Hard At Work
UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Fri. Aug. 6 @ 8:30 am ET - Employment Data
* Wed. Aug. 11 @ 8:30 am ET - m/m & y/y CPI & Core CPI Data
* Thurs. Aug. 12 @ 8:30 am ET - PPI m/m & Core PPI m/m Data
* Tues. Aug. 17 @ 8:30 am ET - Retail Sales & Core Retail Sales Data
* Wed. Aug. 18 @ 2:00 pm ET - FOMC Meeting Minutes
* Fri. Aug. 27 @ 5:30 am ET - Core PCE Price Index Data m/m
* Wed. Sept. 8 @ 2:00 pm ET - Beige Book Report
* Wed. Sept. 22 @ 2:00 pm ET - FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
*** CLICK HERE for link to Economic Calendars for all upcoming events.
Tuesday, April 30, 2013
Sunday, April 28, 2013
Saturday, April 27, 2013
Friday, April 26, 2013
- 6 Major Indices
- 9 Major Sectors
- Channel/Fibonacci Projections to the End of Q2 of 2013 for 6 Major Indices
Thursday, April 25, 2013
*(I may update this list as the year progresses, as various scenarios become clearer, and as new events unfold.)
"MONEY PRINTING" and "EASY MONEY"
- the Fed's "QUANTITATIVE EASING" program ("QE") of buying bonds and mortgage-backed securities
- the Fed (and other Central Bankers around the world) provides low interest-rate loans to Banks
- Banks are supposed to make this money available to companies and individuals at low rates that they deem appropriate (however, as demand for loans picks up, no doubt the Banks will raise interest rates, even though the Fed may not...a risk that will have to be factored into a company's costs)
- the Fed's "DUAL MANDATE" monetary policy -- to reduce the unemployment rate while maintaining an inflation target of 2%
- the Fed's goal is to produce a "WEALTH EFFECT" (precisely who will benefit remains to be seen)
- the ECB's secondary and sovereign bond-buying program (there is still some debate as to its legality) from the implementation of its "ESM" and "EFSF" bailout programs -- UPDATE January 14, 2015 (courtesy of ZeroHedge article): "European Top Court finds ECB's OMT 'May Be Legal' but must meet conditions"
- through the use of its money market operations (for the purposes of reflating its economy)
- wholesale and retail prices of goods and services
- price of stocks, commodities, etc.
- home prices
- interest rates (and, thus, the nest eggs of 'savers')
- market volatility
- the value of currencies (e.g., the Yen)
- introduce company share buy-back programs
- increase dividends
- offer or enhance preferred-share programs
- issue or enhance corporate bond programs
- production and distribution of goods and services
- costs of goods and services
- employee/goods/services performance
- the benefits (to the consumer) of the goods and services
- the housing sector (the Fed's desire)
- short-sellers of national and international holdings
- short-sellers of commodities
- short-sellers of beaten-down stocks
- savers (and, in some cases, seize savings)
- this phrase does not seem to exist in this current environment where most (U.S.) markets are at/near either 4-year highs or all-time highs
- is being ignored
- a new phenomenon and risk, in addition to other types of global cyber attacks that we've seen recently
Companies will need to effectively balance their "SHAREHOLDER PERKS" with their cost-cutting measures against demand for their products/services to ensure that, in offering these perks (while protecting against domestic and global risks), they don't go from cash-rich to debt-ridden in short order. As always, it's up to each investor to determine just how "TRANSPARENT" these "RISKS vs. REWARDS" are, as presented by companies, so they can make informed decisions before buying (or continuing to hold) shares.
The risks of a "VALUE" company in this kind of environment may very well be much greater because of its low-growth nature; whereas, a "GROWTH" company's risks may be lower. However, if demand is not there, they will all become "value" plays (or worse) in the end, as their risks increase. In the long run, all of this will only work if consumer demand for goods and services keeps pace with, and outpaces the ultimate costs of the company's "ADDED RISKS" and "INFLATION."
We'll see how 2013 ends and how well global Central Bank policy has worked. Stay tuned...
- BUY corporate debt
- BUY high dividend-payers
- BUY risk
- BUY banks (and their debts & assets)
Wednesday, April 24, 2013
All of this weakening data this year points to a slowing economy, not an expanding one. Perhaps at some point, the markets will reflect this. Until then, they remain (in "The Twilight Zone") pushed up against 4-year highs (and all-time highs in some cases)...the result of the Fed's influence (and other Central Banks around the world, particularly Japan), and not the normal laws of market supply and demand. This reminds me of the story, "The Emperor Wears No Clothes"...at some point, the public will wake up (and admit) to reality, and Ben (and his cohorts) will be looking for a new tailor (and possibly updating their Linkedin profiles). ;-)
Data Sources: Nasdaq and ForexFactory
Tuesday, April 23, 2013
THE THREAT & THE PROBLEMS
How will fund managers, as well as the "average investor," hedge against this new risk in the current environment where we've seen increasing incidents of cyber attacks around the world?
Those already in the market who have a stop loss set on their trades (within the ensuing price spike) will be taken out by "High-Frequency Algorithmic Trading" (and not necessarily anywhere near the price of their stop loss, but it could be much lower), and those who don't are at the mercy of market reaction to the HFT trades.
