over 4% up on its low last week – before heading lower just ahead of the US markets open as the US Dollar regained some of the ground it lost on Monday following comments by Federal Reserve chairman Ben Bernanke.

The silver price rose to $33.25 per ounce – a 6.8% gain since its week’s low last Thursday – before it too eased.

The US Dollar Index, which measures the Dollar’s strength against other major currencies, hit its lowest level since the start of the month Tuesday. Longer-dated US Treasuries dipped, while European government bonds gained despite warnings that the sovereign debt crisis has not been resolved.

European stock market gains were relatively muted Tuesday morning, compared to those of the preceding Asian and US sessions, while commodities were broadly flat.

Yesterday saw the gold price move back above its 200-day moving average – which by PM London Fix prices stood at $1682 per ounce Monday afternoon in London – after Bernanke spoke of the need for “continued accommodative policies” and said that the labor market “remains far from normal” despite recent signs of improvement.

“Bernanke was back on solidly dovish ground again,” say Standard Bank currency analysts Steve Barrow and Jeremy Stevens.

“Rightly, or wrongly, the market seems to think that his comments could imply another loosening of [policy] via some form of QE3,” they added, referring to the possibility of a third round of quantitative easing.

“Fed likely to hint at QE3 in April meeting,” said Bill Gross, managing director of world’s largest bond fund Pimco, via the fund’s Twitter account.

Physical gold demand meantime “has shot higher as demand from South-East Asia in particular increased with gold below $1,650 over the past few days, no doubt providing support to the gold price when investor sentiment turned bearish,” says Walter de Wet, commodities strategist at Standard Bank, citing the bank’s Gold Physical Flows Index.

Over in New York, the world’s largest gold ETF, the SPDR Gold Trust (GLD), added 6 tonnes to its gold holdings yesterday.

Also in New York, today sees the expiry of April options on Comex gold futures contracts, with a lot of open interest – both bullish and bearish – clustering around the $1700 an ounce mark. The last options expiry date on 23 February saw gold prices jump to a then 3-month high.

Economic growth meantime “is stalling” in Europe, according to Angel Gurria, secretary-general of the Paris-based Organisation for Economic Co-operation and Development.

“Market confidence in the Euro area is fragile,” says the OECD’s ‘Economic Survey of the Euro Area 2012, published today.

“The outlook for growth is unusually uncertain and depends critically on the resolution of the sovereign debt crisis.”

Eurozone finance ministers are due to meet this Friday where they are expected to agree an increase in the size of the single currency’s so-called ‘firewall’ by combining the existing temporary bailout fund with the new permanent one that launches in July, after Germany dropped its opposition to such a move.

“Everybody knows [the combined fund] is not going to be big enough,” says Robert Crossley, head of European rates strategy at Citi.

“But less inadequate is a good thing.”

“The Eurozone remains insolvent,” adds Jim Leaviss, head of retail fixed income at M&G Investments.

“Growth is still a problem.”

Germany’s Deutsche Bank meantime has overtaken France’s BNP Paribas to become Europe’s largest bank, as a result of adding to its assets while other banks have been shrinking their balance sheets, according to newswire Bloomberg.

The likelihood that the German government would support its largest bank in the event of a crisis was cited by Fitch in December when the ratings agency gave Deutsche a stable outlook.

“We haven’t solved the too-big- to-fail challenge in this country,” says Ralph Brinkhaus, a member of Germany’s finance committee as well as chancellor Angela Merkel’s CDU party.

“That problem becomes all the more a matter of concern the bigger the bank is…and in the case of Deutsche Bank, is becoming.”

A Morgan Stanley co-authored report has suggested that banks worldwide will look to reduce the size of their balance sheets by $1 trillion over the next two years.

Here in the UK, Abu Dhabi’s ruling family is in talks with the British government about buying a stake in the 83%-taxpayer-owned Royal Bank of Scotland, news agency Reuters reports.

The gold price could “peak at well over $2000” an ounce, Mark Cutifani, chief executive of gold mining firm AngloGold Ashanti said Tuesday.

Turkey’s central bank today raised the proportion of domestic currency reserves Turkish banks can hold as gold from 10% to 20%, while simultaneously lowering the proportion for foreign exchange reserves from 10% to zero.

