Category Archives: Stock market

by | June 18, 2014 · 2:22 pm

All eyes on FED today

 

European stocks advanced today as investors awaited a Federal Reserve monetary-policy decision. The Stoxx 50 Index was up 0,21 percent earlier today. DAX is up 0,15 percent. Gold is trading at $1,271,40. Silver at $19,73. Crude oil (brent) $113,55.

The dollar held firm today after a surprisingly high reading for U.S inflation raised expectations that Federal Reserve Chair Janet Yellen could strike a more hawkish tone on the monetary policy outlook. U.S futures are all up today.

Fed

The Fed is expected to chop another $10 billion from its monthly bond purchases at a meeting on Tuesday and Wednesday. Many investors will be focused on whether officials tip their hand on longer-term plans for interest rates.

Fed Vice Chair Stanley Fischer will release updated projections for the economy and for when they think rates should finally rise from near zero. The policy-making Federal Open Committee (FOMC) started its meeting Tuesday at 10 a.m Eastern, and they discuss how to raise rates when the times comes.

Fed Chair Janet Yellen will talk about employment and inflation. More than 200,000 jobs were added in each of the last four months. Inflation rate is still below the Fed`s two percent target, which is their goal.

Unemployment is now 6,3 percent which is impressive. March expectations was 5,6 – 5,9 percent. They could nudge up their 2014 inflation forecasts from about 1,5 percent and cutting their GDP forecast.

Reports today:

08:30 a.m EST Current Account

10:30 a.m EST Crude Oil Inventories

02:00 a.m EST FOMC Economic Projections

02:00 a.m EST FOMC Statement

02:00 a.m EST Federal Funds Rate

02:30 a.m EST FOMC Press Conference

 

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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by | June 10, 2014 · 2:01 pm

What – Is Apple down 85%?

Don`t panic if you think that the price of Apple Inc is down -85%, because it isn`t. It`s just your brokers fault. They have not changed the amount of shares as they were not prepared for the coming share split as we all saw in Apple Inc.

Apple

This is happening many times and I have seen that in stocks I have owned many times. So, what is going on here? Apple stock is cheaper because its 7 for 1 split went into effect. The Apple`s share price is back to a 2006 level, trading above $100.

In a traditional 2 for 1 split, all owners of common stock have their share counts doubled while the price is simply cut in half. Shares are now worth half as much as they were before, but there are twice as many available and the percent ownership of each shareholder is unchanged.

Most of the data surrounding stock splits seems quite bullish. In a study by Dr. David Ikenburry of Rice University, he found that stocks which split 2-1 on average outperformed the control group he created by 8% after a year and by up to 12% after three years. The study looked at stocks between 1975 and 1990.

Dr. David Ikenburry did another research including data from 3-1 and 4-1 splits and found that the results from 1990 to 1997 were practically identical to the findings from the original study. A study from 2003 from the Chinese and City Universities of Hong Kong and the Hong Kong Polytechinic University corroborates Ikenburry`findings with similar evidence from the stock market in Hong Kong.

The reason why stocks is performing better after a stock split is probably because they become more affordable to smaller individual investors. They simply look cheaper. People are probably not willing to sink $600 into a single share of Apple, but they may be amenable to spend $400 on 4 shares after the 7-1 split. It`s more a psychological thing.

The Wharton School of Business found that institutions have increased their percent ownership in stocks from 34% in 1980 to 67% in 2010, and its widely believed that institutions like mutual funds are less perceptible to psychological biases like a lower sticker price than non-professionals.

Ikenburry belive that the stocks perform well when they split because the split itself is a signal of bullish sentiment from management. Apple hasn`t had a new product catalyst to ignite its fundamentals since the iPad was released in 2010.

This year CEO Tim Cook has promised several new types of products and that may be the reason Apple`s management has the confidence to split the stock. What could be worse for a CEO than taking a high value stock, splitting it into pieces, then see the face value fall even further sending investors into a panic?

Apple`s acquisition of Beats Electronics can make the stock go higher, but I don`t understand that Apple was so interested in their headphones. They could make their own at a cheaper price. Dr. Dre must, for all i know, have another plan with a new product we don`t know yet.

The music streaming business can be a good business, but so far it isn`t. They may be changing the strategy to make the $3 billion acquisition of Beats a boost and give Apple new income. Anyway; the acquisition of Beats Electronics is a sign of things to come. They have competitors. Google`s Youtube is the world`s largest music streaming service, and Youtube disclosed that 40% of its total users are coming from mobile devices.

 
Reports today:

10:00 a.m EST JOLTS Job Openings
10:00 a.m EST Wholesale Inventories 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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by | June 6, 2014 · 1:20 pm

Strong Jobs report is on the way

Mario Draghi is the man. What a stock rally  yesterday, and all this thanks to one single man: Mario Draghi from the ECB (European Central Bank). He started to cut all three rates, and said he will also start a new QE program if necessary.

 

All this is done because they want action in the markets. As you know, there are millions of people in the EuroZone which is unemployeed. It`s not good for the economy because their buying power remain weak.

 

But what about the U.S? Later today, we will se important reports about Nonfarm Payrolls and Unemployment rate. All investors are waiting for those reports at 8.30 a.m. This is very important news, so what can we expect?

 

Several surprisingly healthy economic indicators reported within the past month including auto sales figures and the most recent jobs numbers indicate that commerce may be picking up. The really big question that will be answered later today is whether growth in the laber market kept up its pace through May.

Nonfarm1

 

According to AutoData, the car sales spiked to an annualized rate of 16,8 million units in May. This is the fastest rate of growth seen in the auto market in 7 years! GM doubled sales growth and reported a 12,6% gain compared to estimated 6,4%.

