by | April 7, 2014 · 2:01 pm

Sell off on friday

A big drop for U.S tech stocks on friday. Nasdaq was down -2,60% on friday. S&P 500 -1,25% and the Dow -0,96%. Nikkei is also down today, together with the other Asian markets. Nikkei is down -1,69%.

Europe is also down today. Stoxx 50 is down -0,89%. FTSE 100 -0,71%. CAC 40 -0,72% and DAX -1,24%. At the same time, you can see the commodities trading down too. Gold is down -0,16%. Silver is down -0,33%. Crude oil (Brent) -0,95%, and Copper -0,13%.

Nadaq

(Nasdaq: Apris 4, 2014)

Many investors have talked about the valuations in the tech stocks for a while now, and many predicted a tech bubble was on the way. I wrote about it for some weeks ago, and I said Twitter was the most expensive stock in this universe.

52 Week high for Twitter is 74,73, and the stock traded down -2,07% on friday. Twitter is down about 50% from the top very soon. Marketers are embracing Facebook over Twitter, and they will rather go for Youtube and LinkedIn before Twitter.

Sometimes investors need to take some profit and friday was a great day for that. It seems like the U.S markets will open down today. I`m excited about the trading sessions, not only today, but for the rest of this week. Take a look at the dollar. It`s up!

Tech and biotech is so far the most popular sectors in 2014, but both of them slide now. Many tech stocks are trading down in Europe too. This is a great time for daytraders. I will follow the charts this week before I start my vacation on friday. Easter bunny is waiting.

 

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 | April 4, 2014 · 1:53 pm

QE in Europe

The dollar rose against major rivals yesterday and investors now wait for employment data later today. The Euro fell yesterday after ECB`s President Mario Draghi said the bank has discussed QE at the last meeting.

The ECB also made no change to interest rate or monetary policy, leaving its key lending rate at 0,25%. Draghi said they would use unconventional measures to fight falling inflation. The mechanics of a hypothetical bond-buying program weren`t hashed out, he said.

The target for inflation rate in Europe is just under 2% in the medium term. Inflation should pick up in April because of the Easter holiday. If Draghi is right, they will probably not do something in May, so the first real opportunity for some action is in June.

Mario Draghi and ECB hope the Easter Bunny will bring an uptick in inflation in April! I hope so too. Usually we see a volatility around service prices in the months around Easter. Draghi expect the inflation to be low in 2015, and push back toward levels closer to 2% toward the end of 2016.

We saw what happened to Japan in 1989. Nikkei topped out on December 29, 1989, during the peak of the Japanese asset price bubble. The ultra-day high was 38,957,44. It grow sixfold during the decade, and lost nearly all these gains.

On March 10, 2009, Nikkei closed at 7,054,98. That is 81,9% below its peak in 1989. Take a look at the chart below. Japan has printed so much money, but have never recovered. The value of the stocks is declining, and Japan`s public debt will be 242% of GDP in 2014.

Nikkei 225

(Chart: Nikkei Index)

Japan`s debt-to-GDP ratio is higher than any country in Europe and more than twice the OECD average. OECD expect Japan`s gross general government debt-to-GDP ration will increase to 231% in 2014.

How is it in the PIIGS country`s? Greece: 166%, Italy: 140%, Ireland: 123%, Portugal: 139% and Spain: 91%. The U.S national debt is now: $17,565,900,000,000. Take a look at this link: http://www.usdebtclock.org/

So, what are you doing if your debt is higher than your income? Paying the debt by another debt? No way! Debt is like drugs. You need more and more and more, and at the end, it will go terribly wrong. Japan had deflation for about 15 years.

Nonfarm Payrolls and Unemployment rate will be reported later on today. Millions are unemployed and this cannot continue. Mark Twain once said: «The lack of money is the root of all evil».

U.S is not Japan. U.S is not half the way either, but will the debt clock stop in the future? Tighter Fed policy will boost economy, according to UBS AG. The expectation for rising rates may prove helpful. This is positive thoughts.

Reports today:

08:30 a.m EST Nonfarm Payrolls
08:30 a.m EST 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 | April 3, 2014 · 2:05 pm

European Central Bank in focus

Nikkei is up today +0,8% to 15,071,88. It`s up because of the news from China which is taking steps to stimulate its economy. All this because they want to reach their goal of the growth at 7,5% in GDP.

ECB

The dollar hit a 10-week high to the yen. Rising up after solid U.S economic data. Investors in the Euro zone are waiting for ECB news and the markets are flat so far today. The ECB will announce its interest rate decision today at 11:45 GMT.

