Archive for Market

Next Global Crisis – Strengthening U.S. Dollar Index or Weakening Euro?

The U S Dollar was the source of much volatility last week as traders were forced to endure a number of factors affecting its value These included U S governmen t report s U S China trade relations and weakening economic data from China and the Euro Zone At times the price action …read more

Read more here: Next Global Crisis – Strengthening U.S. Dollar Index or Weakening Euro?

Category: PersonalFinance

Slicing the Liquidity Pie

It’s no surprise one of the most common complaints about U.S. market structure is “too much …read more

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Category: PersonalFinance

Stock Market News For Feb 11, 2019

Wall Street witnessed mixed trading on Friday following conflicting news on trade war front Additionally concerns about Eurozone s future growth also dented investors confidence While the S amp P 500 and Nasdaq Composite ended in the green the Dow finished in the red However for the …read more

Read more here: Stock Market News For Feb 11, 2019

Category: PersonalFinance

Dovish Central Bank Outlooks Make U.S. Dollar More Desirable Asset

The U S Dollar soared against a basket of currencies last week taking the index to its highest level since January 2 The index is also trading higher for the year recovering from a bearish outlook generated by recent dovish U S Federal Reserve policy remarks The Fed is still dovish but so …read more

Read more here: Dovish Central Bank Outlooks Make U.S. Dollar More Desirable Asset

Category: PersonalFinance

Dovish Central Bank Outlooks Make U.S. Dollar More Desirable Asset

The U S Dollar soared against a basket of currencies last week taking the index to its highest level since January 2 The index is also trading higher for the year recovering from a bearish outlook generated by recent dovish U S Federal Reserve policy remarks The Fed is still dovish but so …read more

Read more here: Dovish Central Bank Outlooks Make U.S. Dollar More Desirable Asset

Category: PersonalFinance

Weekly Outlook, Feb 11-15. Top 5 Things to Know this Week

The RBA left the policy rate unchanged at 1 50 while no changes are expected from BOE 160 The financial markets exhibited thin volatility and trading volume as Chinese banks will remain closed in observance of the Spring Festival The RBA left the policy rate unchanged at 1 50 while …read more

Read more here: Weekly Outlook, Feb 11-15. Top 5 Things to Know this Week

Category: PersonalFinance

Donald Trump lobs a grenade from afar into the G7

By The Economist online…

FOR a moment, the Group of Seven (G7) leaders attending their annual summit, in a mountain village in Quebec, looked like they had managed to paper over their differences with President Donald Trump and present a united front. They found just the right wording to secure American agreement on matters that never used to be in question, such as supporting democracy, abiding by international-trade rules and fighting terrorism. Even Mr Trump professed himself pleased, calling the summit wonderful and rating his relationships with other leaders as ten out of ten.

Yet barely ten minutes after the official communiqué was published, he changed his mind. He tweeted from somewhere over the Pacific, en route to his “mission of peace” in Singapore with Kim Jong Un, North Korea’s despotic ruler, that he had instructed his officials not to endorse the communiqué. He attacked Justin Trudeau, Canada’s prime minister and host of the summit, for making “false statements” at his closing news conference, and renewed his threat to impose tariffs on automobiles supposedly “flooding
the U.S. Market!”.

It was a confusing outcome all round. A flummoxed spokesman said Mr Trudeau had said nothing at the news conference he had not already said before to Mr Trump, both publicly and privately. It was unclear whether Mr Trump’s reversal was because of Mr Trudeau’s confirmation that Canada would retaliate against America’s steel and aluminium tariffs (the two leaders had already discussed this). Or was it a rejection of Mr Trump’s claim that a new deal for a North American Free-Trade Agreement (NAFTA) would have a sunset clause? (This was also discussed, though it seems plausible that Mr Trump believed the Canadians to be moving closer to some sort of compromise.)

