Amazon to add 100,000 Jobs
Amazon announced plans to add 100,000 full-time jobs over the next 18 months, a move that comes amid pressure on the private sector by the incoming Trump administration to create jobs.
Seattle-based Amazon announced that by 2018 it plans to have more than 280,000 full-time U.S. employees, further expanding its workforce that stood at more than 180,000 employees at the end of 2016.
The jobs cover a wide range of sectors, from developers and engineers that work on cloud computing to warehouse operators. The positions will be opened across the country and cover all types of education, experience, and skill levels, ranging from software developers and engineers to entry-level jobs.
Of the 100,000 new jobs that Amazon will create, many will be in new fulfilment centers that the company has previously announced.
In addition to the employment opportunities that Amazon will create, some of the company’s businesses such as Marketplace is said to be continuing the creation of hundreds of thousands of jobs for Americans who wish to have flexibility in working part-time, working at their own schedule, or in starting their own business.
"Innovation is one of our guiding principles at Amazon, and it's created hundreds of thousands of American jobs. These jobs are not just in our Seattle headquarters or in Silicon Valley — they're in our customer-service network, fulfillment centers and other facilities in local communities throughout the country," said Jeff Bezos, Amazon's founder and CEO.
The team of President-elect Trump was quick in taking credit for the announced new jobs by Amazon, as the move falls in line with Trump’s promise to open up more employment opportunities in the United States.
US jobs growth slows to 156,000 during December
US businesses added 156,000 jobs in December in the last release of key economic data before Donald Trump is sworn in as president.
The number of jobs created fell from an upwardly revised 204,000 in November and came in below market expectations of 175,000 new jobs.
The jobless rate also edged up last month to 4.7% from 4.6%.
The US Bureau of Labor Statistics said that the annual rate of wage growth accelerated in December to 2.7%. This compares with a 2.5% increase in annual average hourly earnings recorded in November and is the quickest pace of growth since June 2009.
The bureau revised up the number of new jobs created in November from an initial count of 178,000 to 204,000.
Over the last year of Barack Obama’s presidency, job growth reached 2.2 million, down from 2.7 million in 2015.
This is the last jobs report of the Obama presidency. Some of the figures for Obama’s eight-year presidency are quite good. Eleven million more people with jobs and the unemployment rate down from 7.8% to 4.7%.
Since President Obama's inauguration in January 2009, the number of people with jobs has increased by 11.25 million. The unemployment rate has fallen from 7.8% to 4.7%, having peaked at 10% in his first year.
Donald Trump, who takes office on 20 January, has pledged to create 25 million jobs over 10 years. He has also promised to cut tax both for individuals and for businesses, as well as invest in national infrastructure.
Catching Up With Trading at the Weekend
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Catching Up with Trading Over the Holidays
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Starbucks boss Howard Schultz to step down
The chief executive of the Starbucks coffee chain, Howard Schultz, is due to step down from his post next year.
Mr Schultz will become executive chairman and will change his focus to growing new Starbucks luxury brands.
He will be replaced by Kevin Johnson, who has been on the board for seven years. Mr Schultz who has been at the company for over 30 years, drove much of its expansion, with the company reporting record profits last month. Schultz joined the coffee chain in 1982 but stepped down as chief executive in 2000, before returning in 2008.
Mr Schultz commented on the success of the coffee chain in a statement, "Starbucks consistently outperforms the retail industry because our stores, our offerings and the experiences our partners create make us a destination."
He also said that the company was “ideally positioned” to continue its growth with Mr Johnson.
However, in its last set of earnings the company said it faced "ongoing economic, consumer and geopolitical headwinds".
Mr Schultz also said that the popularity of online shopping is keeping customers away from main shopping streets or malls.
Schultz is now set to work on the innovation, design and development of the more high-end Starbucks Reserve Roasteries around the globe, as well as the company’s social impact initiatives.
In 2008 the company fell on hard times. Howard Schultz, who had left the company in 2000, returned and is credited with getting the company back on track.
The coffee giant now has more than 25,000 stores in over 75 countries around the world.
US unemployment rate falls to nine-year low
The US unemployment rate fell to a nine-year low in November, adding to expectations that US interest rates will rise later this month.
The figures from the Labour Department showed that the US economy created 178,000 jobs in November, while the jobless rate fell to 4.6% in October.
The data shows healthy growth in the economy, although wage growth was weaker than expected.
The Federal Reserve is due to hold its next two-day policy meeting on 13-14 December and analysts think that the Fed will raise rates at its next meeting.
Last month, the chair of the Fed, Janet Yellen, indicated that the US central bank could raise interest rates “relatively soon”, adding that the US economy was “making very good progress”.
The US economy has been creating on average 180,000 jobs a month this year, although this is lower than the average of 229,000 jobs recorded in 2015.
However, despite November’s robust job figures, earnings grew by less than expected as average hourly earnings fell 0.1% from the month before. That reduced the annual increase in wages to 2.5% from 2.8% in October.
Before the job creation figures were published the markets were pretty clear about what they think the Fed will do when it meets later this month; it will raise interest rates. The job creations number has further reinforced that expectation.
In short, this is a robust figure for job creation and is above economists’ estimates of what is needed to keep up with a growing population.
US Economic Growth Revised Upwards
US Economic Growth Revised Up For Third Quarter
Strong consumer spending helped the US economy to grow faster than previously estimated in the third quarter.
The world’s largest economy grew at an annualized rate of 3.2% in the last quarter (in the three months up to September), up from an earlier estimate of 2.9%.
The figure outstrips the second quarter growth rate of 1.4% and beat economists’ estimates of 3% growth.
The commerce department said the rate of growth was the strongest since the third quarter of 2014.
The strong growth may give further impetus to the Federal Reserve to raise US interest rates when it meets in the middle of this month.
A strong employment rate and steadily rising inflation may mean the central bank is comfortable raising rates at the meeting on 13 and 14 December.
The Fed hiked its overnight benchmark interest rate last December for the first time in nearly a decade.
The GDP figure is a measure of the goods and services produced across the US economy.
The Commerce Department said: "The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures, exports, private inventory investment, and federal government spending."
It said consumer spending, which accounts for more than two-thirds of the US economy increased at a rate of 2.8%, which is higher than the initial estimate of 2.1%.
Samsung Electronics Considers Splitting Company in Two
Samsung Electronics has just confirmed that it is considering dividing the company into two separate firms. The company has been under pressure from investors since the Note 7 fiasco to divide itself into a holding unit and an operating company to boost shareholder value.
In October this year, the company was forced to stop production of its flagship smartphone model after failing to resolve battery problems leading to overheating and the devices catching fire.
Samsung has said that it would bring in "external advisers to conduct a thorough review of the optimal corporate structure."
The company's statement comes after US activist hedge fund Elliott Management called for the company to split into a holding unit for ownership purposes and a separate operating company.
The fund argued that a split would simplify the company structure making it easier to get a clear valuation of the firm's assets.
Currently, companies within the wider Samsung Group are linked through a complicated web of cross shareholding, linking Samsung Electronics to many other Samsung's firms and affiliates ranging from shipping, to heavy industries to insurance business.
That makes it difficult for investors to get a clear idea of what each individual Samsung company is actually worth.
The benefit of splitting Samsung Electronics into two companies would be that the cross-shareholding would affect only the holding company, while the operating unit could be assessed separately, therefore making it easier to arrive at a clean company evaluation.
Facebook Founder Zuckerberg details plans to combat fake news problem
Facebook founder Mark Zuckerberg has outlined plans for how he hopes to combat fake news on the site.
Facebook became mired in controversy after some users complained fake news influenced the outcome of the US election.
Mark Zuckerberg posted details of several projects to “take misinformation seriously”, including methods for stronger detection and verification.
Zuckerberg previously responded to criticism of fake news on Facebook by saying that over 99% of its content was “authentic”.
In his post, he said: "We've been working on this problem for a long time and we take this responsibility seriously."
There has been criticism as to how Zuckerberg handled the fake news problem as he dragged out the issue in the news agenda for well over a week.
Zuckerberg said Facebook is currently working on several proposals to combat misinformation more robustly including methods for stronger detection and verification, and providing warning labels on fake content.
In the wake of the US presidential election results last week, many criticized Mark Zuckerberg, saying the fake news on Facebook aided the popularity of Donald Trump.
Zuckerberg has dismissed this idea as “crazy” but fake news sites are gaining popularity due to the profits which can be made from web advertising.
Fake news purveyors can be enticed away from creating funny satirical content to more believable content because they think it is more likely to be shared.
Google announced it would do more to prevent fake news sites from making money through advertising. Shortly after the announcement, Facebook made a similar restriction on the use of its advertising network.
US jobs growth of 161,000 adds to interest rate rise chance
The US economy created 161,000 positions last month and job creation for the months of August and September were revised up.
The healthy labour market will support the notion held by many analysts that the US Federal Reserve will raise interest rates next month.
Average hourly earnings were also higher and were up $0.10, or 0.4% in October, which is a slight acceleration from September’s 0.3% increase.
"The solid gain in employment and the acceleration in average hourly earnings growth in October will increase expectations that the Fed will hike interest rates in December,” said Paul Ashworth, chief US economist at Capital Economics.
On Wednesday, policy makers at the US Federal Reserve decided to keep interest rates on hold, which means rates have not moved in almost a year.
The body which sets US interest rates, the Federal Open Market Committee, next meets on 13 December for two days.
Those policy makers, led by Fed chair Janet Yellen, will have noted the strong performance of the US economy in the third quarter.
Data released last month showed that the US economy grew at the fastest pace in two years in the three months to the end of September.
According to the Commerce Department, the world's largest economy grew at an annual rate of 2.9%.
The monthly jobs report details which parts of the US economy are hiring. Last month health care, professional and business services and the financial sector saw the strongest job creation.
An extra 31,000 jobs were created in outpatient medical care and hospitals generated another 13,000 jobs.
Consumers spending more amid steady job creation
Consumer spending rose steadily in September, a sign of resilience among households amid steady job creation.
Personal consumption, which measures how much Americans spent on everything from airfare to autos, rose 0.5% in September, the Commerce Department said.
Consumer spending accounts for about two-thirds of total output in the U.S. and household outlays have been the main driver of economic growth throughout much of the expansion. Americans had appeared more cautious in recent months amid declining confidence in the economy; however this latest data may help allay those concerns.
In the third quarter of the year, personal-consumption expenditures rose at a 2.1% pace, down from 4.3% during the prior period.
Uncertainty generated by the looming U.S. presidential election could be a factor weighing on consumer confidence. The labor market has also slowed, though it continues to generate jobs at a steady pace.
Economists and policymakers still expect consumers to remain a key support through the end of the year.
The personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, rose 0.2% in September from the previous month. From a year earlier, the index was up 1.2%.
Core prices, which exclude the volatile categories of food and energy, advanced 0.1% from the prior month and were up 1.7% from a year earlier.
Fed officials are watching key metrics such as household spending, inflation and hiring as they weigh another move on the central bank’s benchmark interest rate.
When adjusting for inflation, consumer spending rose 0.3% in September from the prior month.
Deutsche Bank posts surprise third-quarter profit
Deutsche Bank posted an unexpected net profit of 278 million euros ($303 million) in the third quarter after a record loss in the year-earlier period as it benefited from a surge in bond trading.
"We continued to make good progress on restructuring the bank. However, in the past several weeks these positive developments were overshadowed by the attention around our negotiations concerning the Residential Mortgage Backed Securities matter in the United States. This had an unsettling effect," Chief Executive John Cryan said in a statement.
Deutsche Bank shares also rose 3.6 percent in pre-market trading at brokerage Lang & Schwarz, while Germany's blue-chip index .GDAXI was seen down 0.4 percent.
Deutsche Bank is currently fighting a $14 billion demand from the U.S. Department of Justice (DoJ) over the misselling of mortgage-backed securities in the run-up to the financial crisis.
"Discussions with the DOJ to resolve its investigation of Deutsche Bank’s pre-financial crisis RMBS business are ongoing," Deutsche Bank said in a presentation. It gave no information on when it expects to settle the case.
Revenues were also up slightly at 7.5 billion euros in the quarter, beating analysts' expectations, driven by Deutsche Bank's trading activities, while business declined in all other operating businesses mainly due to the effects of the low interest-rate environment.
Compared to its peers, Deutsche Bank's bond trading activities however showed a subdued rebound, in part related to its decision to trim the unit.
Twitter is planning to cut as much as 8 percent of its staff this week
Twitter is planning to cut 8 percent of staff, the equivalent of 300 people. The layoffs came as the money-losing social networking company continues to struggle to grow its audience and its business.
The job cuts could be announced this week, perhaps before its third-quarter earnings report which will be released before the market opens on Thursday.
Shares of Twitter, which are down more than 40% from their 52-week high, were essentially unchanged in after hours trading on Monday.
Twitter CEO Jack Dorsey has been under pressure for putting too much effort into mobile payment company Square. Criticisms have been raised that the 39-year old tech entrepreneur is not able to devote sufficient time and energy to turning Twitter around.
Since taking over as Twitter CEO last year, Dorsey has already initiated one round of job cuts. But he has been unable to grow Twitter’s audience, which stalled at around 300 million users, even as larger companies like Facebook continue to grow and amass millions of new users.
Twitter has been put on auction, but so far no one seems to want it and there have been no offers. Salesforce CEO Marc Benioff, who had deal talks with Twitter, said that he was forced to walk away from the deal table after his shareholders protested.
Other potential buyers, including Google’s parent company Alphabet, also reportedly looked at the company and passed.
Nestle to Miss Its Long-Term Sales Target, Again
Failure in 2016 to achieve organic sales growth of between 5% and 6% would mark the fourth successive year the company has consistently missed its long-term goal.
The Swiss food giant Nestle has reported subdued sales growth and said it would fall short of a key revenue growth benchmark for a fourth straight year.
The data, which was below analysts’ expectations, came on the heels of recent figures from peers such as Unilever PLC and Danone that also showed slower growth.
These companies, like Nestle, face headwinds including weaker global growth particularly in emerging markets, volatile currencies, changing consumer tastes and a difficulty raising prices in an environment of low inflation or even falling prices.
Organic sales at the food giant rose 3.3% from the previous year. Nestlé said it expects organic sales growth of 3.5% for 2016 as a whole, down from its previous forecast of around 4.2%.
Failure in 2016 to achieve its organic sales growth target of between 5% and 6% would mark the fourth successive year the company has missed its long-term goal. Still, Chief Executive Paul Bulcke said the company was sticking with the “ambition” of 5% to 6% growth.
“I do believe that in normal conditions that 5%-6% is definitely something we have to aspire to,” Mr. Bulcke said in an interview. “We’re living in quite special conditions. Everyone has to admit that.”
He said a mix of faster global economic growth and rising prices should create the conditions for Nestlé to reach its growth objective again. “The atmosphere is a little bit depressed in general and that is affecting the macroeconomics of our industry to a certain extent,” he said.
China’s Economic Growth Holds Steady as Retail Spending Rises
China’s economic growth held steady in the latest quarter, shored up by a bank lending boom and consumer spending that helped make up for weaker trade.
The world’s second largest economy grew by 6.7% in the three months ending in September. That was in line with the two previous quarters and better than some forecasters had expected.
"Economic activity seems to be holding up reasonably well, with few signs that a renewed slowdown is just around the corner," said Julian Evans-Pritchard of Capital Economics in a report.
However, analysts cautioned growth is likely to slow next year because the latest strength is based in part on a surge in bank lending and real estate prices.
China’s economy has cooled steadily over the past six years as communist leaders try to steer it more to self-sustaining growth based on consumer spending instead of trade and investment.
There have also been sharp rises in retail spending in China as retail sales grew 10.4% in the first three quarters, boosted by 26.1% growth in e-commerce.
Growth in service industries, boosted by a large surge in real estate sales, accelerated to 7.5% from the previous quarter’s 7.8 percent. By contrast, exports shrank by 5.6 percent in September from a year earlier.
The data indicate "China's transition from a high-speed, heavy industry-based economy to a moderately-fast consumer and services-based economy is well underway," said Andy Rothman of Matthews Asia in a report.
"The challenges of completing this transition will result in gradually slower growth rates and increased volatility, but the risks of a hard landing are very low."
Dalian Wanda woos Hollywood filmmakers to China
China’s richest man told an audience in Los Angeles that filmmakers must find ways to please Chinese moviegoers.
In a speech on Monday evening, Wang Jianlin, chairman of Dalian Wanda Group Co., told several hundred American and Chinese audience members that growth in the Chinese box office means the market will inevitably become the world’s biggest, making it imperative for filmmakers to understand how to appeal to Chinese moviegoers.
Mr. Wang predicted that by 2026, the Chinese box office will gross more than $30 billion annually—representing about 45% of the world-wide total. The U.S. currently has 40,000 movie-theater screens; Wang predicted that China will have about 150,000 in 10 years.
Mr. Wang’s footprint in Hollywood has expanded rapidly in the past year, thanks to the $3.5 billion acquisition of “Pacific Rim” producer Legendary Entertainment in January and pending deals to take over Dick Clark Productions and Carmike Cinemas Inc., which would make Wanda the largest exhibitor in North America. It is already the largest exhibitor in the world, and wants to control 20% of the world’s box office by 2020, Wanda executives said. Mr. Wang has also indicated he wants to own a major Hollywood studio eventually.
Mr. Wang’s roadshow in Hollywood this week hopes to lure U.S. productions to his Qingdao Movie Metropolis, a 400-acre production facility that will include at least 30 sound stages by October 2017.
The company and the city of Qingdao say they have allocated $750 million worth of production incentives over five years, offering 40% cash rebates on some expenditures for qualifying productions.
Wanda-owned Legendary Entertainment will film the next installments of “Pacific Rim” and “Godzilla” at the Movie Metropolis. Several other companies announced plans to film there at a signing ceremony that closed Monday’s event in L.A.
China tops US in numbers of billionaires
China has more dollar billionaires than the US
China’s annual rich list has indicated that the country has more dollar billionaires than the US, and the gap is widening.
Property magnate Wang Jianlin of Dalian Wanda tops the list of 594 billionaires in China, ahead of 535 billionaires in the US.
Alibaba's Jack Ma was second, with his wealth having risen 41% from last year.
The annual list is compiled by Shanghai publishers Hurun and is compared to the Forbes list in the US.
The Hurun Report’s rich list is one of the most accurate assessments of wealth in China and the annual report has been published for the last 18 years.
Earlier this year, the publisher released a separate, global list, showing that the number of billionaires in China has outnumbered those in the US for the first time.
At the top of the China rich list is Wang Jianlin, who has a personal fortune of $32.1bn (£26.4bn).
His company Dalian Wanda has made headlines with a number of high profile forays into the US movie markets. It has taken over Legendary Pictures, as well as striking an alliance with Sony Pictures.
Alibaba's Jack Ma is a close second with $30.6bn, and Pony Ma of internet and online gaming giant Tencent comes third with $24.6bn.
The biggest increase came from Yao Zhengua of investment and real estate firm Baoneng Group, whose wealth jumped by 820% to $17.2bn, putting him in fourth position.
Hurun chairman Rupert Hoogewerf said Mr Yao's rise illustrated a shift in China's maturing economy.
"Yao's financial investment model represents the new wave of wealth creation in China," he explained. "The first money made in China 20 years ago came from trading, followed by manufacturing, real estate, IT, and today it is about using the capital markets for financial investments."
Facebook paid £4.16m ($5.16m) in UK tax last year
Facebook paid £4.16m in UK corporation tax last year, as it expanded its businesses in the UK
This is a steep increase on the £4,327 paid in 2014, which prompted an outcry from campaigners who argued the social network had paid too little.
A spokesperson for Facebook said: "We are proud that in 2015 we have continued to grow our business in the UK and created over 300 new high skilled jobs. We pay all the taxes that we are required to under UK law."
The figures were revealed in Facebook UK's accounts, which were published on Companies House on Sunday.
Richard Murphy, a chartered accountant and professor of practice in international political economy at City, University of London, said it was difficult to determine whether Facebook was paying the right amount of tax in Britain.
"Facebook's UK accounts do not represent its real sales in this country, which are actually booked in Ireland with their true value never being disclosed," he said.
When Facebook revealed it had paid just £4,327 in tax in 2014, there was a storm of protest from campaigners.
2015's bill looks decidedly steeper at £4.16m, but it still appears to bear little relation to the amount of business actually being done by the company. It is based entirely on revenues from engineering and marketing services supplied to other parts of the Facebook group.
Facebook has been expanding its businesses in the UK. The company employed 682 people in the UK last year, up from 362 in 2014, and the company now has more than 1,000 full-time equivalent staff.
Globally Facebook made profits of $3.7bn in 2015 on revenues of almost $18bn - 44% higher than the previous year.
US creates 156,000 jobs in September – slightly lower than expected
The US economy created 156,000 jobs in September which is slightly fewer than expected.
However, August’s figure was revised higher to 167,000 from 151,000. Both figures are lower than the 180,000 average for this year.
The unemployment rate also edged up to 5% from 4.9%, although this is due to more people looking for work.
The US Department of Labor said job gains occurred in the professional and business services sector and in the health care industry.
The dollar has also weakened slightly on the news, but then recovered its ground.
The pace of jobs creation throughout 2016 lags behind that of 2015, when job creation was averaging 229,000 a month.
Chris Beauchamp, chief market analyst at online trader IG, said: "At first glance, the non-farm payroll figure looked rather disappointing, given that it missed expectations. However, for an economy near full employment, a 156,000 print is not at all bad, while the rise in the overall unemployment rate was easily countered by an increase in the labour force participation figure.”
But James Athey, investment manager at Aberdeen Asset Management, said the jobs report would be seen as a minor disappointment.
He thought the chances of a rate rise may have receded: "It is quite likely that the odds of an interest rate hike in December will be re-priced a tiny bit lower by investors following these numbers, especially given recent market volatility. In reality though attention is far more focused on what might happen come November 8."
Salesforce CEO Marc Benioff calls Twitter an ‘unpolished jewel’
Twitter is expected to field bids this week and Marc Benioff has been building a case to Salesforce.com Inc. investors that his company should be the buyer.
Salesforce CEO Marc Benioff sees the social-media pioneer as an “unpolished jewel” with untapped potential in advertising, e-commerce and other data-rich applications. He has also said that the acquisition would secure for Salesforce a treasure trove of data as well as a prized consumer brand.
However, he faces competition from Alphabet Inc.’s Google who may also bid and the media giant Walt Disney Co. who have also been considering its own offer.
Twitter may come at a high price and could cost upward of $20 billion, or more than a third of Salesforce’s roughly $49 billion market value.
Mr. Benioff is clearly interested in buying Twitter, which generates untold reams of data from its hundreds of millions of users and offers potential as a tantalizing turnaround opportunity.
Twitter could also complement Mr. Benioff’s goal of harnessing more data for artificial-intelligence-driven analysis, as well as allow Salesforce to offer additional services in sales, marketing and e-commerce for the company’s 150,000 customers.
Mr. Benioff sees numerous benefits from bringing the companies more closely together. He is convinced a strong partner could figure out how to better monetize Twitter’s big user base and fire hose of content, something the social-media company has struggled with.
Salesforce has made a number of purchases lately. In July, it bought e-commerce specialist Demandware Inc. for $2.8 billion, Salesforce’s largest takeover to date. This week, it agreed to buy San Francisco startup Krux for about $700 million in a bid to bolster the artificial-intelligence capacity in Salesforce’s marketing cloud.
Commerzbank plans to cut nearly 10,000 jobs
Commerzbank plans to cut nearly 10,000 jobs over the next four years, as it restructures to become profitable on a more sustainable basis by 2020.
In a statement, the bank said by the end of 2020 it would have “sustainably increased its profitability”.
Germany’s second biggest lender said in a statement it expected restructuring costs of 1.1bn euros ($1.2bn) as it combines business segments and cuts costs to offset the drag from low loan demand.
As part of this €1.1 billion structure, Commerzbank plans to merge its business with medium-sized German companies with its corporate and markets segment, while also cutting back trading activities in investment banking to help reduce earnings volatility and free up capital for investment.
The bank will also concentrate on two customer segments in the future: Private and Small Business Customers and Corporate Clients. Commerzbank’s strategy will see it concentrating on its “core” businesses of "private and small business customers" and "corporate clients" and digitizing some of its processes.
The revamp will come at a heavy cost for employees as Commerzbank slashes 9,600 of its 45,000 full-time positions, which is a more drastic reduction than at Deutsche Bank which is cutting about 10 percent of staff.
The restructuring is expected to save billions of euros a year and allow Commerzbank to invest in new sectors of business, while creating new jobs in "growth areas".
Asian Shares Down – Nikkei Is Biggest Decliner
Stocks in Japan led to declines across the region, dragged by weak oil prices and concerns about the health of the nation’s banks.
The Nikkei Stock Average closed Wednesday down 1.3% with energy, banking and export sectors leading losses. Korea’s Kospi closed down 0.5%, the Shanghai Composite Index ended 0.3% lower and Hong Kong’s Hang Seng Index was flat.
Japanese shares were also down as the Mizuho Financial Group Inc. fell 1.8%, Sumitomo Mitsui Trust Holdings Inc. ended down 2.4%, Dai-ichi Life Insurance Co. lost 2.5% and Nomura Holdings Inc. fell 2.8%.
The persistent strength of the yen has also weighed on Japanese stocks, said Linus Yip, chief strategist at First Shanghai Securities, calling the yen a “major focus for the Japanese market.” A strong yen makes Japanese exports less competitive and diminishes profits earned overseas.
The yen gained against the dollar in Asian trade Wednesday but was last trading 0.2% lower at ¥100.57 to the dollar.
The situation has been made worse by an oil-price slide in the U.S. overnight Tuesday that hit Japanese energy stocks. Saudi Arabia’s energy minister said OPEC (Organization of the Petroleum Exporting Countries) wouldn’t reach a deal to curb output during talks this week in Algiers.
However, oil prices recovered slightly in Asian trade Wednesday, with international benchmark Brent crude rising 0.4% to $46.17 a barrel.
That helped Japanese oil explorer Inpex narrow its losses. It ended down 0.4%, after being off 2.3% earlier. Japan Petroleum Exploration Co. was down 2%.
Twitter shares on the rise
Shares in Twitter jumped more than 20% after a report said the home of the 140-character tweet had received multiple takeover approaches.
Twitter has been the subject of numerous takeover rumours before but is now getting closer to a sale.
Potential suitors that are interested in a possible takeover include Google and Salesforce.com, the report said.
Last month Twitter shares jumped after comments from co-founder Ev Williams. When asked whether the company would remain independent he replied: "We're in a strong position now, and as a board member we have to consider the right options."
The company’s performance has also spurred talk of a takeover as sales growth has been slowing in recent quarters.
In July, Twitter reported that second quarter sales had risen almost 20%, the weakest growth since its stock market flotation in 2013.
Co-founder Jack Dorsey took over as chief executive in July of last year, after the previous boss stepped down. Mr. Costolo who had been chief executive from 2010, was under pressure from investors unhappy with the company’s performance.
"With ex-CEO Dick Costolo lacking ideas and founder Jack Dorsey split between Twitter and his other company Square, the social network has lost its way," said Jasper Lawler, an analyst at CMC Markets.
"The hope for investors would be that under the wing of a big company, it could expand its user base and better monetise those users," he added.
Twitter shares added 21% on Friday to close at $22.62.
Yahoo confirms breach is much bigger than previously thought
Yahoo says “state-sponsored” hackers stole data from 500m users in what is known to be the largest publicly disclosed cyber-breach in history.
The breach included swathes of personal information. Stolen data includes names, emails, telephone numbers and dates of birth. The hack took place in 2014 but has now only been made public.
Yahoo has confirmed that credit card data has not been stolen. The company said the information was "stolen by what we believe is a state-sponsored actor".
News of a possible major attack on the company first emerged in August when a hacker known as “Peace” was attempting to sell information on 200 million Yahoo accounts.
Yahoo is currently recommending all users should change their passwords if they have not done so since 2014.
In July 2016, Yahoo was sold to US telecoms giant Verizon for $4.8bn.
Verizon has only learned of the hack "within the last two days" and said it had "limited information".
Nikki Parker, vice-president at security company Covata, said: "Yahoo is likely to come under intense scrutiny from regulators, the media and public and rightly so. Corporations can't shy away from data breaches and they must hold their hands up and show that they are committed to resolving the problem."
Questions are being asked about the length of time it took Yahoo to publicly acknowledge the breach.
"It is really worrying that a breach from 2014 can have gone undetected for so long," said Prof Alan Woodward from the University of Surrey.
The scale of the hack eclipses other recent, major tech breaches – such as LinkedIn (164 million).
Inditex, the world’s largest clothing retailer, reported earnings that beat analysts’ estimates as the company prioritized online expansion over shop openings.
First-half operating profit increased 8 percent to 1.61 billion euros in the six months through July. This beat analysts’ estimate of 1.58 billion euros. Revenue rose 13% in the first weeks of the third quarter and the stock rose as much as 1.6 percent in early Madrid trading.
Inditex, which operates Zara and other brands through more than 7,000 stores in 91 countries and operates eight brands including Pull&Bear, Massimo Dutti and Bershka.
Inditex has decided this year to lower its target for retail space expansion as it focuses on bolstering online shopping. The online expansion strategy also includes bigger stores in key markets, as part of an attempt to maintain growth after revenue increased eight-fold since the company’s 2001 initial public offering. Its performance beat industry peers such as Hennes & Mauritz, whose August sales missed analysts’ estimates.
Chairman and chief executive Pablo Isla has emphasized the firm’s investment in technology, saying the company has expanded its online stores to 11 new countries.
Inditex has also launched mobile phone payment in all its Spanish stores as part of its digital expansion strategy, with the objective of “extending the service to other countries”. This will encompass payment by online apps for all of its brands and a specific app for the whole group called InWallet.
Mr Isla added, "Both our online and bricks-and-mortar stores are seamlessly connected, driven by platforms such as mobile payment, and other technological initiatives that we will continue to develop."
Inditex is also benefiting from the steady pace of economic growth in Spain, where the retailer earns about a fifth of its sales. The local clothing market grew an average 3 percent in the three-month period through July.
Grab, the biggest rival to ride-sharing service Uber in Southeast Asia, has raised $750 million in a funding round.
Four-year-old Grab said it planned to expand its services in Southeast Asia through the funding round, which was led by Japan’s SoftBank Group with new and existing investors.
The region has become attractive for ride-hailing firms due to a burgeoning middle class as well as a youthful, internet-savvy demographic.
Since leaving China in August, Uber is even more focused on Southeast Asia. The company is refocusing more than 150 engineers to work on its Southeast Asian operations and hiring more engineers in India. Uber was also working on making sure its maps fit the region.
Grab says it has 95 percent market share in third-party taxi-hailing services, while its private-car business has more than half of the Southeast Asian market.
In addition to expanded ride-hailing services, Grab said it planned to invest in mobile payments capabilities in a region with low banking and credit card penetration and limited cashless payment options.
Since its launch in 2012, the company has expanded into motorbike hailing, carpooling and delivery. It also recently teamed up with Indonesian conglomerate Lippo Group to roll out a mobile payment platform in its biggest market, Indonesia.
"We are particularly excited about the growth opportunity in Indonesia, where we see an almost $15 billion market for ride-hailing services alone, as well as the potential to extend GrabPay's platform regionally," CEO and co-founder Anthony Tan said in the statement.
Grab said it will also invest in data science and machine learning capabilities to enable services like predictive demand and driver and user targeting.
The company operates in Singapore, Indonesia, the Philippines, Malaysia, Thailand and Vietnam.
Uber edges ahead in the driverless car race
Uber made a big move on Wednesday when it released its self-driving car to the public for the first time. As part of its pilot program, select Uber users in Pittsburgh will be able to hail and ride in a driverless car.
A number of car companies are aiming to do this, but Uber is ahead. Ford, for example, plans to roll out its first fully autonomous cars for ride-sharing by 2021.
Companies want to get into some sort of ride-hailing service because automakers and tech companies predict that the traditional car ownership model will dwindle with the rise of self-driving cars.
There are predictions, that in the future cars will be fully autonomous and it will become cheaper for consumers to hail a driverless car than to own a personal vehicle.
While auto sales may decline, companies see a huge opportunity in rolling out autonomous cars in a fleet setting to transport people wherever they want to go. But car companies and tech firms will have to catch-up with Uber in building up a ride-sharing network.
Uber has built up one of the largest ride-sharing networks in the world and is the most popular taxi app in 108 countries.
Uber introducing the public to its driverless tech, even it still needs a driver and engineer present at the moment, is a genius way to expose people to the concept of getting picked up in a driverless Uber.
Like other driverless car companies, there is still time before a driverless Uber can be fully autonomous.
Delays leave passengers frustrated
British Airways has apologized to passengers facing delays after an IT glitch affected check-in desks. Passengers complained of delays at check-in and at the baggage drop.
British Airways passengers around the world endured delays of up to five hours when an IT problem affected check-in systems at airports yesterday.
Passengers took to Twitter around midnight to complain of overly long check-in queues at Heathrow and Gatwick. Also people flying from San Francisco, Washington DC and Atlanta reported long delays on social media.
British Airways later confirmed there was a problem as airport staff were forced to manually process check-ins. Passengers had to board flights with boarding cards written out by hand. One user on Twitter posted a photo of their boarding card written out in pen.
It is not known what specifically caused the problem, aside from it being an IT glitch. British Airways new FLY check-in system went live last October but since then has experienced problems.
One passenger posted a notice by British Airways on Twitter confirming that passengers would be delayed for up to 30 minutes while alternative arrangements were put in place "in the absence of the computer system”.
In response to the situation, British Airways said on Twitter that it apologised “to our customers for the delay and we appreciate their patience as our IT teams work to resolve this issue".
BA encouraged customers affected by the IT problems to check-in online before they reached the airport.
Leaders from 20 major economies are in China for the G20 summit
World leaders are meeting in China at the G20 summit to discuss policies to bolster global economy .
China’s president Xi Jinping urged leaders of the world 20 largest economies to avoid “empty talk” as they look to revive economic growth. They are also discussing the global steel crisis and tax of multinationals like Apple.
At the opening of the summit, President Xi said the world economy is recovering but faced multiple challenges in areas of finance, trade and investment.
"Against risks and challenges facing the world economy, the international community has high expectations of the G20 in the Hangzhou summit," he said.
Before the meeting, the International Monetary Fund (IMF) warned it was likely to downgrade its forecast for global economic growth. The IMF has cut forecasts for world GDP growth to 3.1% in 2016 and 3.4% in 2017.
President Obama has also said that the US would prioritize its trade talks with the EU – known as the Transatlantic Trade and Investment Partnership (TTIP).
Other topic of discussion at the summit is the steel crisis. China’s continued production of cheap steel was also an issue on the opening day of the G20 summit.
European Commission President Jean-Claude Juncker said China must address its problem of industrial overcapacity, saying it was "unacceptable".
"Overcapacity is a global problem but there is a particular Chinese element," Mr Juncker said.
Apple to hold the product launch of the iPhone7 at San Francisco
Apple is going to hold the product launch of the iPhone7 on 7 September at San Francisco.
Apple has held events in September for the last five years. They are the highlight of the company’s year, as well as launching the new iPhone, its most successful product by far; it often uses the attention to launch other, smaller products.
This year the iPhone launch will be doubly important, since it will be the first major new headset to be revealed since sales of the iPhones started sliding.
Many of the innovations expected in the phone have been revealed through leaks. They include a body that removes the antenna lines that sweep around the back and the removal of the headphone jack.
The event is likely to focus on the advanced photography capabilities of the iPhone7, which is expected to include a dual-lens camera for taking deeper images.
The company is also expected to unveil the second version of the Apple Watch (Apple Watch 2). It is expected to include more technology to allow it to work without a phone, and more tools for health tracking.
Apple will be livestreaming the event on its special page.
European Commission rules that Apple should repay Ireland 13bn euros
Ireland should recover up to €13bn from Apple in back taxes, the European Commission has ruled.
The commission said Ireland enabled Apple to pay substantially less than other businesses, paying a corporate tax of no more than 1%.
Ireland and Apple have both said they disagreed with the record penalty and would appeal against it.
Commissioner Margrethe Vestager said: "Member states cannot give tax benefits to selected companies - this is illegal under EU state aid rules."
"The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years," she added.
The standard rate of Irish corporate tax is 12.5%. The Commissions's investigation concluded that Apple had effectively paid 1% tax on its European profits in 2003.
Apple is going to appeal against the ruling and said: "Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned."
Ireland also disagrees with the record penalty and would appeal against it: "I disagree profoundly with the Commission…The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation," said Ireland's finance minister, Michael Noonan, in a statement.
The tax bill should not be a problem for Apple, which made a net profit of $53bn in the 2015 financial year.
Japanese Prices Continue to Slide
Japan’s consumer prices dropped for the fifth consecutive month in July, putting pressure on the government to expand its massive stimulus programme.
The data was worse than expected and marked the biggest annual drop in more than three years.
The consumer price index fell by 0.5% compared with a year earlier.
Tokyo has been trying to raise inflation for years to stimulate spending and boost the state of the economy.
The disappointing data comes with weaker-than-expected economic growth data released earlier this month, despite an aggressive spending policy by the government.
In July, Prime Minister Shinzo Abe announced the latest stimulus effort which is a massive package worth 28 trillion yen to stimulate spending.
Japan has been trying to boost consumer spending which makes up 60% of the economy.
The government’s policy of economic reforms (“Abenomics”) consists of a three –pronged fiscal, monetary and structural approach to lift the economy out of its slump.
However, despite three years of ‘Abenomics’, inflation has remained significantly lower than the central bank’s 2% goals.
Consistent weak household spending is to be blamed with a recent strengthening yen which has pushed down import prices.
Marcel Thieliant, senior economist at Capital Economics commented: "The Bank of Japan has recognised that there are considerable risks to its forecast of hitting its 2% inflation target in the coming fiscal year. We therefore continue to expect more stimulus to be introduced at the Bank's September meeting."
Can the French Tourist Industry recover from latest blow?
Attacks by militants have caused a significant fall in tourism in Paris. There were a million less visitors between January and June compared with the same period in 2015.
Paris is renowned as one of the world’s top tourist destinations and attracts over 16 million visitors a year.
Although, Paris has seen a drop in tourist numbers this year due to recent militant attacks, floods and strikes. The drop is estimated to have cost at least €750m in lost revenue.
France relies heavily on tourism and the tourist industry generates more than 7% of its annual GDP.
About half-a-million people in the Ile-de-France region, which includes Paris, have jobs linked to tourism, making it the biggest employer in the area.
Tourist board figures show that nightly hotel stays fell 8.5% in the Ile-de-France region in the first half of 2016, with an 11.5% decline in foreign tourists and a 4.8% decline in French tourists. The Ile-de-France figures also show a 46% decline in Japanese tourists compared with the same period in 2015 and a 35% decline in Russian visitors.
The drop in tourism has been called an “industrial disaster” by a senior official. Paris region tourist board head Frederic Valletoux said in a statement: "It's time to realise that the tourism sector is going through an industrial disaster."
Other senior people have spoken about the situation. Ile-de-France regional President Valerie Pecresse told Le Figaro in an interview (in French) that the decline in the number of tourists had worrying economic implications and that recent terror attacks were the main reason for it.
Strikes and floods in the city have also taken their toll, adding to the disaster.
Japan’s economy barely grew in the second quarter – economic growth weaker than forecast
Japan’s economy grew at a weaker-than-expected rate in the second quarter despite an aggressive spending policy by the government. Asia’s second-largest economy barely grew in the April-June quarter.
Gross domestic product grew at an annualized rate of 0.2% in the three months to June, below market forecasts for 0.7% and a marked slowdown from the 2% rate in the first quarter.
The figures come after the government launched a massive new stimulus package worth 28 trillion yen ($265bn).
Growth for the world’s third-largest economy was flat on a quarterly basis, adding to pressure on the Bank of Japan to take action to stimulate slack corporate spending.
Moving to salvage his “Abenomics” strategy for fighting stagnation and increase spending, Prime Minister Shinzo Abe recently proposed 28 trillion yen ($267 billion) in spending initiatives meant to get consumers and businesses to spend more and support the recovery.
The Bank of Japan has also announced it would increase its asset purchases from financial institutions to help inject more cash into the world’s third largest economy.
A recent strengthening in the value of the Japanese yen, and weaker oil prices, have slowed progress toward the inflation target set by Abe and the central bank.
Japanese stocks also fell. The benchmark Nikkei 225 share index dropped 0.3%.
Timothy Graf, head of macro strategy at State Street Global Markets said Japan's growth figures "could have been a lot worse".
US jobs growth beats expectations in July
The US economy added a stronger-than-expected 255,000 jobs in July, fuelling speculation that interest rates could rise before the end of the year.
The figure was below June’s upwardly revised figure of 292,000 jobs, but was far higher than analysts’ forecasts of between 175,000 and 180,000.
