Tag Archives: China

Black Gold is up on Iraqi war

Brent traded at its highest level since September as militants in Iraq seized more territory and President Barrack Obama warned that the crises may spill over into other countries. Fighters from the Islamic State in Iraq and the Levant took control of Iraq`s border crossing with Jordan and Syria.

Black gold

Iraq pumped 3,3 million barrels a day last month. Saudi Arabia is the largest producer in the 12-member Organization of Petroleum Exporting Countries. U.S Secretary of State John Kerry arrived in Baghdad to try to get political leaders to set aside sectarian divisions and confront the growing threat.

John Kerry will spend the day meeting with Prime Minister Nouri al-Maliki, as well as ministers and party leaders. But why do the U.S and John Kerry spend so much time and money on this case? Kerry said at a press conference that they want a government in Baghdad «that is prepared to represent all of the people of Iraq, that is prepared to be inclusive and share power».

The U.S didn`t invade Iraq to stop and evil tyrant and spread democracy. There were no weapons of mass destructions, and all of the terrorists that had been in Afghanistan fled to Pakistan. Not Iraq. The U.S went to Iraq for oil.

Back then, the U.S oil production was falling, but now it is rising. From 1970 to 2008, oil production fell from 9,6 million barrels per day to just 5 million barrels per day. Michael Simmons cast doubt on the actual size of Saudi Arabia`s reserves in his book from 2005, so it was not only the U.S either. M. King Hubbard`s «Peak oil» theory and breakneck emerging market growth, explain even more what happened in Iraq.

Vice President Dick Cheney had previously been the CEO of Halliburton, and made about $40 billion from the Iraq war. All this makes it hard to belive that the U.S was not in Iraq for the oil. But, did the U.S get all the oil? Nope.

Iraq is the second largest producer in OPEC and the country`s oil production hit 3,25 million barrels per day last year. A level not seen since before 1990, but the U.S oil imports from Iraq are actually down.

The U.S imported 725,000 barrels per day from Iraq in 1999, but now it is only 340,000 barrels a day. So, if Iraq is producing more oil than it has in decades, where is all the oil going? The oil is going to China.

China`s crude imports from Iraq increased by 31% year-over-year to about 600,000 barrels per day in the first four months of 2014, and that`s twice as much as the U.S import from Iraq. Up from almost nothing a decade ago.

Iraq`s oil production is expected to reach 8 million barrels by 2035, and that`s not all: they forecast that 80% of Iraqi production would go to China. Some investors say that Baghdad to Beijing is the new Silk Road of the global oil trade.

China National Petroleum Corp (CNPC) has invested $4 billion in the Iraqi oil industry. They produced 299 million barrels from the country last year. Almost one-third of its overseas output. PetroChina and Sinopec have invested billions of dollars in Iraq as well, acquiring stakes in some of the country`s largest oil fields. So, why do the U.S and John Kerry spend so much time and money to try to stabilize Iraq?
The U.S came uninvited and the American people don`t want to be there, nor do the Iraqi people want the American people to be there. The U.S has sacrificed much so far; 4,500 dead American soldiers and about 120,000 dead Iraqi civilians. About $800 billion in upfront costs, with additional $1 trillion in military pensions, disability payments and debt service. Is it worth it?

Saddam could have stopped the mess in Iraq, but he is dead. The U.S killed him. Now, the Sunnis, the Shiite, and the Kurds can do it all alone. There is nothing America can do to bring two warring Islamic factions together or redeem its credibility. If someone should spend time and money on this mess, it should be China.

Reports today:
09:45 a.m EST Flash Manufacturing PMI
10:00 a.m EST Existing Home Sales

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Stocks that beats the estimates

Facebook (FB) beats the estimates by $0,10. Q1 EPS came in at $0,34. Revenue of $2,5B, beats the estimates by $160M. The stock slid -2,65% yesterday, but will open up about 5% later on today. Facebook stock trades at about 100 times earnings.

