Month: March 2012

In trading on Wednesday, diagnostics shares were relative leaders, up on the day by about 2.7%. Leading the group were shares of Transcend Services (TRCR), up about 39.6% and shares of China Cord Blood (CO) up about 5.9% on the day.

Source: ForexYard

As trading has continued into the evening hours the euro and Australian dollar were able to gain back some of the losses taken in the last couple trading sessions. Various bits of news coming from these countries may have influence the recent upsurge that occurred this afternoon. In Europe there was a brief reprieve in the single currency’s recent decline as six Greek banks indicated they would participate in Greece’s debt swap. France’s second largest bank also indicated they would be willing to join in on the debt swap. This calmed several worried investors regarding the possibility that Greece may still default on its debt obligations this month. As of this afternoon, the euro is running up against the USD at $1.3150.

News from Australia regarding its GDP forecast indicated growth of 0.4% which falls well below the 0.7% that investors expected. Despite the lackluster news from Australia, the aussie dollar was able to stabilize this afternoon against the USD. The aussie is currently hovering near $1.0570.

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.

The Narodowy Bank Polski‘s Monetary Policy Council maintained its benchmark 7-day interest rate on hold at 4.50%.  The Bank said: “The Council decided to keep the NBP interest rates unchanged. The Council does not rule out the possibility of further monetary policy adjustments in the future, should the positive signs of economic activity in Poland continue and the outlook for inflation returning to the target fail to improve.”

The Bank also kept the following interest rates unchanged: the rediscount rate at 4.75%, the Lombard rate at 6.00%, and the deposit rate at 3.00%.  The Bank last raised the interest rate by 25 basis points to 4.50% in June last year, and held the interest rate unchanged at its previous meeting.  

Poland reported annual headline inflation of 4.1% in January, 4.6% in December, 3.9% in September, compared to 4.3% in August, 4.1% in July, with previous readings of 4.2% in June, 5% in May, 4.5% in April, 4.3% in March, and just higher than the Bank’s official inflation target of 2.5% +/- 1%.  

The Polish Zloty (PLN) has weakened by about 11% against the US dollar over the past year; the USDPLN exchange rate last traded around 3.17.  The National Bank of Poland next meets on the 4th of April 2012.

American Eagle Outfitters (AEO) announced that earnings dropped to $51.3 million, or 26 cents a share, in the fiscal fourth quarter from $87 million, or 44 cents a share, in the same period last year. Revenue increased by 14 percent to $1.04 billion.

By TraderVox.com

Tradervox (Dublin) – The single currency has come under the pressure during the US session as it formed a fresh low below 1.3100 levels at 1.3095. It has retreated a little from the lows and is currently trading around 1.3130, up about 0.15% for the day. The bearish outlook in the markets is posing the threat of losing the 1.3100 levels.The support may be seen at 1.3110 and below at 1.3080. The resistance may be seen at 1.3170 and 1.3220.

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As tension boils in the Middle East, oil prices are surging once again…

Over the past four weeks, crude oil has risen to $107 a barrel over global supply concerns involving Iran, Israel and the western world.

As The Australian reports, “The threat of an Israeli attack on Iran’s nuclear facilities has pushed world oil prices up by 15% in the past month and raised fears that… once again spell global economic havoc.”

Energy investors are understandably nervous. The Middle East is the world’s top oil-producing region, as well as the region with the world’s largest oil reserves. Iran accounts for 9% of the oil produced in the world. And today, it’s facing increasing pressure to end its nuclear program, or else.

“President Barack Obama,” MSNBC states, “said Sunday the United States will not hesitate to attack Iran with military force to prevent it from acquiring a nuclear weapon…”

One thing’s for certain, none of this news is going to help bring down oil prices anytime soon.

Yet, despite so much tension in the Middle East, there’s still hope for the future…

Another Dictator Down

Last week in Yemen, after 33 years as the nation’s autocratic ruler, President Ali Abdullah Saleh stepped down from power.

The transition, overseen by the Gulf Cooperation Council (GCC), makes Yemen just the fourth country in the Middle East to get rid of its dictator since the Arab Spring uprising began in late 2010.

And for Yemen, it signifies an opportunity for new beginnings… Well, hopefully it does.

Yemen’s new leader, Abed Rabbo Mansour Hadi, is already talking about some much-needed reforms. But he was also the former Vice President of Yemen when Saleh was President. So, right now, no one is sure how genuine Hadi is.

After all, he was elected president in a one-man race, even if Saleh and opposing parties did agree on him as a successor. And Hadi has already received approval from the Unites States and its allies.

In fact, according to Washington Post columnist David Ignatius, as an ex-military officer Hadi “understood that the corrupt Yemeni system needed reform. He has promised to hold a referendum within 18 months on a new constitution.”