The following article regarding the AP Tweet is from ZeroHedge:
Add these to the recent mix of weakening data, as I've written about here, here, and here, and you will see that the markets are ignoring (and bear no relationship to) economic fundamentals.
Data Sources: Nasdaq and ForexFactory
Note the radical difference in market reaction between the Asian indices and US indices, as of 10:15 am EST today (Tuesday). Precious metals (as well as Copper) are currently down.
Monday, April 22, 2013
The major indices are in negative territory at the time of writing this post.
Data Source: Nasdaq
As you can see, the GDP numbers have been in a downtrend from January of 2010. If such a rise were to occur as forecast, it would penetrate above this trend, but would still lie within the 3-year range. It would take a higher number for the next quarterly report (for Q2) to confirm that the current downtrend has, in fact, been broken.
Since inflation is anticipated to have risen at such a rate as forecast, I find that 'interesting' in view of what I wrote about here (the BOC's downward 2013 economic growth forecast), here, here, and here, and we may see an attempt at a bounce in Gold this week. However, any rally from its lows of last week may occur on a low-volume 'dead-cat bounce' (particularly on any overnight rallies) and may not be sustainable in the near or intermediate term...one to watch this week, particularly on Friday.
As you can see on the Weekly chart of Gold below, the next levels of major volume/price support lie at 1150 and 1000.
Sunday, April 21, 2013
Friday, April 19, 2013
Further to my last Weekly Market Update, this week's update will look at:
- Nine 1-Year Daily thumbnail chartgrids of a variety of markets around the world
- Nine 1-Week percentage gained/lost graphs of these markets (you can see which markets gained/lost this week, and by how much)
- Three Monthly charts of Lumber, Copper, and the Homebuilders ETF (XHB)
In general, it appears that the U.S. $ and 30-Year Bonds are still considered to be the 'safe-haven' plays.
The next three Monthly charts show resistance and support levels on Lumber, Copper, and the Homebuilders ETF (XHB). Lumber and XHB have pulled back somewhat after hitting major resistance levels. Copper has been much weaker and is approaching one major support level at 3.00. If Copper falls and holds below 3.00, it may have a negative impact on Lumber and XHB. And, vice versa, if Lumber and XHB continue to drop, we may see Copper decline below that level down to its next major support level at 2.50.
As an aside, I'd have to say that a good part of the increase that we've seen in new home prices since the 2009 lows is likely due to the increase in the price of Lumber (which has been approaching historical 25-year highs) (and Copper, to some extent, which hit an all-time high in 2011). We'll see if new home prices (and sales) continue to rise if we see a meaningful decline in these three issues, as well as in the Financials Sector.
These three instruments (including Financials) are worth watching going forward, along with Commodities, as I've written about recently here, here, here, and here, since further weakness in these may markedly negatively influence equities. As well, further weakness in European instruments, particularly their banks, along with the BRIC countries/ETF and Emerging Markets ETF, may negatively impact U.S. equity markets.
Enjoy your weekend and good luck next week!
Thursday, April 18, 2013
What to write about??? That's always the question when I sit down to write a new post. Hmmmm.....
(Taps fingers on mouse pad...looks around for inspiration...)
Since I'm (uncharacteristically) at a loss for words, I'm logging off, will briefly enjoy the view ;-) and will be searching for the biggest piece of chocolate cake I can find...here's to another year!
P.S. Thanks to all for visiting and helping to give my Blog a purpose. And to those kind readers who've taken the time to e-mail me, I've enjoyed the friendly conversations that we've shared...I've learned many important things about life (and myself), as a result...and that's a great gift from each of you that I will forever treasure.
As well, I'd like to take this time to thank the gracious hosts who also publish my articles at these websites (each site offers many valuable resources and a ton of information...well worth repeated visits):
I wish everyone the best of times for the next year! :-)
Wednesday, April 17, 2013
You can watch BOC Governor Carney's subsequent press conference at this video link. I found his response to this question from a member of the press rather "curious." When asked, "What can you say about the plunge in the price of gold this week?" he responded with "It's not a market that we follow closely." (I have to give him credit for holding a straight face while gave his answer...however, Senior Deputy Governor Macklem, to his right was not quite so skilled.) He went on to say that they (BOC) were more interested in a variety of other commodities (he mentioned oil and lumber) as being more indicative and leading indicators of global growth prospects, and that one could point to the base metals in that regard.
As I write this at 10:30 am EST, most of the commodities in my list are down and Canada's TSX Index is down 103.21 from yesterday's close. Most world market indices are also down.
Continued weakness in commodities may, finally, weigh negatively on equities, as I've written in several posts recently here, here, and here.
UPDATE at 4:30 pm EST - As an example of a base metal that they are likely monitoring, copper is down nearly 4% today and is currently trading at 3.1765. Contrast that with its high of 4.6495 reached in February 2011, and it's down by 32% from that level. The chart below shows that a bearish "Death Cross" has formed recently on the Weekly timeframe as price has fallen below 5-Year major price, moving average, Fibonacci, and volume support levels....one to watch going forward, along with other commodities that I've mentioned in the above referenced (and even older) posts.
(Excerpt from BOC press release)
World Market Index Source: http://www.indexq.org/