Tag Archives: Federal Reserve System

Earnings reports this week

Gold is up 3,63% so far this year and the precious metal is trading at $1248,5 at the moment. That is a nice bounce off of the $1200 level. It is not so good for the Dow, which is down 33 points after the bad news on friday. The job growth surprised everyone as Nonfarm payrolls rose only 74,000 in December. Some people are shocked. The S&P 500 ended up 11 points. U.S equities finished the week mixed on the news.

Raw-material prices was down 3,2% this year and this is the worst start to a year since 2007. China is the biggest user of everything, from cotton to pork to zinc and the producer prices declined in December for a 22nd straight month, and this is the longest decline since the Asian financial crises in the 1990`s.

Much has been done of the sharp fall in the unemployment rate to 6,7% and this keeps the Fed on course to start the tapering at this months January meeting, which is January 28-29.

The labour participation rate is at a 35 year low, at 62,8%. It is not a positive thing that so many people have stopped looking for work. Are they really gonna start tapering now?

Hedge funds are cutting their bullish commodity wagers now on signs of slowing economic growth in China and surplus supply.

This year started bad with the major indices trading down the first trading days of the year. This bad starts followed by bad news with only 74000 (non-farm) jobs created in December.

The markets is not as strong as we had thought it might be, and we need some good news now to kick-start the markets again. If not we could lose key support lines. A lot of information is coming out this week.

Very important news is coming from retail sales, housing data, the Fed Beige Book, and consumer sentiment. Earnings reports is on the way too. Bank of America (BAC), Goldman Sachs (GS), J.P. Morgan Chase (JPM), as well as general electric (GE), Wells Fargo (WFC) and Intel (INTC) are some of the large amount of earnings data that will be important to the market this week.

We need a solid week to hold onto technical support.

News today: Federal Budget Balance at 2:00pm (forecast 44,3B – previous -135,2B).

SPX 13.01.2014

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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U.S. nonfarm payrolls data

Yesterday we saw another mixed trading session, and today market participants will wait for the job report at 08:30 ET. The U.S stock index futures is up before the data that shows us that American employers last year added the most workers since 2005.

It is probably added 197,000 jobs in December, which means 2,27 million jobs in 2013 and that will be the strongest year in 8 years. The unemployment rate remain at a five-year low, landing on 7% in December last year. A strong report job data today could make the Fed to reduce its bond-buying stimulus and start the day it starts hiking rates.

The Fed will have a new meeting at Jan 28 – 29. In December they announced that they will reduce its monthly bond-buying program with $10 billion. The reason why they pay $75 billion instead of $85 billion is the recovery in the labor market. The QE program they started has helped the S&P 500 to reach a new high from a 12-year low in 2009.

Market makers will look at earnings numbers now. Many retailers will probably deliver good fourth quarter reports, but what about the banks? Next week we will see reports from Bank of America, Goldman Sachs Group and JP Morgan Chase & Co. That will be interesting numbers.

A slow start in the stock market so far in 2014 have boosted gold prices. Gold ended a 12-year bull run and lost 28% of its value last year. Economic data has showed us that the U.S economy is gaining steam. If the number today exceeds investors expectations, gold will probably go to $1200 or below.

Important news today: Non-Farm Employment Change & Unemployment Rate at 8:30am.

shinybull_for_sitesite-7

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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Health-care bull

The stock indices are up and the fear goes down. Vix is down 4,7%, trading at 12,92. People are bullish and now it is time for the companies to deliver. The sentiment is still very high, so it will be interesting to see the companies economical numbers and their earnings growth.

2013 was an extremely good year in the stock market, but I don`t think 2014 is going to be the same. We did not see a big correction last year. It all went up. But this year will probably be different. It is headed for some corrections and this year will be more volatile than last year.

Three rounds of QE have helped the indices to increase and reach a new all time high. The S&P 500 is up 173% from its twelve-year low in 2009. Janet Yellen will replace Ben Bernanke as a FED chairman on Jan 31. Janet Yellen won Senate confirmation (56-26 votes) to become the 15th chairman of the FED.

The Nasdaq Biotechnology Index is up 1,4%. Health-care shares in the S&P 500 is up 0,3% in 2014, and this is the most among the ten main industries. Investors are waiting for the Fed minutes today, and news about the job report on friday. This is important news that can drive the market.

Today, we will know what outgoing Fed Chairman Ben Bernanke really want to do with the gradual tapering of $10 billion a month. Today`s minutes will tell us that this was a narrower view to some few FOMC members or not.

Follow the oil price now. This is a risky bet. The oil price can plunge and Opec can face huge problems. If this is the scenario, I think it will be very good news for the U.S consumers. Who want cheaper gasoline?

Middle East is the key and U.S Secretary of State John Kerry are working with difficult cases like Shia-dominated government in Baghdad, the Islamic State in Iraq and al Sham (ISIS), Al Qaeda’s fast-growing franchise operating in Syria, Sunni groups marginalized by Iraqi Prime Minister Nouri al Maliki’s authoritarian policies, Egypt, Tunisia and energy producers like Nigeria, Venezuela and Russia.