That’s not all either… Hadi has also promised for real democratic elections by 2014. Not to mention, the United States is also insisting him to reform military pay. As David Ignatius writes, “In Yemen, the military is corrupted because soldiers are paid through their division commanders, who skim money and undermine morals.”

Whether or not Hadi will follow through on all of his promises has yet to unfold. But Yemen could be on the verge of a new energy era that ushers in some much needed prosperity and unity.

Yemen’s Outlook

As it stands today, Yemen is one of the poorest countries in the Middle East. Yet, as the U.S. Energy Information Administration (EIA) says, is strategically located “at the tip of the Arabian Peninsula on the Bab el-Mandeb, one of the world’s most important shipping lanes.”

Last year, Yemen’s oil production rates sank another 34% to just around 170,000 barrels per day. Yemen is the ninth-largest oil producer in the Middle East. But as you can see, rates have been falling for many years now.

Yet, a newly formed government just may help Yemen produce 500,000 barrels of oil per day, or more.

In fact, Iraq is just one example of a country where oil production has steadily risen since reforming its government. According to International Business Times, Iraqi oil production is expected to hit a 30-year high in 2012.

Yet there’s no doubt major challenges are up ahead for Yemen.

Al Qaeda is another big hurdle. In 2011, the EIA said anti-government strikes were the main reason Yemen was under the 200,000-barrels-per-day mark in terms of oil production.

But despite all the drab news, Yemen is proof that radical reform is still sweeping across the Middle East region. And it’ll be very interesting to see how soon it is before foreign investment comes pouring in.

Good Investing,

Mike Kapsch

Article by Investment U

Crude Oil 4hr outlook – 07 March

Crude oil has continued its recent decline falling and closing below the 105.50 area suggesting a push back higher may be resisted.

The initial recent decline was started by a strong bearish pin bar reversal as seen in the below chart. 2 bearish Hikkake’s can also be seen strengthening our short term bearish outlook.

A bearish flag pattern has also started to form on the 4hr chart signaling further losses could be expected. A sequence of highs, lows, lower highs and lower lows is also starting to form which may confirm the bears are taking control.

With the strong bearish short term outlook traders may look to short crude, initially targeting the next level of support which sits at the 103.70 area.

We’ll be looking to short the market upon a break of yesterdays lows at the 104.50 area with initial targets placed at 103.70. With the strong bearish outlook at present, it may be possible to place a tight stop loss resulting in a 1:2 R :R ratio.

Article by vantage-fx.com

The S&P/Case-Shiller is a composite index of home price indices for 20 major metropolitan statistical areas in the United States. The index is published monthly by Standard & Poor’s and uses the Karl Case and Robert Shiller method of a house price index using a modified version of the weighted-repeat sales methodology. This method is able to adjust for the quality of the homes sold, unlike simple indices based on averages.

The Case-Shiller Index was developed in the 1980s by three economists: Allan Weiss, Karl Case and Robert Shiller. These same three later founded a company to sell their research; that company was purchased by Fiserv, Inc., which tabulates the data behind the index. The data is then distributed by Standard & Poor’s.

Let me try to get to the core of what’s going on. Each index from the 20 different areas measures the changes in the prices of single-family houses using the repeat-sales method. This process takes a look at and compares the sale prices of the same properties over time. New construction isn’t included because they’re new and have no previous price by which to compare – these houses haven’t been previously sold, and there’s no way to calculate how their sale prices have changed.

The indices, aside from the national index, are published on the last Tuesday of each month at 9 AM EST. There’s a two-month lag time in the data that’s reported, so the report issued last Tuesday only covers home sales through December.

Housing Market Bottoming?

The S&P/Case-Shiller composite index declined 0.5% on a seasonally adjusted basis, in line with economists’ expectations, after falling 0.7% the month before. Single-family home prices ended 2011 on a downbeat note as a drop in December prices sent the seasonally adjusted index down to 136.63, which is its lowest level since 2003.

“After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today’s report we had believed the crisis lows for the composites were behind us,” David Blitzer, Chairman of the Index Committee at Standard & Poor’s, said in a statement.

“The pick-up in the economy has simply not been strong enough to keep home prices stabilized. If anything it looks like we might have reentered a period of decline as we begin 2012.”

The State of the Housing Market

Here’s the skinny: The numbers have shown that there’s an uptick in activity, but that’s not translating into rising prices. The main culprit for this is an imbalance between supply and demand.

Michael Feder, CEO of real estate data and analytics firm Radar Logic, says his firm’s daily readings on the market show a shifting mix of housing activity away from the foreclosure-related or distressed sales in favor of more traditional sales.