The US unemployment rate has also remained unchanged at 4.9%.
The US Fed recently signaled that it was on course to increase rates this year. The Fed’s next policy meeting is due in September, but analysts think they could wait until later in the year to take action.
The largest growth in US employment, about 70,000 jobs, came from the professional and business sectors, in particular the computing and IT sector.
The healthcare industry also recruited heavily, adding an additional 43,000 staff last month.
Mining companies recorded the biggest fall in new jobs and was down by 6,000.
Average hourly pay also rose, up 0.3% between June and July, against a forecast of a 0.2% rise.
In the 12 months up to July, pay increased by 2.6%, which was the same annual rate of growth as in June.
Wage stagnation has been an issue closely watched by the Fed and was commented on in the presidential election.
A survey by CareerBuilder and Emsi Research released on Friday, suggested that over the next five years the number of middle-income jobs created could slow down, while low and high paying jobs are added to the market.
The research found high-wage and low-wage jobs were both expected to grow by 5%, but the number of middle-income jobs was expected to rise by just 3%.
Amazon chief executive Jeff Bezos becomes world’s third richest
Impressive earnings from Amazon and a boost to the company’s stock have made its founder, Jeff Bezos, the world’s third richest person. Forbes estimated his fortune to be $65.3bn.
Amazon’s revenue beat analysts’ predictions, climbing 31% from last year to $30.4bn in the second quarter.
Profit for the e-commerce giant has climbed a massive $857m, compared with $92m in 2015. Amazon shares have also spiked 50% since February.
Amazon’s Prime membership, which offers a range of extra services including free shipping for an annual fee saw impressive growth.
In June, Amazon launched Prime in India to take advantage of the country’s large consumer market.
"It's been a busy few months for Amazon around the world, and particularly in India - where we launched a new [Amazon Web Services] Region, introduced Prime with unlimited free shipping, and announced that Prime Video is coming soon, offering Prime members in India exclusive access to Amazon Original Series and Movies - including original content featuring top Indian creators and talent," said Jeff Bezos.
Amazon has also boosted its Prime membership by improving its video streaming offerings.
Amazon’s cloud computing unit also grew. Revenue for Amazon Web Services (AWS), climbed 58.2% to $2.89bn.
Sales growth for the unit in North America climbed a massive 10% and 8% in the rest of the world.
Amazon has grown its market share in cloud computing compared with other rivals such as Microsoft and Google.
Facebook has another exceptional quarter of growth, with profit up 186% from this time last year.
Facebook earned $2bn in the last quarter (in the period from April to June), up from $719m in 2015.
Analysts had anticipated revenue of $5.8bn, but the company managed to beat even these expectations bringing in an unprecedented $6.4bn in revenue.
Chief executive Mark Zuckerberg said the company was particularly happy with the growth in video.
"Our community and business had another good quarter," he said, "We're particularly pleased with our progress in video as we move towards the world where video is at the heart of all our services."
Facebook has been encouraging businesses to experiment with video and rolling out new advertising platforms for mobile ads.
Mobile advertising made up 84% of Facebook’s ad revenue in the second quarter and is up from 76% last year. The company has benefited from an influx of advertising money moving away from television to digital platforms.
The number of monthly-active-users (MAU) is a key measurement for advertisers and has increased by 15% to 1.71 billion.
The number of daily active users on Facebook has also topped one billion for the first time. The time spent on the site by daily users also rose.
Facebook is the largest/most engaging mass-reach internet platform for advertisers and has unmatched targeting potential.
Facebook has also been pushing new services, including photo and video-sharing on Instagram and its messaging apps.
The world’s biggest social networking site has also encouraged advertisers to try new means of reaching their targets, including the new Facebook Live features, where users can now watch live streaming videos.
Revenue increased in all geographic areas, climbing a massive 19% in Asia and 21% in Europe.
Twitter reports slowest revenue growth since 2013
Twitter has just reported its slowest quarterly sales growth in three years, as the firm faces stiff competition from a growing number of social media sites.
Revenue for the second quarter was up 20% to $602m, which is far slower than the same quarter last year when it rose 61%.
However, the company has reported a 3% increase in monthly active users (MAU) which is an important metric for advertisers. Twitter has attracted 313 million MAUs and is up from 310 million in 2015.
Twitter has been increasing its efforts to attract users in the face of stiff competition from Snapchat and Instagram.
In a letter to shareholders, Twitter chief executive Jack Dorsey said: "We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage".
However, the disappointing results have called into question the leadership of Jack Dorsey who is one of the company’s co-founders. He re-joined Twitter as chief executive last year as part of an effort to turn the struggling social media site around. Although since his return the company has added only 9 million monthly active users.
Mr Dorsey has made changes to try and make the micro-blogging site more appealing to users. The firm has loosened its 140-character limit and begun showing tweets in order that users will find more interesting, rather than chronologically.
Verizon has finalized its $4.8 billion deal for Yahoo – ending months of speculation
Verizon Communications Inc. has agreed to pay $4.8 billion to acquire Yahoo Inc. The price tag, which includes Yahoo’s core internet business and some real estate, is a remarkable fall for the Silicon Valley web pioneer that once had a market capitalization of more than $125 billion at the height of the dot-com boom.
When the bidding began in April, Verizon was the immediate front-runner with a market capitalization of roughly $228 billion and a plan for how to plug Yahoo into its upstart digital media business.
In June, Verizon submitted a bid of $3 billion but this did not include Yahoo’s real estate and came before last week’s final round of bidding.
Verizon is aiming to build a competitor to online advertising giants Facebook Inc. and Alphabet Inc.’s Google. But a combined Yahoo and AOL would be far outpaced by its now far-larger rivals. Google and Facebook will account for more than half of the $69 billion U.S. digital ad market this year.
Yahoo’s hold on the market is also slipping. In 2014, Yahoo generated $2.54 billion in revenue from U.S. digital ads. This is expected to be $2.32 billion in 2016.
Last week, Yahoo said second-quarter revenue, minus commissions paid to partners for web traffic, fell 19%. This marked the sixth decline in the past seven periods and the steepest slump under Ms. Mayer.
The company also said display ad prices fell 15% year-over-year in the second quarter, while search ad prices fell 8%.
Analysts are divided on the value of Yahoo’s core business. The decline in search revenue prompted Credit Suisse to cut its valuation of Yahoo’s core business to $7 billion, down from $8 billion. But that is more robust than Mr. Kirjner’s estimate of $3.4 billion.
ATM operator VocaLink has struck a takeover deal with Mastercard
The company that operates the UK ATM network (LINK) has been sold to MasterCard.
The business that controls Britain’s cash points has just been sold and this is the second major UK company takeover by an overseas buyer.
Vocalink is being bought by America’s Mastercard for up to £869m. The company controls Link which is the country’s network of ATM machines and Bacs.
Vocalink is owned by a number of major banks in England including Barclays, Lloyds and HSBC and is chaired by the Bank of England’s former deputy governor Sir John Gieve.
A Vocalink spokesperson said the payment technology system operator had been in talks with Mastercard for 8 months.
The Chancellor of the Exchequer (Phillip Hammond), said the Vocalink deal “shows that Britain remains an attractive destination for international investors”.
Earlier this year, the payment Systems Regulator (PSR) recommended that the banks should loosen their grip on the country’s payment systems because their ownership was stopping innovation.
Phillip Hammond said: "The Payment Systems Regulator recommended the UK's biggest banks sell their stakes in Vocalink to improve banking competition in the UK which will deliver clear benefits for challenger banks, fintechs (financial technology companies), UK consumers and small businesses."
Mastercard is buying 92.4% of Vocalink and the remaining stake will be held by the banks for at least three years.
Mastercard will pay £700m and an additional payment of up to £169m, depending on whether certain performance targets are met.
The boss of Easyjet (the low flying airline) says the airline has seen its costs increase by £40m ($53m) in just four weeks, due to the sterling’s drop in value from Brexit.
The drop in value of the pound had made fuel – which the company pays for in US dollars – more expensive. Since Brexit, the sterling has lost more than 10% of its value against the dollar.
The increased cost of travelling abroad is deterring some British holidaymakers and they are seeking to travel to other destinations that are more cost effective.
Easyjet has just released its quarterly results, which warned that the company is earning less per passenger. Extreme weather, air traffic control strikes and terrorist attacks have all contributed to the drop of almost 8% in “revenue per seat”, a key measure watched closely by investors.
The devaluation of the pound since the EU referendum has also had an impact on ‘consumer confidence’ and whether people feel compelled to book flights and holidays.
Easyjet CEO Carolyn McCall said: “If you are a passenger, you are reading every day in the papers that it is more expensive to spend money on holidays”.
She also confirmed that the airline would not be following rivals such as Wizz Air in scaling back from the UK market as a result of the EU referendum.
Easyjet has also confirmed that it is unlikely to move any staff out of its Luton headquarters.
The airline is a major player in many countries across Europe including France, The Netherlands and Switzerland.
As Yahoo accepted the final bids for its core business on Monday, the internet company revealed how badly the business is failing.
Yahoo announced that its revenue in the second quarter fell 15 percent and its operating profit fell a massive 64 percent.
Marissa Mayer, Yahoo’s chief executive said little about the potential sale of Yahoo in a webcast with investors to discuss the results. She said that the company had made “great progress” on the strategic review process but offered no timeline for a decision.
The final bids for the acquisition of Yahoo were due on Monday. The company’s board is expected to evaluate the offers over the next week or two and will decide whether to proceed with a transaction that would end Yahoo’s 20-year run as an independent, publicly traded company.
The bidders for Yahoo’s operations include Verizon Communications and AT&T, several private equity firms and a Quicken Loans co-founder, Dan Gilbert, who is getting financial backing from Warren E. Buffett’s company, Berkshire Hathaway.
Yahoo, the internet portal giant, has been struggling in the face of stiff competition. It is in the final stages of a lengthy bidding process for its core services of search, email, advertising and media operations.
Analysts expect the final bids to come in at $3.5 billion to $6 billion, including Yahoo’s land and patents.
The company reported a net loss of $440 million, or 46 cents a share, for the quarter, compared with a loss of $22 million, or 2 cents a share, in the same quarter a year ago.
US consumer prices saw modest increases in June
US consumer prices rose modestly in June even though the costs of gasoline and rent kept rising, while sales at American retailers registered a healthy gain.
The Labour Department on Friday said that consumer prices increased by 0.2 percent last month, matching the gain in May. Prices are up 1 percent from a year ago which is well below the Federal Reserve’s 2 percent inflation target.
Excluding the volatile food and energy categories, prices were up 0.2 percent from May and 2.3 percent from June 2015.
Food prices fell for a second straight month in June. However, energy prices rose 1.3 percent, including a 3.3 percent increase in gasoline prices. New car and truck prices fell for the third straight month and are down 3.1 percent over the past year.
The Commerce Department has also reported that U.S. retail sales posted a robust increase in June, this is a sign that consumer spending picked up in the spring. Sales at retailers and restaurants rose 0.6 percent, after a 0.2 percent climb in May and sales were up 2.7 percent from a year earlier.
Consumer spending which accounts for more than two-thirds of the U.S. economy, drove faster growth from April through June and is expected to fuel momentum for the rest of the year.
Consumer confidence is likely to get a boost from a surge in job hiring last month. American employers added a robust 287,000 jobs in June after generating just 11,000 in May which exceeded expectations.
Shares in the famous Japanese company Nintendo have seen a stellar rise since the release of their augmented reality game Pokemon Go. Shares have increased by more than 50%. Shares increased by 16% on Thursday, making an overall increase of 56% since trading closed on Friday.
Game developers around the world have been shocked by the phenomenal release of Pokemon Go, a mobile version of the beloved 1990s game from Nintendo became an instant hit becoming the most downloaded app on both Apple and Android phones.
In the game, Pokemon Go players search for locations in the real world to find virtual Pokemon creatures on their smartphone screens.
Since its release, the game has become a global phenomenon success. It has topped the app store download chart on both iPhone’s App Store and Google Play just days after its initial release in the US, Australia and New Zeleand.
The Pokemon creatures first emerged in the 1990s on Nintendo’s Game Boy device. Nintendo is also the genius behind the iconic super Mario game which has traditionally relied on sales of its gaming consoles.
However, sales of the consoles have been slowing in recent years as more gamers move online and onto portable devices.
Analysts have long criticized the company for lagging behind its rivals like Sony and being late to catering to the growing smartphone market.
Due to the success of the game, this may inspire other developers in the mobile gaming industry to create something similar.
Pokemon Go’s long-term success will depend on whether the craze endures and whether rival game makers can duplicate the underlying technology.
Coffee giant Starbucks has announced it will raise wages for workers at all its US stores in October. The pay rises will result in 5-15% increases for its US workers.
The coffee giant came under criticism recently for cutting staff hours and raising prices to meet profit expectations.
In a letter to employees from Starbucks chief executive, Howard Schultz said the company was hoping to ‘strike a balance’ between profit and social responsibility.
Starbucks has agreed to increase base pay by at least 5%, though it may be more for workers in certain areas of the country.
The coffee chain will also be doubling the amount of stock it distributes to hourly employees, who have worked for the company for at least two years.
The combined increases could result in 15% more income for some store employees.
Mr Schultz wrote to employees at Starbucks saying, "Striking the delicate balance between profit and a social conscience is a responsibility I take personally".
The coffee giant is the world’s largest coffee chain and employs 150,000 workers in its US stores alone.
Starbucks recently came under fire from employees who claim their hours have been cut. This resulted in more than 12,800 people signing an online petition alleging the company had cut hours.
One factor that could be involved in the cutting of hours is the growing number of mobile apps that allows customers to order and pay for drinks on their phones, meaning less sales assistants are needed.
In his letter, Mr Schultz addressed the scheduling concerns and said the company would work to ensure employees had the hours they needed to be eligible for certain benefits.
"You have my personal commitment that we will work with every partner to ensure you have the hours you need," he wrote.
US job creation rebound in June
The US economy created 287,000 jobs in June, rebounding strongly from disappointing growth in May.
The growth in jobs was evident across a variety of sectors. The manufacturing sector – which had dropped by 16,000 in May – rose by 14,000, there were also 29,900 more jobs in the retail sector, and the leisure and hospitality industry gained 59,000 jobs.
May’s weak job figure had been depressed by a strike by 35,000 Verizon workers. Their return to work helped to boost information technology employment by 44,000.
The Labor Department figures indicated that wage growth remained steady, rising by just 0.1% in June from the month before. However, earnings were 2.6% higher compared with June from the previous year, up from a rate of 2.5% in May.
The figure was much stronger than forecast. The stronger-than-expected jobs figures are good news for everyone.
Dennis de Jong, managing director of UFX.com added: "It has been a month of huge shocks for the global economy, but what you can hear now is a massive sigh of relief from the markets. The disastrous May non-farm payroll reading followed by Brexit were very painful, yet there is now a glimmer of light at the end of the tunnel."
Earlier this year there had been speculation that the Fed could raise interest rates. However, May’s disappointing jobs report and the uncertainty following the UK’s vote to leave the EU appeared to have pushed any decision of a rate rise.
Could a smartphone actually handle your finances?
People can now pay using an app on their smartphone and if this payment option takes off it could even replace plastic cards.
There has been an upturn in the number of new app-based financial technology firms attracting serious investment across the world in the last few months. Payments providers, trading platforms and foreign exchange companies have all been catching investors’ attention. Globally, financial technology investment has risen from about $3.2bn in 2012 to $22.2bn in 2015.
The question people are asking is, would you be prepared to manage your finances through your smartphone? This is the hope of many financial technology start-ups aiming to transform our money-management. They believe that we now trust our mobile technology enough to carry out our banking, money transfers and even investments without ever needing to step into a bank branch.
Smartphone banking apps are popular with young people and it is now possible to carry out banking transactions and money transfers using your smartphone. There are now even smartphone-only banks that are aimed at younger people.
Today, there are also money management apps such as Loot that aim to help consumers set a budget and keep track of their spending. This allows control over your finances.
The main selling point of using finance apps is that they are intuitive and easy-to-use and you can perform transactions at any place and any time.
The advent of smartphones and apps has given the global financial services industry and tech-based start-ups the opportunity to change the tone and style traditionally associated with finance. The financial services industry is changing and is becoming more consumer-orientated as they seek to offer services that will benefit end-users.
Asian Shares on the rise
Asian markets have recorded more gains, continuing the positive lead set by the U.S. and Europe.
In Japan, the benchmark Nikkei 225 share index was 1.6% higher and Toyota’s shares rose by more than 2% despite the recall over faulty airbags. Automaker Toyota on Tuesday said it was recalling 482,000 vehicles, which include model year 2010 to 2012 Prius vehicles, due to safety issues and faulty airbags.
Other markets across Asia also saw gains. Hong Kong’s Hang Seng Index was up 0.7% while the mainland benchmark Shanghai Composite Index was 0.5% higher and the Shenzhen composite higher by 0.15%. In South Korea, the Kospi share index finished 1% higher.
Wall Street and stock markets across Europe have improved since the UK voted last week to leave the European Union. The market gains in Wall Street are very positive. The Dow Jones industrial average closed up 269.48 points, or 1.57 percent, at 17,409.72; the S&P 500 index added 35.55 points, or 1.78 percent, to 2,036.09 and the Nasdaq composite gained 97.42 points, or 2.12 percent, to 4,691.87.
Asian shares have also recorded gains and major export stocks closed higher. Toyota shares up 2.89 percent, Nissan up 2.28 percent and Honda higher by 1.72 percent.
The Japanese yen traded slightly weaker at 102.25 against the dollar. A stronger yen is a negative for exporters as it reduces their overseas profits when converted into local currency.
India plans to make it easier for foreign firms to invest
India plans to make it easier for foreign firms in many industries to invest in the country. India has announced far-reaching measures to ease foreign investment in a range of industries including defense, civil aviation, pharmaceuticals, retail, food trade and broadcasting. This move is expected to strengthen the country’s efforts to become a global manufacturing hub. The reforms are aimed at improving confidence in the Indian economy among foreign investors.
Since Prime Minister Narendra Modi was elected to power in 2014, his government has worked to increase the ease of doing business in India. Over $55 billion worth of foreign investment came into the country between 2015 and 2016, up 15 percent from the previous year.
Modi’s government raised the foreign investment limit in defense from 26 to a record 49 percent in 2014.
The government has also relaxed local sourcing norms up to three years for single-brand retail trading of products that have ‘‘cutting edge’’ technology, a move that is likely to benefit Apple in its effort to open a chain of branded stores in the country.
Another beneficiary that is likely to benefit from these reforms is the home products and furniture company IKEA.
Perhaps the biggest step, controversially, was to permit 100 percent foreign investment for trading in food products that are produced locally.
India has also permitted 100 percent foreign investment in the civil aviation sector which is up from 49 percent.
The Indian economy is expected to grow at 7.6 percent in the current financial year, based on a report by the World Bank.
Catching Up With Trading at the Weekend
The weekend is a time to relax and spending time with family and loved ones. It is also a time to catch up with your hobbies and doing the things you love.
The weekend can also be a time to catch up with trading on OptionBit’s leading trading platform. You are able to trade on your computer or Ipad in the comfort of your own home. You do not have to sacrifice spending time away from your family and loved ones when you trade from home. You can also trade on OptionBit’s app which means you can trade anywhere, anytime. The OptionBit app provides you with unlimited access to currencies, commodities and other markets.
The weekend is also a good time to catch up with the financial news and what is going on in the broader financial sector. Check out Option Bit’s blog for a range of interesting news and features on the broader financial sector. Be sure to read the news to know what is going in the financial sector and you should use this information when trading. You can also have a look at the economic calendar to see if there are any major financial or economic events that may affect trading.
If you are new to binary options trading you can look at OptionBit’s free video tutorials on their website to get tips and learn new trading techniques. You can learn everything you need to start trading with their comprehensive tutorial videos. The extensive collection of videos will teach you the basics, more advanced trading techniques and tips on how to improve your trading success.
Microsoft is buying the professional networking website LinkedIn for $26bn. The software giant will pay a record $196 a share.
The deal will help Microsoft boost sales of its business and email software. However, Microsoft have reiterated that LinkedIn would still retain its “distinct brand, culture and independence”.
The deal would give Microsoft access to the world’s biggest professional social network with more than 430 million members worldwide.
After a difficult period in which LinkedIn’s shares have fallen amid widening losses, they have persuaded Microsoft to make its biggest deal. The software giant has said that this deal is about more than money, this is a new direction for Microsoft. Their vision is providing a cloud computing business providing all sorts of professional services to clients – including a social network to connect them to each other.
“We are trying to ride the wave of the new technologies,” Mr Nadella said. “It’s about AI, it’s about mobile, it's about cloud and we're trying to bring those things together."
Microsoft chief executive Satya Nadella has expressed his interest in LinkedIn: "I have been thinking about this for a long time."
The software giant has planned a different approach to integrating LinkedIn to preserve its culture and brand.
Following the news of the takeover LinkedIn shares soared 47% in New York. "Today is a re-founding moment for LinkedIn," said Mr Hoffman (co-founder of LinkedIn). "I see incredible opportunity for our members and customers and look forward to supporting this new and combined business."
LinkedIn has been trying to expand by offering users more messaging options, mobile apps and a revamped "newsfeed" to help boost engagement. The site also pledged to send less frequent and ‘more relevant’ messages after numerous user complaints.
The takeover is the biggest acquisition made by Microsoft, which paid $8.5bn for Skype in 2011.
The Brexit Question
As the EU referendum vote gets nearer and we get closer to June 23, people are asking the burning question – should Britain leave or stay in the EU? This has caused much debate and it seems like the end result is uncertain.
The main reason to leave the EU is due to concerns about sovereignty, democracy and immigration. These are all valid and legitimate concerns.
The main cases for staying in the EU are concerns that leaving the EU would hit trade, weaken Britain’s vital finance industry and reduce inward foreign investment. There are also potential knock-on effects of less innovation and slower growth in productivity.
It seems that there is more international pressure to stay in the EU but there is more national pressure to leave the EU. The end result is uncertain.
However, recently there seems to be more support to leave and this means that the Pound has dropped to the lowest point in almost four months as the case to ‘Leave’ leads in new Brexit poll. The campaign for Britain to leave the European Union took a 10 percentage-point lead less than two weeks before the referendum.
Concern over the sustainability of Europe’s political union have caused the pound to weaken more than 3 percent against the dollar this year, making it the worst-performing major currency after the Mexican peso.
There has been much volatility in the value of the currency. The pound dropped as much as 1.1 percent on June 6 after polls started to signal a lead for voters who support leaving the 28-nation bloc. The following day, it climbed as much as 1.5 percent as later polls suggested more support for the “Remain” vote.
The risk of leaving the EU has prompted speculation that major central banks are delaying policy changes until after the June 23 vote. There are concerns that a Brexit would have significant economic consequences.
Amazon’s Plan to Boost India Investment by $3bn
Amazon chief executive (CEO) Jeff Bezos has pledged to boost India investment by $3 bn. He made the announcement when he was speaking at a summit in Washington attended by Indian Prime Minister Narendra Modi.
The online retailer is the largest internet-based retailer in the United States and has said it will increase its investment in India by $3bn (£2.1bn), bringing the total amount invested in the country to more than $5bn.
The online retail giant announced a $2bn investment in India in 2014 and already employs 45,000 people in the country.
Chief executive Jeff Bezos said Amazon has continued to see on-going “huge potential” in the country which is Amazon’s fastest growing region in the world.
In 2014, the firm said India was on track to become its "fastest country ever" to achieve $1bn in gross sales.
However, it faces competition from other home grown e-commerce retailers in India like Flipkart and Snapdeal.
Mr Bezos was speaking at a summit in Washington, attended by Indian Prime Minister Narendra Modi. He told the US-India Business Council's leadership summit: "We have already created some 45,000 jobs and continue to see huge potential in the Indian economy.”
In a letter to shareholders in April, Mr Bezos described Amazon's efforts to educate small business owners in India about selling online.
In February, it launched Amazon Tatkal, a service that enables sellers to get online in less than an hour, which Mr Bezos said had reached sellers in 25 cities.
Uber Turns to Middle East for Investment
Uber receives an unprecedented $3.5 billion investment from Saudi Wealth Fund. This funding gives Uber the same valuation of $62.5 billion and means that the Managing Director of the Saudi sovereign wealth fund joins the board.
Saudi Arabia’s sovereign wealth fund made its highest-profile deal in history, investing $3.5 billion in the popular U.S. ride-share company Uber Technologies Inc. as the country seeks to diversify its assets with more overseas acquisitions.
Yasir Alrumayyan, managing director of the Public Investment Fund, will take a board set at the California-based company after the deal, which values Uber at $62.5 billion. It is the biggest investment in Uber to date and in line with the company’s previous valuation.
Founded in 2009, Uber has won over investors the world over with a promise to remake transportation. In addition to upending the taxi industry, the company has been researching the need for self-driving cars and other services that they believe diminishes the need for people to own a car.
Uber is currently operating in nine countries and 15 cities in the Middle East and Africa. The company has stated that it is committed to investing $250 million in the region and is continuing to spend much more than that in China and India.
Uber is quickly expanding in Saudi Arabia, where the app’s popularity among women has created one if its fastest-growing markets. The company is aiming for growth of 50 percent to 60 percent in trips per month in 2016.
There is some opposition to its services, which offer alternative transport options for women, who can’t drive in the kingdom but have an increasing role in the economy.
Can Turkey’s Tourism Industry Recover from Latest Fall
Turkey’s tourism industry is on the brink as bookings seriously tumble. Turkey is one of the most popular tourist destinations in the world. In 2014 it attracted a record 37 million foreign visitors but is now watching its tourist industry teeter on the brink. The tourist industry accounts for more than 4.5 per cent of its economy.
The tourist industry has taken a tumble due to recent terrorist attacks and tensions with Russia. Tourists are now becoming reluctant to visit.
The result of these unexpected turn of events has shown up in the statistics as January’s tourism statistics show a 6.44 per cent fall on last year, from 1.25 million to 1.17 million. Tourist arrivals have also dropped 28% in April alone. Turkey has suffered its biggest ever monthly drop in tourist arrivals, dropped a massive 28 per cent in April alone. This is the ninth straight month of declines in number of tourist arrivals.
Tourism has also dropped by UK holidaymakers and Thomas Cook has reduced its holiday capacity there by 30 per cent.
At present some resort hotels are offering substantial discounts to entice tourists and they are offering discounts of up to 40 per cent. The extra low prices are an incentive to try and bring tourists to the country.
Travellers wishing to take advantage of these low prices may yet spur a wave of late bookings, but for now tourists are low across all of Turkey’s main attractions, including Istanbul’s Topkapi Palace and things look set to remain that way. It remains to be seen if tourist numbers will change in the future.
The question is how will Turkey deal with this problem and revive tourist numbers.
Microsoft and Facebook Build Undersea Cable for Faster Internet
The project will build highest capacity fiber optic cable across the Atlantic Ocean. Construction is to start in August and expected to finish in October 2017.
Microsoft and Facebook are teaming up to build an undersea cable across the Atlantic Ocean to deliver fast online and cloud services to customers of both companies. They have joined forces to lay fiber-optic cable across the Atlantic Ocean; this is the tech companies’ latest big-budget infrastructure project.
Microsoft is seeing increased demand for speedy and reliable access to services like Skype and its cloud-based Office programs while Facebook needs faster speeds as video plays a bigger role in social media.
Construction of the cable, called MAREA (tide in Spanish). The new project will span for more than 4,000 miles between Virginia and Spain with eight pairs of fiber optic strands, which would make it the highest capacity link across the Atlantic. This 4,000-mile underwater internet cable will be from US to Europe. The giant Web companies have collaborated with Spanish internet carrier Telefonica to build the cable which is expected to enter service next year. This will be the fastest cable ever to cross the Atlantic.
The cable, is the latest in a string of big-budget internet infrastructure projects web companies have pursued to gain more control over their data.
The companies have said that the new cable will help to lower costs, accelerate bandwidth rates and help accommodate the explosion of data use around the world, both for commercial use such as cloud-computing and personal use like sharing photos on social media.
The project is the latest in a series of major cable projects which have become necessary because of the growing demand for internet bandwidth.
Can Egypt’s tourism sector rebound from latest blow
Tourism has long been a mainstay of Egypt’s economy and is the second largest in the Arab world after Saudi Arabia drawing tourists from all over the world to the ancient city of Cairo and the Red Sea resort of Sharm el-Sheikh but could this all change? In 2011, Egypt attracted nearly 15 million tourists a year, lured by such attractions as the pyramids in Cairo and the pristine beaches of the Red Sea resort of Sharm el-Sheikh.
Tourism makes up a huge sector of the economy. In 2014, the industry made up 5.2% of Egypt’s workforce and makes up around 3.5% of the economy.
But the number of tourists is declining and in the light of recent terror attacks on Western tourists, foreign holidaymakers are reluctant to visit.
In light of the recent disappearance of EgyptAir flight MS804, the effect on Egypt’s tourism sector is likely to be severe. The disappearance of Flight 804 with 66 people on board is a blow to the Egyptian tourism sector that is also suffering from five years of political turmoil. It is still unclear whether the EgyptAir plane fell victim to a terrorist attack or it was due to a technical fault or some other accident. The result of recent events is proven in statistics as tourist arrivals in the first quarter of 2016 were 40 percent lower than a year earlier.
Egypt has worked hard to promote its tourism and image abroad but numbers are declining. The number of tourists is declining rapidly and by 2013 it had fallen by one-third to under 10 million arrivals a years and has slumped further since then.
The ministry is maintaining its projection that 10 million tourists will visit Egypt is 2017 but there are doubts whether this will realized and this uncertain. There is also the threat of further terror attacks and therefore losses are inevitable.
Egypt is stressing that this may not have a large impact on tourism as terrorism is a global issue and other countries have the same problem. Egyptian authorities have increased their security and have new security upgrades in the pipeline including adding more CCTV cameras and having routine security checks carried out on people entering Sharm el-Sheikh but it is this enough to entice tourists to visit and reinvigorate the industry?
Has Japan avoided a recession is the question the world is asking
Japan’s economy grows enough in the first quarter to avert a recession. Japan’s economy has dodged a recession last quarter as gains in government and consumer spending compensated for a slide in business investment. Gross domestic product expanded by an annualized 1.7 percent in the first three months till March (January-to- March).
Japan’s economy has dodged a recession in the first quarter. Japan’s economy has expanded at the fastest pace in a year in the first quarter, this is due to a consumption boost and gains in government and consumer spending. However, analysts are asking is this rebound strong enough to dispel concerns over a contraction this quarter.
The world’s third-largest economy expanded by an annualized 1.7 percent in the first quarter, much higher than a median market forecast for a 0.2 increase and rebounding from a 1.7 percent contraction in the previous quarter.
Analysts were worried that the January-March period would not produce enough growth to avert recession (two straight quarters of contraction).
There was also an estimated boost from the leap year, taking into account the positive effects of the extra day from the leap year pushed up the quarter-on-quarter growth rate by 0.3 percentage point.
Private consumption, which makes up 60 percent of GDP, rose 0.5 percent, which is more than double the median market forecast, as households boosted spending on televisions, food and beverage, and recreation.
Japan’s economy contracted in the final quarter of last year as slow wage growth hurt private consumption, while exports felt the pinch from sluggish emerging market demand.
The Decline of the Pound and Its Knock-On Effect
There has been much concern about Britain exiting the European Union as the Pound is declining and is the world’s worst-performing currency of 2016. The currency has declined against all its G-10 peers this year.
The Pound’s strength has been deteriorating over the last few months and declined 0.4 percent this week to $1.4372. This is a steep decline from the beginning of May. Sterling has also dropped 2.7 percent against the dollar since the end of 2015.
Sterling has taken the brunt of the market’s anxiety before the referendum on whether to exit the world’s largest trading bloc. There is a high risk involved in leaving the EU and the outcome of the vote could potentially be very negative for the currency. The U.K. is trying to reduce the risk in sterling of leaving the EU.
The Brexit undecidedness and risk of leaving the EU is very high. The pound’s decline is where investor uncertainty lies ahead of Britain’s European Union referendum. The drop in sterling in the last few months is the result of Brexit-related effects. There is also concern that a vote to leave the EU on June 23 could mean a further decline in the pound and the drop could be very steep and very fast. This would cause severe damage.
The possible effect of departing the EU is a loss of strength of the pound and this has been reflected in the decline of the currency.
The strength of the Dollar is being questioned – is the dollar in limbo?
The strength of the dollar is being questioned as the dollar dipped against a basket of currencies. This also comes at the same time of news of slower-than-expected domestic job growth in April. This has meant the Federal Reserve will not raise interest rates in June.
Traders had scaled back their dollar holdings after the news of a disappointing ADP private employment report (US payrolls report). This is after the jobs report showed employers added fewer workers than forecast in April.
A range of disappointing employment data has been released on the economy, from manufacturing to private sector positions. There was also a lower reading on manufacturing by the Institute for Supply Management.
Although job gains were unfortunately below expectations, the report did indicate a 0.3 percent increase in average hourly earnings.
There is speculation that the currency may have moved too far and too fast and consequently was due to a reversal. The downturn of the dollar and release of disappointing employment data has taken its toll on the U.S. economy and Gross domestic product growth slowed to a 0.5 percent annual rate in the first quarter.
The future of the economy is being questioned as the Dollar is slipping and the recent release of weak U.S. jobs data. The other question to ask is – could the Chinese economy overtake the American economy in time as it is the second largest economy in the world.
In short, this has lead to the question – is America losing the allure of the dollar? Only time will tell…
If Britain leaves the European Union there could be a substantial economic cost
There has been much debate and speculation about Britain leaving the EU. If Britain votes to leave the European Union in the referendum, Britain could face a substantial and lasting economic cost. This is the conclusion of several new authoritative studies.
The Vote Leave campaign has cast the referendum mainly due to concerns about sovereignty, democracy and immigration. These are valid and legitimate concerns. But are these valid enough reasons to justify quitting the EU?
However, the economic consequences of departure cannot be ignored. There are concerns that leaving the EU would hit trade, weaken Britain’s vital finance industry and reduce inward foreign investment. There are also potential knock-on effects of less innovation and slower growth in productivity.
Leaving the EU would also affect the value of the British pound. There is a general concern that leaving the EU would damage the value of the pound and there is debate as to how much the currency would depreciate. The devaluation of the currency could weaken the UK economy.
London’s role in international finance is another concern. About 7 percent of UK economic output comes from financial services. Bank of England Governor Mark Carney has stressed the risk that Brexit poses to this vital part of the UK economy.
However, the exit campaign is arguing that Britain’s economy will prosper more outside the EU. They have argued that Britain could adopt a policy of unilateral free trade, rather than trying to negotiate new agreements with all its trading partners. In the future, this would give better results.
China’s Expected Economic Growth to Slow To 6.5% in 2016. What are the consequences?
Forecasters have predicted that China’s economy is expected to slow to 6.5% this year, the weakest growth since 1990 and down from 6.8% from last year (2015). This maintains pressure on Beijing to offer more policy support.
There are fears that China’s economy could have lost momentum in the first quarter. The expected slowdown in the second biggest economy in the world has seen policymakers focused on boosting economic activity, as markets and investors globally remain hesitant about the government’s ability to manage the transition from a manufacturing-driven growth economy to one reliant on services and consumption. This shows a transition from secondary to tertiary sectors.
Economists have warned that China’s economic performance will suffer as the government presses towards a transition away from a manufacturing-driven intensive model to a consumption-driven and service orientated economy.
In a Reuters survey based of 65 analysts, they predicted a 6.5% growth in 2016 – this is the weakest growth in a quarter of a century.
China’s GDP in the last quarter of 2015 was 6.8%, and the government has since set an economic target of between 6.5-7% for growth in 2016. Beijing will release first quarter GDP data on Friday April 15.
What are the consequences? If the economic growth rate is lower than expected that could devaluate the value of the Yuan and could affect conversions in trading currencies. It could also potentially have an impact on trading major currencies including the Euro, Dollar and the Pound. If there is a decrease in China’s economy growth this could also have an effect on the Australian Dollar (AUD) and New Zealand Dollar (NZD). This is because Australia and New Zealand are China’s biggest trading partners and China is one of the biggest exporters to these countries.
It's going to be a busy week for the Eurozone. However, all may not go well for the euro.
Tuesday, March 22
9:00 GMT Ifo Business Climate (Germany)
Germany, the economic powerhouse in the Eurozone is in a bit of a rut, which of course is terrible for the struggling euro. Manufacturers’ sentiment weakened on February from 107.3 to 105.7. Most responders were particularly dim about future business outlook, especially with regards to the manufacturing sector. A slowdown in emerging economies connected to the German economy certainly contributed to this sentiment. Business climate is projected to rise to 106.1 this go around, which should help the struggling euro.
9:30 GMT Inflation Data (U.K.)
Inflation in the U.K. economy jumped up to its highest rate in a year thanks to price rises in alcohol and clothing. However, despite the increase, the Bank of England anticipates that inflation will continue to remain restrained below the two percent objective set by the government. With weaker oil prices limiting inflation pressures, the BOE probably has no desire to raise the rates above 0.5%. Inflation should however, jump to 0.4% which should help the GBP.
10:00 GMT ZEW Economic Sentiment
Unsurprisingly economic sentiment in the Eurozone has been rather pathetic lately, despite the fact it has beaten expectations during the last four months. Although another better than expected result may be in the cards, the last thing the European Central Bank wants is a stronger euro, so the market’s response will be integral.
Wednesday, March 22
21:45 GMT Trade Balance (New Zealand)
Analysts are a little undecided how this report may pan out. Although Australia’s economy has been doing relatively well as of late economic data out of China continues to disappoint. However, don’t expect the NZD to rally as the RBNZ is doing its form of easing.
Thursday, March 23
9:30 GMT Retail Sales (U.K.)
Last month analysts and traders were completely surprised as retail sales in the U.K. jumped by a firm 2.3% m/m rate. A potential slowdown would therefore surprise nobody.
12:30 GMT Durable Goods Orders (U.S.)
Back in January durable goods orders rose 4.9%, the largest gain in 10 months, in spite of weaker business development. Most economists believe that this is not a temporary event but the start of a positive trend. A smaller rise of 3.0% is expected for February which should prop up the dollar while at the same time pushing down the euro.
Friday, March 24
12:30 GMT GDP Data (U.S.)
With economic expansion coming in at a much slower pace than what was originally projected in Q3 of 2015, the Fed believes there won’t be much improvement in 2016. The reason being is credited to a heavy reduction of inventory stocks. However, the Fed anticipates that decent job gain and accelerated wage growth will spur on the economy. Undoubtedly, this will assist the dollar and temporarily hurt the euro.
How many currencies will be hurt by this week's rate decisions?
Monday, March 7
3:40 GMT BOJ Governor Haruhiko Kuroda speaks
With the effects of its new monetary policy starting to take effect, it seems like the Bank of Japan will achieve its lofty 2.0% inflation goal sometime in the first half of 2017. Of course market volatility should be anticipated when Kuroda speaks.
Tuesday, March 8
Tentative Trade Balance (China)
Without a doubt this report will impact the Australian dollar as China is Australia’s primary trading partner. A sharp reversal is expected from February’s fantastic results, which may of course hurt the AUD.
Wednesday, March 9
15:00 GMT Rate Decision (Canada)
Back in January, the Bank of Canada decided to maintain its interest rate at 0.5%. However, with two previous rate slashes implemented in 2015 it would come as no surprise if the central bank decides to introduce another one this time around. The Canadian economy is expected to expand by 1.5% this year, followed by 2.5% in 2017.
20:30 GMT Rate Decision (New Zealand)
After a December rate slash, the Reserve Bank of New Zealand decided maintain its interest rate at 2.5% in January. What the central bank may do is anybody’s guess.
Thursday, March 10
12:45 GMT Rate Decision (Eurozone)
Rumor has that Mario Draghi, European Central Bank President may in fact ease the Eurozone’s monetary policy in March thanks to growing concerns regarding the weakening of global economic growth triggering volatility in financial markets. The Euro may be in for quite a trading session with Thursday’s potentially inauspicious rate decision.
Friday, March 11
13:30 GMT Employment Data (Canada)
After experiencing severe contraction last month in all but one of the country’s provinces, the Canadian economy is expected to add approximately 10,200 jobs, with the unemployment rate remaining stuck at 7.2%. Unfortunately, until the nation’s unemployment rate starts to drop, the Loonie will still fall.
Tuesday, February 9
0:30 GMT Business Confidence (Australia)
Since mid-2013, this index has treaded in positive territory. However, with China in the midst of an economic downturn there is potential that we may see a decline.
22:30 GMT Westpac Consumer Sentiment (Australia)
As opposed to the business confidence sentiment, consumer sentiment has been a lot more unpredictable. With this report we will see the financial confidence among Australian consumers, which should indicate the level of consumer spending. It would come as no surprise if a negative figure comes out.
