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 4, 2014 · 1:37 pm

GoPro IPO

Selfie here and Selfie there. Selfie everywhere. People want to share with the rest of the world what they are doing on social media platforms like Facebook, Instagram and Snapchat. In addition people now tend to take action films and one of the most popular cameras right now is GoPro.

white-edition

The founder and CEO in GoPro is 38-year-old Nicholas Woodman, who started the company with $65,000 of his own capital. His father invested $100,000. The company has been profitable since day one, Woodman said in an interview on TV. Nicholas Woodman own a 48,8% stake, while his father Dean Woodman has a 6,4% stake.

The company has grown and in December 2012, Foxconn International Holdings invested $200 million and valued the company at $2,25 billion. What a jump! GoPro is probably one of the most successful wearable electronics company right now.

CEO Terry Gou is mentioned during the IPO and he is from the Chinese electronics manufacturer Hon Hai Precision Industry Co. That company is better known as Foxconn. It’s expected that the Taiwanese billionaire would take a seat on the board.

Surprisingly, Terry Gou is not listed as a director on the list. Other names on list is the former Flextronics CEO Michael Marks and current Yahoo CFO Kenneth Goldman.

The California-based company is registered to go public, but the company is the latest to file for a «secret» initial public offering. New rules, under the 2012 JOBS act, allow companies to keep much of their information out of the public eye until shortly before the shares begin to trade.

That`s probably why you don`t here so much about the company in the media at the moment. The act allows companies with annual revenues of less than $1 billion to file with the SEC confidentially.

JPMorgan is the lead banker on the offering, but the date for GoPro`s IPO hasn`t yet been set. As I know so far, the IPO will be at the end of the second quarter of 2014. GoPro may raise $100 million in an initial public offering.

It`s probably not the best time go public right now with all the tech bubble talk around the world. Other companies have delayed its IPO plans due to the market conditions. Companies that have decided to enter the market has not succeed. King Digital is trading well below its IPO price.

Woodman say GoPro plans to list on the Nasdaq under the symbol «GPRO». Revenue for 2013 came in at $985 million and that`s up 87% from the year prior. Net income clocked in at 61 million, up from $32 million in 2012.

So far in 2014, growth is down 7% from $255 million. Net income is down from last year`s first quarter as well. It`s down 52% to $11 million. The company’s revenue has doubled year-over-year up to 2012, but that trend has since ceased.

The company shipped fewer units in the first quarter of 2014. 852,000 cameras compared to 954,000 in the same period last year. They shipped 3,85 million units of its cameras last year, and that is up 66% from the year prior.

As usual, it will be difficult to grab some stocks during the IPO, but there is always a backdoor. GoPro didn`t succeed alone. Another growth company is Ambarella Incorporated (AMBA). GoPro wouldn`t be much without them.

AMBA is a leading developer of low-power, high-definition (HD) video camera systems-on-a-chip. I assume you haven`t heard of the company, but thay are everywhere. You just don`t know, because you can`t see them, but they can see you.

If you walk into a secure area like a bank, airport or a government building, there`s a strong chance that you are being watched by a camera using Ambarella technology. When you watch cable or satellite TV, you`re watching the end result of a signal compressed by Ambarella`s proprietary algorithms.

Ambarella has a key position in the wearable technology market and act as a backdoor into the GoPro IPO because it exclusively manufactures the internal systems-on-chips that power the entire lineup of GoPro`s Hero wearable cameras.

Ambrella`s system helps GoPro make a miniature $300 cameras with the same 4K video quality as a $20,000 camera. That`s not bad! GoPro monopolize about 70% of the wearable sports camera market. It`s expected to see that market to rise by 50% each year. Ambrella will capitalize on this growth.

AMBA dropped -1% yesterday and the stocks is down -27,3% so far in 2014, but it`s up +56,9% (1 YR). I think AMBA has a big opportunity as the market for wearable and action cameras improves. Their relationship with Google and GoPro gives them a great chance to improve sales.