They still succeed on mobile advertising. 0% of their revenue came from mobile in Q1 of 2012. Now, mobile ad revenue accounts for 59% of Facebook`s total ad revenue. That is a big surprise for many investors.

facebook logo

Facebook is growing fast and the trend seems to continue. They have a growing base of monthly and daily active users. They have higher quality ad products, new ad products and the marketers spend more on their ads. Ad revenue growth in Q1, 2014 is 82%.

Facebook have so far been the king of social media but its crown has started to slip. The biggest thing for Facebook right now is mobile. The big question for me is what the acquisition of the instant messaging service, WhatsApp, will give them in return? It remains to be seen.

Apple

Apple Inc (AAPL) slid yesterday, trading down -1,31% to $524,75, but the stock will open up about 7% later on today. The stock is down -6,5% so far in 2014. Mr Tim Cook crushed expectations in the quarter.

Apple Inc earned $11,62 compared to consensus of $10,21. They generated $45,65 billion in sales. It is not a surprise to see the stock pop up today! Iphone sales are very strong at 43,7 million units. It was expected to see a sale of about 38,5 million phones.

We can confirm that the relationship with China mobile (CHL) is a success. Mac sales were also solid at 4,1 million, but iPad is disappointing with a sale of 16,35 million compared to the expectations of 19,8 million.

I think that the iPhone launch in Chine will power growth in coming quarters. All this thanks to the big and fat company in China called China Mobile, which have over 700 million active smart phone users. China dominates the digital world and are a hotbed of crazy innovation!

Apple Inc added $30 billion to its buyback, upped its divided 8% and announced a 7 for 1 split in the stock. That is very unusual nowadays. At 9x earnings, Apple shares are attractive at current levels.

Apple has bought 24 different companies in the last 18 months, but they will wait to lauch any new products, and will likely have to wait until the second half of the year for product launches. These results make it clear Apple is in a position of strength and sky is not falling.

This is good news for investors concerned about the slow growth in Apple. Some investors are worried that Apple has lost its innovative edge under CEO Tim Cook. What I am looking for is a mobile payment solution. Come on Apple!

I know you have 800 million iTunes accounts. Will credit cards linked to them be leveraged for a payment service in the near future? Think different and be innovative. This is the way to make more growth and happy investors.

Microsoft (MSFT) is also down. Slid -0,75% yesterday. It`s understandable to see Facebook grow like they do, because they are young and fresh. But what about Microsoft and Apple? They are big and fat and slow.

They have been strong rivals for many years and they both have a turbulent history. Take a look at their growth. The seven last quarters, the growth has stopped at the most fundamental level. How are they going to grow in the future? Are we in a tech bubble?

Reports today:
08:30 a.m EST Core Durable Goods Orders m/m
08:30 a.m EST Unemployment Claims
08:30 a.m EST Durable Goods Orders m/m

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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China fears

Japan`s Nikkei fell -2,6% today, as investors locked in some profits as caution over Chinese demand continued to hurt commodity stocks. Nikkei ended at 14,830,39 points. It`s all down in Europe too. Gold is up +1,22%.

Gold

Shanghai copper fell by its 5% daily limit and London copper hit a 44-month low. Investors eyes are on mining stocks now because the world’s top user of copper (China) could unlock copper from financing deals and unleash more selling.

Credit Agricole said in a note that it looks bad, and that copper prices continue to be hit by China growth worries. Ukraine tensions have intensified with diplomatic efforts yielding no success and that makes investors nervous.

The U.S markets will open up in a negative territory today, putting the S&P 500 on track for a third day of declines. All this because of the China fear. Not all the investors are selling stocks. Some of them are always looking for bulls.

Take a look at Oxigene Inc (OXGN:O) today. That stock surged 145% before the opening bell, trading at $5,93. They have declared a contract with shareholders to purchase an aggregate of almost $12 million of units at a price of $2,05.

The share faced its lowest price of $2,09 during the latest trading session. The trading volume with the big jump is 8,54 million shares, compared with the average of 586,076 shares. The company`s market cap is $27,75 billion with 11,47 million shares outstanding.