I mention this because it all affects the oil price, and what`s happend in this areas can change the game very fast. This is a big risk in 2014. So, the happenings can drive the oil prices up or down. It depends on whats happening?

The unemployment data from EU yesterday was disappointing. In Italy the unemployment rate is at the all-time high of 12,6% (for November), and for the broader EU unemployment, the rate is now at 12,1%. Just below its record 12,2%. The unemployment rate is U.S is just above 7%.

It looked like we had a game changer in November – December last year, but take a look at the chart below. CRB have turned around and are still declining. It is below 50 MA and I will wait for this to turn up again.

New today: ADP Non-Farm Employment Change at 8:15am, Crude Oil Inventories at 10:30am, 10 Year Note Auction at 1:01pm, FOMC Meeting Minutes at 2:00pm.

CRB 07012014

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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Outrageous predictions for 2014

It is difficult to be in the market under circumstances we have now. We are at the top in many indices, and many of the great blue chips have gone too far. Netflix, Amazon, Yelp, Twitter and Pandora media (better called “the fat five), are all bubbles waiting to plunge about 50%.

The average stocks in the U.S is not expensive, but they are not cheap either. It is better to look at the European and the emerging markets. Gold is still declining but it seems to bottoming out soon, ready to take off again. Gold dropped -1.13% yesterday ahead of tomorrow’s Fed Statement and Press Conference. So, what are we suppose to do next year?

Every year, Saxo Bank are publishing a list with some forecasts and predictions about the markets next year, and those predictions can have huge impact of the global markets.

This time they have predicted scenarios from a return to a “Soviet-style economy” in the EU (?) and a huge recession in Germany. They also predict a failure of the QE program in the U.S. Wow!

These ten predictions are not the official forecast of the bank for 2014, chief economist Steen Jakobsen said, and they are not ment to be “pessimistic”.

2014 should be the year in which a mandate for change not only becomes necessary, but is also implemented, he said. History tells us that changes have always come as a result of the thorough failure of the old way of doing things.

What will happen to the U.S and German economy next year? Will they reach “escape velocity” next year, or will they slow to zero growth? What about the European Parliament? Will the upcoming elections herald a new anti-EU coalition?

Those predictions are made to remind us that “a wake-up call is necessary as the alternatives would leave us with a dire outlook, Jakobsen said.

The ten ‘outrageous predictions’ are listed below.

1. EU creates a new wealth tax on savings above €100,000 in a return to a ‘Soviet-style economy’.

2. The European Parliament elections see the creation of a strong anti-EU alliance, to include the UK Independence Party.

3. The bubble bursts in the five US technology giants that have been trading at a huge premium to market valuations this year – Amazon, Netflix, Twitter, Pandora Media, Yelp.

4. The yen falls below Ұ80 per dollar, as investors pile back into the currency, forcing the Bank of Japan to delete its government debt in order to escape deflation.

5. The US recovery slows down, bringing deflation worries back to the fore.

6. Far from tapering, the Federal Reserve increases QE to $100bn per month and focuses on mortgage bond purchases to support a flagging housing market.

7. The price of Brent crude falls to $80 per barrel, as producers fail to slow down production.

8. Germany enters an unexpected recession as economic activity slows.

9. The French CAC 40 index drops 40% as local politics takes a turn for the worse.

10. The currencies of the ‘Fragile Five’ countries – Brazil, India, South Africa, Indonesia and Turkey – fall 25% against the US dollar.

Take a good look at all the markets today. The Fed`s two day meeting with the FOMC statement release ends today at 2pm ET. If they start to taper or not, I think it will be very sensitive to all the markets.

I don`t listen to what the FOMC members say before those meetings. I do only listen to one person, and that is the Fed chairman Ben Bernanke. He is the man. Is he going to taper? I don`t think so, but let`s wait and see later on today….

News today: Building Permits & Housing Starts at 8:30am, Crude Oil Inventories at 10:30am, Fed Statement at 2:00pm, FOMC Press Conference at 2:30pm.

FOMC-dice

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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Market overview

European shares is up today, led by Aggreko with a bullish trading update. The European market is up despite the concern about the FED`s tapering plans this week. Much higher fear in Japan, while Nikkei sled -1,6%.

The S&P was down -1,65% last week. The worst week since August. Facebook (FB) went in the opposite direction and bucked the market trend lower, finished up +11,22%, trading at $53,32. Facebook will now join both the S&P 100 and the S&P 500.

Many investors are very satisfied with this bullish year 2013, but now all the investors eyes are on the Federal Reserve later on this week. The FED have a two-day policy meeting Wednesday.

FED is very powerful! Everything they say have a huge impact of the financial markets. The question now is whether they will continue QE or start to taper, the huge bond buying program that has made the massive mega-rally on Wall Street.

Look out for the brand news later on this week. The FED Statment will be launched at 2pm ET. Later on the same day, a FOMC Press Conference will be held at 2.30pm. This is very very very important news.

News today (all times are Eastern Times) : Empire State Manufacturing Index at 8:30am, TIC Long-Term Purchases at 9:00am, Capacity Utilization Rate & Industrial Production at 9:15am.

global-options

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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