According to Cisco (CSCO), mobile video is set to grow at a whopping 90% annual rate, reaching 71% of total mobile data traffic by 2016, and AMBA want a piece of the action I think. Google Helpouts and GoPro`s IPO can push Ambarella`s stock higher in a fast growing new market.

Be careful, because other big brands are coming into the market. I`m talking about brands like Panasonic (PCRFY), Texas Instruments (TXN), Fujitsu Limited (FJTSY), Sony (SNE) and Canon (CAJ). Others companies are forging their way into this growing new market. That`s Qualcomm (QCOM), NVIDIA (NVDA), Broadcom (BRCM) and Samsung (SSNLF).

They will all fight in the same market and all of them want a share in the market. This will be a huge challenge in the growing new market.

Reports today:

08:15 a.m EST ADP Nonfarm Employment Change
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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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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by | June 2, 2014 · 1:16 pm

Sell in May and Go Away

«Sell in May and Go Away» is a seasonal market timing strategy based upon the premise that stocks have historically performed better in the Winter months than in the Summer months. The idea of selling in the month of May is rooted in The Halloween Indicator, which points to historically higher returns in the six-month period from November 1 through April 30.

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Mutual fund investors buys and sells based upon their own unique investment objectives like time horizon, financial goals and risk/reward. Their investment decisions is never made on the basis of patterns.

Their sell strategy is not a type of guessing game that rely more on luck than on skill. They sell in may (if they need to) like any other months, so it’s no different in may than any other months. Historically, the stock market is bad from May 1 to October 31, so some investors are buying in that time frame, because the stock prices are lower.

You shouldn`t listen to investors saying «Sell in May and go away». The popular adage «Sell in May and go away» proved to be wrong this year. It was wrong for Indian stocks as the benchmark Sensex gained a whopping 1,800 point and that is the best monthly gain in recent times.

Indian stocks scaled new record highs in May this year, with the benchmark index Sensex rising above 25,000. It rise on new hopes of economic revival as Narendra Modi became the new Prime Minister.

The 30-scrip Sensex gained 1,799.54 points to end at 24,217.34 in May, breaking the May jinx. Is it always like this in India in May? No, it gained 24,53 points in May last year. In May 2012, the stock market dropped 6%. In 2011 and 2010, the Indian stock market fell about 2,5%.

The BSE Sensex touched a record high on 25,375.63 on May 16 this year. This is the day the results for the general election gave Bharatiya janata Party (BJP) a clear mandate. BJP coming into power with full majority has enthused markets.

BJP and Modi is not the only reason why the Indian markets are in an euphoria. Overseas investors have pumped in about Rs 34,000 core in the stock market in India in May. But how is it in the U.S market right now?

It’s the same. New record highs in both S&P 500 and the DOW. The S&P 500 ended Friday up 3,5 points, to 1923,57. The DOW ended up 19 points, at 16717.17, and this is all time high. S&P 500 ended the month in May up +2,10%, while the DOW was up 0.82% in May.

It was a great month for investors in May, and it seems to be little fear in the market, as the VIX (fear index) is at its lows of the year. I think we can blame the FED for the bull market we see right now. QE is the reason for all this.

Some people do not belive in the Summer months and think it is bad for long-term stock investments. People like this usually sells in May and then wait until the Autumn before they buy stocks again.

This is wrong. The summer offers just as many trading opportunities as the rest of the year. Some professional traders are more active during the summer, because the can take advantage of specific markets that are more actively traded during the summer.

Take a look at the commodities and more specific on summer products like corn and wheat. Products like this is more active during the summer because the agricultural industry is very active, like crops and growing and so on.

To sum up; Stick to your own investment objectives and don`t listen to the media noise out there. The decision to buy or sell is a matter of understanding your own purposes for investing.

Reports today:
08:10 a.m EST Treasury Sec Lew Speaks
10:00 a.m EST ISM Manufacturing PMI

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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