Wednesday, February 10
9:30 GMT Manufacturing Production (U.K.)
Talk about disappointing. This report has been underperforming for a number of months. On a month-over-month basis, the last two reports dropped 0.4%. Maybe we’ll see a small expansion here.
15:00 GMT Fed Chair Janet Yellen Testifies Day 1 (U.S.)
Without a doubt this is the most important event of the week. Encompassing a two day period, Yellen will discuss the FOMC’s assessment on the economy and its presence stance on its monetary policy. Given the recent economic slowdown traders should expect a rather dovish stance from Janet Yellen, which may translate into a drop in the USD.
Thursday, February 11
15:00 GMT Fed Chair Janet Yellen Testifies Day 2 (U.S.)
More of the same is expected during day two. Traders should anticipate another drop in the dollar.
22:30 GMT RBA Governor Glenn Stevens Testimony (Australia)
Last week the RBA decided to maintain the rates during its interest rate meeting. With all major central banks taking a rather dovish stance as of late, traders should expect a conservative assessment, which should cause a drop in the AUD.
Friday, February 12
10:00 GMT Flash GDP Q4 (Eurozone)
Analysts believe that the Eurozone grew by 0.3% q/q, though it is interesting to note that it is still heavily struggling to create any sort of significant inflation. However, other economic data has generally been decent, which is why there is a good chance of a better than expected reading.
13:30 GMT Retail Sales (U.S.)
After a disappointing report last month with retail sales contracting -0.1%, the weakest reading since 2009 this figure is critical. If we take a long-term look at this U.S. retail sales haven’t eclipsed analysts’ expectations since June. We’ll see if this substandard trend continues this month. If it does then the USD will certainly take hit especially if Janet Yellen provides us with not so appealing sentiments on Wednesday and Thursday.
Monday, February 1
1:00 GMT Manufacturing PMI (China)
Despite all of the negativity emanating from the world’s second largest economy, manufacturing data has not dropped as of yet. Another 50 or so reading is expected but any dip below 49 could cause the AUD and the NZD to plummet.
15:00 GMT ISM Manufacturing PMI (U.S.)
Unlike in China, manufacturing has deteriorated heavily over the past few months. Although improvements should come in this upcoming reading it may not be enough to prop up the USD until this Friday’s jobs report.
Tuesday, February 2
3:30 GMT Interest Rate Decision (Australia)
In its December meeting the Reserve Bank of Australia kept the official cash rate at 2.0%. Despite the fact Governor Glenn Stevens pointed out there was marked improvement in some aspects of the economy, further economic easing may be necessary. Stevens did imply that he would cut rates if the nation’s economic data ultimately deteriorates. However, with recent inflation numbers surpassing expectations, no slash is forthcoming.
21:45 GMT Employment Report Q4 (New Zealand)
With last quarter’s dismal performance, analysts expect employment growth to rebound back into positive territory. With that being said, the country’s unemployment rate has in fact risen at each quarterly jobs report in 2015. Another rise to 6.1% is anticipated this go around.
Wednesday, February 3
9:30 GMT Services PMI (U.K.)
This piece of data has done quite well over the past few months, despite the immense contraction in manufacturing. Another mid-50s reading is in the cards for this month, which should indicate more solid growth in the service sector.
13:15 GMT ADP Employment Report (U.S.)
Private sector employment in the U.S. increased by 275 thousand jobs back in December, which implies the labor market is in solid condition. Another decent reading coupled with a solid jobs report on Friday may prompt the Fed to raise the interest rates again in March.
15:00 GMT ISM Non-Manufacturing (U.S.)
The service sector in the U.S. expanded less than anticipated in December, with the slowest expansion in nearly two years. More of the same is expected this month.
Thursday, February 4
12:00 GMT Interest Rate Decision (U.K.)
The BoE maintained the interest rates in January amidst all the volatility in the global markets coupled with an unremitting fall in oil prices, which further slowed inflation. No one is expecting Mark Carney to make any substantial changes to its policy this week.
Friday, February 5
13:30 GMT NFP Report (U.S.)
Following 252K jobs added in November, December topped that number with a 292K figure, with the unemployment rate remaining unchanged at 5.0%, a seven and a half year low. Expectations are unsurprisingly high for another strong jobs report this go around.
13:30 GMT Canadian Employment Report
Last month the Canadian economy experienced a strong jobs report, with the economy generating 22.8K jobs. However, with January’s low oil prices, job cuts in the energy sector may cause a more downcast upcoming jobs report.
Earnings season is upon us but there's plenty abuzz in the Forex world especially with upcoming key interest rate decisions.
Monday, January 25, 2016
9:00 GMT IFO Business Climate Survey (Germany)
Without a doubt this particular report gives a very clear outlook on the German economic conditions. Generally businesses have a tendency to react fairly quickly to overall changes in market sentiment, which is why this index is a pivotal indicator not only for Germany but for the rest of the Eurozone. Up until last month’s miss this index matched or beat expectations for five consecutive months so it will be interesting to see these upcoming results.
18:00 GMT Mario Draghi Speaks (Eurozone)
European Central Bank President Mario Draghi is scheduled to speak in Frankfurt. Some analysts believe Draghi will talk about a potential monetary policy changes due this coming March. Either way market volatility is obviously expected not only for the Euro, but the entire market.
Tuesday, January 26, 2016
15:00 GMT CB Consumer Confidence (U.S.)
Overall confidence should be high thanks to a decrease in gas prices, which tends to be the driving force behind this report. If that occurs the USD should jump considerably.
Wednesday, January 27, 2016
0:30 GMT CPI (Australia)
In the third quarter of 2015 inflation in Australia increased 0.5%, a bit lower the 0.7% predicted by economists. This was the primary reason for a rate slash this past December. Poor inflation data was for the most broad-based, except for housing-related issues, which could lead to further slashes in the future. Consumer prices are expected to rise 0.3% this go around.
19:00 GMT FOMC Rate Decision (U.S.)
Back in December the Fed raised its interest rate to 0.50%, which undeniably had an effect on homebuyers and investors. The raise had almost a natural sort of flair to it as this step was the most logical progression, highlighting the economy’s continued recovery from the “Great Recession” back in 2008. The Fed dutifully noted that future interest rate hikes will be gradual in order to avoid harming the economic recovery, which is why almost all economists believe that no change is expected now. Even the probability of interest rate hike in March looks unlikely, which could bring down the greenback if Fed acknowledges this point at the upcoming meeting.
21:45 GMT Interest Rate Decision (New Zealand)
Similar to the Fed, not much is expected from this imminent interest rate decision. Although the Reserve Bank of New Zealand can take the aggressive route and implement a rate slash, most analysts believe that decision will occur in Q2 or Q3.
Thursday, January 28, 2016
9:30 GMT GDP Data (U.K.)
Weaker than expected economic data and ever-growing political concerns has hurt the GBP over the past few weeks. A better than anticipated performance on this upcoming Q4 GDP report should undo some of the negative sentiment that had steadily built up.
Friday, January 29, 2016
Tentative Interest Rate Decision (Japan)
Mixed signals have been the general theme over the last number of months, which may not be so surprising considering the amount of economic uncertainty that has occurred. More than likely, the Bank of Japan will wait and see how present market conditions progress before acting.
13:30 GMT GDP Data (U.S.)
After expanding rather nicely across the board in Q3, analysts are expecting more of the same for Q4. Most are anticipating GDP to touch 0.8% in Q4, which should prop up the USD.
Monday, January 4, 2016
1:45 GMT Caixin Manufacturing PMI (China)
Despite recovering from record lows this crucial independent report continues to worry analysts. After rebounding to 48.6 last month, a small rise to 48.9 is expected this time around, leaving it below the 50 point line, separating growth and contraction. It may be a good idea to place a short put on the NZD and the AUD.
15:00 GMT ISM Manufacturing PMI (U.S.)
After falling to a disastrous 48.6, leading economists do believe a rebound is in the cards, but not enough to send it back into positive territory. Traders should expect a temporary fall in the USD versus the other major currencies with this month's PMI findings.
Tuesday, January 5, 2016
Tentative GDT Price Index (New Zealand)
The Kiwi has always been profoundly influenced by this key index, as dairy products have been the nation’s main exports. Prices have steadily risen over the past two auctions, causing the NZD to rise. A third advance is expected. If it occurs the NZD will certainly reap the benefits.
Wednesday, January 6, 2016
13:15 GMT ADP Non-Farm Employment Change (U.S.)
Overall employment increased by 217 thousand, eclipsing all forecasts and making it the strongest gains in the service sector since June. Job growth continues to remain strong along with the pace of job creation. A 193 thousand reading is expected now, which should help the USD.
13:30 GMT Trade Balance (U.S.)
Thanks to a stronger dollar the U.S. trade deficit has increased $43.9 billion back in December. This reading calls for a deficit of $44 billion.
15:00 GMT ISM Non-Manufacturing PMI (U.S.)
Despite a poor showing last month, the USD wasn’t as hurt as it could have been. Business activity, new orders and employment components still managed to post a reading over 55, indicating the domestic services sector’s strong resilience. A PMI reading of 56 is expected this go around.
19:00 GMT FOMC Meeting Minutes (U.S.)
As everyone knows the interest rates were finally raised following the last FOMC meeting. This should provide us with some in-depth insights into the economic and financial conditions that influenced their vote. Additionally, it may provide clues as to when the next hike may occur. A hike in the greenback is therefore expected.
Friday, January 8, 2016
13:30 GMT Employment Data (Canada)
Despite a 36 thousand job reduction (primarily in the part-time sector), the full-time employee division shot up considerably, implying that overall outlook is not as bad it seems. A gain of 10.4K jobs and a steady 7.1% unemployment rate is projected.
13:30 GMT NFP (U.S.)
A 211K was exactly what the Fed “ordered” in order to raise the rates on their December meeting. Another solid gain of 202K jobs is predicted coupled with a 5.0% unemployment rate. Wages are predicted to rise 0.2 m/m once again. That being said, it should be a good day for the USD.
Tuesday, December 15, 2015
9:30 GMT U.K. Inflation Data
After posting two consecutive deflation months, many analysts believe the time is ripe for a positive turnaround of 0.1%. Should this happen, the GBP will jump temporarily.
10:00 GMT ZEW Economic Statement (Germany)
Economic sentiment finally edged up last month following a staggering seven-month decline for the Eurozone’s largest and most important economy. Perhaps a positive trend will commence this month as it is expected to reach 15.2.
13:30 GMT U.S. Inflation Data
After two straight months of heavy declines consumer prices increased 0.2% in October, thanks to the help of rising gasoline prices. November’s reading is expected to be another step in the right direction, which should bolster convictions for a positive interest rate decision come Wednesday.
Wednesday, December 16, 2015
9:30 GMT Employment Data (U.K.)
Back in October the Claimant Count Change jumped from 0.5K to 3.3K, eclipsing all forecasts. Surprisingly, the unemployment rate dropped from 5.4 to 5.3% in September with analysts expecting no change. Claimant Change is expected to rise 0.9K this time around.
13:30 GMT Building Permits (U.S.)
Despite the obvious improvement in this sector, it is still the way below its prerecession levels. A 1.16 million rise is on the cards for November.
19:00 GMT FOMC Rate Decision (U.S.)
Undoubtedly, this is the most crucial report of the week. If there is a rate rise it will show everyone that the U.S. economy has recovered from its recession. Consumer spending is solid while the inflation outlook is expected to rebound next year. Assuming the Fed follows through and raises the rates to 0.50%, it will be the first rate hike since 2006.
21:45 GMT GDP (New Zealand)
After a poor Q2 showing, most economists are expecting a stronger performance this time around, which should help the beleaguered NZD.
Thursday, December 17, 2015
9:00 GMT German Ifo Business Climate (Eurozone)
Sentiment jumped up to 109.0 in November after a 108.2 showing in October. German business climate is projected to climb further to 109.2 in December, which should do wonders for the Euro.
13:30 GMT Philly Fed Manufacturing Index (U.S.)
For the first time in two months this manufacturing this index made its key return to positive territory. December’s reading should feature more of the same.
Friday, December 18, 2015
Tentative Japanese Rate Decision
Despite deteriorating conditions the Bank of Japan surprisingly refused to change its monetary policy with last month’s shocking rate decision. In fact policy makers astonishingly feel that the country’s overall recovery is right on schedule. Unsurprisingly, no change is expected for December’s rate decision.
Tuesday, December 8, 2015
0:30 GMT NAB Business Confidence (Australia)
This survey, which has been situated in positive territory for the past two years, is considered to be one of the most important indicators for the Australian economy. However, with China continuing its lackluster performance a potential disappointing outcome can hurt the Australian dollar.
Tentative Trade Balance (China)
China, the world’s second biggest economy has been slowing down considerably, implying that this index in particular will almost definitely be closely scrutinized. With that being said, China’s trade balance has performed well over the past three months. Another better than expected showing could quell some fears and boost the Australian dollar.
Wednesday, December 9, 2015
1:30 GMT Chinese CPI & PPI
Consumer prices have been on the rise for over a year while producer prices have been decreasing steadily. More of the same is expected this go around, which should hurt both the Australian dollar and the Kiwi.
20:00 GMT Interest Rate Decision (New Zealand)
A difficult decision lies ahead for the RBNZ this upcoming week, with the bank admitting that 2.5% will probably end up being the final result. However, despite this being the assumed forgone conclusion it remains anything but certain. Most analysts are predicting a slash, which should bring down the NZD.
Thursday, December 10, 2015
0:30 GMT Employment Report (Australia)
Volatile is perhaps the best word to describe Australia’s labor market as of late, including last month’s surprising 58.6K job increase and a 0.3% drop in the unemployment rate. Most economists are predicting yet another expansion, which should help out the battered Australian dollar.
8:30 GMT Rate Decision (Switzerland)
After anticipating an aggressive ECB campaign, the SNB can now breathe a collective sigh of relief as that did not come to fruition. In response to what just occurred, the Swiss National Bank will probably not aggressively intervene and institute a massive rate slash. Instead traders should expect a much smaller rate cut.
12:00 GMT Rate Decision (U.K.)
Mark Carney, Governor of the Bank of England proclaimed last month that interest rates will not rise before the end of 2015. Unsurprisingly, the GBP will more than likely drop as a result.
Friday, December 11, 2015
13:30 GMT Retail Sales & PPI (U.S.)
Without a doubt this will be the two biggest pieces of news coming out of the U.S. this week. Although it is widely assumed that the PPI will drop yet again, retail sales on the other hand should increase thanks to Black Friday and Cyber Monday sales. If this does occur it should cement expectations for a U.S. rate hike.
As Friday’s NFP draws closer one could only speculate if this will spark a December rate hike.
Monday, November 30, 2015
1:00 GMT ANZ Business Confidence
New Zealand is scheduled to release its monthly Business Confidence report. After shocking traders everywhere last month by posting a wildly better than expected result many are wondering if they will make it two months in a row. If that occurs, the NZD will almost definitely rise.
Tuesday, December 1, 2015
1:45 GMT Manufacturing PMI (China)
Another expected repeat performance of 48.3 is expected for November, which would subsequently knock down both the AUD and NZD, as this number indicates contraction.
3:30 GMT Rate Decision (Australia)
The RBA maintained a 2% cash rate for six months running after electing not to institute another rate slash earlier this month. As of now most believe that a rate cut will come within the next few months, but then again nothing should come as a surprise.
9:00 GMT Mark Carney Speaks (U.K.)
Mark Carney, the Governor of the Bank of England will address the nation pertaining to the Financial Stability Report and the U.K. Bank Stress Testing. After indicating that interest rates will remain low for an extended period of time traders should expect no hints of an earlier than anticipated hike.
13:30 GMT GDP (Canada)
It seems that this index is primed for another gain this go around, which should send the CAD up and running.
15:00 GMT Manufacturing PMI (U.S.)
Last month this is index dropped to its lowest level since May 2013 after putting up a 50.2 reading in September. 50.6 is the expected result for November but it would come as no surprise if this index slipped into contraction territory.
Wednesday, December 2, 2015
0:30 GMT GDP (Australia)
Thanks to a sharp plunge in export volumes, Australia expanded at the slowest pace in two years. This time around the RBA is forecasting a 0.7% growth, which should prop up the flailing AUD.
13:15 GMT ADP NFP (U.S.)
After a 182 thousand increase in October, optimism for a December rate hike understandably grew, which is something considering the poor September report. This month’s estimate is expected to display a 191,000 job gain which should prop up the USD.
17:25 GMT Janet Yellen Speaks (U.S.)
Although Janet Yellen announced that a potential December rate hike is on the table no decision has been reached as of yet. If Yellen does reiterate that a rate hike is likely the USD will skyrocket.
Thursday, December 3, 2015
12:45 GMT Rate Decision (Eurozone)
On the flipside, ECB president Mario Draghi has implied that further quantitative easing measure may be implemented in December. Regardless traders should look to short the struggling Euro even if a rate slash isn’t implemented.
15:00 GMT ISM Non-Manufacturing PMI (U.S.)
Thanks to a much faster than expected expansion in October, more calls for a December rate hike have permeated the trading world. This time around non-manufacturing PMI is expected hit 58.1, which should serve as a solid preview for Friday’s upcoming NFP report.
Friday, December 4, 2015
13:30 GMT NFP (U.S.)
Last month’s NFP report literally took everyone by surprise, with it increasing to a staggering 271,000 jobs added. The nation’s unemployment rate additionally fell to 5.0% and average hourly earnings jumped 9 cents, displaying a monthly gain of 0.6%. This month’s NFP report is expected to eclipse the 200,000 mark and wages are projected to rise by 0.2%.
13:30 GMT Jobs Report (Canada)
Canada’s version of the NFP is anticipated to take a bit of a downturn after posting a solid gain of 44,400 jobs back in October. Canada does seem to be showing signs of overall stability despite the decline of oil prices though.
Monday, November 23, 2015
9:00 GMT Flash PMI Readings (Eurozone)
Two integral PMI’s, the Services and Manufacturing PMI’s will be released tomorrow morning. Most analysts are predicting modest growth for both, which should help the Euro.
15:00 GMT Existing Home Sales
For the most part home sales have been moving steadily higher over the past year. However, a number of leading analysts anticipate a small drop off for this month, which could hurt the USD.
Tuesday, November 24, 2015
9:00 GMT Ifo Business Climate (Germany)
Despite the Volkswagen scandal, German business optimism was hardly affected last month. This is rather important considering that Germany is the largest economy in the Eurozone. Sentiment for this month is forecasted to touch 108.3, which should have a do wonders for the Euro.
13:30 GMT Preliminary GDP Report Q3 (U.S.)
Economists strongly believe that this Q3 GDP figure will be revised to 2.0% annualized growth. Without a doubt a better than expected reading will generate more confidence in the Fed enacting an interest rate hike come December.
15:00 GMT CB Consumer Confidence (U.S.)
After deteriorating to a three-month low in October many analysts felt this would seriously quash any December interest hike expectations. Most feel this index will rebound to 99.3 this month, but if it eclipses 100 the USD will almost certainly rise.
Wednesday, November 25, 2015
13:30 GMT Durable Goods Orders (U.S.)
After two months of posting back-to-back declines, the market is expecting a 1.6% surge, which should highlight consumers’ confidence in future economic conditions.
15:00 GMT New Home Sales (U.S.)
After last month’s disappointing 468 thousand reading, a bounce back of 500 thousand is expected. However, another substandard performance could certainly raise some warning flags concerning the U.S. economy, especially with the Fed contemplating on raising interest rates next month.
Thursday, November 26, 2015
0:30 GMT Private Capital Expenditures Q3 (Australia)
This index has plummeted for the past three quarters, with traders expecting another drop this time around. Traders should expect a bit of volatility in the Aussie and Australian equities.
Friday, November 27, 2015
9:30 GMT GDP (U.K.)
An earlier estimate of U.K. GDP growth displayed a 0.5% level. Although that was lower than what many expected, policymakers weren’t alarmed. Traders should anticipate this level for this upcoming GDP release.
Of all of the upcoming inflation reports this week, all eyes are sure to zero in on the U.S. as it may lead into a rate hike.
Sunday, November 15, 2015
21:45 GMT Retail Sales Q3 (New Zealand)
After rising for five consecutive quarters before coming to a humbling 0.1% q/q gain last quarter. Most analysts are predicting a rebound back to the 1.0% q/q plane.
23:50 GMT Preliminary GDP Q3 (Japan)
Despite finishing with a poor GDP last quarter the Bank of Japan has remained adamant in its refusal to expand its QQE program. However, if the nation’s GDP underwhelms yet again, which would of course come as no surprise, perhaps the bank will change its tune.
Monday, November 16, 2015
9:15 GMT ECB President Mario Draghi Speaks
Draghi is scheduled to deliver pivotal speeches on two separate occasions this week. With all of the recent hawkish rhetoric coming from the Fed it would come as no surprise if the ECB president talks down the Euro by mentioning the potential for easier monetary policy next week.
10:00 GMT Final CPI (Eurozone)
Rumors of deflation are rife in the Eurozone even though its CPI has certainly recovered from all of the negative m/m readings earlier this year. If it does indeed dip back into deflation this month, traders should potentially expect more ECB easing next week.
Tuesday, November 17, 2015
9:00 GMT Inflation Data (U.K.)
Much like the rest of Europe, inflation in the United Kingdom has been virtually nonexistent lately. More or less since the start of 2015 prices have remained unchanged and in all likelihood will continue to stay the same. If that’s the case the FTSE 100 may be in for a big day.
13:30 GMT Inflation Data (U.S.)
If the U.S. economy is going to see a rate increase soon, inflation must edge up significantly in order to support such a move. To facilitate a rate hike, inflation must rise above 0.2%. If that occurs expect the USD to skyrocket.
Wednesday, November 18, 2015
19:00 GMT FOMC Meeting Minutes (U.S.)
After a relatively hawkish October regarding inflation and employment, with a hint pertaining to the upcoming December meeting, this minutes’ meeting may very well indicate that a December rate hike is real. Traders should expect the markets to move in a second’s notice based on whatever words are used to describe the current situation.
Thursday, November 19, 2015
Tentative Rate Decision (Japan)
Traders shouldn’t expect any changes to monetary policy this go around especially since the Bank of Japan refrained from increasing stimulus during the last meeting in October.
9:30 GMT Retail Sales (U.K.)
Expectations are looking rather dim, with a number of economists anticipating a 0.4% decline. Traders should expect a drop-off in the GBP.
Friday, November 20, 2015
7:00 GMT ECB President Mario Draghi Speaks
By the end of the week traders should be hard-pressed to find the Euro soaring in the clouds. Expect Draghi to further knock down the Euro after his speech.
Tuesday, Nov 10, 2015
0:30 GMT NAB Business Confidence
Talk about disappointing. This highly important survey has been grounded in the single digits all year, with more of the same scheduled for this month. If it hits five those who are investing in the AUD should be satisfied. However, it would come as no surprise this number fall below expectations yet again.
1:30 GMT CPI (China)
China, like almost every other country in the world has a very subdued inflation rate. However, the nation’s CPI readings as of late have been decent, ranging from 1-2%. Another positive reading is in the cards this time around as Chinese economy seems to be turning the corner.
Wednesday, November 11, 2015
9:30 GMT Employment Data (U.K.)
The nation’s labor market continued to make strides this past quarter, with the unemployment rate dipping to the lowest it has been since Q2 2008. However, jobless claims increased 4,600 in September, broadly missing forecasts for a contraction of 2,300. A 1,600 rise is in employment is expected this time around.
10:30 GMT Mark Carney Speaks
Mark Carney, the Bank of England Governor will speak concerning last week’s inflation report. Last week Carney implied that the nation’s interest rates will remain lower for some time, while also implying that overall global growth decline may take its toll on U.K. growth. Traders should expect a high volatility during the duration of his speech.
13:15 GMT Mario Draghi Speaks
Traders should expect Draghi to enlighten everyone about the ECB’s possible upcoming interest rate slash and along with an increase in quantitative easing in order to avoid an economic slump in the Eurozone. When it’s all said and done the Euro will probably fall even further.
Thursday, November 12, 2015
0:30 GMT Employment Report (Australia)
Prior to a disappointing 5,100 jobs decline last month, this index beat the odds for the last four months. However, another poor employment report may indicate that a bearish trend is in the works. With all of the economic reports emanating from the region this week, traders should specifically tune in to this report to determine whether a trend is occurring.
Friday, November 13, 2015
10:00 GMT Q3 GDP (Eurozone)
Last month the ECB implied that some sort of a stimulus maybe waiting in the wings, which is why this GDP reading should be closely followed. As long as the numbers come in above 0.0% there shouldn’t be any reason for traders to panic.
13:30 GMT Retail Sales (U.S.)
After much better than expected employment figures last Friday, not much economic data is emanating from the U.S. this week. Therefore perhaps more weight will be attributed to this key index. As consumer spending is the largest contributor to GDP growth, this index is important on the larger scale. Retail Sales are expected to gain 0.3% while core sales should rise by 0.4%.
Monday, November 2, 2015
1:45 GMT Manufacturing PMI (China)
China, the world’s second largest economy is in the midst of a severe slump. The last time this index was above 50 (demonstrating growth) was in May. More of the same is expected this time around, which should end up causing both the AUD and the NZD to plummet.
9:30 GMT Manufacturing PMI (U.K.)
As opposed to China, this index has been rather impressive for England as of late. For the past six months it has consistently measured in between 51 and 52, demonstrating sizeable growth in the U.K. manufacturing industry. Another solid reading is expected, which should boost the Pound and add further fuel for a potential rate hike.
15:00 GMT Manufacturing PMI (U.S.)
Unlike its U.K. counterpart, manufacturing in the U.S. has been rather poor, with last month’s reading coming in at a paltry 50.2, indicating very little growth. Things aren’t looking any better as this month’s estimate is just 50.0.
Tuesday, November 3, 2015
3:30 GMT Rate Decision (Australia)
Last month, after much speculation the Reserve Bank of Australia decided to maintain the 2.0% interest rate, with Governor Glenn Stevens saying that he was “pretty content” with the present situation. Although no change is expected, some analysts feel that the RBA may slash the rates due to rising mortgage rates.
21:45 GMT Employment Report (New Zealand)
Since this report is only updated on a quarterly basis, it will almost definitely have a key impact on the nation’s currency. The last two readings failed to meet expectations, with employment dropping in each and unemployment rising to an alarming 5.9% last quarter. More negative data will have the NZD retreating and increase the possibility of the RBNZ instituting another rate slash in the near future.
Wednesday, November 4, 2015
9:30 GMT Services PMI (U.K.)
Unlike its manufacturing counterpart, this index has fallen harshly over the past four months. Economists are now wondering if it will fall into contractionary terrain for the first time since January 2013. A 53 or better showing is needed in order to quell any fears and keep the hope of a potential rate hike alive.
13:15 GMT ADP Employment Report (U.S.)
Despite overall weakness in the all-important NFP report in the last few showings, this index has held up its end of the bargain. A decent reading is expected, which should at least temporarily prop up the USD.
15:00 GMT Janet Yellen Testifies (U.S.)
Federal Reserve Chairwoman Janet Yellen is scheduled to testify before the House Financial Services Committee in Washington D.C. Many are speculating as to whether she will imply that a rate hike is imminent. Market volatility is of course expected.
15:00 GMT ISM Non-Manufacturing PMI (U.S.)
Despite a weaker than anticipated reading, this index remained in positive territory for an impressive 68th straight month, implying growth and a stronger employment division. This index is expected to hit 56.6 for the month of October.
Thursday, November 5, 2015
12:00 GMT Rate Decision
Most are expecting almost no change to monetary policy. Its quarterly inflation report should shed some on light on the bank’s longer-term views on the economy. Although some sort of a downgrade is expected, perhaps a bounce in the GBP may occur if the bank puts forth an optimistic tone for a potential rate hike in mid-2016.
Friday, November 6, 2015
0:30 GMT RBA Monetary Policy Statement
This statement should provide traders with some sort of an insight in the RBA’s long-term outlook for the economy. An optimistic outlook seems rather unlikely considering the glaring weaknesses in the Chinese economy and the commodity market.
13:30 GMT NFP (U.S.)
More weight should be added to this report after last week’s hawkish FOMC meeting indicated that a potential December rate hike is on the table. Understandably, the Fed would like to see a job growth that jumps into the 200K range with a wage growth of at least 0.2% m/m. However, this seems very unlikely.
Monday, October 26, 2015
9:00 GMT IFO Business Climate (Germany)
The Eurozone’s most important economy will be under the spotlight as it gets set to present this crucial finding. For the past three months this index has roundly beat expectations. If it repeats the EUR/USD should be in for a nice rebound after its big selloff last week.
Tuesday, October 27, 2015
9:30 GMT Preliminary GDP (UK)
Expansion over the past few years has been generally steady as low inflation is having a positive impact on consumer spending. Similar results are expected for Q3 as GDP growth is projected to reach 0.6%.
12:30 GMT Durable Goods Orders (US)
Despite sustaining a heavy blow last month, leading many to assume that overall global growth is severely slowing; many analysts feel a rebound is in the cards, which should boost the USD.
14:00 GMT CB Consumer Confidence (US)
After putting up a shocking but most certainly welcoming 103.0 score in September, consumer confidence is still expected to remain strong as most analysts feel that index will hit 102.5.
Wednesday, October 28, 2015
18:00 GMT Interest Rate Decision (US)
Last month the Fed disappointed many investors with their contentious decision to leave the interest rates unchanged. Since that fateful day the US economy produced a mixed bag of figures such as stronger inflation but a poor NFP and weaker retail sales. It should therefore come as no surprise if the rates remain untouched this time around. However, it would be wise to be on the lookout for any hints about a possible interest rate hike in December.
20:00 GMT Interest Rate Decision (New Zealand)
After the central bank slashed the nation’s interest rates to 2.75% with the hope of spurring growth, many analysts are split if the bank will do so yet again this month. Of course the most important factor leading up to this decision is the value of the Kiwi, which adequately adjusted according to Bill English, the country’s finance minister. If the NZD’s value continues to rise, the RBNZ will very likely cut the nation’s interest rate again or talk down the stubborn currency.
Thursday, October 29, 2015
12:30 GMT Advanced GDP (US)
Majority of economists believe the US economy slowed down even further this quarter after only rising a disappointing 2.3% in Q2. Another subdued reading, which is currently being projected nay very well negate any prospects of a potential interest rate hike in the near future.
Friday, October 30, 2015
Tentative Rate Decision (Japan)
Earlier this month the Bank of Japan kept its monetary policy on hold. With its semi-annual outlook in focus many believe the BOJ will not budge. However, nothing is certain, given the economic state of the Eurozone and China, both of which underwent forms of quantitative easing. It would therefore not be surprising if the Bank of Japan decides on Friday to enact a negative rate or some version of QE.
12:30 GMT GDP (Canada)
Most economists believe the third-quarter GDP will range between 2.5% and 3%, certainly above the 1.5% Bank of Canada projection. However, a drop-off shouldn’t catch anyone off-guard, especially after only 0.34% growth in July after a 0.44% growth in June. Low oil prices coupled with a harsh winter contributed to a 0.9% decline in the first five months.
Intel Corporation (NASDAQ: INTC) is scheduled to release its Q3 earnings once today’s Wall Street activity comes to a conclusion. Although Intel’s shares are outdoing the Dow’s expectations since its previous earnings report the overall health of the personal computer market cannot be ignored. Over a 9% decline in 2015 PC shipments was forecasted by a prominent industry tracker. Micron Technology one of Intel’s premier rivals announced a 15% decline in revenues, blaming the disappointing figures on the overall weakness in the PC market.
Perhaps this is why numerous analysts anticipate Intel’s earnings per share to fall to 59 cents compared to 65 cents in the year –earlier period. Others have the company earning 60 cents a share. Additionally overall revenue is expected to decline to $14.24 billion, down from $14.55 billion during the same period the year prior. However, despite these predicted setbacks, Intel’s shares have risen approximately 10% over the past three months outpacing the Dow 30, which incidentally is down 3.5%.
The leading computer chip maker last reported its quarterly earnings findings on Wednesday, July 15th. Intel reported $0.55 EPS for the quarter, surpassing the $0.50 unanimous estimate by $0.05. Revenue for the company was listed at $13.20 billion for the quarter, paralleled to estimates of $13.06 billion. Its quarterly revenue fell 4.6% on a year-over-year basis. Almost all analysts believe that Intel will post a $2.15 EPS for the present financial year.
Yesterday Intel’s shares inched up 0.22% during mid-day trading yesterday, before finishing the session at $32.21 with an overall trading volume of 18,773,606 shares. The company’s 50-day moving average price is situated at $29.21 and its 200-day moving average price is listed at $30.67. Intel’s one-year is $37.90 while its low is $24.87. The stock has a market cap of $153.13 billion and a P/E ratio of 13.65.
Tuesday, October 13, 2015
Tentative Trade Balance (China)
Thanks to dubious economic data and great instability in its stock markets the overall health of the world’s second largest economy is no doubt in question. Tuesday’s trade data should give the market a little bit of an insight into these beleaguered segments. Imports and exports are both expected to fall, with the overall balance tumbling to a poor $48.22 billion. This should cause the AUD and the NZD to plummet.
8:30 GMT CPI (UK)
Core inflation weakened to 1.0% while the year-on-year pace dropped to 0% back in August, eliminating any possibility that the Bank of England will raise the rates anytime soon. In September, the CPI is expected inch up by a miserable 0.2% m/m and y/y.
9:00 GMT German ZEW Economic Sentiment
German economic sentiment dropped in September to the lowest level in nearly 10 months thanks to mounting apprehensions over the growth outlook in emerging market economies such as China. Unsurprisingly, analysts believe economic sentiment will descend to 6.8 in October, which should cause the Euro to decline.
Wednesday, October 14, 2015
1:30 GMT CPI (China)
Without a doubt this could very well be the most important and telling piece of economic data this week. Year-on-year inflation already slowed to 1.8% in September from 2.0% in August. Factory prices are expected to remain in deflationary territory, which means more bad news for the Aussie and the Kiwi.
12:30 GMT Retail Sales (US)
After a solid July retail sales data came up short yet again in August. Understandably this of course triggered some warning signs concerning the overall health of the US economy. Although leading analysts are calling for a 0.2% m/m in September it would come as no surprise if this comes up short again.
Thursday, October 15, 2015
0:30 GMT Employment Data (Australia)
Although 17,400 new jobs were created in August, which beat forecasts of just a 5,200 gain unemployment was still stuck at 6.2% and isn’t expected to change anytime soon. Most analysts expect an additional 7 thousand plus jobs to have been added in September, which should prop up the AUD.
12:30 GMT CPI (US)
Despite the fact the US economy is seemingly picking up, overall CPI growth resides in stationary territory. Another poor CPI outing, which is at this point anticipated the interest rates will probably remain the same for a while.
21:45 GMT CPI (New Zealand)
Inflation is expected to soften to 0.2% q/q, which may cause the RBNZ to further slash the interest rates later this month. Of course worse than anticipated data will almost definitely cause the NZD to run further south.
Friday, October 16, 2015
14:00 GMT Consumer Sentiment (US)
This is one of the few indexes that has continuously shown solid improvement over the past few years and continues to remain nicely above post-GFC lows. Most believe this index will recover to 88.5, which could influence future rate decisions.
Twitter (NYSE: TWTR)is now rehiring its co-founder Jack Dorsey, hoping that he can come up with a strategy to expand its target audience and finally put a stop to a 10 year financial slide. Unsurprisingly the stock rose seven percent on that news, but for investors the social media giant has been a resounding bust overall. Despite being shelved by Twitter’s board of directors the first time around, they now seemingly have confidence that Dorsey has a new-found sense of maturity and knowhow to fix all of the ailments that have caused the stock to forfeit close to half of its overall value over the past five months.
Among the number of candidates that were considered over the past three months was its chief revenue officer, Adam Bain, who is now being promoted to chief operating officer to take of the ever-piling responsibilities as he tries to ultimately turn Twitter into a profitable and lucrative business. Interestingly enough Dorsey is the current CEO of Square, which he founded in 2009 and still plans on leading even after he takes the helm at Twitter.
The social media giant is apparently retracting its position after promising to choose a candidate who would make a total full-time commitment to the company. However, the board had a change of heart as it watched Dorsey completely outstrip all expectations as Twitter’s interim CEO. This is why many are dubbing Dorsey as a second coming of Apple co-founder Steve Jobs; an association that Dorsey has never rejected. After being shown the door at Apple in the mid-1980’s, Jobs returned as the company’s interim CEO in 1997 and resurrected the floundering company.
Twitter is one of the many social media companies that are widely struggling this fiscal year. LinkedIn’s shares are down more than 15% this year while Yelp, a social media company that combines reviews and social networking saw its shares fall by a whopping 70% over the past two years. The only social media stock that continues to dominate is Facebook. Its shares are up by a remarkable 20%, which is not just impressive in the social media realm but in the broader market in general. Shares of Facebook which traded for $94.01 yesterday have more than doubled since twitter made its IPO. At yesterday’s closing bell Twitter finished at $$28.15, up 6.99%.
Monday, September 21, 2015
14:00 GMT Existing Home Sales (US)
After a rather disappointing and uneventful FOMC meeting, many analysts are still trying to determine when the Fed will ultimately raise the interest rates. Any future data coming out of the region will certainly be scrutinized more, making this report that much more important.
Wednesday, September 23, 2015
1:45 GMT Caixin Flash Manufacturing PMI (China)
This independent report should provide us with a better depiction of the Chinese economic slowdown. Barring any unforeseen miracles this index will still remain in contraction territory, which should have negative effects on both the AUD and the NZD.
7:30 GMT Flash Manufacturing PMI (Germany)
Although this index is expected to drop from 54.9 to 54.5, it still is comfortably situated in expansion territory, which should be of no concern to the Euro.
13:00 GMT Mario Draghi Speaks
After the ECB slashed its growth and inflation forecasts for 2015 and the subsequent two years, ECB president Mario Draghi hinted that another dose of quantitative easing could be implemented to kindle more market activity, which would of course cause the Euro to tumble. Is more of the same expected during this upcoming speech? Either way market volatility for the Euro and other facets will almost certainly reign supreme.
22:45 GMT Trade Balance (New Zealand)
To combat a massive deterioration of domestic economic activity and the softening global economic conditions, the Reserve Bank of New Zealand has been considerably softening monetary policy in an effort to encourage domestic economic activity. Most analysts are expecting exports to dip to 3.58 billion from 4.2 billion.
Thursday, September 24, 2015
8:00 GMT Ifo Business Climate (Germany)
After rising to three-month 108.3 high in August consensus is expecting a drop-off to 107.9. Although it isn’t necessarily a cause for concern it will be interesting to see how the Euro responds.
12:30 GMT Durable Goods Orders (US)
A mixed bag is on the forecast for this key economic index. Durable goods orders are expected to contract 2.0%, while core orders are due to gain 0.2%.
21:00 GMT Fed Chair Janet Yellen Speaks
Many expect Yellen to shed some light on the Fed’s most recent decision to maintain the interest rates and to perhaps give some sort of a timetable for the long awaited rate hike. Market volatility should of course be expected. Any dovish sentiment will cause the Euro to rise and hammer the Greenback.
Friday, September 25, 2015
12:30 GMT Final GDP q/q (US)
Most leading analysts believe the third and final release of Q2 US GDP numbers will confirm what we already know – the US economy expanded at an annualized pace of 3.7% this past quarter. The GDP Price Index and personal consumption are expected to rise 2.1% and 3.1% respectively, matching what was previously put out.
Daimler AG (XETRA: DAIGn.DE) will soon be in direct competition with Tesla Motors Inc. (NASDAQ: TSLA) as its Mercedes-Benz sector has confirmed that it will field an electric car, presumably by 2018. Daimler claims that its new automobile will be quite different and provide a much better experience than the company’s other electric vehicles for its consumers. The new vehicle is expected to provide a range of 400-500 kilometers per charge and will be larger in order to properly house its big battery pack.
For the most part those who are looking to purchase a car tend to shun electric automobiles due to the shorter driving range, limited charging stations available and the often steep price tag. Currently, Tesla is the dominating force in this relatively small but rapidly growing market. Its Model S was heralded as the best-selling electric vehicle in the U.S. during the first half of 2015.
Daimler isn’t the only company that is looking challenge Tesla for market share. Volkswagen’s (XETRA: VOW3) top-of-the-line brands Porsche and Audi recently showed off new battery-powered autos at the prestigious Frankfurt auto show. The Mission E concept, Porsche’s first battery-powered sports vehicle and E-tron Quattro sport utility concept, Audi’s first electric model are both scheduled to hit the market sometime in 2018. Interestingly enough Daimler’s CEO did state that it is open to creating some sort of an alliance between German premium car designers to produce next-generation batteries.
