Tag Archives: Inflation

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 16, 2014 · 2:27 pm

Food prices are up – so are Giggles N Hugs

 

It`s not going to be easy for the restaurants if the cost is rising. A beef is 25 percent higher now than at the end of last year. If this continue, the restaurants need to rise the prices on the products they have on the menu. Or they can simply change the menu.

Giggles N Huges logo

What does that mean for the customers? It means it will be more expensive to eat out, so it will be a question about eating out or going the long way to the refrigerator. This is not good news for the restaurants as the industry is grappling with excess capacity and declines in foot traffic.

 

This is why it makes it difficult for the restaurants to rise their prices because they can lose a lot of customers. In addition; disposable income growth as the primary driver of consumer spending hasn`t improved in this slow recovery since the financial crises started in 2008.

 

According to the Bureau of Labor Statistics monthly consumer price index, the cost of eating at home rose 1,7 percent in April, while consumers paid 2,2 percent more at U.S eateries. Food-at-home inflation has been accelerating, and May data on retail prices will be released tomorrow.

 

It`s not a good ting when prices are increasing as the wages remains low or declining, but there are one out there that is waiting for the prices to increase; the Fed. Their inflation goal is about 2 percent, and they are now looking for signs that companies are able to pass along higher costs to their customers.

 

According to the Beige Book from June 4, policy makers said price pressures are «contained», some are reporting rising food costs and that is particularly meat and dairy products. For example beef and pork is now more expensive at grocery stores, so restaurants will probably boost prices of certain menu items.

 

McDonald`s is up 3,6 percent YTD, while Chipotle Mexican Grill is up 10,4 percent YTD. This big companies, but what about a smaller one; Giggles `n` huge, which is up 20,69 percent in one day! This can be a growth company in the future.

 

The company operates a kid-friendly restaurants in California. They are known for its own creation called Mom`s Tricky Treat Sauce, which hides pureed vegetables in kid`s favorite meals, such as pizza, pastas and macaroni and cheese.

 

Its restaurant features kid-size castles, giant climbers, a pirate ship, and a walk-on dragon, as well as tricycles, swings, bouncies, and an abundant selection of toys in each location. Their stock price rose 20,69 percent on friday, closing at 0,700. When was the last time McDonald`s made jump like this?

 

Reports today:

08:30 a.m EST Empire State Manufacturing Index

09:00 a.m EST TIC Long-Term Purchases

09:15 a.m EST Capacity Utilization Rate

09:15 a.m EST Industrial Production m/m

10:00 a.m EST NAHB Housing Market Index

 

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 | May 26, 2014 · 2:07 pm

Interest-rate cut in the Euro Zone

 

Japan`s Nikkei index rose to a 7-week high today, up +0,97%. Yen retreated against the dollar and a record high for Wall Street helped the Asian stocks on upbeat U.S housing data. The broader Topix advanced 1,2% to 1,194,69.

 

European stocks are also up today, helped by Italy`s Prime Minister Matteo Renzi. FTSE MIB outperform after Italy`s Prime Minister`s centre-left Democratic Party`s reform were endorsed by a strong showing in European elections.

ECB

A big surprise for many nervous «Sell in may and go away»-investors on friday. The U.S indices increased with the DOW up +0,38% to 16,606,27, Nasdaq +0,76% to 4,185,81, and S&P 500 +0,42% to 1,900,53.

 

ECB`s President Mario Draghi says the policy makers are watching the market closely and once they see low inflation they will be ready to take some action. Draghi said they are looking for a negative spiral to take hold between low inflation, falling inflation expectations and credit.

 

«We are not resigned to allowing inflation to remain too low for too long», Draghi said today. He is trying to guide the euro area through a fragile economic recovery that remains threatened by subdued pricing power.

 

Next ECB meeting is June 5 and they are now working on a package including interest-rate cuts and liquidity injections. Many investors will wait for the next ECB meeting and the lower the interest-rate is, the bigger the problem in the economy is. You are tough if you buy stocks now.

 

Reports today:

 

04:00 a.m EST ECB President Draghi Speaks

All Day Bank holiday

 

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 | March 31, 2014 · 2:09 pm

Low inflation in Euro zone

The yen is weaker today, but Japan`s Nikkei is trading up at its three-week high. A nice day, but it is the worst quarter performance for Nikkei in about two years. It’s also a «window dressing» as the books close for the fiscal year-end today. Nikkei rose to 14,827,83, up 0,9%.

Janet Yellen

The inflation in Europe is at its lowest since November 2009. The question now is what ECB (European Central Bank) will do to stop this threat of deflation in the currency bloc. It`s far from the deflation we saw in Japan in early 90`s, but it is a clear sign of a weak economy.

ECB will probably cut the interest rate on the meeting on Thursday, but because of this year`s late Easter, they will probably wait until the next meeting which is in June this year. It`s still a case for easing.

That`s why we see the European markets trading up today to a three-week high. There are growing speculation that China will start to stimulate its economy too. This is music in investors ears, and not only European shares are up today.

It seems like the U.S markets will open up today too. That`s a nice, green and positive territory. Right before a speech by Federal Reserve Chair Janet Yellen. She is scheduled to speak in Chicago at 09:55 a.m EST.

Investors will listen to what she have to say about interest rates. Last time Yellen spoke about the possibility of an earlier-than-anticipated increase in rates, the equities dropped. This is the last day in march, and the S&P 500 is nearly flat this month. Up 0,5% for the quarter.

Reports today:

09:45 a.m EST  Chicago PMI
09:55 a.m EST  Fed Chair Janet Yellen 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 | February 12, 2014 · 2:07 pm

The other currency

The U.S stocks surged yesterday as the Fed and Janet Yellen said they would continue the central bank’s policy of providing monetary stimulus to bolster the economy. This is music in the investors ears!

 

«What would cause the committee to consider a pause in tapering is a notable change in the outlook,» Janet Yellen said. Republicans don`t want to fight anymore, so he house voted to raise the government`s borrowing l limit. This will continue until March 2015.

 

Asian and European stocks is up today, as the investors cheered Janet Yellens stance. Gold is down today. USD have always had an interesting relationship with Gold. When gold is rising the dollar has declined in the long term, but that is not true, in the short term, so the relationship can be tenuous at best. Take a look at the charts, and you can see for yourself. You can see a strong negative correlation to a strong positive correlation and back again.

 

This relationship can be linked to the Bretton Woods System. International settlements were made in U.S dollars and the U.S goverment promised to redeem dollars at a fixed gold rate. Bretton Woods Systems was dissolved in 1971. When gold is discussed, talk of the U.S dollar usually ensues.

 

Gold and U.S dollars can be seen as a trading pair like EUR/USD or other currency pairs, but it is important to remember that gold and currencies are dynamic and have more than one simple input.

 

Gold is impacted by far more than just U.S dollar, inflation or war. Gold can be traded all around the world as a global commodity and it reflects global sentiment. Not only a sentiment of one economy or group of people.

 

It seems like a new bullish trend have started, but be careful and take a look at the gold, equity markets and the U.S dollars during the 2008 financial crises. Gold plummeted like the stock market, and the U.S dollar skyrocketed. This is just a reminder.

Gold

 

Reports today:

 

10:30:00am EUR ECB Precident Drahi speeks        
10:30:00am USD Crude oil inventories        
01:01:00pm USD 10-y bond Auction        
02:00:00pm USD Federal budget Balance        

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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