Reports today:

 

10:30 AM ET Crude Oil Inventories
01:01 AM ET 10-y Bond Auction

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Risky business

Copper is in red territory today, town -2,03%, followed by Crude oil (brent), which is down -0,80%. Gold and silver is up. Asia is trading down today. Hang Seng is down -1,75%, Shanghai is down -2,86%, while Nikkei closed down 1% at 15,120,14.

Asian markets tumbled today. People are worried about the Ukraine crises and some are disappointed about the surprisingly weak Chinese trade data released today. All this, despite the surprisingly good news from the U.S on friday. Nonfarm payrolls was better than expected.

The commodity-sensitive Australian and Canadian dollars suffered today, as copper of which China is a major consumer, reached a four-year low in Shanghai. Australian and Canadian dollars lost half a percent against a steady U.S dollar. The Chinese yuan opened down 0,5%.

Groupon Inc (Nadaq:GRPN), is still the market leader in the daily deal voucher sales, but the stock is declining while this stocks seems to be a risky stock. Most of the Groupon`s customers are often struggling merchant partner who can`t afford to pay.

In worst case, if many of them go bankrupt, then Groupon will lose a lot of money. In addition; Groupon will pay back the customers if the merchant fails, and unused vouchers has increased to $725 million.

Merchants need to offer discounts of 50%, and share 50% of the rest with Groupon. As you know, this is a risky business. Merchants do not earn money and have no control if too many vouchers are issued.

Groupon say they are «the morst effective local advertiser tool» available for marketers, but I think that the shoppers are the winners here. Mainly because the shoppers are one-time shoppers looking for good deal, better called «coupon hunters», which is not loyal repeated customers.

This can be a ticking bomb, and the stock is now trading at $8,60. The stock will open down today -0,58%. The stock is down -67,16% from the top, and so far this year the stock is down -26,90%. Groupon shows us that not everything in the social space is rosy.

Revenue growth and user growth is the king in the stock market.

Groupon logo

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Prepare for next year

It was not so hard to earn money in 2013 if you invested in U.S stocks. 9 out of 10 stocks in the S&P 500 was in positive territory. But everything associated with gold gave you losses. Did you sell the gold related investments in 2013 and what are you gonna do with it next year?

The gold is down about 30% in 2013, so owning a stake in a gold mine was not the smart way to make money this year. The worst U.S large Cap stocks was Newmont Mining. The second largest gold producer is down about 50%, and 30% of its corporate office staff is eliminated.

They are not only building cars in China. They are building factories to meet the demand for cars because the sales of automobiles are surging in China. The main partner of Ford Motor is Chongqing Changan Automobile Co. (000625). Changan`s earnings per share is up 400% and are the best International stock!

To be an investor is like being a school student. You have to do your homework every day. I don`t say you have to follow every stock you have in your portfolio with every tick of intraday trading.

What I prefer is to follow the stocks and the stock market for important changes over time. Sometimes it is important to evaluate and update the portfolio, like now, in the year end.

You can save money and take advantage of last minute tax savings in preparation of your portfolio. If you do all the things alone, you may do some work. You have to prepare your portfolio for the next year. I have created a few things to consider:

  1. Tax planning. Take a good look at your portfolio and check your winners and losers. You can offset capital gains with capital losses. If you have lost everything in one stock, you can sell it before the end of the year to offset any pending gains you may have on other stocks. Check the IRS rules and talk with a tax adviser before you take any tax decisions.

  1. Goals. What is your goals for 2014? What have happened so far this year? What do you think will happen next year? What is your plan for next year? Do you want to spend more money in the financial markets? How will your economy be next year? marriage or divorce? Some kids? What about you family situation? Some dramatic changes in 2013, or next year? You get the idea. Create a trading plan for 2014.

  2. The right balance. Do you have all you eggs in one bag? What is your mix today. Do you only go for stocks? Do you have bonds? Currency? Do you have the right mix in your portfolio or do you need some adjustments?

2013 have been a great year in the stock market. Many investors have done it better than the market in 2013. Is this going to continue next year? Try to follow the market and read the news and do as best as you can to understand them. Don`t always listen to everything people say on TV, and think by yourself. Be smart and look for great opportunities and be a winner in the market next year!

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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