Mario Draghi will talk about any further policy decisions at the conference at 12:30 GMT today. It is expected to see ECB keep the rates steady and offer no new aid to the euro zone`s fragile recovery.

As I wrote about yesterday; the inflation in the Euro zone is dangerously low, but despite the lowest inflation in more than four years, they will probably wait for some action now. It seems like the U.S markets will open up today.

Gold is declining as the investors are waiting for the ECB news. Because of the incumbent macro events, the gold prices is continue to fall. New reports from U.S jobs numbers comes tomorrow too. That will be a final sign to see that the economy is on the recovery path.

Reports today:

08:30 a.m EST ECB Press Conference
08:30 a.m EST Trade Balance
08:30 a.m EST Unemployment claims
10:00 a.m EST ECB President Draghi Speaks
10:00 a.m EST ISM Non-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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by | April 2, 2014 · 1:58 pm

Gold at 7-week low

Gold is still declining from a technical sell signal and a weaker U.S dollar followed by ECB (European Central Bank) meeting is not pushing the gold higher. The ECB will probably do something to help boost the inflation, but it is still too early to see any action now.

Gold

Eurostats reported on monday that annual consumer inflation fell to 0,5%, and that`s the lowest since November 2009. A drop from 0,7% in February. If ECB don`t do something about it now, EUR/USD could break above $1,40 and hit $1,50.

The ECB will probably wait and see what`s happening with the inflation. The drop from 0,7% to 0,5% is significant. The correlation between Euro and Gold has been very strong so far.

As the inflation drops dangerously low, Mario Draghi will probably start to announce some kind of a quantitative easing, or some stronger forward guidance, but it could be too early to do that this week.

ECB can lose its monetary policy if they stop absorbing the liquidity. They used to purchase government bonds, and sterilizing it will have a huge impact on the money supply. It will neutralize their impact on the supply and then lower the risk of inflation.

We saw a sell signal on gold at $1320 and gold prices are down -3,0% since the signal told us to sell. Look out for $1250 on gold. That will be a profit target. Gold hits its 7-week low in lack of bullish news.

Many traders are awaiting for the U.S jobs reports on Friday. This is the most important U.S economic report of the month. In the Euro zone, the Markit manufacturing PMI came in at 53,0 last month, down from 53,2 in February.

Next level to look for in Gold is $1250. If it break that level, the bearish down-trend continue. I will look for $19 in silver which is the bears next near-term downside breakout price. Copper is up 0,99% today. Trading at $306,45. Next bull upside level is $310.

Today, I will look at the economic report at 08:15 a.m EST. That news will show us that U.S economic recovery is on track or not. European stocks gains before the report today. S&P 500 is little changed after the gauge closed at a record yesterday.

Reports today:

08:15 a.m EST ADP Nonfarm Employment Change.

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 | April 1, 2014 · 1:36 pm

AT&T is a long term pick

Fed Chair Janet Yellen said in a speech in Chicago yesterday that the recovery still feels like a recession to many Americans. The «overall comitment to maintain extraordinary support for the recovery for some time to come» is a strong one, she said.

«The scars from the Great Recession remain, and reaching our goals will take time», she said. U.S stocks moved to session high. S&P 500 up +0,79%. Dow up +0,82% and Nasdaq up +1,04%. It’s all green in Europe today too. All indices are up, but it was mixed in Asia earlier today.

100px-AT&T_logo.svg

The biggest U.S phone company AT&T Inc is planning to repurchase 300 million shares (about 6%) on its outstanding stock. AT&T Inc has acquired 775 million shares since 2012. They give itself room to boost shareholders returns and repurchasing 300 million shares would cost about $10,6 billion.

AT&T`s dividend yield is 5,2%. It is expected to see a net-debt-to-adjusted-EBITDA ratio in the 1,8 range or lower. This is a stock for value investors that offers reasonable dividend yields, low valuations and a solid margin of safety.

The stock has declined in 2013. Down from its high at $39. At&T Inc is now trading at $35,07. Both AT&T and Verizone are dropping but not a huge plunge, but they look worse when compared to the Dow`s gain.

The telecom sector is still unloved, and its all comes down to the never-ending radio spectrum battles. Companies like AT&T, Sprint, Verizone and T-Mobile sit on the losing end of this zero-sum equation.

Sprint investors are ignoring the good spectrum tidings, worried that this idea might be a needless cash flow killer. Building a so-called FirstNet will cost about $7 billion to build and there will be less pressure to make big money on the larger auction of former TV station frequencies next year.

Bad for Verizone and AT&T. Good for Sprint and T-Mobile, and great news and even better for the American people.

Reports today:
10:00 am. 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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