Daimler last posted its quarterly earnings report on July 23. Its earnings per share (EPS) came in at $2.34, soundly beating the consensus estimate of $2.11. Most analysts believe Daimler will put up a $8.02 EPS for the year. Despite the fact that Zacks downgraded Daimler from a “Strong-Buy” rating to a “Hold” rating, most leading research analysts have given the company a “Buy” rating with an average target price of $99.00. Currently, Daimler is trading at 75.40, up 0.13%.
Despite going through what many would describe as a rough year, Alibaba (NYSE: BABA) Group Holding Ltd Executive Vice Chairman Joe Tsai stated that he strongly believes that the up-and-coming e-commerce giant is in better standing than when it first listed its IPO. Tsai pointedly remarked that investors and potential investors should take a long-term approach with Alibaba as opposed to a quarter-by-quarter snap judgment feel. Additionally, he feels that despite a warranted fear of a Chinese recession China’s consumers, which account for most of Alibaba’s business so far, are “very, very heathy”.
However, contrary to Tsai’s claims Alibaba has forfeited nearly 40 percent of its overall value since the start of the year, which of course implies that the company has been majorly affected by China’s economic implosion. Just this past Tuesday the company said that its Q2 gross merchandise volume (GMV) will probably be considerably lower than what was originally estimated because of poorer consumer spending.
Tsai believes especially with wages in the country rising year after year and the Chinese government grossly devoted to shifting its economy from manufacturing based to services based more and more potential consumers will come about and ultimately provide a boost for Alibaba. To make up for Alibaba’s receding revenue and GMV growth rates and emerging rivals such as JD.com Inc, Alibaba has started quite a few multi-billion dollar diverse investments, ranging from pharmaceuticals to sports.
After jumping over 5% as Yahoo proclaimed that the IRS refused to approve its plan to spin off its enormous Alibaba stake on a tax-free basis, the company finished yesterday’s trading session at 64.07, up 0.05%, with it dropping to 63.55, down 0.81% during after-hours trading. Most leading analysts who cover Alibaba shares have significantly slashed their profit projections since the company’s earnings outcome last put out in July. Its average earnings estimate for the second half of 2015 has fallen to $1.45 a share, from $1.55 a month ago.
Upcoming rate decisions will play a major impact on the Forex market this week.
Monday, September 7, 2015
11:50 GMT Final GDP Q2 (Japan)
It is no secret that the Japanese economy is struggling mightily from a lack of domestic and international demand. According to preliminary figures, annualized GDP declined 1.6%, and many believe the final figures are bound to show an even worse contraction of 1.8% q/q. A weaker than expected number will almost definitely send the Yen retreating and could very well strengthen the calls for further easing by the Bank of Japan.
Tuesday, September 8, 2015
1:30 GMT Business Confidence Index (Australia)
Business confidence has been anything but stable as of late in the land down under. Sentiment seemed to be on the up and up in late Q1 and throughout much of Q2 after a poor 2014. However, this all changed direction at the start of the current quarter and will probably deteriorate further in conjunction with global sentiment. Another drop in this index may push it close to or into contraction territory.
Tentative Trade Data (China)
After the People’s Bank of China’s shocking decision to devalue the Yuan last month, investor scrutiny has shifted even more to the world’s second largest economy. The market is expecting exports and imports to fall 6.1% and 7.7% respectively. Although it is slightly better than the previous month’s figures it is not too encouraging for both the AUD and the NZD.
Wednesday, September 9, 2015
14:00 GMT Rate Decision (Canada)
Twice this past year the Bank of Canada has cut the nation’s interest rate, with the hope of boosting the country's floundering economy. However, the BOC forecasts a rebound in the second half of fiscal 2015 as it expects growth of 1.9% for the year. Most leading analysts believe the rates remain the same this time around.
21:00 GMT Rate Decision (New Zealand)
In July the RBNZ cut its interest rate to 3.0%, with the hope of raising inflation and boosting economic activity. Many economists expect further cuts in September and October as the economic slowdown in China, one of the nation’s most important trade partners is starting to affect New Zealand’s economy. The rate is expected to fall to 2.75% this month.
Thursday, September 10, 2015
1:30 GMT Employment Data (Australia)
Despite 38,500 jobs opening in July, the nation’s unemployment rate inched up an uncomfortable 0.2%, reaching 6.3%. However, most attribute the rise to an increase in participation, which reached 65.1%. This rise in the number of job searchers should contribute to jobs growth in the next few months, which is of course a good thing for the economy. Forecasters predict 5,200 jobs and the unemployment rate to fall to 6.2%.
1:30 GMT Inflation Data (China)
With imports plunging and other aspects of domestic activity majorly slowing, the overall health of China’s domestic demand has been called into question lately. Inflation however, is expected to make a comeback in August with the CPI to jump to 1.9% y/y, after gradually increasing for the better part of a year on extensive monetary easing from China’s central bank. This should bode well for the AUD and the NZD.
11:00 GMT Rate Decision (UK)
Mark Carney, the head of the Bank of England stated that a slowdown in China’s economy could impact the bank’s inflation decision. However, its outlook pertaining to the interest rates has not changed; well at least not yet. At this upcoming meeting don’t expect a rate hike just yet. Most assume the first move will commence at the beginning of Q1 2016.
Friday, September 11, 2015
14:00 GMT UoM Consumer Sentiment (US)
Every bit of economic data is going to be scrutinized with even more intensity as everyone is gearing up for the Fed’s upcoming rate decision next week. Overall consumer sentiment has recovered over the past few years, which should influence any potential for a tighter monetary policy this year. The index may fall to 91.5 this time around.
Tuesday, September 1, 2015
1:00 GMT Manufacturing PMI (China)
China’s integral manufacturing division is struggling due to a lack of demand and economic activity. Understandably, analysts believe that it will dive into deflationary territory for the first time since February. If that occurs, the NZD and the AUD will probably drop.
4:30 GMT Interest Rate Decision (Australia)
Last month the Reserve Bank of Australia decided to maintain the interest rates at 2.0%. This time around most feel the RBA will not make any changes. However, there is a possibility that the rates may be slashed in order to soften the effects of the Chinese slowdown and mitigate the drop in overall expenditure.
8:30 GMT Manufacturing PMI (UK)
Despite being in expansion territory last month, new orders were down. This month most economists are anticipating a slight improvement to 52.0. If expectations are met the Pound should rise.
13:30 GMT GDP (Canada)
Last time around the Canadian economy contracted by 0.2%, marking the fifth successive month of decline. Canadian policy makers hope lower interest rates and a weaker Canadian dollar boosted the economic activity. 0.3% growth is the expected figure.
14:00 GMT ISM Manufacturing PMI (US)
In the month of July, manufacturing did expand but at a slower than expected pace. Leading analysts feel that this was due to a profound lack of global demand coupled with a strong dollar. This index should improve and meet expectations this month.
Tentative GDT Price Index (New Zealand)
After dropping at the last 10 auctions prices rebounded, which is of course integral for the country’s dairy sector, the main staple of their economy. Another positive showing should ease people’s fears and improve the RBNZ’s outlook pertaining to the country’s interest rates.
Wednesday, September 2, 2015
1:30 GMT GDP Q2 (Australia)
Things aren’t looking to positive as the market is expanding the economy to only have expanded 0.4 q/q and 2.1% y/y, down from the previous quarter’s 0.9% q/q and 2.3% y/y.
12:15 GMT ADP NFP (US)
After posting the smallest increase in new jobs since April, economists are expecting a strong figure this time around. If it surpasses 204 thousand, perhaps interest rates will rise come September.
Thursday, September 3, 2015
11:45 GMT Interest Rates Decision (Eurozone)
Although the European Central Bank is not expected to change its policy right now, Quantitative Easing has achieved some results in monetary easing and indirectly a weaker euro. Further stimulus may be in the offing due to the latest market turbulence. The question remains if the ECB will implement a 60 billion euro acceleration of its QE program per month. Understandably, a rise in the Euro is certainly not desired as the recovery is still delicate. If ECB President Mario Draghi even hints at that something may be in the cards, the Euro will certainly fall.
12:30 GMT Trade Balance (US)
The recent strength of the USD has been raising doubts concerning the health of this particular sector of the economy. Even though exporters only make up a small portion of the US economy, they are intensely connected to the rest of the economy. The trade deficit is expected to widen from 43.8 billion to 44.3 billion.
Friday, September 4, 2015
12:30 GMT Canadian Employment Data
Although 6,600 jobs in July, it didn’t alter the unemployment rate, which stayed stuck at 6.8%. This time around 2,500 jobs are expected to be cut, while the unemployment rate is still expected to remain at 6.8%.
12:30 GMT NFP Report (US)
After a solid June increase of 223 thousand in June, July experienced a 215 thousand boom, with the unemployment rate remaining steadfast at 5.3%, a seven-year low. New jobs for August is expected to come in at 220 thousand, with the unemployment rate is expected to fall to 5.2%. Of course, another excellent NFP could be the catalyst that sparks the Fed to hike the interest rates.
Colossal shockwaves were heard on Monday as stock markets plunged across the world following Friday’s nosedive. A sharp 8.5% drop in the Shanghai Composite Index kicked off the devastation, with stock markets in Japan, South Korea and Australia following immediately after. Unsurprisingly, European stocks such as the DAX tumbled after they exited the runway. Last but not least, the American stock markets fell after the opening bell. Of course China has played a considerable part in contributing to the stock market collapse mess but there are other factors that must be addressed.
Over the past 25 years the Chinese economy grew at a rapid 7-10% annually compared to only a 2-3% growth by its US counterpart. This phenomenal growth rate was enabled thanks to an export-oriented strategy which existed thanks to China’s poor wage structure. However, as China’s living standards it is becoming more and more difficult to compete with other low-wage countries such as Bangladesh. In order to continue expanding China needs to focus on producing more goods and services for domestic intake as opposed for export. Additionally, they need to drastically improve at creating and marketing their own products as opposed to just manufacturing them. However, the inner workings of the Chinese economy prevents this from happening as a large chunk of China’s economy is in the hands of bureaucratic and state-owned industries that are forever losing money. These issues really began manifesting themselves over the past year.
After soaring by over 150% from June 2014 to mid-June 2015, Chinese shares started going south thanks to an economic stranglehold on the country that has been growing over the past year. Officially, the growth rate was 7.0%, but it’s widely assumed that this number was severely inflated. A number of Chinese officials even admitted that these economic figures are completely untrustworthy. Despite measures that were taken by Chinese officials in July in order to calm fears in the country’s rapidly slowing economy, the China’s stock market has fallen tremendously over the past number of weeks. This only intensified after China shocked the world and devalued its currency, the yuan, earlier this month.
However, the sole question that needs to be addressed is will this plague the fragile western economies? Many western economies are still reeling from the ill effects from the great recession in 2008. Generally, central banks battle recessions by slashing interest rates. However, in the Eurozone and in the U.S., the short-term interest rates have dropped to zero, which is rendering those techniques to be ineffectual. Another option, called “Quantitative Easing” was considered quite controversial, so the Fed and the European Central Bank (ECB) used it cautiously. This created a rather sluggish and a not-so-clear recovery in the U.S., and Europe where in some parts unemployment is still rampant. This ultimately makes them increasingly vulnerable to declining exports.
Secondly, many companies that are registered on the European and American stock markets are what can be considered multinational businesses that conduct a lot of their business in China so an economic drop-off in the country can have dire consequences on the particular stock.
Perhaps this is a sign of worse things to come as this crisis has spread to all facets of the greater financial world. However, perhaps this is just a scare and no wide-scale travesty will occur. As of now the stock markets have recovered somewhat but one can’t say for certain what the future will hold.
Volatility will reign supreme at the annual Jackson Hole Symposium
Tuesday, August 25, 2015
3:00 GMT Inflation Expectations Q2 (New Zealand)
This gauges where the bank believes prices are heading. This is one of the premier reports and should give us an insight into the country’s monetary policy. If the report is soft, the NZD may suffer.
8:00 GMT German IFO Business Climate
Although it was only mild, this index did improve in July to 108.00. This month general consensus is forecasting a drop to 107.5 in the main index, with the IFO falling to 102.00 from 102.4.
22:45 GMT Trade Balance (New Zealand)
Unsurprisingly the trade deficit is expected to heavily widen to 650 million. Exports are only expected to jump 3.85 billion while imports are anticipated to climb 4.4 billion. Traders should expect the NZD to fall against the majors.
Wednesday, August 26, 2015
12:30 GMT Durable Goods Orders (US)
After an encouraging 3.4% rise in June, most analysts are anticipating a 0.4% decline for the month of July, with core orders gaining 0.3%. If better than expected results occur, this could be a strong indication that the US interest rates will rise in September.
Thursday, August 27, 2015
All Day Jackson Hole Symposium
This annual event will occur Thursday through Saturday, with a number of central bankers present. Although Federal Reserve Chairwoman Janet Yellen will not be attending, other important financial figureheads will undoubtedly make their presence felt. Market volatility should be expected throughout Thursday and Friday as comments and speeches from central bankers and other influential officials are sure to generate quite a stir at the Jackson Hole Symposium.
1:30 GMT Private Capital Expenditure q/q (Australia)
Falling commodity prices and an overall lack of global resource demand has plagued the traditional part of the Australian economy, which has caused the RBA to step in and lend its support to the broader economy. This index is expected to fall 2.5% for the quarter, which should drive down the Aussie. The AUD/USD may further fall if positive sentiment is generated for the dollar during the Jackson Hole Symposium.
12:30 GMT GDP Data Q2 (US)
This upcoming GDP report may be the key to raising the interest rates come September. According to the initial estimate the US economy expanded by 2.6% in the second quarter, a solid rebound from a revised 0.6% in Q1. An upgrade to 3.2% is expected for Q2, with personal consumption increasing 3.1%. However, the USD will presumably only rise if there is positive statements emanating from the Jackson Hole Symposium.
23:30 GMT Japan Inflation
Despite the valiant effort of the BOJ the Japenese economy is still floundering. Although the Bank of Japan Governor Haruhiko Kuroda stated that the bank won’t respond to temporary threats to inflation, these threats are starting to feel somewhat permanent, which may cause the BOJ to further loosen its monetary policy. Consumer prices are thought to have increased 0.2% y/y, while core prices are believed to have regressed to deflationary terrain. Depending what occurs during the three day span at the Jackson Hole Symposium, the Yen could further weaken against the dollar.
Friday, August 28, 2015
8:30 GMT GDP Data Q2 (UK)
According to the initial read the UK economy grew stronger this past quarter. A confirmation is anticipated for the first revision, which should provide a boost to the GBP.
12:30 GMT Personal Income & Spending (US)
Two-thirds of all economic activity in the US revolves around consumer spending, implying that this index acts as a key evaluator of the general health of the economy. Leading analysts believe personal income increased 0.4% along with retail spending. This and positive remarks regarding the US economy at the Jackson Hole Symposium should cause the USD to jump.
Citigroup (NYSE: C) has just agreed to terms to pay nearly $180 million after deceiving and defrauding wealthy customers of two failed hedge funds. Citigroup told them the investments were as secure as low-risk municipal bonds. The Securities and Exchange Commission (SEC) clam that Citigroup made dishonest and deceptive statements regarding the funds, which raised approximately $3 billion from 2002 to 2007.
When the devastating 2008 financial crisis commenced Citigroup decided not disclose information to many of its clientele that the hedge funds potentially posed substantial risks. Additionally, the company failed to reveal that one of the funds was trying to secure an emergency loan. Citigroup settled without confirming or denying the charges. Furthermore, the mega bank may have another scandal on its plate as the US justice department is investigating a potential money laundering scheme as the company is known to be connected to Mexican billionaire Carlos Hank Rhon.
Despite these accusations many equities analysts such as BMO Capital Markets and Zacks gave Citigroup favorable ratings. Only two analyst firms have given the company sell rating while six have placed a hold rating. 17 equities research analysts have assigned a buy rating and one has given a strong buy rating. Overall the stock has an average “Buy” rating, with an average price target of $63.87.
Citigroup’s EPS came in at $1.45, 10 cents ahead of the $1.35 consensus estimate. During the very same quarter, the company earned $1.24 EPS. Citigroup posted $19.20 billion revenue for the quarter, less than the $19.37 billion leading analysts estimated. On average, leading equities research analysts believe that Citigroup will put up $5.65 EPS for this fiscal year.
Yesterday Citigroup shares reached $57.55 after trading down 0.38%, with a trading volume of 11,592,231 shares. The multinational financial services corporation’s 50-day average price was $57.26 and $54.21 was its 200-day moving average. Its one year high is $60.95 while its one year low is $46.60.
Is solid inflation data what it would take for the Fed to raise the rates?
Sunday, August 16, 2015
23:50 GMT GDP Q2 (Japan)
After a set of disappointing Q2 numbers, expectations for solid GDP numbers are looking rather bleak. Just last week machinery core machinery orders fell by a whopping 7.9%. Exports did increase by 10% due to a weaker Yen, but weak inflation still continues to plague the economy despite the bank’s massive-money printing scheme designed to lift inflation. Most assume that Japan’s economy shrunk by 0.5% in Q2, with an annualized growth pace falling to -1.8% q/q.
Tuesday, August 18
1:30 GMT RBA Meeting Minutes
This past meeting the bank did a complete 180° and removed its dovish bias from the AUD. Additionally, the RBA put more of a positive spin on the country’s economy, highlighting the uptick in the latest business confidence results. However, business confidence figures have slumped since then, yet the Aussie still rose.
8:30 GMT CPI (UK)
Inflation in the country fell to 0.0% from 0.1% thanks in part to a decline in clothing, food prices and airfares. Mark Carney, Governor of the Bank of England anticipates inflation will remain low for the next few months. However, rising wages should increase consumption, which will ultimately lead to stronger inflation. This upcoming CPI report is expected to remain at 0.0% this time around.
12:30 GMT Building Permits (US)
In June the number of building permits issued reached the highest level since July 2007 by 7.4% to a 1.34 million-unit rate. Additionally, builders’ confidence reached a 9 and a half year high in July, implying the housing market should expand during the next few months. Although, this isn’t a major headline, the USD should react.
Wednesday, August 19, 2015
12:30 GMT CPI (US)
This is the one area that may be keeping the Fed from not hiking the rates sooner. Most expect the pace of inflation to drop to 0.2% from 0.3%, while core CPI is expected to jump to 0.2% from 0.1%.
18:00 GMT FOMC Meeting Minutes (US)
These minutes should give us more of an indication as to how and when the Fed will hike up the interest rates. Currently, there is a major divide between the ongoing overall improvement in the job market and the poor inflation condition. We’ll see if a September rate hike is in the offing.
Thursday, August 20, 2015
8:30 GMT Retail Sales (UK)
Although the core retail sales remained strong at 4.2%, retail sales for June dipped uncharacteristically by 0.2%. This time around analysts expect an increase of 0.2%. Overall this report won’t have such a major impact on the GBP unless these estimates really exceed expectations or totally miss the mark.
14:00 GMT Philly Fed Manufacturing Index (US)
Despite the fact this index plummeted to 5.7, it still indicated expansion. Weaker global demand and a strong USD lowered the number of manufactured goods ordered. Most economists believe a rebound is in the works.
Friday, August 21, 2015
12:30 GMT CPI (Canada)
Further rate cuts seem likely as the Canadian economy is stuck in the mud. Softer than expected inflation data may cause the Bank of Canada to further retreat into dovish territory.
Shares of Google (NASDAQ: GOOG) are up 37.08 (5.85%) to 670.81 in after-hours trading after finishing Monday’s trading at 633.73 (-0.25%). This comes after Google CEO Larry Page just announced that Google is restructuring itself into a holding company called “Alphabet Inc.” that will render the giant search engine as a subsidiary, effectively replacing Google Inc. as the public entity. Alphabet will still continue to be listed as GOOG.
The move is supposed to provide wider freedom to its chief web operations while at the same time giving investors greater insight as to how the company invests in its numerous projects such as high speed internet service, driverless cars and health related technologies, which has been a longstanding concern for many investors. Google announced, beginning in Q4 it would report distinct financial results for its core businesses and the remaining Alphabet businesses so its investors will receive the transparency they have been looking for. Additionally, this transition makes it considerably easier to perform any other potential divestments and future acquisitions. The new umbrella will include Google Ventures, Google Capital, Google X and various other subsidiaries.
Google’s current leaders Larry Page, co-founder Sergey Brin and CFO Ruth Porat will be managing the new umbrella company. Google will be managed by Sundar Pichai, who has been the head of product and engineering for Google’s internet businesses. Almost all of Google’s $66 billion revenue in the previous year came about because of those businesses. One of the premier researching company’s, eMarketer believes that one in every 10 dollars spent on advertising globally ends up with Google The mega search engine’s second largest source of revenue was sales of movies, music and apps through its Play store on Android smartphones.
Many speculate that this fundamental change will provide increased value to the company, now worth approximately $445 billion. Up until Google reported much better-than-expected Q2 results and indicated that it will cut down spending on secondary projects, company shares had fallen behind of other leading technology companies. However, this new change should propel Google forward and leave its rivals to contemplate what to do next.
Monday, August 10, 2015
17:25 GMT FOMC Member Lockhart Speaks
Dennis Lockhart, the President of the Federal Reserve Bank of Atlanta is scheduled to speak in Atlanta. After calling on the Fed to raise the interest rates in September, Lockhart gave a clear indication that the Fed is concocting a policy shift. Traders should expect plenty of market volatility.
Tuesday, August 11, 2015
1:30 GMT NAB Business Confidence (Australia)
June’s solid business confidence was certainly at least partially responsible for the RBA’s slightly more hawkish tone at its policy meeting earlier this month. The NAB’s Business Confidence Index shot up to 11 in June from a revised 6 in the previous. Without a doubt any worsening of the sentiment would cause a drop-off in the AUD, but another improvement will restate the call for looser monetary policy and subsequently boost the AUD.
9:00 GMT ZEW Economic Sentiment (Germany)
Sentiment fell in July to 29.7, as it was lower than the expected 30.6 amid the Greek debt crisis and much weaker than anticipated industry data. Although sentiment in Germany is expected to rise to 31.1, it would not be surprising if it falls again.
Wednesday, August 12, 2015
5:30 GMT Industrial Production & Retail Sales (China)
China is attempting manage its economic slowdown, but many feel that a small rebound is in the cards. Retail sales are expected to increase 10.6 y/y with industrial production expected to jump to 6.6% y/y. If improvement occurs the AUD and the NZD should be the primary beneficiaries.
8:30 GMT Employment Data (UK)
June’s setbacks indicate the UK’s recovery is still fragile and more measures are still needed to boost growth. Although average weekly earnings including bonuses increased at an annual pace of 3.2% between April and June (the fastest rate in five years), the number of individuals claiming unemployment benefits jumped by 7 thousand, contrary to a forecast of a 8,900 decline.
Thursday, August 13, 2015
12:30 GMT Retail Sales (US)
Back in June weaker than expected retail sales numbers in June caused many analysts to severely question the economic growth pace in the US and the likelihood of interest rates rising this coming September. July’s retail sales are expected to bounce back in July by a rather encouraging 0.5% m/m, which should increase the chances of a rate hike next month. However, another weak month could obliterate these hopes entirely.
Friday, August 14, 2015
6:00 GMT Preliminary GDP (Germany)
Germany’s economy expanded at a lowly 0.3% in Q1 compared to an expected 0.5% after a 0.7% gain in the previous three months. A decline in global trade and weaker consumer spending contributed to this decline. Germany is anticipated to expand by 0.5% in the second quarter.
12:30 GMT PPI (US)
Producer rose 0.4% after gaining 0.5% in the month prior, indicating that the manufacturing sector is in fact stabilizing along with increased inflation. PPI is widely expected to increase by 0.1% this time around.
14:00 GMT UoM Consumer Sentiment
July’s consumer moral declined to 93.3 from 96.1, which was significantly more than expected. Inflation expectation on the other hand rose to 2.8% from 2.7%. Consumer sentiment is expected to reach 93.5 for this month.
India has been garnering an awful lot of attention from the global-commerce industry and Alibaba (NYSE: BABA) is keen on entering. Reports have been circulating that it is actively participating in a funding for Snapdeal, an Indian e-commerce startup. Alibaba may be joined by Foxconn, a Taiwanese manufacturer and Softbank, a Japanese internet company for the $500 million round. Softbank was already the largest shareholder, after dumping $627 million into the company a number of months earlier.
News surrounding the mega-deal first appeared back in March, but supposedly was put on hold after disagreement regarding proper valuation. However, in June it was reported that talks were resuming under the supposition that Snapdeal would be valued at approximately $5 billion. Now it is widely believed that a deal is imminent, but Alibaba is remaining mum on the issue.
Although Alibaba has already invested in Paytm, an Indian payments company, this would represent Alibaba’s first direct e-commerce stake in India. It comes as no surprise that Alibaba is trying to break into this highly demanded demographic. According to Accel Partners the online-retail market in India is positioned to balloon to $8.5 billion in 2016 from just $2 billion in 2013. By fiscal 2020 that figure could potentially grow to as much as $33 billion. Only 17% of the 1.28 billion people living in India are online and only 9% of the 17% shop online, which indicates a tremendous opportunity as those consumers make the shift to online.
Additionally, declared that it will invest another $1billion to promote further growth in its cloud computing service, Aliyun. Experts believe this is and will continue to be an important growth area for the company. Alibaba stated that the funding will be used to expand Aliyun’s international presence and for the continued development of new big data and cloud solutions that allow its clientele to enhance productivity, while lowering costs as their businesses grow.
Perhaps these two endeavors will boost its stock. After claiming the title for the largest global IPO (initial public offering) of $68 a share, Alibaba reached its climax in November at around $119 a share and has largely declined ever since. Currently, it is listed at 77.96, down 0.49%, which has many analysts believing that is oversold, so a potential turnaround may be coming.
Interest Rates may be determined after this jam-packed week featuring multiple PMI readings, trade balances, and culminating with the NFP report.
Monday, August 3, 2015
1:45 GMT Caixin Final Manufacturing PMI (China)
After a much larger drop-off than anticipated in July, many (rightly so) began to severely question China’s overall health in its manufacturing sector. Although the market is expecting a slight turnaround to 48.3, the bottom line is the country’s manufacturing sector still remains in a perpetual state of contraction. If this index happens to take a turn for the worse tomorrow the AUD and the NZD will both fall.
8:30 GMT Markit Manufacturing PMI (UK)
Although last month this index came in at 51.4, it has been contracting since 2013. This time around however, consensus is indicating that a slight improvement to 51.6 is in order. We shall see.
14:00 GMT ISM Manufacturing PMI (US)
Manufacturing activity surpassed expectations in June, which was in line with the Fed’s plans to ultimately raise the interest rates later on this year. Analysts are expecting a small uptick this month to 53.6.
Tuesday, August 4, 2015
4:30 GMT RBA Rate Decision
Last month’s decision to leave the rates at record low of 2.00% generated some stability in the Australian economy, as the Central Bank indicated that a lower currency is key to achieving balanced growth. Most analysts believe the interest rates will remain at 2.00% but there those who feel that the RBA may institute another slash in order spur further spending.
22:45 GMT Employment Data (New Zealand)
After Q1’s rather bleak employment report, this result will be closely viewed. This time around many analysts are expecting the nation’s unemployment rate to increase to 5.9% from 5.8%, with employment and wages both anticipated to jump 0.5% q/q. An even worse than expected set of data can potentially really damage the NZD as it would increase the potential for further policy loosening from the RBNZ.
Wednesday, August 5, 2015
12:15 GMT ADP Non-Farm Employment Change (US)
Private sector employment in the US increased at the fastest rate in six months as 237 thousand more jobs were added in June. Healthy employment figures together with other promising economic data such improvement in consumer spending and better factory activity demonstrate the US economy is growing at a solid rate, implying that a rate hike is imminent. Another 218 thousand jobs are expected to be added for the month of July.
12:30 GMT Trade Balance (US)
It goes without saying that the health of this sector is another important piece in the Fed’s policy making process when determining future interest rates, especially as recent strength in the USD has had a negative impact on exporters. Although the export segment does not make up a large share of the US economy, a number of companies are incidentally affected by it. A number of analysts are expecting the trade deficit to have increased to $42.25 billion to $41.87 billion.
Thursday, August 6, 2015
1:30 GMT Employment Data (Australia)
Surprisingly, Australia’s unemployment rate remained at 6.00% in June, while its economy added another 7,300 jobs; in contradistinction to an expected 6.1% unemployment rate and a 2,100 jobs contraction. However, despite these positive developments, most policymakers are wary about the persistent increase in the unemployment rate following the deplorable situation in the mining sector. The economy is expected to gain 10 thousand jobs, while the unemployment rate is expected to reach 6.1%.
11:00 GMT Bank of England Rate Decision & Inflation Report
There is a growing possibility that the BOE may raise the country’s interest rates before the Fed. Presently the Bank of England is expected to commence hiking interest rates in January; only one month after the Federal Reserve is expected to tighten monetary policy. Of course this upcoming inflation report is going to be closely watched by the market at large for any potential indications that the bank may institute a rate hike sooner rather than later, given the latest improvements in the labor market.
Friday, August 7, 2015
1:30 GMT RBA Monetary Policy Statement
This statement is only released one time per quarter and it tends to be very in-depth, implying that it provides more of a lucid picture of the RBA’s view pertaining to the nation’s interest rates than the its post-meeting statements. This statement tends to get the AUD moving in one way or the other.
Tentative Bank of Japan Rate Decision
After lowering its growth forecast for fiscal 2015 to 1.7% BOJ Governor Haruhiko Kuroda voiced his concerns regarding China’s slumping stock prices and its economic downturn effect on Japan’s economic outlook. Share prices in China dropped more than 30% in just a few weeks. Exacerbating the problem, the Chinese economy has broadly shifted its focus from exports to its domestic demand, thus severely reducing trade volumes in Asia. Bearing this in mind it would come as no surprise if the BOJ downgrades its growth forecast yet again.
12:30 GMT NFP & Unemployment Rate (US)
To end off the week we have the all-important NFP report and employment numbers for July. Successive strong employment reports make the case for the Fed to tighten monetary policy and should certainly help determine when the Fed will start hiking interest rates. The market is expecting an NFP figure of approximately 225 thousand, while the unemployment rate is expected to remain at 5.3% and average hourly earnings to increase 2.0% m/m.
Yesterday mega-card giant MasterCard (NYSE: MA) posted a relatively flat earnings report from year-earlier levels that made its stock tumble to 93.00 before ultimately rebounding and closing at 96.74 (+1.66%). Its overall revenue growth was marginally weaker than expected as it continues to feel considerable pressure from a stronger US dollar. Additionally, MasterCard CEO Ajay Banga stated that revenue growth is being hampered due to the continuing shift of J.P. Morgan Chase’s credit-card portfolio to Visa Inc., as well as the company’s paid incentives to clients. Despite those nagging issues Banga reaffirmed that MasterCard continues to do well, with solid volume and good transaction growth.
For the quarter, which concluded on June 30, MasterCard reported earnings of $921million, or 81 cents a share, compared to $931 million, or 80 cents a share, in the very same quarter just a year prior. This included a $44 million after-tax charge associated with a UK merchant litigation settlement. Revenue did rise 1.00% to approximately $ 2.39 billion, however, most leading analysts expected at $2.41 billion in revenue and at least 85 cents a share in profit.
Another concern for MasterCard is that operating expenses rose over 15% from year-ago levels to the tune of $1.14 billion, thanks to higher data processing, acquisition costs and advertising and marketing expenses. Even after removing the impact of the UK settlement, cost increases that came close to 10% were definitely a stark reversal from the progress the company has made in containing costs in previous quarters.
However, MasterCard did show how proficient it is at procuring financial rewards globally. Purchase volume grew by 12% to $841 billion and processed transactions jumped 13% to 12 billion. Additionally, gross dollar volume, which over two-thirds of it comes from outside the US, rose 13% to $ 1.1 trillion and shows no signs of slowing down.
The main question that MasterCard must grapple with is whether it can continue to keep finding opportunities to strengthen its growth. The company did acknowledge that acquisitions added approximately two percentage points to its overall revenue growth during the quarter. This means that revenue from internal operations actually dropped in US dollars. Most analysts and investors for that matter believe that the dollar’s surges can’t continue forever, and once negative currency impacts start to decrease, more of MasterCard’s growth should once again run through its top and bottom lines. However, there is no way of knowing when the dollar’s strength will start to wane.
All in all, MasterCard unsurprisingly believes that its stock remains a good value. The company did in fact buy back 9 million shares during the quarter for approximately $850 million, and it claims that it has so far bought back another $182 million worth of shares during the first three and a half weeks of July. With another $2 billion left over for further stock buybacks; MasterCard certainly has enough in its arsenal to support its stock.
Nike Inc. (NYSE: NKE) CEO Mark Parker has just received a “restricted stock award valued at $30 million. It is on condition that Parker will remain with Nike for the next five years. Company spokesman Greg Rossieter stated that Nike’s board of directors were pleased with Parker’s exceptional leadership and his pivotal part in setting Nike’s growth strategy for many years to come.
This news should come as no surprise as Nike has been performing solidly as of late, with the athletic footwear giant posting a respectable earnings report back on Thursday, June 25. The company reported $0.98 earnings per share (EPS), soundly beating the consensus estimate of $0.83. During the very same quarter in the year prior, the footwear maker posted $0.78 EPS. Nike posted$7.78 billion revenue for the quarter, up 4.8% on a year-over-year basis. Most leading analysts believe that Nike on average will maintain earnings per share of $4.18 for the present fiscal year.
Numerous brokerages have issued favorable reports on the company such as Morgan Stanley, Zacks, Citigroup and S&P Equity Research all issuing or reiterating “buy” ratings. The stock currently has an average rating of “buy” and an average target price of 114.71.
Nike traded down 1.12% on Monday settling at 111.76, while currently listed at 111.82, up 0.05% in after-hours trading. The stock has a 52 week high of 114.70 and a 52 week low of 75.90. Additionally, the company has a 50-day moving average of $108.58 and a 200-day moving average of 100.90.
Presently, Nike is currently the undisputed champion in the athletic footwear arena, holding a 62% market share. The company had future orders for its brand shoes that totaled more than $13 billion, up 2.00% from the previous year. However, one of Nike’s competitors, Skechers (NYSE: SKX) is looking stronger than ever.
Skechers is certainly succeeding in areas where Nike falls dismally short; specifically in walking and casual footwear. However, the one thing that should have Nike concerned is Skecher’s ability to resonate with teens and millennials. The company’s kids sector is enormous and growing a rapid pace, while the stock itself is one of the best performing consumer goods names this year so far. Perhaps its finally time that Nike starts taking this competitor seriously.
Monday, July 27, 2015
8:00 GMT German IFO Business Climate
In June this closely viewed index, which highlights the business climate in the heart of the Eurozone, dropped considerably more than expected to 107.4 from 108.5 in the previous month. Although this index was cast aside as investors zeroed in on Greece, last month’s harsh decline was the second month in a row this index has missed the mark. A slight uptick to a 107.5 is expected, but it would not come as a surprise if it were to fall yet again.
12:30 GMT Durable Goods Orders (US)
This index is expected to have increased around 3.0% last month, after plunging a revised 2.2%. Core durable goods are expected to rise 0.4%. This important index should gauge the overall health of the US manufacturing sector, but the real assessment should come on Thursday when the GDP results are in.
Tuesday, July 28, 2015
8:30 GMT GDP (UK)
Q1 growth numbers were revised higher in June for the UK. Additionally the nation’s bank has been doing better ever since, which undoubtedly means that these figures are extremely important for future investor sentiment in monetary policy in the UK. Most leading analysts assume the GDP is to have expanded a solid 0.7% q/q last quarter.
14:00 GMT CB Consumer Confidence
Consumer confidence strengthened heartily in June, jumping to 101.4 from 94.6 in May, indicating the recent job surge boosted economic activity. Continued improvement in overall job market conditions and bigger wages increased not only optimism and consumer spending. Most economists expect over a 2.00% surge in job growth in the Q2; consumer confidence should hit 100.1 this time.
Wednesday, July 29, 2015
18:00 GMT FOMC Statement (US)
Although interest rates are not expected to be on the move this month, hawkish statements from Fed Charwoman Janet Yellen and promising US economic data has increased the more than likely possibility of a September rate hike. The FOMC may decide to use this meeting to potentially make a path for a rate hike at the next meeting, which will probably result in a significant demand towards the USD.
Thursday, July 30, 2015
12:00 GMT CPI (Germany)
The pace of inflations is one of the most important issues emanating from the heart of the Eurozone, particularly after last month’s CPI dropped 0.1% in Germany. Although, most leading analysts are expecting a 0.2% m/m and 0.3 y/y rebound in CPI results, a worse than expected result could harm the euro.
12:30 GMT Advance GDP (US)
Annualized GDP is expected to jump to 2.5% q/q for Q2 after falling heavily in Q1. The US GDP’s pace of growth is a major factor in setting monetary policy, which is of course very closely watched by policy maker and investors.
23:00 GMT CPI (Japan)
Japanese core-CPI as of now is well below the Bank of Japan’s official 2.00% target and inflation is entirely expected to stall in June, after a poor 0.1% y/y increase during the previous month. If consumer prices fall back into deflationary territory it will certainly increase the probability of loosening further policy, which almost always means a lower yen and a higher Nikkei 225.
Friday, July 31, 2015
12:30 GMT GDP (Canada)
Growth in Canada was surprisingly soft earlier in the year which was the number one reason as to why the Bank of Canada made a decision to cut its interest rate earlier in the month. Recession is knocking at the door, especially after GDP fell 0.6% last quarter and is expected to fall yet again in Q2.
International Business Machines Corporation’s (NYSE: IBM) revenue was considerably worse than anticipated in Q2, causing share prices to plummet in after-hours trading. The company reported net income of $3.4 billion or $3.50 a share, on revenue of 20.8 billion. After adjustments, IBM stated that it earned a profit of $3.84 a share. Revenue for IBM was down 13.5% from the very same quarter the previous year, with the company missing revenue expectations for the past four quarters in a row. The technology giant said that it expects its third quarter revenue to be more-or-less the same as the first quarter, around $19.6 billion. IBM bought back over $1.1 billion of its stock in the quarter, and paid $1.3 billion worth of dividends. The company’s cash on hand is listed at around $8.8 billion.
IBM is in the midst of transition, and has been selling businesses such as cash registers, low-end servers and semiconductors in order to shift their attention to high-growth areas which include data analytics, cloud services and security software. Revenue from mobile and cloud computing, data analytics and social security software jumped approximately20%. However, these new business ventures have so far failed to make up for the lost revenue. However, IBM does expect a modest increase in its overall free cash flow.
Additionally, IBM stated that revenue from its software business dropped 10% to approximately $5.8 billion from a year prior. Furthermore, weak discretionary IT spending by clients caused a 10% fall in revenue from global technology services such as outsourcing.
Quarterly results for IBM were additionally hurt due to the strong dollar. The company feels that a greater currency impact is in store for the latter half of the year considering it receives have of its revenue from overseas.
IBM finished Monday’s trading session at 173.25, up 0.43%. However, the stock is tanking in after-hours trading, currently listed at 164.50, down 5.03%.
Currencies will fluctuate this week as interest rate decisions loom.
Monday, July 20, 2015
12:30 GMT Wholesale Sales m/m (Canada)
Wholesale Sales were up considerably in last month’s release, coming in at 1.9%. A steep drop-off is expected to the tune of 0.1%. However, if this index posts better than expected results due to the lower expectations the Canadian dollar should jump.
Wednesday, July 22, 2015
03:05 GMT RBA Governor Glenn Stevens Speaks
It is widely assumed that Glenn Stevens will speak about the RBA’s recent decision to preserve the nation’s 2% interest rate and its intention to offer additional easing measures to boost potential recovery. Although Australia’s economic growth was considerably weaker than what was forecasted, it is expected to rebound in the next two years. The question that is on everyone’s mind remains; will Stevens try to further weaken the Aussie?
8:30 GMT MPC Official Bank Rate Votes (UK)
After Bank of England Governor Mark Carney’s recent hawkish sentiment, many analysts are wondering if he is speaking for the rest of the MPC. It is expected that all members will have voted in unison against changing the policy at the July meeting. However, it will be interesting to watch if all MPC participants are satisfied with the inflation and growth outlooks in the coming months. If the GBP is to rally, then there will need to be signs that the members of the BOE can possibly vote for an interest rate increase in the near future.
21:00 GMT Official Cash Rate (New Zealand)
Last month the Reserve Bank of New Zealand slashed the interest rates from 3.50% to 3.25% for the first time in four years in order to protect the heavily export-reliant economy from potential deflation risks. The bank decided to cut the rates despite four previous successive rate increases and a satisfactory annual growth of 3.00% after milk prices slid more than 50% and demand from China softened considerably. Many analysts are predicting at least one more rate cut before the end of the calendar year. If the country’s interest rate is slashed to 3.00% the NZD will almost certainly fall.