“Sellers are acquiescing to the new reality in pricing,” Feder says. The demand for housing is out in the market, but buyers are going to take the risk of further price depreciation. There’s a line in the sand and they won’t pay more. Unlike earlier in the downturn, sellers are finally coming to grips with the reality of what they can get. While that sounds encouraging, Feder is quick to warn that the general sentiment in the market is cautious.

And another cautiously optimistic voice out there is Karl Case, who lends his name to the index. The numbers have historically showed that the number of households usually grows by at least 1 million to 1.5 million every year. That number actually fell between March 2010 to March 2011, as young people stayed with their parents and more people shared homes.

But from March to December, the number of households picked up again. It’s just a question of how long it will take for demand to catch-up with supply and kick the recovery into another needed gear.

Good Investing,

Jason Jenkins

Article by Investment U

I’m a glass half full kind of person. That’s quite an accomplishment coming from my family, who not only believes the glass is half empty but that it’s teetering on the edge of the counter and is about to get knocked to the floor and shatter into a million pieces. Then we’ll have to wear shoes in the kitchen for a month, otherwise we’ll get shards of glass impaled in our feet.

Over the past year, while talking about the markets and the economy with my father, he’d often skeptically ask the question – “What’s going to make the economy recover?”

My answer was always the same. “I don’t know what’s going to cause it to recover, but the market is telling us it is going to recover.”

The markets are a forward-looking mechanism. They rise and fall a few months ahead of macro-economic trends.

The market topped in October 2007. The Great Recession officially began in December of that year. Similarly, the market hit a bottom in March 2009. The recession formally ended three months later.

There are still plenty of nattering nabobs of negativism out there who refuse to look at the data and admit things are getting better, often because of a political or economic agenda.

They’ll point to unemployment at a still-too-high 8.3% (although it’s down from over 9%) and ignore things like:

• The four-week moving average of jobless claims is at its lowest level since March 2008.
• Consumer confidence is at its highest point in over a year.
• Tax revenue in many cities and states is higher than expected.
• The Non-Manufacturing Business Activity Index rose for the thirty-first consecutive month and climbed 3.1 percentage points in February. The New Orders Index increased 1.8 percentage points and the Price Index grew 4.9 percentage points.

Still not convinced the economy is rebounding?

Earnings for S&P 500 companies were not only up 10% last year, they were record profits for the second year in a row.

And although the market is clearly in a bull phase, P/E ratios have actually come down as stock prices have not kept up with earnings growth.

According to Bespoke Investment Group, the 14.1 P/E ratio of the S&P 500 is below the prior high (of this bull market) of 15.6, back in April – despite earnings growing at a double-digit clip.

P/E ratios in energy and materials companies have gone down the most, presenting investors with some interesting opportunities.

For example, Williams Partners (NYSE: WPZ), a MLP that’s currently in The Ultimate Income Letter’s Perpetual Income Portfolio, has seen its P/E ratio fall from 17.5 in 2010 to 16.3 at the end of 2011, down to 14.0 today, despite the stock price advancing 31% since the end of 2010.

Also, interesting to note that despite a three-year bull market, investor sentiment is still negative. According to the American Association of Individual Investors, only 44.5% of investors are bullish.

So, what are the markets telling us now?

You know that we don’t try to time the market here at Investment U or The Oxford Club. But the fact that the stock market is still climbing, earnings are growing and sentiment is not yet bullish, makes me think this bull still has some legs. And, just as importantly, that the economy will continue to improve.

When sentiment gets significantly more bullish and the market and earnings turn lower, that’s when I’ll start to grow concerned.

We still have serious problems in the country that need to be addressed. But for now, the market is indicating that the sky isn’t falling. In fact, it’s looking clearer every day.

Good Investing,

Marc Lichtenfeld

[Editor’s Note: Marc originally recommended WPZ in September of 2011. Since then it’s up over 15% plus a dividend yield of about 5.5%.

But Marc also recommended another stock on the same day that’s up almost 30% plus a 4% dividend yield. And this stock’s P/E is still lower than WPZ.

To find out how to get “in the know” with this stock and many more, click here.]

Article by Investment U

Source: ForexYard

The Japanese yen is holding up strong against the USD as Wednesday afternoon trading progresses. Analysts are speculating that the JPY has finally bottomed out against the dollar and see a possible uptrend as the purchasing of Japanese exports returns back to form. The yen is trading near $80.75 as of this morning. The yen is approaching the psychologically significant $80 mark as the Bank of Japan’s decision to inject millions into the economy is showing moderate signs of success. In addition to the recent upsurge against the greenback, the yen is also maintaining its ground against the euro. Currently, the yen is hovering near 106.06.

Read more forex news on our forex blog.

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.