Tag Archives: Janet Yellen

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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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 | March 20, 2014 · 1:51 pm

FED raise rates

Silver dropped -2,60%, while gold is down -1,01% after the news from Fed Chair Janet Yellen. Oil and Copper is also down today. Janpan`s Nikkei 225 is down -1,65% to 14,224 points. Hang Seng is also down together with the rest of Asia.

Janet Yellen

(Picture: Fed Chair Janet Yellen)

The U.S indices traded down yesterday too and Europe is also in a red territory. Most investors don`t know what to do right now. It seems to be a red opening in the U.S later today. This is all reactions on the FOMC meeting yesterday.

The Fed will probably end its massive bond-buying program this fall and probably start raising interest rates around 6 months later. This comment sent stocks and bonds tumbling. We will see a more aggressive path toward higher interest rates than anticipated she said yesterday.

The Federal Reserve has held the interest rate near zero since late 2008. They have pumped trillions into the markets with its bond purchases. All this because they tried to foster a stronger recovery. Despite the QE program, the growth has been very slow.

The change in its rate hike guidance did not mark a shift in its intentions and they will wait a «considerable time» after shuttering its asset purchase program before pushing borrowing costs higher. «Considerable time» means about 6 months.

But, as Janet Yellen said: «It depends – what the statement is saying is it depends what conditions are like».

Most people don`t know it, but the best period of economic growth in all U.S history was without a central bank. Do U.S really need Federal Reserve? They created the markets crash in 1929, and so far the FED has been a disastrous.

The FED started about 100 years ago, and since then the dollar has lost more than 96% of its value. The size of the U.S national debt is more than 5000 times larger. The Fed`s «debt-based» financial system has trapped the U.S, and are on the verge of the greatest financial crises in history.

Congress could have shut down the FED long time ago. I HATE DEBT!

Reports today:

08:30 AM ET Unemployment Claims
10:00 AM ET Existing Home Sales
10:00 AM ET Philly Fed Manufacturing Index
10:00 AM ET CB Leading Index m/m
04:00 PM ET Bank Stress Test Results

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 19, 2014 · 1:09 pm

FOMC Press Conference

Asian stocks fell today as investors are waiting for the Federal Reserve`s policy statement. The FOMC (Federal Open Market Committee) will end a two-day policy meeting today, after data yesterday indicated the U.S home-building industry is stabilizing.

Investors are still very cautious and The Fed will probably water down their forward guidance and keep U.S interest rate low for at least another 18 months. The FOMC will further scale back its bond-buying at the meeting.

They will probably reduce purchases for the third time by $10 billion to a $55 billion monthly rate. Gold had the longest slump since mid December 2013. What is going on with the precious metal? Are the first stage in the gold bull over?

Gold has declined before the meeting and are now trading at $ 1345,10. Nobody knows what Janet Yellen will say today, but it is expected that the gold will bottom out today before the meeting and then go up again.

Traders will probably sell on rumors of Fed tapering and will cover shorts and buy after the announcement. Gold broke out of its first stage, and now have a sharp pullback to previous resistance. Gold is volatile so it is expected.

Now, it will be interesting to follow the bond market. It seems like it is on the way to break out to the upside. If TLT ETF who tracks the value of the 20-year treasury bond breaks out, the rates will drop. So, how will that be if the Fed buy fewer bonds?

Right after the Fed meeting, I will follow the gold price, stock market, bond market and the interest rate. Janet Yellen can move the market, but it depends on what the news is? I look forward to the FOMC meeting today.

Reports today:

02:00 AM ET FOMC Economic Projections
002:00 AM ET FOMC Statement
02:00 AM ET Federal Funds Rate
02:30 AM ET 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 | 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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