23:50 GMT Trade Balance (Japan)
Most are predicting a recovery for June to ¥45.8 billion from -¥217.2 billion due to an export boost and a decrease in imports. Considering there is a bearish outlook for the yen for the rest of the fiscal year, this should help improve Japan’s trade balance in the coming months.
Thursday, July 23, 2015
8:30 GMT Retail Sales (UK)
Most leading analysts believe that this sector will rise to 0.4%, which should boost the pound. Over the past few months the strength of the GBP and concerns pertaining to the Eurozone have severely hindered UK exports, domestic demand is expected to continue to be a key player to UK growth during the next few months.
10:45 GMT Trade Balance (New Zealand)
The balance is expected to dip this time around after a stellar result last month. If this occurs the Kiwi may take a further beating, giving the RBNZ another reason to slash the interest rate.
Friday, June 24, 2015
1:45 GMT Markit Flash Manufacturing PMI
After poor 49.4 score in June, a 49.8 posting is expected, which still indicates contraction. This independent reading of the Chinese economy should give us a better understanding of the world’s second largest economy. If the score remains below 50 the AUD and the NZD will probably suffer, which is in line with the interest rate slash New Zealand recently had and will most likely experience yet again.
8:00 GMT Markit PMI (Eurozone)
Starting with France at 8:00 GMT and followed by Germany at 8:30 GMT most feel that the survey data will remain roughly in line, suggesting that economic recovery is continuing at roughly the same pace. The composite is widely expected to fall back marginally to 53.9 from 54.2. If this month’s results exceed expectations we could very well see a jump in the euro after last week’s heavy losses.
14:00 GMT New Home Sales (US)
Although this accounts for only a small chunk of transactions, every sale has a broader impact on infrastructure and added spending. After reaching 546 thousand in May, a small dip to 541 thousand is expected for June. If the results do end up being better than expected which is certainly a strong possibility, a September interest rate hike could be in the offing.
The AUD/USD rebounded earlier this morning thanks to an upbeat Australian business confidence report. The National Australia Bank (NAB) reported that its business confidence index jumped to 10 in June from 7 in May. Additionally, the AUD was buoyed due to the unanimous agreement that was reached amongst the Eurozone leaders, following a marathon of weekend talks. Greece has until Wednesday to pass new legislation mandating sales tax increases, cuts in pension payments and heavy spending cuts before a third bailout program can even begin. However, instability in the Eurozone may still persist. Currently, the AUD/USD and the EUR/USD are listed at 0.7430 (+0.33%) and 1.4778 (-0.59%) respectively.
The UK Office for National Statistics is set to release the nation’s CPI y/y at 8:30 GMT. As of now inflation remains low in the UK and will presumably remain that way for the foreseeable future. Additionally, the RPI, which measures consumer inflation, will be announced. This particular index has been rather steady, hovering at approximately 1.0% for most of 2015. This is widely expected to continue in this month’s report. Presently, the GBP/USD is trading at 1.5470, down 0.15%, while the EUR/GBP is trading down at 0.7103 (-0.04%) due to all the uncertainty in the Eurozone.
At 9:00 GMT the Germany will report its ZEW Economic Sentiment. Consensus expects the index to drop, which could be because of weak investor confidence in Greece. This finding will certainly have repercussions on the euro as Germany is the largest economy in the Eurozone. However, this index should pick up next month as a deal with Greece was reached.
Later on at 12:30 GMT the US Census Bureau will release the country’s June Retail Sales report. In May Americans increased their spending at retailers, sales rose to 1.2% after a measly 0.2% advance in April. If this trend continues the Fed may raise the rates in the near future. Retail sales are expected to rise 0.4%, while Core sales are projected to advance 0.7%. Over the past few weeks the US picked up in comparison to the Eurozone.
Inflation is on everyone's mind as CPI reports are due.
Sunday, July 12, 2015
All Day EU Economic Summit
This may be the final deadline to potentially strike a deal Greece. As the country is more or less giving in to the EU’s demands, there is a lot of optimism that a deal is in the making. However, the key player is Germany and how much they are willing to restructure.
Monday, July 13, 2015
Tentative Trade Balance (China)
China is set to release its Trade Balance report sometime tomorrow morning. Australia and New Zealand’s currencies have been taking a beating lately thanks to China’s floundering stock markets. A better than expected report may temporarily reverse this trend.
Tuesday, July 14, 2015
8:30 GMT CPI (UK)
Most leading analysts believe the core rate will remain at 0.9% while the annual rate will fall back to 0.0% from 0.1%. This may understandably raise some concerns that inflation could take some time to make it to the BOE’s target rate of 2.00%. If the CPI comes in weaker than expected, traders should expect a major selloff in the GBP.
9:00 GMT German ZEW Economic Sentiment
Although last month’s business sentiment dropped to 31.5 points, positive feelings remain. However, that may be cast aside as slide to 30.6 points is in the offering for July. Due to the Greek crisis, a bigger plunge should definitely not be ruled out.
12:30 GMT Retail Sales (US)
Unsurprisingly most leading analysts believe a moderation in this index after a tremendous 1.2% gain in May. Although the market is calling for a modest 0.4% reading, no one will be surprised if it comes in at 0.6%, which would indicate that weak oil prices continue to bolster consumer spending.
Wednesday, July 15, 2015
2:00 GMT GDP Q2 (China)
As with most news coming out of China, this report is expected to be weak. Most assume that growth will drop from 7.00% to 6.8%, the lowest level since 2009. However, a number of analysts feel that GDP figure could be even weaker. If that is the case it will be a rough day for the AUD and the NZD.
Tentative Bank of Japan Meeting
No fireworks are expected in this meeting. However, it wouldn’t come as a shock if the BOJ is ready to add to its stimulus program in the event of China’s stock market volatility spilling into Japan.
14:00 GMT Overnight Rate (Canada)
Although most feel that the rates will remain the same at 0.75%, the CAD will be on the move regardless before and after the statement.
11:45 GMT CPI q/q (New Zealand)
The last time this CPI exceeded expectations was January 20, 2014. Since then it’s all been sown hill especially the last two releases, which were in negative territory. A 0.5% reading is expected this time around.
Thursday, July 16, 2015
9:00 GMT CPI (Eurozone)
This is the final revision for the preliminary reading that was released earlier. Although no change is expected, a weaker than expected CPI reading would not be out of the ordinary. If that does occur, it could result in a major selloff in the euro.
11:45 GMT ECB Meeting
Most analysts are not expecting to see any change in the Eurozone interest rates and no additional extension of QE. However, if the Greek crisis still remains unresolved then perhaps Draghi will hint regarding a possible QE extension, which could boost the equity markets and hurt the euro.
Friday, July 17, 2015
12:30 GMT CPI
The market is expecting a slight increase in US prices for last month, with the rate expected to jump to 0.2% from 0.0%. Although it is still relatively weak it does suggest inflation is starting to crop up. The core index is expected to rise to 1.8%, up from 1.67%, which would erase May’s disappointment. If expectations are exceeded or met it would certainly help boost the chances of a rate hike come September.
Last week British Petroleum (NYSE: BP) (LON: BP) was able to reach a provisional settlement of approximately $18.7 billion with the US government and five states regarding the catastrophic 2010 Gulf of Mexico oil spill. It claimed the lives of 11 rig workers in the well bow out, while the equivalent of 3.19 million barrels of oil seeped in the water according to estimates. This horrific event was the worst oil spill in US history.
The settlement however, still requires the official approval from a US federal judge. Assuming it is granted, it should put an end to all federal and state civil suits against British Petroleum. The London-based oil major will additionally be spending more than $50 billion related to the oil spill. Under the provisional settlement British Petroleum will end up paying $5.5 billion over a 15 year duration. Five Gulf Coast states would be paid another $7.1 billion and an additional $6 billion would be shelled out to the states and local governments for the economic damages, including the overall tax revenue. This leaves many analysts wondering how it will manage these harsh penalties.
Interestingly enough British Petroleum’s penalty comes at a time when crude oil prices have significantly waned. The plunge in prices has forced companies like British Petroleum to heavily reconfigure and update their operations as production margins have slowed majorly. In order to survive this low cost scenario British Petroleum has implemented a value over volume approach.
British Petroleum however, did see its shares rise significantly after the company announced that it reached a settlement. The stock rose by over 5.00% on the June 7 session in the NYSE. The rally reverses the downtrend it had been experiencing since June 25. Over the last month or so, British Petroleum has seen on positive and one negative revision while the Zacks Consensus Estimate rose, suggesting that better trading is to come. Currently British Petroleum is listed in the London Stock Exchange at 427.30 (+0.97%) and at 39.12 (-0.08%) on the NYSE. However, it is listed at 39.60, up 1.23% in after-hours trading.
JPMorgan Chase & Co. (NYSE: JPM) has just agreed to pay a minimum of $125 million to settle investigations conducted by the US state and federal authorities regarding its illegal practice of collecting and selling consumer credit card debt. The settlement additionally includes approximately $50 million in restitution.
JPMorgan Chase, the US’s largest bank has been accused of using roundly discredited methods of chasing consumers for debts they may not have even owed and for giving erroneous information to numerous debt buyers. The US Consumer Financial Protection Bureau (CFPB), 47 states and the District of Columbia are expected to announce the exact details regarding the settlements some time later on today.
Earlier in September 2013, the CFPB ordered JPMorgan Chase to refund $309 million to approximately 2 million clients for illegal credit card practices, including charging its clientele for credit card monitoring services they did not receive. Additionally, the big investment bank had to settle a $13 billion settlement with the US Justice Department and it lost no less than $6 billion in 2012 after the famous “London Whale” case.
On Monday JPMorgan Chase announced that Stephen M. Cutler will be the new vice chairman, which was left vacant until now. The move by JPMorgan Chase is noted by leading industry experts to be concentrated on efforts towards fixing their legal and compliance issues. Cutler formerly served as the Securities and Exchange Commission’s (SEC) director of enforcement. Since February 2007 Cutler has been part of the New York-based banking giant. Furthermore, he served as the executive vice president and head of the international legal and compliance activities at JPMorgan Chase.
Despite the negative information and the shakeup, JPMorgan Chase still remain s as one of the most sought after investment banks as it boasts the research department with the highest number of star analysts. However, this debacle should have an impact going forward. Currently, JPMorgan Chase is listed at 66.82, down 0.76% and at 66.66, down 0.24% during after-hours trading.
The EUR/USD dropped sharply earlier this morning after voters in Greece soundly rejected the proposed bailout requirements from international creditors, which understandably placed the position of the country’s current standing in the Eurozone in doubt. Reports stated that over 60% of the voters rejected the terms submitted after months of incredibly tense talks. However, Greek Prime Minister Alexis Tsipras stated that the “no” vote does not necessarily mean that Greece will exit the European Union. Greece will continue negotiating with a plan of reforms. Emergency talks immediately got underway as European Commissioner President Jean Claude-Juncker and major creditor Germany regarding this fiasco. Bank in Greece are expected to remain shut on Monday as future funding sources remain in doubt.
Not only did the Greek crisis cause a firestorm in the EUR/USD, but other major currency pairs such as the AUD/USD were additionally affected by the results. The AUD/USD plunged to six-year lows against its US matching part as market sentiment was considerably lower this morning. At one point the AUD/USD hit 0.7464; the pair’s lowest standing since May 2009. Currently, the AUD/USD is listed at 0.7512 (-0.05%) while the EUR/AUD is sitting at 1.4740, up 0.39%.
At 14:00 GMT Canada will release its Ivey PMI, which is one of the leading indicators of the country’s economic health. Analysts are expecting a sharp drop-off to 56.2 from 62.3. Although above 50 indicates expansion, such a knockdown is a little disturbing after posting two solid months of growth. As of now the USD/CAD is trading at 1.2570, down 0.03%.
Additionally, at 14:00 GMT the US Institute for Supply Management is scheduled to put out its monthly Non-Manufacturing PMI report. General consensus expects this index to rise to 56.5 from 55.7. If expectations are met the EUR/USD should drop even further. Presently, the EUR/USD is situated at 1.1077, down 0.31%.
Beyond the Greece debacle many investors are trying to fully digest the impact of Fridays worse than expected NFP results and the associated drop in the participation rate on Fed policy. If the labor market pressures do not intensify, earnings are more than likely to remain subdued. As a result the Fed will probably take a rather cautious approach regarding future interest hikes. This would undoubtedly cause the EUR/USD to ultimately rise. However, at this current juncture it seems that the EUR/USD will only continue to drop.
MasterCard Inc (NYSE: MA) announced yesterday that it has extended its long-established UEFA Champions League sponsorship for the next three seasons through 2018.For over 20 years MasterCard has supported Europe’s most esteemed club football competition. The company will continue to bring fans throughout Europe and the rest of the world closer to the UEFA Champions League by offering Priceless Surprises to cardholders. Predictably, this announcement caused a bump in the stock as it closed yesterday’s trading at 94.54, up 1.13%. Currently, it is listed at 94.42, down 0.13% in after-hours trading.
Additionally, MasterCard users may soon have the ability to pay for online purchases using finger recognition or by taking a “selfie” upon checkout. The credit card company will launch a pilot program with approximately 500 participants over the next few months to properly develop the setup to approve purchases without the need to enter a password.
Users will be required to download the MasterCard app on their phone in order to use the upcoming function. Once an online purchase reaches the checkout stage, the app will send automated request to the user asking for authorization before payment is submitted. Users will have the choice of using fingerprint recognition, which customers verify their identity by simply touching their device; or facial recognition, which users stare at their camera while their face is viewed. To thwart identity theft, blinking while taking a payment “selfie” will prevent a prospective thief from just holding up a picture pretending they are the customer.
It comes as no surprise that MasterCard received a “buy” recommendation from 24 out of the 31 brokerages that are covering the stock. Five have given a “hold” recommendation, while one has given a “sell” recommendation on the company. Several analysts have recently commented regarding the stock including SunTrust who have reaffirmed their “buy” rating and have set a $120.00 target price on the stock, $10.00 up from their prior target.
The euro dropped against all of the major currencies this morning after Greece became the very first developed country to officially default on the International Monetary Fund (IMF) as its bailout program terminated. The IMF confirmed that the Greek government was unable to repay 1.6 billion euro loan by the end of Tuesday. The IMF additionally stated that Greece can now only receive extra capital once its debts are absolved. Greece did request a last-minute repayment extension yesterday, to which the IMF replied that it will consider “in due course”. As of now the EUR/USD is trading at 1.1109, down 0.31%.
At approximately 8:30 GMT the UK will release its Manufacturing PMI. The market expects an increase to 52.4 compared to 52.0 in May, which is well below the average level over the past 18 months of 54.2. Presently, the GBP/USD and the EUR/GBP are listed at 1.5707 (-0.02%) and 0.7071 (-0.28%) respectively.
Later on today at 12:15 GMT the US will announce its ADP Employment Change report. Analysts are expecting yet another strong showing in private sector employment of 210 thousand, after 201 thousand in May. A solid number will certainly give the USD a burst especially after IMF rebuffed Greece’s request for a loan extension.
Then at 14:00 GMT the US Institute for Supply Management will release their Manufacturing PMI report. This index is expected to rise 53.1 from 52.8 in May.
Despite a worse than expected HSBC Final Manufacturing PMI of 49.4, the AUD/USD is trading in the green (0.7718, +0.18%) at the moment. Anything below 50 indicates contraction and considering China is Australia’s biggest export partner the Aussie should have fallen. However, the AUD benefited from a much stronger than anticipated Australian Building Approvals m/m of 2.4%, well above an expected 1.2%. Further gains against the USD are expected to be limited since Greece officially defaulted after the IMF refused to provide further funding.
The Kiwi rose against the US dollar earlier this morning, moving away from the five year lows. However, gains were limited because of the Greece situation. Sometime later on today or tonight New Zealand will announce the results of its bi-monthly GDT Price Index, which will certainly have an effect on the currency. Currently, the NZD/USD is listed at 0.6791, up 0.17%.
BlackRock, Inc. (NYSE:BLK), the world’s biggest money manager, has decided to begin using the Shanghai-Hong Kong exchange link. The company’s Hong Kong China A- Shares Fund currently plans to invest approximately $60 million. BlackRock already has nearly $1.5 billion allowance to purchase mainland shares through separate programs for certain foreign qualified institutions. The money management firm has over a 10 year history of investing in China’s onshore markets, according to Marc Desmidt, BlackRock’s head of strategic product management. Many analysts feel that this will ultimately prove to be positive for the company.
Interestingly enough BlackRock has recently received raving reviews from various companies including an “A+” credit rating from Morningstar, an investment research and investment management firm. This excellent rating indicates that the company is a low default risk. Additionally, they gave the stock a solid four star rating. Other analysts over the past three months have given BlackRock mixed reviews. Zacks actually downgraded shares of BlackRock from a “hold” to a “sell” on June 22, while analysts at Goldman Sachs issued a buy rating and a $421.00 price target on the stock on June 8. Additionally, Piper Jaffray issued a “neutral” rating, with a $416.00 price target on June 2.
BlackRock last released its earnings data on April 16. The highly touted money management company reported $4.89 earnings per share (EPS) for the quarter, soundly beating the consensus estimate of $4.51. The firm posted a $2.72 billion revenue for Q1, falling short of the $2.81 billion predicted by most leading analysts. A year previously during the same quarter, BlackRock posted a $4.43 EPS, with the company’s overall revenue up 2.0% on a year-on-year basis. General consensus is that the firm will post $20.32 EPS for the present fiscal year. Additionally, many feel that its Q2 revenue will be in line with expectations. BlackRock finished yesterday’s trading day listed at 344.54, down 2.80%, with it currently situated at 345.54 (0.29%) in after-hours trading.
Crude oil prices last week failed yet again to edge up higher in reaction to news of a harsher than expected draw of 4.9 million barrels in US crude oil stocks. There was no doubt that investors were increasingly growing worried about the increasing possibility of Iran joining an already saturated market. The self-imposed deadline on June 30 for negotiating a final nuclear agreement that the P5+1 nations imposed on Iran is just a day away. It actually appears that the talks are progressing rather well especially after it was reported that there will be no inspection of Iran’s nuclear facilities. Of course if the economic sanctions are ultimately lifted this will have a major impact on oil prices.
Presently oil prices are sort of relaxed as many do not believe the imposed sanctions will be lifted entirely. Additionally, even if the sanctions are completely removed it would take Iranian oil industry a long period of time to adequately adjust, causing oil prices to remain in their present state. However, there are pundits that completely disagree with these assumptions. First off, the infrastructure is already in place, which implies that production will most likely increase at a faster pace than some may think. Secondly, even if it takes a bit longer for Iranian output to return close to the pre-sanctions levels, this can have a psychological effect on the market, which could of course weigh on oil prices.
According to Iran’s oil minister crude oil output could increase by almost 1 million barrels per day within only six months from the time sanctions are lifted. Just the statement alone could send oil prices tumbling. OPEC is currently producing close to 1 million, more than its arranged quota of 30 million barrels per day. If Iran makes close to a full-fledged return to the market, the already bloated supply would exacerbate, causing oil prices to potentially crash.
Tomorrow, June 30 is the supposed deadline, which means that if a perennial deal is in fact reached oil prices will almost definitely drop. Additionally, the American Petroleum Institute will publish its weekly report on US oil supplies, which will also have an effect on crude oil prices. Currently crude oil is listed at 58.39, down 2.07%.
It's that time of the month; NFP report marks crucial period for the USD
Monday, June 29, 2015
12:00 GMT CPI (Germany)
Inflation is starting to display signs of recovery from its dismal lows. In May, prices surpassed initial expectations and the CPI advanced 0.1% m/m. The initial reading for June is expected to show a rise of 0.2%.
Tuesday, June 30, 2015
8:30 GMT Mortgage & Credit Data (UK)
Lending has been one of the UK’s strongpoints and this upcoming reading should be no different. The market is anticipating a 1.1 billion GBP increase in consumer credit along with a 2.1 billion boost in mortgage lending.
8:40 GMT RBA Governor Stevens Speaks
RBA Governor Glenn Stevens is scheduled to speak at the Official Monetary and Financial Institutions Forum in London. Analysts are expecting Stevens to address the country’s lukewarm economic growth and overvalued housing market. Traders should assume the AUD will drop as his speech progresses.
12:30 GMT GDP (Canada)
Policy makers expect rebound in growth after a dismal performance over the past few months. Most leading analysts expect the figure to be 0.1%. However, a worse than anticipated reading should not be ruled out. Additionally, if the upcoming US NFP report is better than expected the CAD will fall even further.
14:00 GMT CB Consumer Confidence (US)
Last month, this index produced an excellent result, reaching a solid 95.4. Stronger housing and employment data were the predominant causes for the rise in sentiment. This index is expected to hit 97.1 for June. This figure should give us a potential feel for Thursday’s NFP report.
Wednesday, July 1, 2015
1:45 GMT Manufacturing PMI (China)
This report should have implications on the AUD and the NZD as their respective countries are major trading partners with China. A reading of 50.2 is on the forecast, indicating industry expansion. If it matches or eclipses this figure the NZD and AUD should rise.
8:30 GMT Manufacturing PMI (UK)
A below average pick-up of 52.4 is expected. However, that does not mean the GBP will suffer. Lower expectations can potentially bolster the GBP if they are surpassed. If other indicators such as new orders are additionally picking up, the GBP should rise.
12:15 GMT ADP NFP Report (US)
It’s that time of the month again and analysts are anticipating this figure to reach 216 thousand. If the current pace continues, the economy should reach full employment in just a year’s time. Additionally, this NFP report should give us a good indication of what may occur on Thursday.
14:00 GMT ISM Manufacturing (US)
53.2 is to be expected this time around. However, a rise in the ISM Manufacturing Prices from should give the USD a major boost.
Thursday, July 2, 2015
1:30 GMT Trade Balance (Australia)
After two poor readings of -1.32 billion and -3.89 billion respectively, Australia’s trade balance is supposed to rise to -2.17 billion. However, considering all of the shaky data that has been emanating from that region, a worse than expected reading would not be that surprising.
12:30 GMT NFP Report (US)
This is the day that all economists have been waiting for. Most are calling for another 200 thousand plus figure, with expectations centered at 230 thousand. The unemployment rate is expected drop down to 5.4% from 5.5%, while the hourly earnings are projected to inch up by 0.2% m/m. Of course the NFP report is the week’s major data release and it should set the tone for the markets for the duration of the month. Another strong NFP report could boost expectations of an eventual rate increase and make the USD an attractive asset.
Friday, July 3, 2015
8:30 GMT Services PMI (UK)
The market is anticipating strong growth in this sector, with expectations zeroed in at 57.5. If this will occur it would be considered a positive sign for Q2 GDP. 57.5 would negate some of the losses that happened last month. However, service sector growth has been positive for the most part. A better than anticipated reading should bolster the GBP.
Crude oil prices were widely mixed earlier this morning thanks in part to an unexpected build in US gasoline inventories offsetting a higher than anticipated draw in crude oil stocks. Brent crude, interestingly enough rose earlier this morning after ending yesterday’s trading down 96 cents (-1.5%), while US crude oil more or less remains unchanged at 60.28 after finishing yesterday down 74 cents (1.2%). This follows a rather bearish US Department of Energy weekly petroleum report and drawn out talks regarding Iran’s nuclear program.
The report indicated that domestic crude oil output edged up to a record 9.6 million barrels per day during the week of June 19, and that crude oil stockpiles, although down 4.9 million barrels during that week, were still near a record 463 million barrels. Clearly nothing in the data remotely suggested that the US oil industry, especially with country entering the summer driving season, was reducing its output in the face of low prices. Additionally, many analysts are expecting that an extension of Iranian nuclear talks is in the offering. Most feel that this possibility is increasingly likely as all of the parties involved have singled doubt about being able to resolve all of the issues by the June 30 deadline. Iran has the world’s fourth-largest oil reserves; however, its exports have fallen to 1.3 million from 2.2 million barrels per day in 2011 because of sanctions.
The six global powers – France, Russia, Britain, China, United States and Germany are trying craft a deal to limit Iran’s nuclear aspirations by drastically reducing its stockpiles of enriched uranium while suspending some of its sites. If such a deal is made and implemented by the deadline, it means the six world powers have agreed to steadily reduce sanctions levied since 2012, including those that have severely impacted its crude oil industry.
As of now, crude oil is listed at 60.22, down 0.09%. However, if output remains the same and a subsequent deal is reached with Iran, crude oil prices may come tumbling down very soon.
Although US equities closed only mildly higher on Tuesday, these minor increases were good enough to set some new records. Surprisingly, not one stock index closed more than 0.2% higher than where it began for that day. Lifted by optimism regarding Greece’s debt talks abroad and solid economic data at home, the S&P 500 reached a level not seen in several weeks and the NASDAQ closed at a new all-time high for the second day in a row.
The S&P 500 closed at 2,124.2 points, up 1.25 points (0.06%) for the day, a relatively modest gain, but a rise that was good enough to give the index its best day in about a month. Its energy index rose 0.3% and was one of the day’s top performing sectors. The NASDAQ concluded the day up 6.12 points (0.12%), which was good enough to push it to a level of 5,160.09, a new all-time high. The NASDAQ recorded 180 new highs, compared to just 23 new lows. The Dow Jones finished yesterday up 24.3 points, (0.13%) at 18,144.07 points, with its bag of stocks offering mixed results. 14 stocks closed in the red, while 16 closed in the green.
On Tuesday new home sales were up 2.2% in May, rising to an annual, seasonally adjusted rate of 546 thousand, which happened to surpass leading analysts’ expectations, giving skeptics a potential reason to be optimistic about the housing market and perhaps even the broader economy. Meanwhile, in Europe, talks between Greece and its Eurozone creditors displayed some signs of progress, as indicated by French president Francois Hollande proclaiming, “The basis of a deal has been assembled today.” Although these factors are not really related, it was enough to send all three indices, especially the NASDAQ climbing.
Today at 12:30 GMT the US Bureau of Economic Analysis will release its Final GDP q/q results. The market is expecting an upward revision to -0.2% from -0.7%, which would indicate that the US economy did not have such a harsh slowdown in Q1 as initially surmised. This information will certainly have an effect on all of the US indices especially the NASDAQ.
Gold prices concluded last week just under 1200 at 1199.90 after rising steadily from the conclusion of the FOMC press conference. Fed Chairwoman Janet Yellen indicated that a rate increase will come albeit at a slower pace than what was previously anticipated. Commodities overall experienced quite a volatile week as many traders kept their eye locked in on the USD and increasingly intensifying concerns that Greece could ultimately default and crash out of the Eurozone. The EU has actually scheduled an emergency summit meeting for today in Brussels, in which they hope to end the five-month gridlock between the Athens heavily anti-austerity dominated government and its creditors. If a deal is not reached gold and the euro will plummet while the USD will skyrocket.
Greece however, maintains that a last-minute deal regarding its gargantuan debt is still feasible, but the ECB held an emergency meeting on Friday to increase its financial support to Greek lenders as fears grew of a potential run on Greek banks after an onslaught of deposit withdrawals. Gold subsequently gained considerable ground as traders searched and are still continuing to search for a safe haven from Greek default worries and the unexpectedly cautious US interest rate outlook. Generally, gold is widely considered by investors as a go to in times of economic instability.
Interestingly enough gold is listed at 1,195.20 (-0.56%), which is odd as it is the Dragon Boat Festival, a holiday in China. As a general rule of thumb, gold prices almost always jump during the holiday period. Later on today at 14:00 GMT the National Association of Realtors will publish the Existing Home Sales. If it reaches its 5.27 million expectation, the USD will undoubtedly rise while gold will fall. However, the most pressing issue for gold today is the outcome of the Euro summit. If a deal is struck, gold can potentially be swayed either way. Investors may decide to forgo the precious metal for now as there is now more stability or they may instead flock to it since the dollar won’t be in as high demand.
Other upcoming events this week will additionally play an important role in gold’s demand. On Tuesday at 12:00 GMT FOMC member Jerome Powell is due to speak and chances are he will speak about future interest rates. A more hawkish view may send the USD up while knocking down gold. Afterwards at 12:30 GMT the Census Bureau will release the Core Durable Goods Orders m/m findings. Then on Wednesday at 12:30 GMT, the Bureau of Economic Analysis will announce the Final GDP q/q results. This will without a doubt send gold prices moving in either which way.
EUR/USD may be in for a tumultuous week as Greece deal looms.
Monday, June 22, 2015
13:00 GMT Euro Summit
Finance ministers from across all the Eurozone to discuss a potential last minute deal regarding Greece’s dire financial predicament. Most feel that a deal will be reached, however, the stakes are rather high and confidence is incredibly low. Without a doubt, this meeting will have serious ramifications on the EUR/USD.
14:00 GMT Existing Home Sales
In April we saw the number of previously owned home sales decline to 5.04 million after a strong 5.2l million reading in March. Most economists feel that April’s gaffe was just a minor glitch and therefore feel that this figure will jump to 5.29 million this time around. If it indeed does, the EUR/USD should drop.
Tuesday, June 23, 2015
1:45 GMT HSBC Flash Manufacturing PMI
This independent reading of the world’s second largest economy always has significant impacts on both the AUD and the NZD. However, it additionally provides us with some sort of an insight on the global economy as a whole. After contracting to 49.2 points in May, the number for June is expected to advance to 49.4 points. However, this still may spell bad news for the Aussie and the Kiwi since only a score above 50 indicates growth.
8:00 GMT PMI’s (Eurozone)
This information will show us how the Eurozone economy performed at the end of Q2. Most analysts expect fairly upbeat readings, with only moderate drop-offs in the services sector reading from 53.8 to 53.5. The obvious danger is how Greece plays into all of this; however, many believe the services and the manufacturing sectors have weathered the latest Greek tempest. A worse than expected reading however, can weigh heavily on the EUR/USD.
12:30 GMT Durable Goods Orders (US)
Most leading analysts are expecting yet another sharp decline; however, the ex-transportation number that most are interested in is supposed to rise by 0.6%, something that all would consider to be fairly decent. This would indicate that the US economy is getting back on track after a slowdown in Q1. This number should certainly impact the EUR/USD, as the market concentrates on the US economy in the shadow of this past FOMC meeting.
Wednesday, June 24, 2015
Tentative ECB Decision on Greek ELA
Currently, the ECB is keeping Greek banks alive with the Emergency Liquidity Assistance. If the ECB were to discontinue this arrangement Greece would eventually need its own currency. This routine meeting occurs every Wednesday, but is even more important especially to the EUR/USD this go around.
8:00 GMT Ifo Business Climate (Germany)
This index fell for the first time in seven months in May to 108.5 compared to 108.6 in April. However, the figure was better than the 108.3 forecasted by leading analysts. The drop was unsurprisingly due to uncertainty regarding Greece’s place in the euro-area and the potentially negative outcome of a Greek default. Sentiment is only expected to reach 108.2, which could hurt the EUR/USD.
12:30 GMT GDP Q1 (US)
This will be the second reading of the US GDP for Q1. Interestingly enough the market is expecting an upward revision to -0.2% from -0.7%, which would imply that the US economy did not have such a harsh slowdown as many originally thought. If the data is in fact revised we should see the USD rally, which should lower the bar for a potential rate hike.
Thursday, June 25, 2015
22:45 GMT Trade Balance (New Zealand)
After posting a better than expected figure in May, this indicator may come back down to earth. A reading of -50 million is expected by most leading experts, which should cause the NZD to plummet further.
Friday, June 26, 2015
8:00 GMT ECB Monetary Data
Previously the M3 Money Supply showed a clear acceleration in growth of money circulation, all the way to 5.3% y/y. This indicates the ECB’s loose monetary policy is finally reaching the real economy. Additionally private loans have stopped shrinking on a yearly basis, with a 0.0% change in April. Continued improvement is in store for May, which should help up the EUR/USD.
The Asian equity markets were broadly lower today thanks to the USD being on the defensive after Federal Reserve Chairwoman Janet Yellen indicated that the interest rates will rise more slowly than the markets had previously anticipated. Although the Fed did state the economy was more than likely strong enough to support an interest rate hike by the end of the year, it lowered its for fiscal 2015 economic growth due to a weak start to the year and it additionally reduced it federal funds rate forecast. The Fed’s rather surprising stance certainly caught a number of investors off guard who had expected the central bank to issue a rate rise as early as September.
The Nikkei 225, one of the most watched Asian equity markets fell by over 0.8% to a one week low, ultimately finishing the day at 19,990.82 (-1.13%) as the yen gained against the dollar. Currently, the USD/JPY is listed at 123.07, down 0.30%.
Not all Asian equity markets plummeted, however. The South Korean equity markets posted their highest gains in near four weeks, with the Korean Composite Stock Price Index (KOSPI) rising to 2,041.88, up 0.34%.
After the Fed’s surprising news, the US equity markets all rose significantly, rallying from previous losses in the morning session. The Dow Jones Industrial Average and the NASDAQ Composite Index each gained more than 0.15%, finishing off the trading day situated at 17,935.27 (+0.17%) and 5,064.88 (+0.18%) respectively. The S&P 500 Composite Index however, gained 0.20%, closing at 2,100.42 as stocks on eight of the 10 segments finished in the green. Stocks in the Consumer Goods, Consumer Services and Utilities industries led the way, with each gaining more than 0.4%.
As for today, if US inflation data matches expectations when the results are announced at 12:30 GMT and if at 14:00 GMT the US Philly Fed Manufacturing Index rises above 8.1, which many expect, the US equity markets may be on the retreat.
After being buoyed by positive data today's FOMC meeting should indicate which direction the USD is heading.
The Japanese yen weakened slightly earlier this morning despite a narrower than anticipated trade deficit report. May trade data displayed a deficit of ¥216 billion, slightly smaller than the ¥26 billion seen. This was the second straight deficit after a ¥53 billion in the month of April after a rare surplus of ¥227.4 billion in March, the first surplus in 33 months. As of now the USD/JPY is listed at 123.51, up 0.12%, however, after today’s FOMC meeting the yen should drop even further against the dollar.
At 8:30 GMT the UK Office for National Statistics will release the country’s employment data. This figure continued to improve in April with unemployment falling and the number of people employed rising. The number of individuals claiming unemployment benefits in April declined by 12,600 to 764 thousand overall. Rising demand for workers pushed wages to a 2.2% increase. If more improvements are in store for May the GBP will certainly skyrocket. Currently, the GBP/USD is trading at 1.5638, down 0.06%, however, today’s upcoming FOMC meeting may change that.
Jumping ahead to 18:00 GMT comes the much anticipated FOMC meeting followed by the FOMC press conference at 18:30 GMT. As the US labor market continues to recover with an impressive 280 thousand NFP increase in May, along with steady wage inflation and a surge in core prices, consumer spending is now increasing at an encouraging pace as overall retail sentiment improves. Additionally, manufacturing activity gauges are further making their way into positive territory. These optimistic signs may generate a more hawkish statement from Fed Chairwoman Janet Yellen. If such statements are uttered at the FOMC meeting, the USD will rise against all of the major currencies.
Lastly at 22:45 GMT New Zealand will present its Q1 GDP report. After being viciously assaulted by the bears following last week’s policy meeting at the RBNZ, in which the bank cut the official cash rate to 3.25%, the economy overall is only expected to have expanded 0.6% q/q and 3.1% y/y last quarter. This is a tremendous drop-off from Q4 2014, so a softer than expected figure, which is entirely plausible, will add weight to the NZD selloff. As of now the NZD/USD is situated at 0.6937, down 0.68%, however, traders should expect that figure to drop substantially after today’s FOMC meeting.
Both the UK and the Eurozone gear up for their CPI readings today.
The AUD tumbled earlier this morning against most of the major currencies after a rather dovish press conference. This is not at all surprising considering at the policy meeting earlier this month on June 2, the RBA left the official cash rate on hold at 2.00% and retained it explicit easing bias. The bank specifically noted that because of the country’s uncertain and to some extent grim economic outlook accommodative monetary policy will ultimately be required. More of the same sentiment was echoed at this Meeting Minutes. Currently, the AUD/USD is listed at 0.7738, down 0.37% while its UK counterpart (GBP/AUD) is trading at 2.0168, up 0.38%. The number could rise further if the UK’s CPI reading is better than expected.
The yen additionally weakened earlier today on comments from Bank of Japan Governor Haruhiko Kuroda. He clarified that his remarks from last week do not indicate that the nominal yen rate would not further weaken. He said that his comments pertained to the real-effective exchange rate and not specifically aimed at any pairs. Understandably, the yen plummeted after those remarks. As of now the USD/JPY is trading at 123.58, up 0.14%, while the EUR/JPY is trading at 139.33, up 0.10%. The EUR/JPY could rise further if the Eurozone provides us with a better than expected CPI reading and a better than expected German ZEW Sentiment.
At 8:30 GMT the UK Office for National Statistics will release the country’s monthly CPI findings. This index entered deflationary territory for the first time on record in April, but almost all analysts do not expect it to remain there for long. The main causes behind this setback appear to be only temporary and weak inflation at least in the short-term should help boost economic growth. Nevertheless, the Bank of England isn’t going to think about tightening monetary policy while inflationary pressures continue to remain low, which could very well place a cap on the GBP.
Just a half hour later at 9:00 GMT, the Eurozone will announce its final CPI numbers for the month of May, which is expected to confirm that consumer spending rebounded somewhat over the month, after a poor 0.0% reading in April. Year-on-year CPI growth is additionally expected to continue to recover, with a 0.7% reading this go around. However, the German ZEW Economic Sentiment which is additionally scheduled for 9:00 GMT could put a damper on the EUR if it falls below expectations, something which is definitely conceivable.
Expect cheap crude oil prices to linger for quite some time if OPEC continues producing record amounts and If Iran enters the market.
After generating some impressive gains crude oil coughed most of them up by the end of last week. Prices started to drop Wednesday afternoon as investors took profit ahead of the official crude oil supply later on that day. The US Energy Information Administration (EIA) reported that crude oil stocks fell by over 6.8 million barrels last week, for the sixth time in as many weeks. Gasoline inventories additionally dropped heavily, indicating the strong start to the US driving season as drivers take advantage of the “cheaper” fuel prices. Despite this positive sentiment, crude oil failed to extend its gains Wednesday afternoon. A contributing factor is that the American Petroleum Institute had already reported similar numbers on Tuesday evening, indicating the “good news” was already factored in.
Many traders were additionally cautious ahead of the monthly crude oil report form the International Energy Administration (IEA), after the EIA produced an almost identical report which only predicted a small rise in crude oil demand for 2015 to 20 thousand barrels per day to 1.25 million b/d. Although the IEA elevated it demand projections to 1.4 million b/d, the report overall conveyed quite a bearish outlook considering it stated that global oil production growth was “exceptionally high” despite clear signs of a slowdown in the non-OPEC zone, most notably the US. Just last week OPEC agreed to continue it 30 million b/d production share for an additional six months. However, according to the IEA, OPEC instead has been pumping more than 1 million b/d above this designated target for three consecutive months. Saudi Arabia, Iraq and the UAE, the largest OPEC producers are pumping at record monthly rates in just the month of May alone.
If Iran were to theoretically make a full return to the market the crude oil surplus could reach new highs. The deadline for the nuclear agreement is just a couple of weeks away, set for June 30. Additionally, it is worth mentioning that if prices do start to increase distinctly then US shale oil companies will almost certainly ramp up production again. This means that the global supply surplus will definitely remain in place for a lot longer than some analysts might expect. Currently, crude oil is listed at 60.28, down 0.20%.
CPI is the persistent theme this week as many countries get ready to present this crucial index.
Monday, June 15, 2015
12:30 GMT Manufacturing Sales (Canada)
January and February were not kind to this index as manufacturing sales posted its biggest two-month decline since the recession. Although it rebounded strongly in March, it will certainly take more than one solid month of positive economic data to convince the market.
13:00 GMT ECB President Mario Draghi Speaks
In Draghi’s last major appearance he was quite relaxed on his QE program, which caused the euro to rally significantly. However, if he decides to go back on the aggressive side and push QE, it will almost definitely weigh on the euro.
13:15 GMT Industrial Production (US)
After a dismal display last month, most analysts feel that it will rebound to 0.2% this time around. This important indicator is a good metric for broad economic activity, and if there is yet another soft reading it could very well undermine much of the positive sentiment that has been steadily built up thanks to stronger consumer spending and jobs numbers.
Tuesday, June 16, 2015
1:30 GMT RBA Monetary Policy Meeting Minutes
As was expected the RBA left the official cash rate at 2.00% during this month’s meeting, retaining its implicit easing bias. The bank did note that due to Australia’s uncertain and somewhat bleak economic outlook the economy does require dome accommodative monetary policy. It will certainly be interesting to see if the RBA expands on this pertinent issue in its Meeting Minutes.
8:30 GMT CPI (UK)
CPI figures entered into the deflationary zone last month for the first time on record. However, don’t expect them to remain there for long as the main catalyst appears to be temporary. Analysts assume the number will revert to 0.1% from -0.1%.