Turkey is one of a number of countries facing current account deficits and exchange rate problems that have recently turned their attention to gold.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

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.

By TraderVox.com

Tradervox (Dublin) – Euro made a fresh high of the month yesterday at 1.3366 but today it traded in red. During the Asian it spent most of the time in consolidation. During the European session the single currency is threatening the 1.3300 levels. It is currently trading around 1.3320, down about 0.27% for the day. The support may be seen at the current levels and below at 1.3260. The resistance may be seen at 1.3360. The GFK consumer confidence survey from Germany came below expectation at 5.9. The consensus was 6.1.

The Sterling pound failed to break the 1.6000 levels as it reached a high of 1.5997, during the European session.  This high was last visited in the month of November last year. The cable is currently trading around 1.5963, marginally down for the day. The resistance may be seen at 1.6000 while the support may be seen at 1.5920 and below at 1.5860. UK CBI distributive trades survey came above expectation at 0% against the consensus of -6%.

The USD/CHF held the 0.9000 levels as it printed a low of 0.9014. It is currently trading around 0.9038, up about 0.12% for the day. The support may be seen at 0.9010 and below at 0.8960. The resistance may be seen at 0.9060 and above at 0.9100. UBS consumption indicator came at 0.87.

US dollar has regained the level of 83 against the Japanese Yen as it prints a fresh high of 83.21. It is currently trading around 83.11, up about 0.37% for the day. The resistance may be seen at 83.40 and above at 83.80. The support may be seen at 82.90 and at 82.50.

The Australian dollar also lost against the US dollar as it is a US dollar is strengthening in most of the pairs. The Australian dollar is losing ground in European session as it forms a low of 1.0494. The pair is trading near the low at 1.0512, down about 0.20% for the day. The resistance may be seen at 1.0560 and at 1.0600. The support may be seen at 1.0500 and below at 1.0450.

The US dollar index is trading around 79.13.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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Source: ForexYard

The Australian Dollar weakened against all of its 16 Major counterparts due to concerns over the pace at which China’s economy will grow, reducing demand for smaller nation’s commodities.In other words, a slow down in China’s economic growth will have a negative impact on Australia’s Currency.

The Australian and New Zealand Dollars were poised for their first monthly losses this year as reports and figures from China showed that earnings dropped in the nation’s industrial companies.It is possible that the Aussie and Kiwi Dollar may experience some difficulty if news out of China continues at this negative rate.

News involving China will always have a big impact on both the Aussie and Kiwi Dollar as China is a very important trading partner for the two nations.

Many traders are anticipating China’s PMI for manufacturing which is set to be released on the 1st April 2012.
The great nation is Australia’s largest overseas market whilst China also holds the title as New Zealand’s second biggest export destination.

Despite the recent fall against its major currency rivals, both the Aussie and Kiwi Dollar are set for their second consecutive quarterly gains over the Greenback.The Aussie Dollar has added 3 percent this year whilst the Kiwi has risen 5.7 percent.

The Australian Dollar is a very profitable currency to trade due to its volatility.However, the nation is very dependent on China and therefore its important for traders to keep a close eye on significant news coming out of China as it will have a direct affect on the Aussie. Continue reading “Aussie Dollar Falls on Chinese Growth Concerns”

Source: ForexYard

A speech by Fed Chairman Ben Bernanke yesterday resulted in the US dollar tumbling throughout the European trading session. The speech, which hinted that the Fed may initiate another round of quantitative easing in the near future, turned the USD bearish against both the euro and Swiss franc. Turning to today, traders will want to pay attention to the US CB Consumer Confidence report, scheduled to be released at 14:00 GMT. A positive figure may help the dollar recoup some of yesterday’s losses.

Economic News

USD – US Consumer Confidence Set to Impact Dollar

Signs that the Fed may initiate a new round of quantitative easing sent the dollar tumbling against some of its main currency rivals during yesterday’s trading session. Following a speech from Fed Chairman Bernanke, in which he said that the US economy is not growing fast enough, the EUR/USD spiked, eventually reaching a fresh three-week high. The pair eventually stabilized at around the 1.3325 level during afternoon trading. Against the Swiss franc, the dollar fell close to 100 pips during the European session. The USD/CHF eventually stabilized around 0.9045.