 

The automotive data is encouraging, but the nonfarm payrolls change is the indicator investors really keep a close watch on later today. The change in nonfarm payrolls may be the most influential economic indicator (other than perhaps GDP) because it`s reflective of two key factors for the national economy.

 

The jobs number tells us both about the strength of corporations and their willingness to spend cash to expand their businesses. It also gives insight into the number of newly added employees which may bolster consumer spending with their freshly minted paychecks.

 

Todays jobs report also contains supplementary information about employee earnings levels and the unemployment rate, which isn`t considered to be as clear of a signal because it is positively influenced when job-seekers drop of out the labor force in what is known as the discouraged worker effect.

 

The U.S change in nonfarm payrolls unexpectedly climbed from 203k jobs added in March to 288k in April. The markets around the world rallied after those news. Later today we will see the May jobs data.

Unemployment rate2

 

On todays report Morningstar has the nonfarm payrolls change consensus at 220k jobs added while the consensus from Estimize is 10% higher at 243k. Morningstar also indicate that the unemployment rate may rise slightly to 6,4% while Estimize are forecasting that unemployment will remain unchanged at 6,3%.

 

The Estimize community is expecting the number of jobs added in May to be considerably less than the number added in April, but the community is still optimistic that the labor market will outperform predictions from the majority of economists.

 

All eyes on the Labor Department`s report today at 8.30 AM EST.

 

Reports today:

08:30 a.m        Nonfarm Payrolls

08:30 a.m        Unemployment Rate

 

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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by | June 5, 2014 · 12:59 pm

Negative Interest Rate in Europe?

The Fed have printed a lot of money, just like Japan have done for years. Now, Europe are thinking of doing the same. ECB is about to join Fed in the money printing scam. Mario Draghi will speak later today, and what can we expect?

ECB

We can see negative interest rate in Europe. Do you really know what that means? It means that you are losing your money if they are in the bank. It means that it is more attractive to put your money under the mattress. Can you belive that?

Many expect that the ECB will cut its deposit rate from zero to negative. The benchmark rate will probably also be reduced to a record low at 0,1%. If so, ECB will be the first major central bank to introduce a negative rate.

The problem for ECB and Draghi is the deflation. Their inflation goal is around 2%, but the inflation remain below 1%, and it has slowed to 0,5% last month. In March, ECB said it won`t return toward its goal until the end of 2016.

Draghi said earlier this year that large-scale asset purchases would be justified if the medium-term outlook for inflation worsens. The ECB and Bank of England have called on regulators to ease rules on asset-backed securities in Europe. That would provide a broader range of funding options for companies and create assets the ECB could buy to supply liquidity.

Rate is the Central banks tools. The lower the rate is, the bigger the problems are. What is the bank signaling if they cut the rate? It says you need to spend your money. Do not put in the bank. That`s all it is about; consumer spending. That what`s makes the world go around. A very simple concept.

European stocks are little changed before the ECB meeting today. Stoxx Europe 600 Index trading near a six-year high. U.S stock-index futures and Asian shares were also little changed. Many have waited for the news today. Will Mario Draghi shock the markets? Let`s wait and see.

Reports today:
07:45 a.m. EUR Minimum Bid Rate
08:30 a.m. EUR ECB Press Conference
08:30 a.m. USD Unemployment Claims
01:30 p.m USD FOMC Member Kocherlakota Speaks

 

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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by | June 3, 2014 · 1:04 pm

India is the leader

India added 28 million users in mobile subscriptions in Q1 ended March this year. According to Ericsson`s Mobility report, the total base is now 790 million. Among the top five countries by net additions, India is the leader, accounted for more than 50% of new mobile subscriptions in Q1.

Samsung

(Picture: Samsung Smartphone)

Ericsson expect that the total number of mobile subscriptions will exceed the world`s population in 2015. By the end of 2019, they predict that the mobile broadband subscriptions will reach 7,6 billion, representing more than 80% of total mobile subscriptions.

It is also expected that the number of smart phone subscriptions will reach 5,6 billion at the end of 2019. 65% of all phones sold worldwide in Q1 were smartphones. Smartphone subscriptions will exceed those for basic phones in a couple of years.

India is growing! So are the smart phone sales. It skyrocketed in 2013 and 44 million shipments is a big jump compared with 16,2 million a year earlier. The growth is expected to continue in 2014. The Indian consumer is expected to consume four times the amount of mobile data per month, contributing to the 10-fold growth prediction in mobile data traffic between 2013 and 2019.

It’s expected to see a shift in 2016, as the networks will go from GSM to 3G and 4G, and that will help cellular Machine-to-Machine (M2M) devices to grow significantly. 3G and 4G will represent the majority of active cellular M2M subscriptions in a few years.

Cellular M2M is taking off, and the number of active cellular M2M devices will increase to about 4 times by 2019, from 200 million at the end of last year to about 800 million in 2019. It is expected to see more than 20% of the active cellular M2M devices to be connected to LTE subscriptions.

In 2019, China will reach over 700 million LTE subscriptions, and that is more than 25% of total global subscriptions for LTE. Europe will only see LTE subscriptions penetration of 30% compared to 85% in North America.

China`s TCL Communication is preparing to launch 4G phablets in a tie up with Reliance Jio Infocomm, which is likely to roll out its much-awaited high-speed data and voice services in Q2 this year.

TCL Communication is listed on the Hong Kong Stock Exchange and part of China`s TCL Corporation. They sell smartphones under Alcatel One Touch brand. The Chinese company bought the Alcatel phone business in 2005. A phablet is a mobile handset with 5 to 6,9 inch screen size.

Reports today:

10:00 a.m EST Factory 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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