9:00 GMT ZEW Economic Sentiment (Germany)
Last month, this survey fell to an appalling 41.89 points. Although the figure is still positive it’s expected to drop to 38.6 points, which will probably cause the all-European figure to slide to 60.3 from 61.2 points. If the drop-off is worse than expected, which many analysts assume, the EUR/USD will definitely drop.
Wednesday, June 17, 2015
8:30 GMT Unemployment & Jobless Claims (UK)
The GBP may be in luck as the unemployment rate is expected to remain the same at 5.5% while the jobless claims are expected to fall to 13.8 thousand. This should give the GBP a proverbial shot in the arm.
18:00 GMT FOMC (US)
Although the US economy is showing gradual improvement no interest rate changes are expected as of yet. However, the Fed may adopt a more hawkish tone, which would do wonders for the USD.
22:45 GMT GDP Q1 (New Zealand)
The NZD was mauled by the bears following last week’s rate slash. The economy is only expected to have expanded 0.6% q/q and 3.1% y/y, which is a tremendous step down from Q4 2014. A worse than expected figure, something that is entirely plausible considering the state of the NZ economy will definitely trigger another major NZD selloff.
Thursday, June 18, 2015
8:30 GMT Retail Sales (UK)
Core retail sales are presumed to have fallen 0.2% the previous month, which should end the recent improvement seen previously in this sector. However, because expectations are bleak, a stronger than anticipated figure would push the GBP higher at least in the short-term.
12:30 GMT CPI (US)
The ongoing lack of consistent inflation in the US is perhaps the one thing that is preventing the Fed from raising the rates sooner rather than later. This without a doubt makes the upcoming CPI release integral for the USD. However, the index is only expected to rise 0.2%, though anything more should cause the USD to jump temporarily.
Friday, June 19, 2015
Tentative Monetary Policy Statement (Japan)
Last week Bank of Japan Governor Kuroda stunned the market when he said the yen was incredibly weak but is unlikely to fall further. If the bank is truly uncomfortable with a weaker yen, further QE is very unlikely. With regards to this upcoming statement analysts are expecting the bank to maintain the status quo through reinforcing the possibility that potential easing still exists. However, everyone by should learn to expect the unexpected with Japan.
12:30 GMT CPI (Canada)
Just last month CPI fell into negative territory for the first time since January. If this ultimately turns into persistent deflation, monetary policy will become a whole lot murkier in Canada. A poor CPI reading could lead to a sharp selloff in the CAD.
Explore the less conventional currencies in Forex trading.
For many traders, it seems that the world revolves only around a few major currencies. They involve the Euro, USD, Sterling, Yen, Swiss Franc, and the three ‘other’ Dollars – CAD, AUD and NZD. However, we are in the midst of an era where significant action and volatility are occurring even outside of the well-travelled Forex highways, which is why it’s a perfect opportunity to take a step back and look at some of the other countries and more importantly their currencies.
South African Rand (ZAR) – Earlier last year South Africa lost its status as Africa’s largest economy, with Nigeria overtaking it by a significant margin. Predictably, the rand has been having a rough time since, especially when paired up against the USD. An escalating account deficit, the retirement of the president of the SA Central Bank, and the increasing amount of strikes has set the currency back. Most leading economists feel that the rand is only going to fall further, but there are a few that think that it will improve over time.
Ruble – It’s been a rather interesting year for Russia, with a takeover of the Crimea and subsequent forays into Eastern Ukraine leading the EU and US to respond with financial sanctions, which in turn has caused the ruble to slide. Additionally, a dramatic drop in oil prices has seen the ruble regress to new lows against all of the major currencies especially against the USD.
Krone/ Krona – No matter how successful the Scandinavian countries were, they were unable to escape the 2007 financial crisis when it rolled into town. Although not forgetting the existence of Iceland and Finland, the main Scandinavian currencies when it comes to Forex are the Swedish Krona (SEK), the Danish Krone (DKK) and the Norwegian Krone (NOK).
SEK – National elections back in September left Sweden with a hung parliament and saw the Krona drop. Interest Rate cuts that occurred earlier didn’t help the cause either, with the SEK subsequently weakening against all of the major currencies. Although the krona still continues to struggle against most of the major currencies, it is starting to gain some traction.
DKK – It’s been a tough few years for Denmark as it’s attempted to emerge from the financial crisis; the government does feel however, the country’s noticeable efforts to maintain a grip on the deficit at the same time as balancing caution with necessity regarding stimulus measures will ultimately work in its favor. In the meantime, however, the DKK is struggling mighty against most of the major currencies.
NOK – Despite struggling the Norwegian Central Bank decided not to cut interest rates in March, which saw the NOK rise substantially against currencies such as the euro, where it surged by 2.8%. Seemingly the NOK dodged another bullet as policy makers are implying that the rates will remain the same this month once the decision is made next week. Assuming nothing happens many assume the EUR/NOK will drop to the 8.40 range.
USD may not jump if the Fed raises the rates, according to BOJ Governor Haruhiko Kuroda
The USD rebounded against the yen earlier this morning, recovering from it largest one-day decline in over six months. On Wednesday Bank of Japan Governor Haruhiko Kuroda suggested that the overall value of the yen may not continue to fall. Additionally, he stated the greenback may not necessarily rise further against the yen if the Fed ultimately raises interest rates, as the possibility of future rate hikes maybe already priced into the market. Currently, the USD/JPY is situated at 123.59, up 0.77%.
The Aussie rose against the USD earlier this morning, thanks to some notable employment data. The Australian Bureau of Statistics reported last month’s employment increased by over 42 thousand, impressively beating the 11 thousand expected increase. Additionally, the report stated Australia’s unemployment rate fell to 6.0% from 6.1% in April. Almost all leading analysts predicted the unemployment rate would rise to 6.2%. Earlier the AUD/USD hit 0.7793, the pair’s highest since June 3. However, the gains are still expected to remain limited for now as demand for the USD is growing stronger ahead of the upcoming US economic reports. Currently the currency pair is listed at 0.7741, up 0.04%.
The New Zealand dollar took quite a hit earlier this morning, tumbling to almost a five year low against the USD, after the Reserve Bank of New Zealand unexpectedly lowered interest rates by 0.25% to 3.25%. Adding fuel to the fire, RBNZ Governor Graeme Wheeler explicitly stated that the NZD needs to weaken even further. Consequently, the NZD/USD dropped by over 1.0% to as low as 0.6998, the pair’s lowest since September 2010. The kiwi additionally fell sharply against the euro, with the euro surging earlier as much as 2.49% to 1.6110. As of now the NZD/USD is trading at 0.7024, down 0.48%.
Later on today at 12:30 GMT the US Census Bureau will release the monthly Retail Sales report. This will be watched closely as there have been numerous signs the US consumer is exercising restraint, which of course could limit economic growth going forward. Most analysts are expecting a healthy 1.1% reading, which could reverse the recent weakness. However, if the reading is weaker than anticipated the results may not be pretty for the USD.
Despite a mini decline Facebook is clearly a powerhouse in the market.
Facebook Inc. (NASDAQ: FB) declined in yesterday to $80.74 per share before finishing the day at 80.67 (0.00%). Various reports stated that this is due to it abandoning plans to build and ultimately launch a satellite that would enable certain regions in Africa and other continents access to the internet. Facebook originally had plans to invest as much as $1 billion on this endeavor. The social networking giant is following Google’s action to halt investing in satellites, as both companies have been searching for ways of making the internet accessible to more people. Both Facebook and Google are looking for more cost-effective ways of reaching a greater audience such as balloons and drones.
Despite this little bump, Facebook is rated by many as an excellent stock to buy as it possesses multiple strengths in a number of different areas. Facebook generated a solid revenue growth this past quarter, which exceeded the industry average of 5.7%. Since the same quarter one year ago, revenues rose by over 41%. Surprisingly, this revenue growth has not appeared to have seeped down to the company’s bottom line, considering that there earnings per share actually decreased.
Additionally, Facebook boasts a rather sound financial position, with its debt-to-equity ratio at 0.01, way below the industry average. It maintains a quick ratio of 7.97, which clearly shows its ability to cover any immediate cash needs. Furthermore, Facebook generates a respectable cash flow from operations, a solid stock performance and expanding profit margins. Although it posted a great gross profit margin of 94.44%, Facebook’s net profit margin is only 14.45%, which trails the industry average.
It is interesting to note that overseas markets bring in more advertising revenue than the US for Facebook, amounting to over 50% of global ad sales in Q1, with growth in Asia as the fastest at 57%. This is the first time Facebook has detailed ad sales outside of the US and Canada as a percent of worldwide sales. Facebook’s mobile advertising accounts for over 70% of the company’s total ad revenue and most importantly mobile advertising is particularly strong and very attractive to advertisers in emerging markets, something which Facebook is actively expanding upon.
AUD jumped up substantially after a solid NAB Business Confidence report.
The AUD rose significantly earlier this morning after a very upbeat NAB Business Confidence report. Almost always, anything above 0 indicates improving conditions while anything below implies worsening conditions. This index impressively beat expectations at 7 as opposed to 3, which understandably caused the AUD to rise against the other major currencies. Additionally, home loans in Australia rose 1.0% in April, beating the 2.0% drop that was previously seen. The AUD jumped despite the fact China posted worse than expected results in monthly CPI report. Generally speaking a negative report emanating from China will have negative repercussions on the AUD as Australia and China are major trading partners. Currently, the AUD/USD is listed at approximately 0.7661, down 0.55%.
At 9:30 GMT the UK Office for National Statistics is scheduled to release the nation’s monthly trade balance report. So far in 2015 this monthly report has been a major drag on Great Britain’s overall growth. Although it is expected to show slight improvement it would be no surprise if the opposite were to occur, which would cause the GBP to fall against currencies such as the AUD and USD (1.5274, -0.49%).
A little while later at approximately 10:00 GMT the Eurozone will put out its GDP Q1 figures. Most analysts are expecting a reading of 0.4%, which would push annual growth to 1.00%. Although this is still relatively puny for an economy the size of Europe’s, it does suggest that the Eurozone is continuing to expand at a moderate pace, which is of course better than no growth whatsoever. It is interesting to note however, there will almost definitely be some regional differences, such as in Germany. If results are better than expected the EUR should in fact climb against the AUD, GBP and especially the USD. Earlier this morning in fact the USD was in the negative against the EUR and the AUD and other currencies thanks to rising bund yields and solid German economic data. As of now the EUR/USD is trading at around 1.1284, down 0.07.
GE may have recovered on Friday but they aren't completely out of harm's way.
General Electric (NYSE: GE) fell significantly on Friday before ending the day on a positive note at 27.30 (+0.13%). Reports surfaced that the company may consider moving its headquarters after Connecticut, which is where GE is located, just passed a budget that includes approximately $1.2 billion in tax increases for some of the state’s biggest corporations. On Wednesday, Connecticut lawmakers approved a $40 billion financial plan which would increase business taxes by over $500 million in a two year span. These measures introduce a tax on group-wide income even if it originates out of state and extend a 20% surcharge on corporate tax.
Immediately after this law was approved GE CEO Jeff Immelt sent an email to GE’s Connecticut-based employees asking them to potentially examine the company’s options to relocate the headquarters to a state with what he calls a, “more pro-business environment”. Immelt claims that GE’ s state taxes increased five times over since 2011.
Although alarm bells may have initially rung in the ears of their investors, many analysts are lauding the fact GE is about to strike a deal to sell its private equity lending unit to the Canadian Pension Plan Investment Board (CPPIB) as the company goes forward with its planned massive pullback from its finance operations. GE and the CPPIB are in fact planning to sign the deal sometime today. The finer terms are however, still being negotiated for a takeover that would include more than $10 billion’s worth of assets but ultimately less than the entire $16 billion. GE’s retreat from lending may ultimately prove to be beneficial as US regulators are moving to limit aggressive lending by financial institutions that may pose universal risk. Earlier in April the company already announced that it plans to exit $200 billion worth of finance assets in order to focus more on its manufacturing of industrial products.
GE, this past quarter has expanded its profit margins along with generating solid cash flow from its operations. However, there are some weaknesses such as deteriorating net income, higher debt management risk and disappointing return on equity.
A busy week ahead as many from across the world including the US convene at the G7 Meetings.
Monday, June 8, 2015
All Day G7 Meetings Day 2
Finance ministers and central bankers from the US, UK, Canada, Japan, France, Germany, and Italy will continue to discuss a number of important global economy and foreign policy challenges, which include the escalating Greek debt crisis. Traders should expect high volatility affecting all of the major currencies once the meetings conclude and the press is addressed.
Tentative Trade Balance (China)
This report will have an impact on the AUD and the NZD as both countries are widely dependent on China for trade. Expectations are pointing to a 44.9 billion surplus; however, China has been in a bit of a funk lately, so it would not be that surprising if they miss the mark.
Tuesday, June 9, 2015
8:30 GMT Trade Balance (UK)
Although the trade balance has been hindering growth in the UK in fiscal 2015 it is however expected to show a slight improvement for the start of Q2.
9:00 GMT GDP Q1 (Eurozone)
Leading analysts are expecting a reading of 0.4%, which would push annual growth to approximately 1.00%. Although this is still relatively weak for an economy the size of the Eurozone, it does imply that the economy is continuing to increase at a moderate pace, which is of course better than no growth at all. If this report comes in better than expected the euro will rise.
Wednesday, June 10, 2015
2:50 GMT RBA Gov Glenn Stevens Speaks
Speculations are Stevens will speak about the slower than expected pace of growth in the Australian economy along with the inherent weakness in business capital expenditure in both the mining and non-mining sectors. If he touches on those key issues the AUD should depreciate further against the majors including its US counterpart.
8:30 GMT Manufacturing Production (UK)
Although this report can be often overlooked, it can certainly impact the GBP. In this particular case, the pound may falter as many analysts assume that production growth slowed.
20:00 GMT BOE Gov Mark Carney Speaks
Market volatility is highly expected during this speech in particular as he may have to refer to the embarrassing revelation that the Bank of England is secretly planning for Great Britain’s exit from the European Union.
21:00 GMT Official Cash Rate (New Zealand)
In light of the rising uncertainties in Europe, China and Australia the RBNZ maintained rates at 3.5% for the month of April. However, many economists feel that enormous decline in global oil prices should boost growth since crude oil prices are almost 50% below their July 2014 levels. Inflation does remain low but that too is expected to increase gradually. Consensus feel the RBNZ will maintain the rates for June but will ultimately slash them sometime later this year.
Thursday, June 11, 2015
1:30 GMT Australian Employment Data
In April Australia’s unemployment rate increase mildly to 6.2% as 2,900 positions were terminated. Unemployment data overall remains above 6.0% over the past 11 months, which indicates sluggish growth in the Australian job market. Although the market is expected to add another 15 thousand plus jobs, the unemployment rate is still expected to remain at 6.2%.
5:30 GMT Industrial Production (China)
After bottoming out at 5.6% in April industrial production levels went up to 5.9% in May. Although it was below expectations, it seems that the Chinese economy has started to turn the corner. If production levels rise above 6.0%, the AUD and the NZD should both gain.
12:30 GMT Retail Sales (US)
Retail sales remained roundly flat in April amid reduction in the automobile purchases, implying the US economy is struggling to right the ship after sluggish growth in Q1. Hopes for a strong rebound in Q2 for the U.S economy is rapidly fading in light of this potentially weak release along with other economic indicators. Retail sales inched only 0.1% while expected to rise 0.4%. Unless there is a rapid turnaround, the Fed in all likelihood will not raise the interest rates anytime in the near future.
Friday, June 12, 2015
9:00 GMT Industrial Production (Eurozone)
A strong rebound is expected in this area to 0.4% from -0.3%, which would push the annual rate up to a healthy 1.1%. It definitely is worth watching the regional differences to see if production growth is broad-based or centered mainly in Germany. A stronger than expected finding will certainly boost the EUR.
12:30 GMT Producer Prices (US)
US Inflation is the primary focus ahead of next week’s highly anticipated Fed meeting. Of course, any sign that inflation pressures are building in the producer sector in particular could very well boost the USD. Most economists believe that this index will rise to 0.4%, which should help the annual rate improve after recent declines.
14:00 GMT Prelim UoM Consumer Sentiment (US)
Consumer sentiment declined to 90.7 last month, the lowest reading since November 2014. However, the Conference Board, a business group, just reported that its consumer moral index showed mild improvement in May. Despite last month’s shortcoming the Michigan index is well above last year’s horrid 81.9, indicating a strong pickup in consumption. If the index rises above 91.3, which is more than likely, the USD will definitely rise.
Oil prices nose-dived over the past year after OPEC decided not to cut its production to rescind a global surplus that arose from a US shale oil boom. Instead OPEC decided to fight for market share, assuming that a price drop would ultimately weaken output levels in higher-cost producers such as the United States. However, OPEC severely lost the gamble.
During the past few months US oil production growth has started to slow in recent months, with the number of oil rigs drilling for crude shrinking substantially. Interestingly enough many analysts feel if prices start stabilizing and start improving rigs will be more active and quickly generate more supply into the system. Many CEO’s who have spoken at a seminar held by OPEC over the past two days. Chief executive of Italy’s Eni, Cladio Descalzi stated that he believes the US shale oil production will go up and down with oil prices and vice versa. He and many others strongly believe that if oil prices start to recover shale production will jump yet again. In other words OPEC and all the other oil producing companies that are looking to profit need to make their projects more profitable.
As the OPEC output decision looms the ruble is continuing to loose traction against all of the major currencies, with it losing more than 4.00%. Almost all experts feel that falling oil prices and renewed shelling in Donbass are the key factors behind the ruble’s downfall. The ruble, they feel will plunge even more if the OPEC member states decide to keep future oil output quota unchanged, which amounts to nearly 30 million barrels a day.
Almost all traders are ready to place a put on crude oil considering the recent speculations. Although OPEC is widely expected to leave oil prices unchanged at Friday’s meeting, which should cause a major selloff in both crude and brent, there is a miniscule chance that oil output may decrease. It may not be a popular opinion but it could certainly cause the tables to turn if it should come to fruition.
Although it is fraught with some deficiencies, LinkedIn is in a prime position for long-term growth.
Shares of LinkedIn Corp (NYSE: LNKD) jumped up in early market trading on Wednesday morning, after JPMorgan Chase added LinkedIn to its, “U.S. Equity Analyst Focus List” as part of a growth strategy earlier that morning. Many analysts at JPMorgan consider LinkedIn to be one of the most desirable stocks and firmly believes its net ratio will continue to improve through its second quarter. LinkedIn helps companies and individuals manage professional identity, build and actively engage with professional networks, and provide excellent insights and opportunities as well as universal access.
LinkedIn’s many strengths can be seen in multiple areas. This includes concrete revenue growth, a widely stable financial position with reasonable debt levels and a solid stock price performance. LinkedIn’s total revenue growth grew 35% year-over-year, attaining $638 million and its EBITDA was $160 million, or 25% of its overall revenue.
However, there are a number of glaring weaknesses that can be associated with the company, which includes a deteriorating net income, weak growth in earnings per share (EPS) and a rather disheartening return on equity. LinkedIn is aggressively investing in areas such as human talent and R&D, which are squeezing its profit margins. Additionally, the company just announced the acquisition of Lynda.com, one of the leading online learning companies for approximately $1.5 billion. This means LinkedIn will face increased integration expenses and over $24 million in additional stock-based compensation expenses during Q2.
Despite all of its glaring issues, LinkedIn looks extremely well positioned to continue expanding rapidly for the next number of years. LinkedIn has a diversified business model, as opposed to companies such as Twitter and Facebook, which make most of their money from online advertising. LinkedIn is the undisputed leader in its main professional contacts and recruiting business. This apparent long-term growth opportunity could easily provide justification for the short-term risk associated with its stock.
Currently LinkedIn is listed at 213.30, up 4.15%, with sitting at 214.19 (0.42%) during after-hours trading.
USD should rebound with better than expected ADP and Trade Balance Reports.
The AUD jumped to one-week highs against the USD earlier this morning, after an impressive quarterly GDP report showed that the Australian economy grew at much faster rate than was expected. In the report, the Australian Bureau of Statistics revealed that the GDP rose 0.9% in Q1, beating the 0.7% projections. In New Zealand, the NZD has risen significantly against the USD earlier today, thanks in part to yesterday’s negative US data. Currently both the AUD/USD and the NZD/USD are listed at 0.7795 (+0.30) and 0.7164 (-0.19%) respectively.
At approximately 9:30 GMT the UK will announce its Services PMI. Many analysts are expecting only a slight moderation, to 59.2 from 59.5 for May. Nonetheless, this index should remain at a very high level. Traders should expect to see a jump in the pound especially against the USD. Currently, the GBP/USD is trading at 1.5361, up 0.10%.
At 10:00 GMT the Eurozone is expected to release its unemployment rate and retail sales figures. Most economists expect the unemployment rate to fall to 11.2% from 11.3% which still suggests that the Eurozone economy is still in relatively weak shape. However, the retail sales are expected to increase to 0.6% thanks to a surge in overall German retail sales in April. Most assume that the EUR will rise against most of the majors including the USD because it seems that the Eurozone is starting to head in the right direction. As of now the EUR/USD is trading at approximately 1.1144, down 0.07%.
Later on today at around 12:15 GMT the US will announce its ADP Non-Farm Employment Change figures, which will kick off the country’s slew of employment data. Expectations are 198 thousand jobs were created during the month of May. Although this particular jobs report does not have a perfect correlation to the actual NFP figure, it could certainly give the USD a much needed boost if the number is 200 thousand plus. Additionally, at 12:30 GMT the US will give over its monthly Trade Balance report, with estimates pointing to a deficit of -43.9 billion from 51.4 billion previously. If both the ADP and Trade Balance findings are better than expected the USD will almost certainly rise against all of the majors.
HSBC Holdings Plc (LONDON:HSBA) is expected to announce heavy job cuts that could number somewhere between 10,000 and 20,000 at a strategy day next week. Many assume that this is part of broader plan that could also see HSBC dismantle operations in Brazil and Turkey. Unsurprisingly as a result, HSBC’s shares fell earlier this morning in Hong Kong, underperforming the Hang Seng Index.
Tougher regulations coupled with low interest rates have severely impacted HSBC more than the most other banks over the past few years, which have caused the bank to score misses on its cost targets and overall profit. Profits fell by over $1 billion in 2014 compared with a year earlier thanks to tougher market conditions that all investment banks are facing.
A number of leading analysts have also stated HSBC has been roundly slower than its rivals with regards to restructuring its investment bank and that it needs to further cut its rates and credit business. In response HSBC either sold or exited over 75 business units since Stuart Gulliver became the company’s chief executive approximately four years ago. Just only a few months ago in February he indicated that HSBC branches in the United States, Brazil, Mexico and Turkey needed to greatly improve or be sold.
HSBC confirmed recently that it is now actively looking to sell its Brazil business and it is widely expected to announce on June 9 its Turkey operation is on the chop block. HSBC is additionally expected to confirm that substantial fixes to its US and Mexico businesses are in the offing. Furthermore, it is assumed that Gulliver will provide more details at the strategy day next week as to whether HSBC should move its headquarters from London to Hong Kong, where it was originally based before making the move to London in 1993. Currently HSBC is listed at 620.44, down 0.60%.
PMI readings and the highly anticipated NFP report will be the focus for this week’s Forex roundup.
Monday, June 1, 2015
1:45 GMT HSBC Final Manufacturing PMI (China)
China has been regressing over the last number of months as this vital index has only eclipsed 50 once over the last five months. Expectations for this month are at a paltry 49.2, which means Australia and New Zealand may be in for a rough day in the Forex market.
8:30 GMT Manufacturing PMI (UK)
Many leading analysts believe that it will improve to 52 from 51.9 in April. This could perhaps reinforce the belief that the UK is growing despite a rather disappointing 0.3% GDP increase in Q1.
14:00 GMT ISM Manufacturing PMI (US)
Despite a poor Q1 GDP report, many feel that this index will improve to 52.0 from 51.5, which could imply that the Q1 GDP report was just a one-time gaffe and have the USD regaining its prominence in the Forex market.
Tuesday, June 2, 2015
4:30 GMT Cash Rate & Rate Statement (Australia)
This is one way to get the Forex market moving. The rates have been steadily declining in Australia over the last few months. Although many analysts are expecting the rates to remain at 2.00%, it would not be at all surprising to see it drop further in an attempt to beat down the currency.
8:30 GMT Construction PMI (UK)
Despite the apparent regression over the past couple of months, this index has been one of the UK’s best performers for almost two years. Economists are calling for an attainable reading of 55.1.
Tentative GDT Price Index (New Zealand)
This bimonthly report has not been to kind to the country as of late. Although May’s findings have certainly been encouraging positive results have not occurred since the beginning of March. If this reading comes in near or above the breakeven point perhaps we can close the book on this ugly stretch.
Wednesday, June 3, 2015
8:30 GMT Services PMI (UK)
Although a slight moderation is to be expected in this data, this index is expected to remain at a relatively strong level. This will give the pound a boost in the Forex market and indicate that the UK economy has turned the corner this quarter.
9:00 GMT Unemployment Rate (Eurozone)
Although many analysts do believe a slight moderation is in order, 11.2 is still a rather elevated level for unemployment figures. Of course this implies that the Eurozone economy is still in trouble, which shows us that QE is undoubtedly necessary. Expect the euro to fall against the majors in the Forex market.
12:15 GMT ADP Non-Farm Employment Change (US)
This is the first of a number of employment data due during the latter half of the week from the US. Analysts are anticipating the creation of 198 thousand new jobs. If there is a 200 thousand plus boost, which is certainly attainable, the USD will jump tremendously in the Forex market.
14:00 GMT ISM NON-Manufacturing PMI
Despite the fact a small decline is expected in the service sector, this index has been one of the stronger performers, which is why this past month’s data should continue this trend.
Thursday, June 4, 2015
11:00 GMT Bank of England Rate Decision
With the exception of a few, most leading analysts do not expect any sort of change. Assuming the rates remain the same, the GBP should experience no major movement in the Forex market.
11:45 GMT ECB Decision
Almost all leading economists believe that no changes will be made at this particular meeting. Draghi and the rest of his cohorts will probably stress for the umpteenth time that QE is here to stay, which will probably push the euro down.
Friday, June 5, 2015
9:00 GMT GDP Q1 (Eurozone)
The GDP is currently expected to remain at 0.4%, at an annual rate of 1.0%, which is seemingly relatively healthy at this stage. The particulars are expected to remain strong, with investment and household consumption estimated at 0.6% each. Furthermore, public spending is expected to rise to 0.3% from 0.2%.
12:30 GMT NFP Report & Unemployment Rate
The market is anticipating a strong showing in this pivotal report, with expectations centered at 221 thousand from 213 thousand in April. The unemployment rate is expected to stay steady at 5.4%, but wages are expected to increase by 0.2%. Of course any better than expected data will almost definitely give the USD a much needed boost.
Preliminary Investing Report is sure to weigh heavily on the UK this morning.
The Japanese yen weakened considerably earlier this morning after the country’s monthly retail sales report came in weaker than expected at 5.0% as opposed to 5.3%. Although this was the first rise in four months, leading economists still believed the result should have been better. Currently, the USD/JPY is listed at 123.60, down 0.03%.
The Aussie fell after a dismal quarterly Private Capital Expenditure (PCE) report. Perhaps the writing was already on the wall from the previous PCE report’s decline of 2.2% that times were about to get tough for investors. Just like last time, the AUD has and still is plummeting against the majors, with it trading at 0.7710 (-0.30%) against the USD.
At 9:30 GMT the UK Office for National Statistics will present its quarterly Preliminary Business Investment findings. Much like Australia’s PCE, this Business Investment report is vital to the UK’s economic growth. After struggling mightily for the last couple of quarters, in which it posted back to back declines of 1.4% and 0.9% respectively, leading analysts are predicting an increase of 1.1% this time around. Interestingly enough, consensus was anticipating increases during those two dismal quarters as well. If this figure in particular can properly rebound into positive territory, the GBP can continue to potentially make up what it lost ahead of the UK elections.
Additionally at 9:30 GMT the UK will give over its quarterly Second Estimate GDP reading. Generally, significant revisions to the original GDP in the UK are not so common. Thus, the 0.3% first reading is only expected to increase to 0.4% and it will more likely than not stay at or around that figure if it indeed rises. It goes without saying, whenever something is widely anticipated, anything deviating from that has the potential to cause tremendous movement. Currently the GBP/USD is situated at approximately 1.5379, up 0.14%.
At 14:00 in the US the National Association of Realtors will give over the latest Pending Home Sales report, which is expected to rebound significantly from its appalling showing last month. However, if it misses the mark again then it will have heavy repercussions on the USD going forward. Encouragingly however, both Building Permits and Housing Starts rose last week, which could signal increased interest in purchasing homes.
After posting a stellar Q1 growth Amazon’s set to expand its workforce and compete with Etsy
This past Monday Amazon.com Inc. (NASDAQ:AMZN) declared that it will be hiring an additional 6,000 workers in an effort to meet its growing customer demand. Amazon’s new employees will help process customer orders in the company’s fulfillment centers across a dozen states. Amazon, as part of a broad incentives program, offers its hourly employees a vast range of educational benefits such as its Career Choice initiative. It will prepay up to 95 percent of tuition for courses related to fields that are in-demand, regardless if the skills they acquire are at all relevant to a career at Amazon.
Recently, Amazon announced that will soon launch a platform called Handmade, which would enable artists to sell their handmade merchandise. This will certainly thrust a dagger into the heart of its direct competitor Etsy (NASDAQ:ETSY), whose shares have fallen more than 50% since its IPO. Although Etsy has a faithful customer base of over 1.4 million individual sellers and approximately 21 million buyers, it will hardly be able to compete with the sheer scale that Amazon could offer, with its 250 million plus users. In a $34 billion dollar handmade goods industry, Etsy commanded an underwhelming $532 million this past quarter. Its gross merchandise sales (GMS) only rose 28%, marking a significant slowdown from the 43% increase last year. With limited online competition there is no logical explanation for this sort of severe slowdown. One can only imagine what will occur once Amazon enters the game.
Impressive Q1 growth in the North American segment drove Amazon’s earnings through the roof. Amazon’s regional revenue grew by 24% thanks to rising demand for electronics and general merchandise. The company's operating income in the North American sector rose by 78% during the first quarter alone to $517 million. Currently, Amazon is listed at 425.47, down 0.51%. It is currently trading at 425.90 (+0.10%) during after-hours trading.
Charter is shaking up the cable and broadband industry with its acquisition of Time Warner
Time Warner Cable Inc. (NYSE:TWC) is set to be acquired by Charter Communications Inc. (NASDAQ:CHTR) for approximately $55 billion, which would in effect combine the second and third largest U.S. cable and broadband operators. Charter plans to announce the deal sometime today, people with direct knowledge of the matter said yesterday. Acquiring Time Warner would create a major rival to Comcast Corp (NASDAQ: CMCSA), the biggest cable and broadband provider in the U.S. market.
Just last month Comcast tried to purchase Time Warner. However, the plan fell through after encountering severe resistance from antitrust regulators. Charter will pay Time Warner approximately $195 per share, with $100 or $115 in cash and the rest in its own stock. Time Warner will receive a $2 billion break-up fee should the deal fall through, something that was not offered when Comcast tried to purchase Time Warner. Additionally, Bright House Networks, the sixth largest U.S. cable operator will be acquired by Charter for 10.4 billion. The joint companies could have as many as 23 million total customers, just behind Comcast’s 27.2 million customers.
Deals between Time Warner and its rivals are becoming more common in an industry experiencing fading demand for traditional TV packages and stiff competition from Amazon, Netflix and other online services. Although many leading analysts anticipated this deal between Time Warner and Charter for quite some time, French cable billionaire Patrick Drahi made a surprise entry into the U.S. market just a few days ago, on May 20 when he agreed to purchase a smaller rival. Interestingly enough, he did meet Time Warner Chief Executive Officer Rob Marcus, but obviously nothing really became of that meeting.
Unsurprisingly Time Warner share prices rose significantly ever since the news broke last week. Currently Time Warner is listed at 171.18, but after hours / pre-market trading has the stock situated at 185.00, up 8.07%. Compared to where it was a year ago today, Time Warner is now trading at a higher level regardless of the weak earnings results it posted at the end of the previous quarter.
After a sharp rally, crude oil ended off last week on a sour note, with the downwards pressure set to continue into this week.
Just before the start of the weekend Crude oil prices fell, most probably on profit-taking ahead of the long weekend and thanks to a better than expected rise in U.S. core CPI, which strengthened the USD and subsequently undermined most commodities across the board. This came after crude oil’s sharp rally on Wednesday and Thursday due another drop in U.S. inventories for the third week running. Crude oil was additionally strengthened by a falling USD after experiencing a slew of negative reports such as the latest unemployment claims, manufacturing PMI, Philly Fed manufacturing index and a rather poor existing home sales figures.
This week the dollar will certainly play a major role in determining crude oil’s direction, which is why it is absolutely vital to pay close attention to an economic calendar. However, this week’s key data will ultimately be the weekly U.S. oil inventories report, which will be released on Thursday, a day later than usual due to Memorial Day, occurring today.
Crude oil stocks have fallen for the third consecutive week, by a total of 8.8 million barrels. Not only crude oil but gasoline stocks have plunged as the U.S. driving season is about to jump into full gear. However, crude oil has not been able to reach a new high, ever since reaching $62.55 on the sixth of May, which coincidently happened to be when the first crude stocks decline of the fiscal year was reported. It will certainly be interesting to see how crude oil prices will react to this week’s upcoming supply data, especially if it displays another heavy decline. However, it would be a mistake to only mention the U.S. crude oil inventories. OPEC continues to produce more crude oil than is needed as it desires to staunchly defend its overall market share. This will more than likely keep crude oil prices under considerable pressure for the foreseeable future.
Currently crude oil is listed at 59.37, down 0.59%, along with gold (1,204.40, -0.02%) and silver (17.038, -0.06) respectively.
After an impressive year Electronic Arts is becoming one of the most attractive stocks on the market.
Growth stocks such as Electronic Arts (EA) are some of the most exciting picks on the market. These high-flyers enthrall investors with their potential and big gains, which is why Electronic Arts fits the description. The company posted an earnings-per-share (EPS) growth of over 100% this past year and is in line for another successful year as well.
This past quarter alone, EA, the maker of the wildly successful ‘Madden NFL’ franchise posted an $896 million revenue stream, with an EPS of 39 cents per share. Its results exceeded expectations of an estimated $877 million in revenue and earnings 33 cents per share. Interestingly enough some of the hierarchy at Electronic Arts are taking a rather cautious approach despite the earnings and revenue beat. EA plans on lowering its fiscal 2016 revenue estimate to $4.25 billion from $4.60 billion while raising its EPS estimate from $2.60 to $3.00. With these new estimates Electronic Arts believes its stock is fairly valued.
As of a matter of fact, a number of analysts feel the same way and firmly believe that it is worthwhile for investors to buy into EA. This year’s growth estimate alone calls for an EPS growth of 18.9%. Additionally, EA’s long-term growth rate is estimated at a rather impressive 15.6%, which suggests that it is poised for another strong year. Furthermore, EA has incredibly seen estimates rise over the past month for the current fiscal year by a remarkable 7.2%.
However, just a couple of days ago Frank Gibeau, the company's head of mobile gaming, suddenly left the organization. Generally, if something such as that occurs to a high profile individual in a large company, suspicions start mounting. Many investors will start getting nervous, which could lead to a massive selloff. Leading analysts however, have anticipated Gibeau’s departure for quite some time. Gibeau, at one point had been considered a contender for the position of chief executive at Electronic Arts after John Riccitiello’s sudden departure in March 2013. However, Andrew Wilson was tapped as the new leader.
Despite the turnover, traders and investors should not be deterred, as it seems EA is taking its turn as one of the preeminent growth stocks. EA finished yesterday at 62.24, down 0.59%.
It's not make it or break it for the USD, but we should catch a glimpse of where it may be heading.
The Yen fell, especially against the USD despite better than anticipate Q1 GDP figures earlier this morning. GDP in the first quarter rose 0.6%, marking a yearly pace of 2.4%, clearly outstripping expectations of just a 0.4% gain for year-on-year pace of a paltry 1.5%. A number of prominent economists expect Japanese GDP to continue growing in the second quarter. The average GDP forecast for Q2 is an annualized 2.26%. Many investors are still focused on Europe, with Greece’s debt in particular. Currently, the USD/JPY is trading at 121.06, up 0.31%. It will certainly be interesting to see how the USD and the Yen line up after this evening’s FOMC Meeting Minutes.
At 12:30 GMT Canada will release its Wholesale Sales data which is a leading indicator of consumer spending. Almost always retailers order more products from wholesalers when they expect sales to increase. Four out of the last five releases came in worse than expected, with only two striking in positive territory. Most analysts expect a rise to 0.9% but there will certainly no surprise if it fails to do so. Undoubtedly, this will impact the loonie’s relationship with the USD, which is currently sitting at 1.2236, up 0.03%.
The highly anticipated FOMC Meeting Minutes will commence at 18:00 GMT, with its ramifications on the USD. During the meeting along with the hours leading up to it the USD will almost definitely will be in a volatile state. Since there was not a press conference after the Fed’s last decision, this FOMC Meeting will probably tell us what they actually discussed, which should impact the USD against the majors. Many economists believe that low oil prices and weather will be prominent themes in addition to the much anticipated discussion pertaining to the timing of the first potential rate hike. If a hint is dropped, it will certainly have an effect on the USD. If the implication is that a rate hike is imminent, the USD will go through the rafters.
Speaking of which, the USD rebounded yesterday against the EUR thanks to comments from an ECB member pertaining to increased stimulus measures with what some would call its ‘overly aggressive’ quantitative easing program. As one could have easily guessed, this led to a sharp selloff in the EUR and a heavy purchase in the USD. Currently the EUR/USD is trading at approximately 1.1095, down 0.50%.
Over the past 12 months, Microsoft (NASDAQ:MSFT) has been one of the top performing tech stocks despite the major ongoing shifts in the PC industry. Since May 2014, Microsoft stock has rebounded more than 20%, outstripping the broader S&P 500. It is no wonder why a number of analysts are beginning to finally predict that Microsoft could be headed higher.
Last quarter Microsoft Windows revenue contracted 22% on yearly basis, which was rather notable among consumer PC’s, where revenue fell by a whopping 26%. Despite all of this Microsoft stock is rallying, something that a number of analysts feel is due to a shift in direction by the company. Microsoft is investing heavily into the cloud computing world, a prosperous sector for the tech giant. Just last quarter commercial cloud revenue rose over 105%, which now puts Microsoft on pace for annual run rate of $6.3 billion, up from the prior quarter’s $5.5 billion. Additionally, demand for its cloud products such as Dynamics CRM, Office 365 and Azure has been tremendously strong not only among enterprise customers but the general public as well.
Perhaps another catalyst for the surge in Microsoft stock is the anticipation of Windows 10. Unfortunately for Microsoft its Windows 8 was an unmitigated disaster. Despite being featured on several hundred million PCs, it failed to keep the Windows platform relevant in a progressively mobile- centric world. Windows 10, however, could be very different, as it carries a unified interface and support for an extensive variety of different form factors. Although Windows revenue may not directly profit, other Microsoft businesses can certainly benefit. Windows 10 is filled with features that highlight other features that Microsoft has to offer such as Cortana, Xbox and Bing. Most importantly if Windows 10 becomes a hit, investors will realize that Microsoft is still a force to be reckoned with in the operating system business.
Microsoft finished yesterday’s trading session at 48.01, down 0.59%. After-hours trading currently has the stock at approximately 48.14, up 0.27%.
Gold staged a sharp rally this past week as the USD endured a sharp selloff. Additionally, there was a rather sharp increase in global bond yields in the past few weeks. This may prove to be good news for gold as investors’ price out the ever-increasing likelihood of the global economy falling into severe deflation. The reason being is that generally inflation and yields will generally go in the same direction. If there is a reason to suspect that higher inflation may be in the offering then yields will typically rise in order to compensate for the loss of purchasing power of future cash flows of bonds. Consequently, if inflation is what the market as a whole is concerned about, inflation hedging assets such as gold should in fact benefit. Perhaps this is what we are witnessing now.
Another intriguing reason why gold may have a chance of extending its gains this week is due to the negative sentiment still surrounding the precious metal. Normally, markets, be they the commodities market or any other market tend to turn is when sentiment is at an extreme. For example, think back to the precious metals’ slump in 2011 or the stock market rally, which commenced in 2009. A this particular moment with global inflation very low and U.S. equity markets near record highs, most economists and analysts are not giving gold much attention. According to the World Gold Council (WGC), total demand for gold was down 1.00% this past quarter compared to the same period just a year earlier. Gold purchases in the world’s leading gold consumer, China, are down 10%. Interestingly enough India, the second leading gold purchaser saw a sharp rise in gold purchases this past quarter.