Turning to today, USD traders will want to note the results of the CB Consumer Confidence figure, set to be released at 14:00 GMT. Consumer confidence is widely considered an accurate indicator of overall economic health. At the moment, analysts are expecting a slight drop in the figure over last month. If true, the dollar could extend yesterday’s losses against the euro. That being said, should the Consumer Confidence number come in above the forecasted level of 70.3, the dollar could reverse its recent bearish trend.

EUR – Analysts Warn That EUR Gains Could be Temporary

The euro saw significant gains against the USD yesterday, as signs began to emerge that the US economy may not be growing fast enough to sustain an economic recovery. The EUR/USD spiked well over 100 pips as a result, eventually reaching as high as 1.3337 during mid-day trading. The euro also received a significant boost against the Japanese yen yesterday. The EUR/JPY was up approximately 130 pips, eventually reaching as high as 110.54 before staging a slight downward reversal. The pair eventually stabilized at 110.30.

As we take an extended look at the rest of the week, analysts are warning that the euro’s recent bullish trend could be temporary. Signs of economic turmoil in several euro-zone countries, including Portugal, Italy and Spain, may soon dominate the news and could lead to significant euro losses. Traders will want to note the results of bond auctions from both Italy and Spain, scheduled for later in the week. In addition, a meeting of euro-zone finance ministers could offer additional clues as to the current state of the euro-zone economic recovery.

JPY – Safe Haven JPY Falls vs. Riskier Assets

The Japanese yen tumbled vs. some of its more volatile currency rivals throughout yesterday’s trading session. The CHF/JPY was up over 100 pips during the European session before hitting resistance around the 91.60 level. The AUD/JPY was up close to 130 pips, reaching as high as 87.36 before staging a slight downward correction. The pair found support at 87.15. Analysts attributed the yen’s losses to the poor economic situation in Japan, combined with a positive German Ifo Business Climate figure which led to an increase in risk taking.

Turning to today, traders will want to pay attention to any announcements out of the euro-zone, particularly with regards to the current state of the Italian, Spanish and Portuguese economies. Any negative news could lead to risk aversion in the marketplace, which could help the yen reverse its current bearish trend.

Crude Oil – Crude Oil Moves Up amid Risk Taking

The price of crude oil saw significant gains throughout yesterday’s trading session, eventually reaching as high as $107.30 a barrel before staging a downward reversal. Positive news out of Germany led to an increase in risk taking, which helped support the commodity throughout the day. The gains proved to be temporary though, and by the end of the European session oil was once again trading below $107.00.

Turning to today, crude oil traders will want to pay close attention to any announcements out of the euro-zone. Analysts are warning that debt worries in several European countries could lead to risk aversion in the market place. In such a case, riskier commodities like oil could see downward movement.

Technical News

EUR/USD

The Bollinger Bands on the weekly chart appear to be narrowing, indicating that a price shift could occur in the coming days. The Williams Percent Range on the daily chart is in overbought territory, signaling that the shift could be downwards. Traders may want to go short in their positions ahead of a possible bearish correction.

GBP/USD

Most long term technical indicators show this pair in neutral territory, meaning that no major shift in price is expected at this time. That being said, traders will want to keep an eye on the MACD/OsMA on the daily chart. It looks like a bearish cross may be forming. If so, it may be a sign of a possible impending downward correction.

USD/JPY

The weekly chart’s Relative Strength Index is hovering right around the overbought zone, indicating that this pair could see downward movement. This theory is supported by the Williams Percent Range on the same chart, which is currently at -20. Traders may want to go short in their positions ahead of a possible downward correction.

USD/CHF

While the Williams Percent Range on the daily chart is currently in the oversold region, which is typically a sign of impending upward movement, most other technical indicators are in neutral territory at this time. Traders may want to take a wait and see approach for this pair, as a clearer picture may present itself later on.

The Wild Card

AUD/CHF

The 8-hour chart’s MACD/OsMA has formed a bullish cross, indicating that upward movement could occur in the near future. This theory is supported by the daily chart’s Williams Percent Range, which is currently in oversold territory. Forex traders may want to go long in their positions ahead of a possible upward correction.

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.

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