Perhaps this week gold will extend its rally further as it’s displaying some bullish signs. With all of the inflation reports scheduled for this week, gold will play a significant role. If the upcoming reports will come in worse than anticipated, gold should rise significantly. Currently, the precious metal is trading at 1,227.80, up 0.20%.
Monday, May 18, 2015
7:00 GMT FOMC Member Charles Evans Speaks (U.S.)
Federal Reserve FOMC members vote on where to set the nation’s key interest rates and their public engagements are often used to drop subtle hints pertaining to future monetary decisions. Considering how rocky things have been in the U.S. especially in the Forex market for the past month, any hints will in all likelihood be negative.
Tuesday, May 19, 2015
1:30 GMT Reserve Bank of Australia’s Meeting Minutes
Just a few weeks ago, the RBA implemented a rate cut, which many in the market expected for quite some time. Interestingly enough, it actually provided more of a lift for the AUD, which is atypical when a central bank executes rate cuts. Perhaps the reason being is that the RBA did not imply that additional cuts were on the horizon. This upcoming meeting can potentially clarify things, particularly if there are in fact extra rate cuts ahead. If there are hints of additional rate cuts the AUD will almost certainly tank.
8:30 GMT Consumer Price Index (U.K.)
Great Britain, along with the rest of the economically developed world is trying to deal with the effects of low inflation. However, with the resurgence of oil prices, there is a possibility that this index could rebound somewhat. Although consensus is calling for flat read, anything positive could help the pound continue its impressive rally. This is the first of many CPI reports that will shake the Forex market this week.
9:00 GMT German ZEW Survey
Over the past few months sentiment has been falling in Germany as the ECB has kicked off their Quantitative Easing program. Additionally Greece continues to ail, expecting the rest of the E.U. especially those who have wider wallets such as Germany to bail them out of their economic mess. Most leading analysts assume that this report will hurt Germany, which should put an end to the EUR/USD’s (1.1390, 0.00%) rally in the Forex market.
12:30 GMT Building Permits & Housing Starts (U.S.)
Both of these reports severely missed the mark, with the Housing Starts falling beneath the 1 million level for the second month in a row. Most economists believe however, both upcoming reports will right the ship this time around.
Tentative Global Dairy Trade’s Price Index (N.Z.)
Milk prices are more than likely the reason why the Reserve Bank of New Zealand is discussing rate cuts, which has the NZD falling from highs against a number of currencies. The last four releases have shown declines to the order of -8.8%, -10.8%, -3.6% and -3.5%. Because New Zealand relies so heavily on the dairy industry, declines of this scale are incredibly punishing, and may come with lower inflation as well. If result is in the negative again, a rate cut will most assuredly occur on June 10.
Wednesday, May 20, 2015
18:00 GMT FOMC’s Meeting Minutes (U.S.)
This detailed record of the FOMC’s most recent meeting, should give us an idea of what “transitive” effects in Q1 2015 were. Perhaps we'll be privy to hints pertaining to the next potential rate hike.
Thursday, May 21, 2015
1:35 GMT HSBC Flash Manufacturing (China)
China has experienced nothing but severe decline for the past number of months, with last month’s manufacturing metric measuring in at 48.9. Although consensus is expecting something a little better, no one should be the least bit surprised if another negative result is in the offering. Of course Australia and New Zealand will be affected by the outcome.
7:30 GMT Flash Manufacturing PMI (Germany)
Considering that Germany is the biggest economy in the E.U. this index should have an effect on the EUR. Over the past number of months the result has been just above 50, with it hitting 52.4 in March. Many leading analysts feel that it will rise above the 53 plateau, something that has not occurred in over a year.
8:30 GMT Retail Sales (U.K.)
Last month’s 0.5% decline was the worst since June of last year; however, it stung much more as an increase of 0.4% was anticipated. Expectations are centered at a 0.3% increase, but if it fails to reach that level, which is more than likely, profit taking will take effect.
Friday, May 22, 2015
Tentative Bank of Japan Monetary Policy Statement and Press Conference
The implication of many Japanese officials is that no further Quantitative Easing measures will occur. However, it would not be surprising if Governor Kuroda will increase QE measures considering that inflation has not yet materialized and the economy hasn’t properly recovered.
12:30 GMT Consumer Price Index (U.S.)
The U.S. Producer Price Index this past week did not give anyone any positive sentiment heading into this week’s CPI. Last week the PPI declined by 0.4% on expectations of 0.1% increase, and the CPI is additionally expected to jump by 0.1%. Traders should pay attention to the other CPI releases that will be released prior to this one to potentially gauge whether inflation is rising globally. If it is, the U.S. CPI may follow suit.
Cisco Systems Inc. (NASDAQ:CSCO) posted another solid quarter, bolstering momentum in a number of significant markets earnings. Yesterday, the network equipment maker announced non-GAAP earnings of $0.54 per share on revenue of $12.14 billion, up 5.1% from $11.5 billion a year ago. Cisco’s earnings beat out analysts estimates of EPS of $0.53 on revenues of $12.07 billion. Net income was reported at 2.44 billion, or $0.47 per share, compared to a year-earlier profit of $2.18 billion, or $0.42 per share. Actual product sales, the company’s largest business segment, increased to $9.33 billion from $8.8 billion in the period just a year earlier.
The company’s cash and cash equivalents and investments were $54.4 billion compared to the $53 billion at the end of the previous quarter. During this quarter Cisco paid a cash dividend of $0.21 per common share, or $1.1 billion.
This quarter proved to be very strong despite ongoing rumors that CEO John Chambers would relinquish his post, which he confirmed last week. Chambers, who joined a startup founded by Cisco in 1983, soared up the corporate ladder and became company CEO 12 years later in 1995. He will be succeeded by Chuck Robbins, who formerly served as the company’s senior vice president of Worldwide Field Operations.
Changes such as this could often hurt a company as it is only natural for investors to question the overall standing of the company. The next few quarters may prove to be vital for the mega technology supplier.
Cisco is losing sales to rival companies such as Arris Group Inc. and Casa Systems Inc. Additionally, another trouble area is in China, where Cisco and a number of other technology suppliers have been hurt due to suspicions about their connections to U.S. intelligence agencies. Cisco’s total Asia-Pacific sales grew 1.0% this past quarter, but its businesses in China severely declined by over 20%. Furthermore, revenue from Russia dropped off by over 40% this past quarter.
Cisco finished yesterday’s trading day at 29.35, up 0.41%, with it currently at 29.28 (0.24%) during Pre-market trading.
Although the Australian dollar rose earlier this morning despite a worse than expected Wage Price Index finding, the AUD recently dropped against almost all of the major currencies thanks to a poor Chinese Industrial Production report. Although overall output rose to 5.9% from 5.6% in March, it was still deemed too slow. Additionally, investment slowed to the weakest pace in more than 14 years, which possibly implies that some form of monetary easing is seeping into the economy. Australia, being one of the biggest trading partners with China almost always suffers if China is amiss. Currently, the AUD/USD is trading at 0.7968, down 0.10%.
Despite a worse than anticipated German Preliminary GDP report earlier today, the EUR/USD (1.1234, +0.19%) is in the green thanks to a global bond sell-off, especially in the German and French markets. However, a positive U.S. Retail Sales report at 12:30 GMT can certainly alter that figure if it jumps above 0.3%.
At 8:30 GMT the U.K. will announce its monthly Claimant Count Change results. The previous month’s miss reversed a string of four straight solid reports, which is why expectations for this month have dropped in order to accommodate a potentially weaker reading. Because expectations are considerably lower, it would not be surprising if to see the GBP rise.
A little while later at 9:30 GMT the Bank of England will present its Quarterly Inflation Report (QIR) followed by a speech from Governor Mark Carney. The QIR is almost always a market-moving event for the GBP, especially now that inflation has become quite a hot topic around the world. The BoE’s expectations for inflation moving forward literally form their monetary policy. If they are more optimistic which could certainly be the case this time around, the GBP will certainly benefit. As of now the GBP/USD is approximately 1.5669, down 0.01%.
Lastly at 22:45 GMT New Zealand will give over its Q1 Sales report. Although leading analysts are predicting a 1.6% increase it would not at all be surprising to for it to fall short, considering the struggles in dairy prices.
Consumers around the world continuously argue over which beverage giant is better; Coca-Cola or PepsiCo. Proponents of each firmly believe that their beverage is superior in terms of taste and in overall brand awareness. When it comes to investing however, Pepsi, for now should be the company of choice for the following reasons:
- Cash flow & dividend potential – Recently PepsiCo announced a dividend increase of 7.6% to $2.81 per share, amounting to a current yield of 2.95%. Coca-Cola on the other hand raised its dividend by 8.2% to $1.32 per share, making its current yield 3.24%. Seemingly with regards to dividends Coca-Cola has the upper hand. However, dividend investors should consider the future dividend growth potential. When analyzing PepsiCo, there is a free cash flow of $7.65 billion and total dividend payments equaling $3.73 billion in fiscal 2014. This means that PepsiCo’s payout ratio was 48.8% of its overall free cash flow. In fiscal 2014 Coca-Cola’s free cash flow was $8.21 billion, and it paid $5.35 billion in dividends, amounting to a 65.2% payout ratio of its overall cash flow. When looking at a company’s potential to future dividends, the percentage of free cash flow paid in dividends is an important measuring stick. With the aforementioned payout ratios, one could calculate a normalized dividend yield. PepsiCo yields 3.95% compared to Coca-Cola’s 3.24% at a normalized payout rate. Additionally, PepsiCo was able to generate a much faster free cash flow of 15.3% as opposed to Coca-Cola’s 2.2% during the 2012-2014 period. Therefore one can certainly say that PepsiCo has quite an advantage over Coca-Cola.
- Wide-ranging business – Both brands are incredibly strong, with Coca-Cola ranked 3rd with a total value of $56.1 billion and Pepsi 28th with a total value of 18.9 billion in Forbes’ list of most valuable brands. However, Coca-Cola is outstripped by PepsiCo in total brand value compared to just sales. Coca-Cola generates only 42.4% of its brand value in annual revenue as opposed to PepsiCo’s whopping 67.7%. PepsiCo can be classified as a snack and beverage giant as it owns premium brands such as Doritos, Quaker Foods and Tostitos, a number of which had solid 2015 Q1’s. This considerably reduces the reliance on soda brands, which have increasingly come under attack from government and healthcare institutions. Coca-Cola pales in comparison to PepsiCo in this regard.
- Overall Valuation – Based on a discounted cash flow (DCF) module, numerous analysts found that PepsiCo’s fair value is $97.07, slightly above the current share price of 96.35 (-0.20%). Coca-Cola’s fair value on the other hand is at approximately $34.00, almost $7.00’s below it current share price (40.94, -0.04%). This indicates that PepsiCo’s shares are fairly priced while Coca-Cola’s are clearly overvalued.
Both PepsiCo and Coca-Cola are tremendous companies that are wildly successful. However, based on what was mentioned above PepsiCo has the most potential.
Last Wednesday afternoon crude oil prices dropped substantially when the Energy Information Administration published its latest supply data. Although it showed that crude oil stocks dropped by over 3.9 million barrels last week, which was the first decline since the beginning of January, oil prices were unable to go up any further. Interestingly enough oil prices suggest that investors do not fully believe that last week’s fall in crude oil stockpiles will mark the start of a major destocking sequence. However, the refinery utilization rate has risen far above the regular level for this particular time of year, which probably suggests that the demand for oil is great and ultimately indicates that there will be lower stock pile in the next few weeks.
Seemingly the global demand for oil is way stronger than was anticipated, which was almost definitely the reason as to why Saudi Arabia recently raised its prices to consumers in Europe and North America. Additionally, China, the second largest oil consumer recently posted trade data which shows that crude imports hit a record level of 7.4 million barrels per day in the month of April alone. However, indications are the crude oil rally is concluding. Perhaps one of the main reasons is due the USD rally this past week, which found some new life thanks to a decent NFP report.
On Tuesday, May 12, the OPEC will give over its monthly assessment of the oil markets followed by the American Petroleum Institute announcing its weekly findings on oil supplies. On Wednesday at 5:30 GMT China will release its industrial production report, with the German and Eurozone GDP estimates occurring a little while later. Later on in the day at 14:30 GMT, the U.S. will publish its weekly report on the crude oil inventories. Currently, crude oil is trading at 59.09, down 0.50%.
Monday, May 11, 2015
All Day Eurogroup Meeting
Greece is sure to steal the spotlight on tomorrow’s upcoming meeting. Although the country claims that it will pay off all of its debts in time, it will more than likely require additional funding from the rest of the EU. As this issue continues to drag on, the rest of the European nations will almost definitely become more frustrated, which could very well lead to a euro selloff.
11:00 GMT Interest Rate Decision (U.K.)
Considering the fact the Bank of England has not enacted an interest rate change in quite some time, it is more than likely that no change will be instituted this time around. Unless a hint is dropped, it should not have much of an effect on the GBP.
Tuesday, May 12, 2015
9:30 GMT Manufacturing Production (U.K.)
This report should get things rolling in the U.K. as expectations are centered at 0.3%. Manufacturing generally makes up approximately 80% of the total industrial production, which almost always tends to dominate the market impact.
Wednesday, May 13, 2015
5:30 GMT Industrial Production & Retail Sales (China)
China has been struggling in every which way as of late, which is why declines or missed expectations should have even more effect than usual. If these two reports improve though, the AUD and the NZD should enjoy a nice rebound.
6:00 GMT Preliminary Gross Domestic Product Q1 (Germany)
Germany, being the largest member of the Eurozone has a strong influence on the growth of the region. German growth has been steady over the past few months, despite the other countries in the Eurozone failing to find a semblance of economic traction. Expectations are fixed at approximately 0.5%.
8:30 GMT Claimant Count Change (U.K.)
The previous month’s miss reversed a run of four straight strong surprises. Fortunately, expectations are lower at -20.1K, so a rebound could be in the offering.
9:30 GMT Bank of England Quarterly Inflation Report and Governor Mark Carney Speaks
This report will certainly be a market-moving event for the GBP, especially now, as inflation is becoming such a hot topic around the world. Expectations for inflation moving forward shape the BoE’s monetary policy, and if they are a tad more optimistic than they have previously been, the GBP will rise.
12:30 GMT Retail Sales (U.S.)
Before last month’s 0.9% increase, Retail Sales had declined for three straight months. Although the previous month’s figure was decent, it failed to meet consensus of 1.1%. This time around however, expectations are very low, at 0.3%. If this report clears the hurdle the USD will undoubtedly rise against most of the majors.
Thursday, May 14, 2015
12:30 GMT Producer Price Index (U.S.)
Because of inflation concerns the PPI will probably take center stage. Considering that this index has failed to beat estimates since November 2014, it would take very strong improvements to potentially convince the Fed to raise interest rates sooner rather than later. Expectations are quite low at 0.1%, which means that a better-than-expected gain of let’s say 0.2% would be a sign that transitory effects may come to fruition in the not-so-distant future.
Friday, May 15, 2015
14:00 GMT University of Michigan Preliminary Consumer Sentiment Index
U.S. consumers have a lot to feel good about lately. Employment has been solid and the housing market is starting to strengthen. Only two out of the last eight releases have failed to meet expectations, so a mild increase from the previous figure is to be expected, which would mean an easy score for the USD.
The Australian dollar dropped earlier this morning after a disappointing Employment Change report. Australia forfeited 2,900 jobs this past April, which was well below the 5K gain expected. However, the report from March was reconfigured upwards from 37,700 to 48,200, so the AUD fallout was weakened to an extent. Currently, the AUD/USD is trading at 0.7968, down 0.02%.
The Parliamentary Elections are underway in the U.K. and will be occurring throughout the day. Undoubtedly, the results will have an effect on the GBP. As for today, while the Parliamentary Elections are occurring, volatility will reign upon the GBP. Until the results are in it would probably be wise to steer clear of the pound. As of now the GBP/USD and the EUR/GBP are situated at 1.5234 (-0.09%) and 0.7467 (+0.35%) respectively.
At 12:30 GMT the U.S. Department of Labor will present its weekly Unemployment Claims report, with the figure expected to rise to 277K. A combination of positive reports from the Eurozone and a worse than expected U.S. ADP Employment Change caused the EUR/USD (1.1362, +0.12%) to pointedly rise yesterday. If Unemployment Claims fall significantly short of the 227K expected, we should see a reversal as we gear up for tomorrow’s NFP report.
Later on this evening at 23:50 GMT the Bank of Japan will conduct its Monetary Policy Meeting Minutes. In all likelihood this meeting will not reveal that much concern regarding their current situation. However, no one would be surprised if they were to state a potential QQE increase was discussed during the meeting. If that is the case the JPY would take a nosedive. The USD/JPY is listed at 119.40, down 0.05%.
HSBC Holdings Plc, the largest bank in Europe had a rough day yesterday, as it fell the most in over two months during London stock trading after Q1 revenue failed to meet analyst’s expectations, along with higher operating costs at too fast of a pace. The stock finished the day at 625.9 pence.
Shares fell over 3.2% yesterday after the company announced a 4.0% gain in adjusted revenue to the sum of $15.4 billion for the first quarter, missing consensus estimates of roughly $15.8 billion. Additionally, operating expenses rose over 6.0% to $8.5 billion. Many assume that this occurred due to hiring and wage inflation.
Stuart Gulliver, HSBC’s Chief Executive Officer is determined to cut overall costs and sell businesses in order to boost earnings, while at the same time spending billions of dollars to significantly improve internal compliance. He did hint that HSBC is still considering moving its headquarters overseas as British lawmakers are determined to raise taxes on lender’s balance sheets after the elections, which are scheduled for tomorrow. HSBC will more than likely pay $4.5 billion worth of taxes over the next three years, or 11% of the bank’s net profits just because its headquarters is centered in London.
There are a few strategic questions being posed by Morgan Stanley, which happens to have a Hold rating on the stock:
First and foremost, does HSBC have the capability of further growing its revenue? This latest earnings report showed us that the company failed to beat, let alone match analysts’ forecasts through revenue growth.
Secondly, is HSBC becoming too large to adequately manage? The mega bank conducts operations all across the world; perhaps it is time to sell or break up a few of those businesses.
Only time will tell if this was just a temporary setback or the start of something more sinister. Currently, HSBC is trading at 628.60, up 0.43%
The Australian dollar is surprisingly in the green despite a rate cut to a record 2% from 2.25% earlier this morning. Many economists and analysts predicted some sort of a rate cut but hardly anyone imagined that the AUD would rise. Additionally, Australia reported a negative Trade Balance report of -1.32 billion. In his speech Governor Stevens did mention that there are signs of improving household spending along with a better job market. That perhaps was the reason why the Australian dollar is afloat. Currently, the AUD/USD is listed at 0.7866, up 0.39%.
Two upcoming reports will surely affect the New Zealand dollar today, with the Employment Change and Unemployment Rate Q1 report scheduled for 22:45 GMT and the Global Dairy Price Index, which will appear sometime today. Interestingly enough these two reports may have opposite effects on the currency. When looking at the Global Dairy Price Index, milk product prices have dropped for three straight auctions and many leading analysts expect a similar result.
The Employment Change and Unemployment Rate, however, is presumably headed the other direction as most economists believe the results will be positive. Out of the last eight releases regarding employment, only one of them failed to achieve the consensus expectation. However, it would not be a total surprise if it failed to impress as an ominous black cloud has been hovering over the New Zealand economy over the past number of months. Traders may want to exercise caution when approaching this report. As of now the NZD/USD is situated at 0.7529, down 0.10%.
At 12:30 GMT the U.S. and Canada will present their Trade Balance reports, with both apparently heading in opposite directions. The U.S. looks to increase its deficit to -41.2 billion, while Canada is expected to decrease its deficit to -0.8 billion. Currently the USD/CAD is trading at 1.2121, up 0.22%.
Gold endured one of its most volatile weeks in recent history. The precious metal surged higher on Monday and Tuesday before plummeting astronomically to end the week. This past Thursday alone it dropped by over $30 at one point. The sharp rally at the start of last week came about due to a sharp sell-off in the USD, which fell thanks to a number of weaker-than-expected economic data. Likewise, the bearish flight during the second half can be attributed to stronger U.S. data, which may imply that the Fed was probably correct with their assessment of the economy.
This past Wednesday’s policy statement reflected this as it acknowledged the recent slowdown in activity, but at the same time stated the risk to the overall economic outlook was still more or less balanced as it put the blame on temporary and fleeting factors behind the weak data in Q1. This impacted commodities in a rather negative sort of way as commodities widely fell to end the week. The Fed’s less pessimistic outlook can arguably be understandable especially as the latest jobs data showed that the amount of individuals seeking unemployment benefits dropped substantially; the lowest level in over 15 years. Understandably this has raised expectations that this week’s upcoming NFP report will demonstrate a strong rebound in the number of jobs created in the month of April.
This week’s key economic data releases should keep the volatility in both the Forex and commodity markets elevated. The two biggest events for gold will undoubtedly occur on Wednesday and Friday. On Wednesday, May 6, 2015 at 12:15 GMT the U.S. will release the ADP Non-Farm Employment Change report. Although this is not the final report, a negative outcome will almost definitely send investors running to purchase the precious commodity. On Friday, May 8, 2015 at 14:00 GMT the U.S. will announce the NFP findings along with the unemployment rate. If the result is positive, many are indeed speculating, the USD will unquestionably rise while gold will plummet.
Monday, May 4, 2015
Final Manufacturing PMI (Germany) 7:55 GMT
Most of the manufacturing that occurs in the Eurozone takes place in Germany, which implies that this metric should be very telling. Although the general rule is that if the score is over 50 the industry is expanding many analysts are quite tentative, as estimates place it at 51.9 Germany is the heart and soul of the Eurozone and if it is potentially struggling, the euro will certainly drop.
Tuesday, May 5, 2015
4:30 GMT Reserve Bank of Australia’s Monetary Policy Decision and Rate Statement
For the past few months RBA Governor Glenn Stevens has been proclaiming to all he would prefer the AUD to be lower. Look for similar sentiments to be echoed on Tuesday.
Tentative Global Dairy Trade Price Index (New Zealand)
It is common knowledge that New Zealand is highly dependent upon the health of the milk industry. Unfortunately, this index has not been to kind to the country as of late. Milk related products have dropped substantially over the past three months, and most analysts are expecting a similar result.
22:45 GMT Employment Change & Unemployment Rate (New Zealand)
If recent reports are worth anything to gauge opinion on, chances are that these upcoming results will fall in positive territory. Seven out of the last eight quarterly employment releases met or exceeded expectations. It will definitely be interesting this time around considering the RBNZ’s implications that something troubling is brewing. It would therefore be wise to tread cautiously heading into these two reports.
Wednesday, May 6, 2015
8:30 GMT Services PMI (U.K.)
Just like the U.S., this index is one of the leading indicators of the country’s economic health. Last month’s 58.9 reading was the nation’s strongest since September of the previous year. Another positive release will bode well heading into the country’s upcoming elections. However, this index has alternated between positive and negative over the last six releases. If this particular trend continues, then the expected 58.6 may be a tad too optimistic for this release.
9:00 GMT Retail Sales (Eurozone)
The previous month proved to be quite disappointing for this index as it failed to meet expectations and obliterated a three-month winning streak. Unfortunately, this month’s overall consensus doesn’t seem to promising, with leading analysts calling for a -0.4% plunge.
12:15 GMT ADP Non-Farm Employment Change (U.S.)
Last month spelled disaster for the U.S. as this index fell beneath the 200K line. Although this reading isn’t as important as the actual NFP report, it still provides us with a pretty accurate description of what is to come.
13:15 GMT `Federal Reserve Chair Janet Yellen Speech.
Surprisingly the FOMC meeting this past week sounded slightly less dovish than many anticipated despite the slew of negative economic reports that surfaced in the U.S. over the past few weeks. If Yellen rules out or even hints that a June rate hike is out of the question, the USD will fall while the equity markets will undoubtedly rise.
Thursday, May 7, 2015
All Day U.K. Parliamentary Elections
These elections will without a doubt have an impact on the GBP. Traders should expect heavy volatility throughout the day.
1:30 GMT Employment Change and Unemployment Rate (Australia)
Australian employment has been booming over five out of the last six months, as all of them but one matched or exceeded expectations. However, the RBA doesn’t think that this is likely to continue. If employment significantly surpasses the rather downbeat estimate, the AUD should rise against the majors.
23:50 GMT Bank of Japan Monetary Policy Meeting Minutes
The general feeling is that nothing of relative importance will be discussed at this meeting. However, they reveal that a potential QQE increase is on the table, the Japanese yen will undoubtedly drop.
Friday, May 8, 2015
Tentative Trade Balance (China)
Last Month’s Trade Balance was absolutely horrific, considering many expected a strong result. Over the past few years there have been various rumors indicating a Chinese slowdown, but those rumors were discarded as the country kept on rolling. Perhaps it may be more of the same this time around, but there will certainly be more scrutiny. If the Asian Giant fails to impress the biggest losers will be the AUD and the NZD.
14:00 GMT NFP & Unemployment Rate (U.S.)
The previous month’s horrendous NFP findings ended a streak of 12 straight releases in the +200K realm. If there is in fact any hope of a potential rate hike in June, figures may have to be above 250K.
The world’s most well-funded bitcoin company, Coinbase, has finally opened its exchange and online wallet in the U.K., thanks to surge of enthusiasm for the crypto-currency in the region. Brian Armstrong, chief executive of Coinbase stated that the interest is incredibly strong as opposed to the rest of Europe which has expressed considerably less interest. Coinbase decided to launch its U.K. services after reaching a partnership with an unknown European bank. This launch reaffirms the overall plan to transform the U.K. into a global center for the digital currency. The British government has actually enacted statutes designed to enable more bitcoins to flow through the country. Interestingly enough the Bank of England actually published a report approximately a year ago, which stated that the digital currency poses very little risk to monetary or financial stability.
Coinbase created a sort of ‘wallet’ that allows individuals to send, accept and store payments in bitcoin. Just a few months ago it additionally opened up an exchange, which permits people to change traditional currency into bitcoins. On Tuesday, Coinbase made both of these services available to British consumers, enabling them to convert the GBP into bitcoin. Although the ‘wallet’ is already available in 24 countries, the exchange was previously only available in the United States.
This may appear to be a great accomplishment but bitcoin as a currency has been falling out of favor as reports continue to surface every so often pertaining to illicit transactions and theft. The ‘wallet’ is unencrypted, by default, and consequently becomes a valuable target for theft. Nobody can accurately predict what the future has in store for the crypto-currency; however, until it removes its somewhat sullied reputation it will still face an uphill battle.
The yen rose sharply earlier this morning after an 8 to 1 board vote in which the Bank of Japan kept its monetary policy steady. One board member, Takahide Kiuchi, however, still continued to demand a cut in the amount of government bonds bought by the BOJ to ¥45 trillion annually from ¥80 trillion currently. As of now, the USD/JPY is trading 118.87, down -0.13%.
The USD continues to experience a beat-down, as it fell against all of the majors yesterday. The euro in particular rebounded, and moved to a two-month high against its main counterpart, while closing at a strong 1.1128. This occurred due to the Federal Reserve, as it maintained its rather cautious outlook regarding a potential interest rate hike. A poor Advance GDP quarterly report probably contributed to the Fed’s wary outlook. Currently the EUR/USD is trading at 1.1163, up 0.32%
At 9:00 GMT the Eurozone will announce its CPI Flash Estimate. Traders should note that this accounts for a majority of overall inflation, which is of course important to currency valuation. At this point everyone is more or less familiar with the ECB’s Quantitative Easing efforts. However, more time may be required to get this metric rising. It should come as a surprise to no one if it meets or falls short of expectations.
At 12:30 GMT Canada will release its GDP results with expectations centered at a meager -0.2%. This may be because of a rate cut along with a host of poor economic figures. However, employment numbers have been on the rise for quite some time and oil prices are starting to rise once again. If the GDP reading even exceeds expectations by a mere percentage point the CAD will almost certainly rise against most of the majors.
Twitter managed to disappoint investors as it posted worse-than-expected financial results for the first quarter. Its overall revenue grew at 74% in the first quarter, which was well below the company’s own forecasts and well less than the 97% percent in Q4. Company officials believe the slowdown occurred due to a transition to a new advertising model that priced certain ads based upon potential results, such as whether the viewer or user downloaded an app, as opposed to whether the person simply clicked on it.
The company’s revenue, which mainly comes from advertising, came in at $436 million in the first quarter, up from $250 million in the very same quarter just a year ago. This figure, however, was well beneath the $457 million that many on Wall Street had expected. Twitter additionally continued to lose money in the first quarter to the likes of $162, or 25 cents per share. However, the company reported a profit of $46.5 million, or seven cents per share. This figure does exclude stock-based compensation and certain other expenses. Furthermore, for the year, the company told investors to expect revenue of $2.17 billion to $2.27 billion. That is certainly lower than the $2.38 billion that Wall Street has projected.
Ironically, the financial analytics firm Selerity used the social network to reveal Twitter’s overall revenue of 436 million. Twitter claims the results were leaked and it is in the process of investigating the matter. Shares slumped to $38.38 when they started trading again before concluding the day at $42.27, valuing the company at $27.6 billion. The shares were placed under short sell restrictions, meaning short-sellers were banned from driving the stock down further in order to make a profit. Interestingly enough this isn’t the first time Selerity has released a company’s results early. Just a few years back in 2011, the company obtained Microsoft’s quarterly results early and published them online.
Perhaps, in order to placate their troubled investors, Twitter announced a new advertising partnership with Google on Tuesday. This should make ads, which is the main source of the company’s revenue easier to buy. Twitter additionally announced that it had acquired TellApart, an advertising technology company that specializes in direct-response marketing, which may help its performance with those types of ads. Currently, Twitter is trading at 40.58, down 4.00%.
Apple Inc. revealed that its quarterly profit shot up by 33%, as its iPhone has hooked buyers in China, netting a 72% gain in the number of phones sold in the country. Net income for the quarter was a whopping $13.6 billion, or $2.33 per share, while overall revenue rose over 27% to an astounding $58 billion. Interestingly enough many analysts had forecast second-quarter profit of $2.16 per share and sales of $56 billion.
The company stated that iPhone sales in China outstripped those in the U.S. for the very first time, thanks to the Chinese New Year celebration. An overall surge in demand for the iPhone 6 and 6 plus has Apple on pace to record its highest annual profit since 2012, a company record. This certainly shows that demand for larger-screened smartphones is very much in the spotlight.
Apple amazingly is pulling off a feat that is rarely ever seen in any industry. It is gaining tremendous market share while additionally commanding higher prices. The company on Monday, April 27 stated that it sold over 61 million iPhones in the quarter alone, up 40% from the same period a year earlier. This comes as the average selling price of an iPhone during the latest quarter was $659, up more than $60 compared to a year earlier. Ever since Apple introduced the new phones, approximately six months ago, the company’s overall revenue increased by more than $29 billion, compared with the period a year ago. This is more-or-less equivalent to Nike Inc.’s annual revenue in fiscal 2014. At the end of March, Apple’s cash totaled $193.5 billion, up from $178 billion at the end of December. This feat is greater than the market capitalization of all but 15 other companies in the S&P 500.
Surprisingly enough Apple’s revenue gains abroad come despite the impact of a stronger dollar. This means that sales in other currencies translate into fewer dollars. Apple did mention that the foreign exchange impact reduced its revenue growth by six percentage points, while in the current quarter it expects the currency impact to expand to eight percentage points. Currently Apple Inc. is trading at 131.98, down 1.11%.
Earlier this morning the Australian dollar rose to one-month highs against the USD, following RBA Governor Glenn Stevens’s comments pertaining to the risks that the Australian economy would face if there were lower interest rates. Currently the currency pair is trading at 0.7872 (+0.20%). Interestingly enough the New Zealand dollar dropped against the greenback earlier today despite a slew of disappointing U.S. data last week.
At 9:30 GMT the U.K. will announce its quarterly preliminary GDP findings, which should give analysts a better gauge of the economy’s health. Expectations have it coming in at around 0.5%, which would make it the lowest it has been in the last seven quarters. If it fails to meet expectations, the GBP will almost definitely drop substantially, eliminating the current hot streak. Currently, the GBP/USD is situated at 1.5251 (+0.09%), while the EUR/USD is trading at 1.0887 (-0.04%).
Later on at approximately 12:45 GMT, Bank of Canada Governor Stephen Poloz is scheduled to speak before the House of Commons Standing Committee on Finance, in Ottawa. Traders should expect volatility during his speech. If he does say something a little hawkish the CAD should rise against the majors. As of now the USD/CAD is trading at 1.2099, up 0.11%.
Lastly, at 14:00 GMT the U.S. will present its Consumer Confidence report, with many analysts believing that it will rise to 102.6. Traders should note that financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. If it matches or exceeds expectations, the USD should rise against all of the majors.
Gold fell earlier this morning, one day after posting its biggest one-day gain in over three months. However, it is still above the all-important 1,200 figure, as it currently sits 1,201.20, down -0.17%. The precious metal will be impacted by today’s upcoming Consumer Confidence report scheduled for 14:00 GMT and by the upcoming Fed meeting scheduled for Wednesday, April 29.
Crude oil fell earlier today ahead of the upcoming industry supply data, which will be presented by the American Petroleum Institute later on today. Currently the commodity is sitting at 56.45, down 0.92%.
Indices & Stocks
Earlier today the Nikkei 225 closed at 20,058.95 (+0.38%) despite a particularly weak Retail Sales report from Japan.
European Stocks were broadly lower earlier this morning as investors remained somewhat cautious despite hopes for a breakthrough on Greece’s debt negotiations. France’s CAC 40 (5,241.17, -0.53%) and the DAX (11,970.50 -0.61%) have had particularly rough mornings so far.
BP (LONDON:BP) reported a strong Q1 profit of $2.58 billion earlier this morning, soundly beating expectations, as a tremendous increase in refining revenue counterbalanced a slump in oil production earnings. Currently the stock is trading at 483.15, up 1.31%.
Price Charts are Great Tools
Generally most binary options trading is executed in the short term, simply because it offers an almost immediate payout, so your money is not tied down for a long duration of time. This is where a good price chart becomes an important strategic tool in assessing the actions of any given asset. A good price chart should give you an accurate representation of how quickly prices might change and allow you to see how quickly future trades will materialize.
When using a price chart, you can see minute-to-minute movements of different assets in order to try to accurately predict what those assets are likely to do in the near future. Although it may take some time to get used to reading a price chart in a way that helps you to predict the outcome, but after a while you will start to learn how to spot specific trends in the market. By understanding and using these trends, you can accurately gauge the direction an asset is most likely to travel.
The Candlestick Chart
Perhaps the best type of price chart to use for assessing the movement in any given asset is called a “Candlestick Chart”. A candlestick chart will provide you with the most information on the performance of any given asset over a short period of time. The first thing you need to know is how to read a candlestick chart before you can actually utilize it for trying to predict your assets movement. At first glance, candlestick charts might seem a little complex, but in reality after understanding the essentials, they are very easy to use and unbelievably intuitive.
A candlestick chart will show you the opening, highs and lows and closing value for a set time frame of an asset. The chart is made up of vertical rectangles which are either red or green with lines on the tops and bottoms of the rectangles. The rectangles are called the bodies and the lines are called the wicks. The wicks tell us the highs and lows where the top line defines the upper value of the stock while the bottom line describes the lower value. If the asset closes higher than the opening price, the body is then displayed as a hollow rectangle, with the bottom of the body representing the opening price and the top of the body representing the closing price. If, however, the asset closes at a lower value than its opening price, the candlestick is then displayed as a filled rectangle, with the top representing the opening price and the bottom representing the closing price.
Generally, the longer the body of a candlestick the more extreme the buying or selling of that asset is at that duration in time. Conversely, the shorter a candlestick is, the less movement there is in the price of the asset. A long hollow candlestick shows aggressive buying and a long filled candlestick shows strong selling of any given asset. The longer the hollow candlestick is, the higher the close is above the opening, and conversely the longer the filled candlestick is, the lower the price of the closing is above the opening.
Through simply studying candlesticks over a period of time you can easily see various patterns in the opening and closings and almost always, without any further information, you can frequently determine the next action of the given asset. For example, you may notice on a number of price charts that there is a filled candle, hollow candle, filled candle, hollow candle, etc. If the last option closed higher than it opened, then the probability will be that in the next period of time it will close lower than opening and you would then place a “put” option on that asset, and vice versa. This is probably one of the simplest, yet one of the most successful strategies used by many binary option traders today.
An additional dimension to look at when you are reading the candlestick chart is the wicks (lines or shadows) on the candlesticks. The wicks on a candlestick show you the real movement during the session of buyers and sellers of any particular asset. The longer wick on top and shorter wick on bottom indicates that the buyers dominated the session and bid higher prices, however, sellers forced the price down toward the latter part of the session and the weak close produced a long upper shadow. If however, the lower wick is longer and the top wick is shorter it shows that it was controlled by the sellers during that session, with the buyers driving up the price toward the end of the session with a strong close, causing a longer lower wick.
Through understanding candlestick charts you can definitely use the information to accurately predict how any given asset is going to move. Although you can never be 100% certain as to how it will play out, understanding candlestick charts provide you with a very good chance to succeed.
When Friday came to a close New York oil futures finished modestly lower (57.29, -0.79%) as numerous investors decided to cash out of the market in order to secure gains from a recent rally. Overall Brent and crude oil were able to recover from their slump at the beginning of the week; so much so that on Thursday Brent soared to its highest level since early December. Perhaps the most obvious reason that oil is gaining some momentum is due to a weaker dollar, which has sold off in part because of the rallying EUR/USD. However, many analysts feel that the euro’s new-found strength is unlikely to be sustained in the long-run. Once investors realize that the interest rate differential between the Eurozone and U.S. is growing commodities such as crude oil should drop.
Although crude oil production in the U.S. has started to decrease, it is quite minor compared to the rest of the world where there is a vast oversupply. Additionally Iranian oil could soon make a full return to the already saturated market, after it reached a provisional agreement with the P5+1 earlier this month on a basis that would lift most of the sanctions including those on oil. Thus any shortcomings in U.S. production will likely be offset by increased output from Iran.
However, the short-term outlook for oil is now bullish as many are pointing to the recent 2.1 million-barrel decrease in gasoline stocks. This indicates a stronger fuel demand from motorists ahead of the U.S. driving season, which unofficially commences at the end of May.
When looking at the week ahead we see that on Tuesday, April 28 the American Petroleum Institute, an industry group, will publish its weekly report on current oil supplies. On Wednesday, April 29 the Energy Information Administration will release its weekly report on oil inventories. On Friday, May 1, China will publish its monthly Manufacturing PMI report. This can certainly have an effect on the oil prices as China is one of the largest economies in the world.
Monday, April 27, 2015
22:40 GMT RBA Governor Glenn Stevens Speaks
Glenn Stevens, the Governor of the Reserve Bank of Australia is scheduled to speak at the Australian Financial Review Banking and Wealth Summit later tomorrow evening. Based on his previous statements, he could very well continue to encourage the AUD to drop. Oddly enough the AUD has been doing quite well as of this past week as inflation was indeed higher than anticipated, coupled with the decent employment data from the week before. Seemingly, in order for the Aussie to tank Gov. Stevens would have to state that a future rate cut will soon occur.
Tuesday, April 28, 2015
8:30 GMT Preliminary Gross Domestic Product Q1 (U.K.)
The previous seven GDP reports have all fallen between 0.5% and 0.8%, with expectations this time around for it to come in at 0.5%. If it were to theoretically disappoint and not meet expectations the GBP could fall significantly. This reading could be under even more scrutiny considering the U.K. elections are right around the corner.
Wednesday, April 29, 2015
12:00 GMT German Preliminary Consumer Price Index
Since the heavy decline in oil prices, talk about inflation has sprung up like wildfire among central banks around the world. Surprisingly this has been quite a common topic of conversation in Germany as well. Although the future is brighter for the largest nation in the Eurozone, inflation should not be on anyone’s mind in that region as most analysts assume that the country’s CPI index will come in at a poor -0.1%. If it were to fall even further below that figure, expect the EUR to plunge.
12:30 GMT Advance GDP Q1 (U.S.)
Unsurprisingly many economists are predicting a less-than-stellar reading. However, a surprise to the upside may be what the USD needs to return to prominence once again.
18:00 GMT FOMC Monetary Policy Statement and Rate Decision
Although Janet Yellen said that a rate rise should not be ruled out, that likelihood has almost a zero percent chance of occurring especially after the previous dismal NFP report. If Yellen sounds too dovish the USD may drop tremendously.
21:00 GMT Reserve Bank of New Zealand’s Monetary Policy Statement and Rate Decision
RBNZ Assistant Governor John McDermott recently indicated the possibility of introducing interest rate cuts. Many will be watching carefully to see if McDermott’s mention will be a potential policy decision or simply just a thought in passing. If it is indeed just a thought the NZD could perhaps reverse last week’s losses.
Thursday, April 30, 2015
3:00 GMT Bank of Japan Monetary Policy Statement, Rate Decision, and Press Conference
Many leading analysts feel that nothing spectacular will occur at this conference even with talk of increasing the QQE package. However, earlier this month Prime Minister Shinzo Abe indicated that he was satisfied with the current stimulus level.
9:00 GMT Eurozone Preliminary Consumer Price Index
Although the German CPI report earlier in the week will have a greater impact due to the sheer size and influence it carries this index will certainly carry some weight. If it is worse than expected it will undoubtedly spell trouble for the euro.
Friday, May 1, 2015
1:00 GMT Manufacturing PMI (China)
Although the HSBC Manufacturing PMI generally receives more notice since it is independent of the Chinese government this one should certainly be observed. Consensus is predictably calling for a reading of 50 which would indicate neither growth nor contraction; however, a drop beneath 50 will almost definitely generate a selloff in the AUD and the NZD. If the Chinese government does actually spill the beans this would have terrible implications on those two aforementioned currencies.
8:30 GMT Manufacturing PMI (U.K.)
Despite the GBP taking a bit of a beating as of late, this month’s Manufacturing PMI should enable it to rise. Consensus is calling for it to jump this time around, which should provide the GBP a little spark heading in to next week’s elections.
14:00 GMT ISM Manufacturing PMI (U.S.)
Because this is a leading indicator which rates the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories it should give us an early feel what the ever-important NFP report may have in store. Although there will be more pre-NFP releases that will arrive next week, this is could paint a picture for what investors think the rest of the figures will show.
There are plenty of people make money trading binary options however, it is not as simple as snapping your fingers. It is easy to dream of being smarter and luckier than everyone else. However, realistically speaking, trading is not that easy. Do not fall into the trap and assume all you need to do is to simply go on a hot streak and become the new up-and-coming trader on the block with an, ‘I am invincible’ sort of mentality. That is, more often than not destructive and will almost certainly cause you to lose your investment. Making money trading binary options on a consistent basis requires serious dedication along with a commitment to constantly learning and honing your skills.
Learning doesn’t only mean scanning a few quick articles or perusing the latest binary options trading manual. Rather, it means learning from your wins, losses (believe me there will be some) and from your hard-earned experience. You always have the potential to learn from each and every one of your trades regardless if they were miniscule or massive. Bearing this in mind, here are a few simple but important tips that will enable you to make money when trading binary options.
1) Always trade with a sense of purpose. Many individuals will often find themselves trading based on a feeling, or worse, out of sheer boredom. Never open up a trade without realizing as to why you are executing it. Before you begin think over the purpose of the trade. Is it strong? Is there a strong probability that you will be successful? Are you hoping for a good outcome or considering the most likely outcome?
2) Do not let your emotions influence the way you trade. Being a successful binary options trader always means thinking rationally in a systematic sort of way. Losses will occur, it happens to the most successful traders. If you feel yourself getting frustrated, take a break and continue when you become clear-headed.
3) Perhaps the most important tip is to learn from your mistakes and do not repeat them. Remember no one is perfect, everyone falters. However, it is the wise that learn and ultimately make money. Do whatever it takes in order not to make mistakes. An easy way is to keep a trading journal. Whenever you learn or experience something new, jot down one or two sentences.
Binary options are rapidly becoming incredibly popular in the financial world. However, successful binary options traders are those who are disciplined and dedicated. If you possess these traits then you will find binary options to be enjoyable and profitable.
A few months ago on January 15, 2015 the Swiss National Bank stunned investors and traders all across the globe by suddenly announcing that it was abandoning its three-year-old currency peg of 1.20 francs to the euro. Subsequently, the franc shot up over 30% against the euro. This peg was first introduced in 2011 and was pivotal in Switzerland’s effort to essentially to pin down the franc’s value against the dismal euro as increasingly nervous traders and investors abandoned the euro and other volatile markets for a much more stable Switzerland.
Understandably a very strong franc would negatively impact the Swiss economy, which heavily relies on exports. The Eurozone is Switzerland’s largest trading partner and a weakening euro meant that Swiss products were becoming swiftly and increasingly unaffordable, which caused Swiss exporters to suffer substantially. In fact only a short while ago the Swiss National Bank restated its pledge to continue to keep the franc in check by purchasing the euro in, “unlimited quantities” if need be. Needless to say this has many people pondering as to what exactly caused the Swiss to suddenly abandon the plan.
Swiss National Bank (SNB) Chief Thomas Jordan explained that the euro cap in essence served its purpose, which was to provide Swiss manufacturers with a reasonable timeframe to adjust to the situation. He claimed that this was not sustainable in the long-term due to numerous developments, such as the ever strengthening U.S. dollar, and fears that the ECB will inevitably pull the trigger on its Quantitative Easing program, which will flood the markets with hundreds of billions of euros and create a very costly venture for the Swiss if they were to keep up such a program. At one point it was reported that the SNB was purchasing half of the entire sovereign bond issuance of the Eurozone in order to preserve this franc to euro peg. However, in order to combat the franc from skyrocketing out of control the SNB stated that it will start charging foreign central banks to keep francs on deposit in Switzerland as may view the franc as a traditional safe haven in times of turmoil.
It seems that the Swiss view the euro as, ‘the sick man of Europe’ and thus wish to distance themselves from the currency. Of course such a move comes with its fair share of far-reaching consequences and implications.
The euro suffered its biggest one-day plunge against the Swiss franc in history and at the same time fell to an 11-year low against the U.S. dollar. Additionally, Swiss products in every single sector became much more expensive. As the franc soared against all other currencies, Swiss stocks fell tremendously. Many investors quickly sold shares, affecting companies ranging from Nestle to the chemical company Syngenta. Furthermore, many investors flocked to purchase gold and the Japanese yen as a precaution against increasing volatility and instability. Those two assets already have been on the rise thanks to anticipation of Europe implementing its QE policy, the World Bank slashing its fiscal 2015 global growth forecast and the collapse in oil prices. The day Switzerland made their shocking announcement gold prices jumped approximately 2.8%, for the biggest increase this year. Additionally, the yen had completed its biggest weakly gain since May 2011.
Many traders and investors in the forex market certainly lost tremendously if they took a gambled and leveraged the franc at a high figure. Numerous foreign exchange trading platforms stated that their clients lost millions on Thursday January 15, 2015. One foreign exchange brokerage in New Zealand even stated that it was ceasing all operations because heavy client losses caused it to breach regulatory capital requirement.
As of now it is too early to say whether the SNB made the right move. However, aside from catching everyone off-guard, it did give traders a temporarily clear picture as to where they should perhaps invest at least for the short term. Presumably this would be a good time to measure the reliability signal service providers based on this surprising turn of events.
The JPY fell slightly against the USD early this morning despite an incredibly positive trade balance report, indicating a surplus, the first in nearly three years. March trade data revealed a surplus of ¥229.3 billion, a rise well above the meek ¥50.0 billion expected. Exports rose 8.5%, reaching expectations and imports declined over 14.5%. Currently the USD/JPY is situated at 119.60, down 0.06%. Additionally, earlier today the Aussie increased significantly after Australia’s quarterly CPI met expectations at 0.2%. As of now the AUD/USD is trading at 0.7766, up 0.70.
At 8:30 GMT the Bank of England will have their monthly monetary policy vote count. Many feel that nothing will change as the voters most likely voted unanimously to keep the rates static. Interestingly enough, towards the end of fiscal 2014, there were a couple of MPC voters who thought that a rate increase was certainly appropriate. However, due to a lack of inflation in the U.K. those voters will probably remain with the majority. Traders should expect to see volatility leading up to the vote count.
Later on at 14:00 GMT the U.S. National Association of Realtors will present its Existing Home Sales report. Although it under-performed over the past four months most analysts believe that it will be relatively strong this time around. If that ends up being the case we may see a mini USD resurgence. Currently the GBP/USD and the EUR/USD are trading at 1.4943 (+0.08%) and 1.0761 (+0.23%) respectively.
Gold fell earlier this morning as many investors are concerned about a potential Greece exit from the Eurozone community as opposed to yesterday when the precious metal edged up. As of now gold is trading at approximately 1,202.80, down 0.04%.
Crude oil is trading at 56.03 (-1.03%) adding to yesterday’s losses in which it dropped nearly 2.0%. This comes ahead of the Energy Information Administration’s weekly supply report scheduled for 14:40 GMT. Additionally, an end to the Saudi Arabian military campaign in Yemen helped lower prices.
Indices & Stocks
The Nikkei 225 (20,133.90, +1.13%) finished in the green today thanks to a much better than anticipated trade balance report, in which Japan recorded a surplus for the first time in 33 months. This marks a 15-year high for Japanese shares.
Currently the S&P 500 Futures and the NASDAQ are trading at 2,098.45 (+0.36%) and 4,444.10 (+0.35%) respectively. The Dow 30 on the other hand had a bit of down-day yesterday closing at 17,949.59, down 0.47%. Lastly, the DAX is trading at 12,009.50, up 0.59%.
Yahoo (NASDAQ:YHOO) disappointed investors as its net income fell to $21.2 million, or 2 cents per share for Q1, from $311.6 million, or 29 cents per share, a year earlier. Revenue fell to $1.04 billion from $1.09 billion. Currently Yahoo is listed at 44.49 (-0.37%), with After-hours trading at 44.81 (+0.72%).
Yesterday International Business Machines (NYSE:IBM) Corp posted over a 12% first-quarter revenue drop-off. This comes as the company tries to remove unprofitable businesses in order to focus on cloud-computing initiatives. Additionally a stronger dollar severely dented its overseas earnings. This was the 12th straight quarterly descent in total revenue for the company.
For the past three years IBM’s revenue has been shrinking considerably as it tries to eliminate low-profit businesses such as low-end servers and semiconductors along with cash registers. It is now focusing on high-demand areas such as cloud services and security software. However, these new business ventures have so far been unsuccessful in making up the lost revenue.
Although many investors are still displaying patience despite IBM’s slow alteration there are some signs that there are those that are apprehensive after over a 13% decline in its shares over the past year. There were even a number of top shareholders that sought help from influential investors in order to spark the company.
To their defense, IBM did state that it made over $7.7 billion in total cloud revenue over the past 12 months, a sharp increase from the previous year. Although net income fell slightly this past quarter to $2.33 billion compared to $2.38 billion a year previously, profit did rise on a per share basis to $2.35 from $2.29. Additionally, total revenue dropped to $19.6 billion from $22.2 billion, which was for the most part in line with analysts’ average estimate of $19.64 billion.
Interestingly enough shares in IBM rose in after-hours trading despite its 12% decline in quarterly revenue. Shares gained by as much as 0.32% to 166.70. IBM ended Monday’s trading session as the top performer on the Dow Jones, gaining 3.42% to finish at 166.16.
Oil prices came charging out of the gates early this morning as prices continued to build on last week’s gains. Investors have seemingly piled back into the markets after the latest data from the Energy Information Administration (EIA) showed U.S. stockpiles grew at a poor pace compared to the start of the year. This past week stockpiles only grew by 1.3 million barrels compared to the projected 3.5 million. This occurred thanks to a steady drop in the number of U.S. rigs digging for crude, which clearly indicates that there will be a lower supply later in the year. This is decline is a record setting 19th straight week for the U.S. oil drilling, the lowest since 2010.
Although this week’s drop was not as heavy as was anticipated, perhaps implying that the collapse in drilling may be coming to a halt, many feel that an eventual recovery in U.S. oil drilling may never yet again reach or eclipse last year’s feverish pace.
Additionally, China’s latest stimulus measure certainly strengthened the market demand for oil as China introduced a stimulus measure in order to jumpstart their seemingly troubled economy. China’s central bank on Sunday decided to limit the amount of cash in which banks must hold as reserves.
There are those who believe that despite the decline in the amount of U.S. oil, prices will only reach the mid $60s and mid $70s for crude and brent oil respectively because the global oil market is well supplied.
This upcoming week promises to be quite telling as on Tuesday, April 21 the American Petroleum Institute will publish its weekly report on oil supplies. On Wednesday 14:30 GMT the EIA will give its weekly report concerning the U.S. oil inventories.
After a rather tumultuous week in which the EUR/USD made significant strides capping the week at 1.0808, gaining 1.89% while the AUD and the NZD took a bit of a hit here is this week’s Forex outlook:
Sunday, April 19, 2015
22:45 GMT Consumer Price Index Q1 (New Zealand)
Over the past four or so quarters New Zealand has swung and missed on this important economic indicator, which accounts for a majority of overall inflation. Therefore it shouldn’t come as a surprise that many analysts are predicting a reading of -0.2%, indicating deflation, which is of course not good for the NZD.
Tuesday, April 21, 2015
9:00 GMT German ZEW Survey & Economic Sentiment
Although this has steadily risen for the past number of months, it actually slowed according to the last two releases. A number of analysts are assuming it will rise yet again, but at a limited pace. Lowering the sentiment could actually provide a boost to the euro if it exceeds expectations.
23:50 GMT Trade Balance (Japan)
Since early 2011 Japan has actually run a trade a deficit. Although that isn’t expected to change upon thus upcoming release or the next, hitting a surplus is something that could potentially occur in the not so distant future. Economists are predicting a significantly better result than the previous month. If this month’s report shows that a surplus is potentially within reach we may see some tremendous movement in the yen.
Wednesday, April 22, 2015
1:30 GMT Consumer Price Index Q2 (Australia)
Australia along with the rest of the world is struggling with inflation. Naturally if Australia‘s CPI report ends up being higher than expected then it will be better for the struggling AUD. This may be too much to ask for, considering that the trend has been down as of late.
14:00 GMT Existing Home Sales (U.S.)
The U.S. has experienced a rather unpleasant slew of poor economic reports and many are wondering if the economy will soon significantly regress. Although Existing Home Sales has missed the mark for the past four months, it is expected to be quite strong this time around. If it indeed is, perhaps it will trigger the start of a U.S. resurgence.
Thursday, April 23, 2015
1:45 GMT HSBC Flash Manufacturing PMI (China)
Economic growth In China has been declining in recent months and this report has certainly contributed to its freefall. It has remained under 50 for three out of the last four months. Most analysts feel that it will come in below that figure yet again. If that occurs expect to see the AUD and the NZD decrease.
8:30 GMT Retail Sales (U.K.)
This has been one of the greatest strengths of the U.K. over the past number of months. However, last month saw only a 0.7% increase and this month the overall consensus stands a 0.4%.
14:00 GMT New Home Sales (U.S.)
Interestingly enough the New Home Sales unlike the Existing Home Sales has experienced three straight better than anticipated results as last month’s 539 thousand marked a seven-year high. If this streak continues the USD should experience a nice boost.
Friday, April 24, 2015
All Day Eurogroup Meeting
Are we looking at the end of Greece as we know it? If there is even a hint that Greece will likely default expect to see the EUR/USD come tumbling down. However, as history has shown us before some sort of a compromise should be reached.
12:30 GMT Durable Goods Orders (U.S.)
If one were to look back at the last 12 reports one would realize that this is one of the hardest readings to accurately predict as six exceeded expectations while six underwhelmed. Although forecasts are calling for a 0.7% increase it shouldn’t surprise anyone in the slightest if it goes the other way.
Bitcoin, known as the world’s first decentralized digital currency is now valued at around $3.4 billion. This is quite an achievement considering the fact that it was only released in 2009. Many companies and investors have worked and are continuing to work in order to demonstrate that the technology can lower the costs of financial services but at the same time make it more useful. However, competition may be looming.
In order to understand the potential competition one has to understand the dynamics of Bitcoin transactions. They occur through software run on thousands of computers connected over the internet. This complex network uses a series of rules and cryptographic principles to in most cases reliably verify numerous transactions even though no individual or organization is in control. Interestingly enough when it was first introduced to the world one of the main points in the overall design was that there is a way for a collection of individuals that don’t necessarily trust one another to jointly create and enable a system to validate transactions. However, in reality the way Bitcoin accomplishes this makes it slower and much less secure than is desired for something that is actually meant to become part of the global market’s financial infrastructure.
Stanford professor David Mazières believes that he has a much faster, more flexible and most importantly more secure alternative. Just a little over a week ago he released his design for his system in a white paper. Dubbed SCP, it is meant to effectively make financial services cheaper and more widely accessible around the world. Furthermore Mazières believes that his new system will eliminate security the security problems that Bitcoin is undergoing. Each individual running the software must properly identify a few other trusted participants to properly apply the cryptographic rules used to validate transactions. The software will only recognize transactions once a certain majority fraction of its trusted partners have additionally signed off. In essence SCP’s unique selling point is that it should remove many of the security problems that Bitcoin is experiencing.
Although Bitcoin currently is the main decentralized currency, considering its security problems and high volatility it would not at all be that surprising that sometime in the not so distant future SCP will come to fruition and lay claim to the throne.
Luxury automaker BMW is in the midst of a bitter disagreement with its distributors in China, as a number of dealers are claiming that they will miss projected sales targets unless they receive better and more realistic financial terms from BMW. Earlier this week Chinese dealers sent the German luxury car maker a letter stating that BMW must lower wholesale prices, set more realistic sales goals and lengthen grace periods for payment in order to assist a number of dealers who are stuck with high inventories amidst weakening demand.
In an attempt to at least rectify part of the problem, BMW in January agreed to offer its sellers in China subsidies of $820 million many dealers have stated that they have for the most part exhausted those subsidies in the form of discounts to their consumers in the first quarter. From the outset BMW is aiming to sell at least 500 thousand automobiles in China this year, approximately a 10% rise from 2014. A number of dealers are complaining that it is to unrealistic as there are so many cars from the previous year still sitting in showrooms across China.
Although BMW claims that it keeps a close eye on the market and economic situation in China, some dealers feel otherwise. China’s economic growth has been substantially slowing in the past number of months, as it expanded during the first three months of fiscal 2015 at its slowest pace in over six years. Furthermore, there has been a wide anticorruption crackdown on government officials, which has considerably lessened the amount of luxury goods purchases. This has of course has affected numerous companies in the automobile industry, including BMW. Additionally data from the official China Association of Automobile Manufacturers indicate that foreign car maker sold only three million vehicles. This marks just a 1% gain in the first quarter compared to a year earlier.
Currently BMW’s stock is trading at 115.00, down 0.35%. Although it has made some nice gains since the beginning of the year it has started to taper off. It will certainly be interesting to see how BMW handles this current situation and how it may affect its stock.
Ever since mid to late fiscal 2013 Samsung has been wading through rather choppy waters. Because of the steep competition,stemming from the smartphone industry in particular, the company is being tested across all market segments, whether they are the high end, mid and low end markets. Companies such as Apple has been challenging Samsung in the high end market while companies such as Lenovo have hurt Samsung in the mid to low end markets.
Due to the ongoing and perhaps ever-growing competition in the overall smartphone market, Samsung’s quarterly earnings should take a substantial hit according to a number of analysts. The company itself recently estimated at the end of March that its operating profit is at approximately $5.4 billion for the end of the quarter. This is over a 30 percent decline from a year ago. Additionally the company recently projected that its sales may only reach $43.2 billion which would be down 12 percent from the previous year.
However, the future may not be that bleak for Samsung as it may receive the chance to redeem itself with the Samsung Galaxy S6 and Galaxy S6 Edge. Although they are both more expensive than Apple’s iPhone 6 and iPhone 6 Plus, they are abundantly rich in features, which has attracted many buyers. Samsung has offered consumers numerous ‘Galaxy Gifts’, which includes apps such as Uber, Kindle, Evernote and Microsoft One Drive. Additionally, Samsung’s music streaming service, Milk will come pre-installed. Furthermore, as claimed by Samsung, the new Galaxy smartphones do offer better battery life compared to all of its prior models.
Interestingly enough, the clincher for Samsung may be a future acquisition of Advanced Micro Devices (AMD). This potential acquisition will certainly enable the company to take a stronger stand in the face of competition and certainly boost its share prices.
On Tuesday the euro enjoyed a particularly nice rally against the dollar, halting at least temporarily a steady decline that it has endured for a number of months. This occurred due to a few poor reports that emanated from the American sector. Yesterday the U.S. posted its Core Retail Sales, Retail Sales, and PPI findings, all of which were worse than expected. However, USD’s losses would have been tremendously worse if the U.S. economy showed actual signs of regressing. These reports proved that the economy is picking up, but not at the pace many analysts predicted.
The euro could in fact capitalize on its gains made yesterday, with the Minimum Bid Rate set to be announced at 11:45 GMT. Afterwards, at 12:30 GMT the ECB will conduct a press conference. Traders should note this is the primary method the ECB uses to communicate its monetary policy. If the implications sound more hawkish the euro should rise against most of the major currencies. However, considering the euro-zone is in the midst of its Quantitative Easing that is not likely. Currently the EUR/USD is trading at 1.0652 (-0.05%).
The Aussie continues its plunge thanks to another negative report from China. Earlier this morning China released its worse than anticipated Industrial Production figures, which dropped to 5.6%. This had negative repercussions on Australia and New Zealand, both of whom are major trading partners with China. Currently the AUD/USD is situated at 0.7599, down 0.37%.
Lastly at 14:00 GMT the Bank of Canada will announce its interest rate decision, followed by a press conference. Many leading analysts are unsure how this will play out as data over the month has been a rather mixed bag. Nonetheless, traders should expect a fair amount of volatility leading up and during the decision and press conference.
Crude oil has risen the most since February 17, as it is currently trading at 54.15, up 1.59%. Today at 14:30 GMT the U.S. Energy Information Administration will present their Crude Oil Inventories report.
Gold futures fell slightly yesterday despite the fact the USD dropped. Generally gold and the dollar are inversely related. As of now the precious metal is trading at 1,191.50, down 0.09%.
Indices & Stocks
The DAX (12,297.50, +0.60%) and the CAC 40 (5,248.50, +0.53%) are currently trading higher this morning as many in the euro-zone are anticipating the ECB’s upcoming policy statement. Yesterday the Dow (18,036.70, +0.33%) and the S&P 500 ended higher, thanks to energy stocks and a slew of March- quarter earnings reports that bested modest expectations after concern regarding a strong dollar. Currently, the S&P 500 and the NASDAQ are trading at 2,090.15 (-0.04%) and 4,395.10 (-0.06%) respectively.
Shares in Intel (NASDAQ:INTC) jumped more than 3% in after-hours trading immediately after the company posted flat earnings for the first quarter yesterday afternoon. Intel reported net profits of over 1.99 billion, slightly up from the 1.93 billion it earned during the same period in 2014. Currently the stock is positioned at 32.54, up 3.33% (pre-market).
Cause for Concern?
Recently David Bloom, Global Head of Currency Strategy at HSBC claimed that U.S. dollar’s bullish run is drawing to a close. While this may sound startling to some their line of reasoning may not be that farfetched. If we examine the following points there may be what to be concerned about.
- As of now the only currency that appears to be more overvalued than the USD is the Swiss franc. Since January of last year the greenback has moved up swiftly to claim the second most overvalued currency.
- If one takes a look at the previous four Fed tightening sequences, each particular time the USD fell immediately after the first rate rise. In other words once the Fed raises the rates the dollar falls considerably.
- Interestingly enough the economic surprise index for the euro has been considerably outdoing the U.S. economic surprise index in fiscal 2015. If one were to look carefully the euro-zone is on the rebound, which is a complete reversal of fiscal 2014.
- The U.S. may not be able to tolerate a strong dollar considering that the Fed’s favored measure of inflation continues to remain well below target. If the U.S. economy would theoretically expand at a quick enough rate it would generate sufficient internal inflation to counterbalance the disinflation it is causing because of the stronger dollar. Additionally, a stronger dollar is having repercussions on a number of emerging markets.
Not so Fast
However, as compelling as these arguments might be don’t open up sell positions on the USD just yet. There are still a few ways the greenback can still continue its bull-run.
- There has been talk about a number of countries such as Greece leaving the euro-zone. If that were to occur or if these rumors should pick up steam the euro could collapse based on the fear of such a breakup.
- Currently, the Japanese yen is in a weak state. At the end of October Bank of Japan Governor Haruhiko Kuroda introduced a form of Quantitative Easing (QE) in order to stimulate their economy. So far it is debatable if it is working to say the least. If the yen were to crash due which is not an unrealistic possibility, the dollar would certainly rise.
With no clear-cut answer perhaps the best solution is to tread carefully. Although a USD collapse may not be imminent, it may not be long before we start to see some significant pushback.
What is a Technical Analysis?
A technical analysis can be best defined as the use of charts and historical prices in order to study market price activity and evolution. The ultimate objective is to use this information in order to attempt to forecast future price trends.
Types of Technical Analyses
When using a technical analyses to properly calculate the possible price movement of an underlying asset, traders can generally use time price charts and volume price charts. Price charts can be used to help in tracking the movements of all different types of underlying assets, regardless of whether these are commodities, currency pairs, individual stocks, or market indices. Although there are additionally a number of different types of charts, such as bar charts, line charts, and histograms, most of these will normally plot the price of the underlying asset either by volume or by time.
Volume Price Charts
Volume price charts, one of the most widely used charts in a technical analysis will plot a particular price level after a certain number of contracts have occurred or a certain amount of a commodity has been traded. These charts will more often than not have fewer entries, and will thus provide more of a focus on times when the trading levels are more normal. When the volume of a particular underlying asset is low, it is possible that sudden changes in price could in fact happen if large trades are undertaken on that asset. In addition, a sudden increase or decrease in trading volume can certainly indicate that the price of the underlying asset is likely to move up or down in the near term.
Similarly, the end of a market move is oftentimes initiated by an increase in volume that will reach a peak and then suddenly drop. Any signs, particularly fluctuations in an assets volume are important to be aware of as short-term price movements in the underlying asset are most likely to happen. Regardless of the type of chart that you may decide to use, however, it is always more useful if the data is up-to-date and in as close to real time as can be.
Time Price Charts
Time price charts are very essential when performing a technical analysis. This particular chart will plot the various price movements of the underlying asset over a particular duration of time. The choice of the time price chart that you may wish to use on your technical analysis can depend upon several factors, such as the type of trader that you are, and the duration of the binary options expiry. For example, if you wish to take on short-term trades, price changes at 60-minute intervals or less can help in predicting price movements that are likely to occur within the next one-hour period of time.If you wish to conduct longer-term transactions it may be better to study price changes that have been plotted on a daily or weekly basis. In these cases, you may want to see the open price of the underlying asset at the beginning of the period, coupled with the high and low prices both during and after the end of the time period.
Popular Technical Trading Patterns
In a technical analysis, technical trading patterns can often vary. Some may take a number of months to form whilst others can be seen on just a one minute price chart. The length of time that these patterns take to form are an indication of how influential they are likely to be and will help determine the expiry time of the binary options. Generally, the most reliable technical price patterns are additionally the most popular. These include ‘double tops’ and ‘double bottoms’ as a preferred reversal pattern used by numerous traders. This pattern forms when price makes a high or a low, pulls back and tries once again. The failure for the price to move any higher on the second attempt creates the potential setup. When this price reverses beyond the original pullback it confirms that a new trend in the opposite direction is more than likely.
Another popular pattern used by many traders when conducting a technical analysis is the head and shoulders and ‘triple top and bottom’ reversals. Similar to the double top and bottom signals these both form a triple attempts for price to push higher or lower before eventually giving up and reversing. These technical patterns can be confirmed by using a technical indicator. These indicators are applied to price charts and can demonstrate the inherent strength or weakness of the current price. Additionally they can potentially predict the likely momentum in the future. Combining technical indicators and chart patterns when performing your technical analysis can help pinpoint some exceptional trading opportunities.
The AUD/USD (0.7579, -1.34%) weakened significantly earlier this morning after a rather shocking and disappointing Trade Balance report surfaced in China. Many expected a much larger trade balance surplus than a measly 3.1 billion. Although China did not finish the previous month in the negative, many leading experts found this development rather disconcerting. Considering that China is Australia’s chief trading partner, this had dire consequences on the AUD when compared to other currencies. This additionally affected New Zealand as the kiwi dropped against most of the majors including the USD (0.7446, -0.92%). China as it is known is one of New Zealand’s most important trading partners.
In Japan the yen declined against most of the majors after a rather bleak Monetary Policy Meeting Minutes forum in which a number of board members from the Bank of Japan expressed their concern regarding its bond buying pace. Currently the USD/JPY is trading at 120.72 (+0.43%).
The GBP/USD (1.4599, -0.24%) continued its freefall earlier morning as it slipped to a five-year low against the dollar. The pound hasn’t experienced such a blow since June 10, 2010. On Friday the GBP came under tremendous pressure after official figures displayed that U.K. industrial production only increased by 0.1%, compared to an expected 0.4%. This worse than anticipated increase in industrial output can mainly be attributed to a 12% decline in annual oil and gas production, the largest decrease since August 2013.
Crude oil futures rallied today as disappointing Chinese trade data added to speculation that policy makers in Beijing may decide to implement further stimulus packages. China is the world’s second largest oil consumer after the U.S. and has significantly increased its demand. Currently crude oil is trading at 52.69 per barrel, up 2.02%.
Thanks to disappointing trade data from China gold prices rose substantially earlier this morning. Interestingly prices rose for the first time in three sessions on Friday, due to speculation that upcoming U.S. data this week will show that the U.S. economy slowed significantly in the first quarter. Currently the precious commodity is situated at 1,198.30, down 0.52%.
Indices & Stocks
European indices such as the DAX dropped earlier this morning presumably because investors began to eye the European Central Bank’s upcoming monetary policy meeting, scheduled for later on in the week. The DAX slipped by as much as 0.17% but is now sitting at 12,380.30 (+0.05%).
Rumors have been circulating that Google (NASDAQ:GOOG) is looking to purchase the social media giant, Twitter (NYSE:TWTR). This caused Twitter to jump by over 4% last Tuesday. Seemingly this supposed move makes little sense from at least one standpoint: Google recently recruited a new CFO, Ruth Porat , from Morgan Stanley in an apparent effort to control their glaring costs. However, many individuals seemed to have bought the rumor as Twitter shares rose tremendously. Google finished last week at 540.01, down 0.14%.
Just a few days ago Iran and the P5+1 countries consisting of the United States, United Kingdom, France, China, Russia and Germany agreed to a seemingly historic deal regarding Iran’s nuclear proliferation. Due to this many are now speculating as to whether this will lead to an agreement that would ultimately free up the country’s oil output. With oil prices already in the midst of a steep decline, seemingly this would only cause prices to decrease even further. However, many leading analysts are of the opinion that prices will not be impacted for at least another year, despite a kneejerk drop in crude prices immediately after the announcement on April second.
Since the European Union imposed sanctions upon Iran approximately three years ago, Iran’s oil exports have fallen more than 1 million barrels per day. This in itself is rather significant, considering the world crude supply presently exceeds demand by over a whopping 2 million barrels per day. This gross oversupply was one of the factors that caused oil prices to plummet to six-year lows last month.
Although the framework of the agreement certainly forges a path towards ultimately increasing Iranian oil exports, this will undoubtedly take some time. Assuming the final agreement with Iran even occurs, coupled with the time then required to remove the sanctions, analysts are claiming that Iran will almost definitely be unable to increase its output more than 500 thousand barrels per day by the end of 2016. If this is indeed the case the Iran accord is very unlikely to affect oil prices in the near future. In other words if the price of oil does continue to dip, it will have nothing to do with Iran, at least for now.
What is Bitcoin?
Bitcoin, first launched in 2009 is considered to be the world’s “first decentralized currency “. It is filled with a number of intriguing features that make it particularly innovative and different from other payment methods:
- Bitcoin payment processing is conducted through a private network of computers, and every single transaction is recorded in a public record called the “blockchain”.
- It is categorized as a ‘crypto-currency’ because it uses a type of military-grade cryptography to secure all transactions. Bitcoin has absolutely no government affiliation, central authority or banks.
- It is the first decentralized payment network, based strictly on peer-to-peer technology.
However, before choosing Bitcoin as a trading asset, there is one important aspect you should certainly be aware of.
With prices rising from $100 to $1,240 and then decreasing to around $375 in a relatively short span of time, Bitcoin quickly earned a reputation of being tremendously volatile. There are a number of different reasons for this phenomenon, but only a few will be focused upon.
Over the last year more and more governments stated that Bitcoin is likely to be regulated in the near future. Announcements made by the IRS stating that the currency should be considered an asset for tax purposes generated an increased amount of volatility. This is due to a slew of negative incidents such as the infamous Silk Road that was a platform in which Bitcoin was used in conducting drug transactions. Another troubling event was the bankruptcy of Mt. Gox, one of the very first Bitcoin exchanges. Both of these incidents and public panic rapidly caused Bitcoin’s value to plummet. However, many pro-Bitcoin investors considered these events to be evidence that the market was maturing, which subsequently drove up the value once again.
Additionally Bitcoin’s volatility can be attributed to its security vulnerabilities. The Bitcoin community will sometimes expose these weaknesses in order to produce a massive open source response in the form of security fixes. In other words Bitcoin developers must reveal these security concerns to the general public in order to generate viable solutions. Although it has produced fantastic results, Bitcoin embarked on a roller coaster ride. In April 2014 alone, the digital currency plunged over 10% versus the USD.
Bitcoin offers traders another unique way to profit. However, you should be aware of the popular adage, “an educated consumer is the best consumer”. Therefore, before you start trading this asset you should fully understand its dynamics.
What is a Fundamental Analysis?
Fundamental analysis in forex and binary options studies the underlining elements that can influence the economy of a particular unit, such as a currency or stock. It tries to predict price action and various trends by analyzing a number of economic indicators or reports, societal, government policies and a whole host of other factors. This is quite an effective way of forecasting economic conditions and should give a potential investor a nice vibrant picture of an economy’s overall health and the forces behind it.
Some economic reports garner a lot of attention such as unemployment figures, which tend to be well publicized. Other reports, receive much less coverage. However, each and every indicator serves a distinct purpose and can certainly prove to be useful. Here are four major reports which tend to have significant impacts upon the economy and more importantly on potential profit implications if acted upon properly.
- Gross Domestic Product (GDP) - The GDP is considered to be the most extensive measure of a country’s economy, and it soundly represents the entire market value of all goods and services produced in a country over the course of a given year. It is widely considered to be the primary gauge of the economy’s overall health.
- Consumer Price Index (CPI) – The CPI measures change in the prices of consumer goods across over 200 different categories. This particular report, when compared to a nation’s exports, can be used to examine if a country is earning or losing money on its goods and services. Furthermore, consumer prices account for a majority of overall inflation.
- Retail Sales – The retail sales report measures the total receipts of all retail stores in a particular nation. This is of course derived from an assorted sample of retail stores throughout a country. This is a timely indicator of vast consumer spending patterns that is almost always adjusted for seasonal variables. It is often used to assess the immediate direction of an economy. Often revisions to advanced reports of retail sales can cause a tremendous amount of volatility.
- Unemployment - People are basically what drive economic growth; therefore, unemployment is the backbone of economic growth. When unemployment levels increase, it has a devastating effect on economic growth; consequently, when the labor market contracts and unemployment increases, interest rates are often cut in an attempt to increase the money supply in the economy and stimulate economic growth.
Remember, these four reports alone do not necessarily dictate what will occur in the global trading sphere. Nothing is ever foolproof. The markets are susceptible to many different factors and outside influences that could cause it to go up or down. However, these four aforementioned factors can almost certainly give you an indication as to where the markets are heading. For example if the CPI in the Eurozone came in worse than expected you can assume that the euro, in the short-term will drop.
Lastly, and perhaps most importantly, always know when these integral reports are due to come out. This can be done by reading an economic calendar, which will list the date and time when these and many other reports are due to be announced. Ultimately understanding and reviewing a financial calendar should give you an idea as to when to place your trades.
Super Turbo Options
We are thrilled to announce that OptionBit will now have Super Turbo Options
Super Turbo Options, allows traders to place trades within 45, 30 and 15 seconds’ time frame. The new Super-Turbo feature is a trading tool that offers you even shorter time frames for your trades, with a 15/30/45 seconds’ time frame that are being added to the existing 60/120/300 seconds’ time frame. It allows you to enjoy the shortest/quickest options that are available today. Using this feature is no different than using the classic trading mode. You select the asset of your choice, the time frame, and specify your trade amount.
The main advantage is that you can essentially trade as much as you want. Theoretically you could make a trade every few seconds, or basically as fast as you can click your mouse. This allows you take advantage of any short-term opportunities you may see, without needing to worry about finding an expiry time that suits your timeframe. Trade multiple assets and you could have multiple trades on at one time, all expiring within a very short timeframe.
From a trading perspective Super Turbo options allow you to potentially capitalize on strong market moves effectively. Suppose the EUR/USD is having a very strong morning, while you still need to time your entry, chances are the EUR/USD is still going to be strong 30 seconds from now. Therefore, these options let you jump into the flow of the market, and get out of the trade quickly before a major reversal occurs. This enables you to potentially seize every possible opportunity.
We are excited to introduce Dynamic Payout, the latest trading tool added to the OptionBit Trading Platform.
The Dynamic Payout feature provides traders with the possibility to change their payout (return) according to offered loss ratios prior to initializing a trade. The trader is able to create a different perfect combination of possible return/loss on every single trade. All combinations are pre-defined and pre-calculated. There is one standard ratio and four additional combinations the trader can choose from. The main principle is that the distance between the levels in each combination is set at 5%. The possible return on loss levels are: 0%, 5%, 10%, 15%, 20%.
For example most currency pairs give you a maximum payout of 180% if you are in the money. If you are out of the money you receive nothing. OptionBit allows you to lower your return, thus ensuring you that you will receive some capital in case you are out of the money. If you choose for example to only receive 165%, if you are out of the money you will collect 15%. In essence this feature enables you to properly manage your risk.
Please be aware that this brand new feature is available only on Digital Options trading and is specifically designed to provide traders with a better understanding of the risks they take and the possible return they can get for taking such risks.
Billions of dollars are invested daily in commodities. They literally can be found all across the world, and can be traded on the global marketplace as part of a diversified portfolio. Although they can be traded on spot or futures markets, generally most individual commodities are dealt in the futures market. In other words, the commodity itself is not being traded but rather a specific contract to buy or sell it for a specific price in the future. Granted, this often creates the potential for heavy market fluctuations, but at the same time it presents thrilling prospects for investors who are willing to jump on the ship and ride out market volatility in order to reap the rewards.
One of the most sought after commodities is and probably will always be gold. Trading goods and services for gold is the most ancient form of monetary exchange because of its great value. It has always been revered as a symbol of wealth and prosperity. Throughout history gold has also been used as a form of currency and as a way to sustain the fiat money of a number of countries. In the U.S. gold and the dollar were associated when the gold standard was being used, which meant that the value of a unit of currency was tied to a specific amount of gold. This standard was used from 1900 until 1971, with this practice having to be abandoned in order to protect the gold reserves. The dollar thus became a true fiat currency. This simply means that it receives its inherent value from government regulation, but it is not backed by an actual physical commodity. It enabled the greenback to be traded on the foreign markets and to be used as a reserve currency without risking the U.S. gold reserves. Subsequently, the price of gold was freed from the restraint that had been placed on it by various financial measures intended to keep currencies under control.
Ever since the dollar freed itself from gold it fluctuates more widely, while gold generally tends to remain stable, making it a safe haven for investors and all sorts of traders during times of uncertainty. The fluctuations in its price in U.S. dollars reflect confidence in the currency, as the dollar revalues itself in relation to gold. Therefore, the price of gold almost always tends to move in opposite directions to the value of the U.S. dollar.
Investors ranging from standard gold commodity traders to those who deal with binary options try to predict when this inverse correlation is most likely set to occur in order to amass the highest potential profit. Traders can utilize a number of tools to help capitalize on these opportunities. Many conduct a fundamental analysis, which is the interpretation of various statistical reports and economic indicators. Additionally many will opt to perform a technical analysis, which studies past market data, primarily priced and volume to try and predict future price action. Without engaging in the specifics, these are both excellent ways of trying to forecast what will happen to gold or any other asset that one wishes to trade.
However, sometimes these methods can be confusing if one is not fully familiar with all of the factors. Furthermore, they could prove to be time-consuming and everyone especially investors are aware of the popular adage, “Time is money”. Therefore, many decide to resort to sophisticated signal providers, especially those in the binary options or forex trading worlds. These signals are based upon complex algorithms that will often provide the investor with an exact or approximate entry, exit and stop-loss figures for all sorts of trades. This certainly takes the complexity out of trading and thus allows even amateur investors to join and profit.
It is important to note that if acted upon in the designated time frame signals can become an important indispensable tool for investors across all spectrums of the financial world. Whether one is a commodity, stocks, forex or binary options trader, accurate signals can certainly help investors regardless of their background profit handsomely.