During the summit itself, which Mr Trump left early, the tone had been conciliatory. The other leaders spoke warm words of support for Mr Trump’s effort to persuade North Korea to give up nuclear weapons. There were even signs that the group had overcome their differences regarding Russia. Before leaving Washington, Mr Trump had said that Russia should be readmitted to the group that had excluded it in 2014 after its invasion of eastern Ukraine and annexation of Crimea. But in the end there was no invitation to join the group next year in Biarritz, France, and the final communiqué called on Russia to stop destabilising democratic regimes and start living up to its international obligations as a member of the UN Security Council.

On trade, at one point it seemed as though Mr Trump was in search of some sort of grand bargain, as he called for the end of all subsidies, tariffs and non-tariff barriers to trade. But this was more an indication of how poorly Mr Trump understands the global trading system than a serious summons to the negotiating table. Even so, combing through the joint communiqué, signs of genuine co-operation were to be found, including a commitment to agree on new rules regarding “market-distorting subsidies” and state-owned enterprises.

Read more here: Donald Trump lobs a grenade from afar into the G7…read more

Category: Business and finance, Approved, Business and finance, Finance and economics

Interest Rate and Trade Concerns Cast a Shadow Over Stocks

The S&P 500 index has traded in a narrow range for the past month, fluctuating between resistance at its 100-day moving average and support at its 200-day moving average, unable to establish any clear direction. The failure of stocks to push higher can be traced to a variety of concerns, including rising interest rates, trade tensions and signs of slowing global growth. At the same time, a strong first quarter earnings season has kept stocks from falling below their longer-term trend. The net result has been directionless trading, in search of a catalyst to break the stalemate.

We continue to believe that stocks can move higher, as economic growth accelerates from the modest first quarter and earnings growth remains strong, even though the rerating of earnings expectations following the passage of tax reform had been mostly discounted by the January rally. As it turns out, however, actual earnings this quarter are exceeding even those lofty expectations. According to Factset, by the end of March earnings expectations for the first quarter had risen to 17 percent. And as recently as last week, those expectations had edged higher to 18 percent. But now, after some better than expected results mostly from technology stocks, earnings are expected to grow by an astounding 23 percent. It seems unlikely that results that strong had been fully discounted by the January move, but that still has not been enough to pull stocks higher, suggesting that worries over trade and interest rates must recede to lift the cloud over stocks.

GDP and Inflation Ratchet Higher 

Last week we learned that GDP growth in the first quarter grew by an estimated 2.3 percent. And although that result continued the pattern of relatively weak performance to start the year, it was better than the 2.0 percent Bloomberg consensus. Improvements in both trade and inventories from the previous quarter were not enough to offset weakness in personal consumption, particularly in automobile sales. But compared to the 1.2 percent pace of growth in the first quarter of 2017, and 0.6 percent in 2016, this year’s performance looks rather healthy overall.

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The real problem with pensions

By The Economist online…

PAYING for pensions is like one of those never-ending historical wars; a confusing series of small battles and skirmishes that can obscure the long-term trend. The latest conflict is in Britain where university lecturers are indulging in strike action over changes to their future benefits.

Let us start by making the long-term trends clear.

1. People are living longer and retirement ages have not kept pace. This increases the cost of paying pensions

2 Interest rates and bond yields have fallen. This increases the cost of generating an income from a given pension pot

3. Private sector employers have reacted to this cost by closing their defined benefit (DB) schemes (which link pensions to salaries) and switching to defined contribution (DC) schemes (which simply generate a savings pot)

British universities have reacted in a similar way; they are proposing switching future benefits to a DC basis. To avoid confusion, this means that past benefits will be unaltered; if you are 50, and have worked for 25 years, you will still have 25 years of DB benefits. But since pensions are deferred pay, it does mean that the total benefits of academics are being cut so one can see why they are upset.

But there is still plenty of confusion, as this piece in the Independentillustrates all too well (to cite just one example, in a piece about workplace benefits, it quotes OECD numbers on state-pension replacement rates). There are three big areas where the debate gets muddled.

Read more here: The real problem with pensions…read more

Category: Business and finance, Buttonwood’s notebook

Some hotels charge visitors for bad reviews

By The Economist online

Last March, a couple arrived at the suite they had booked at the Abbey Inn in Indiana only to find, they claim, a dirty bed, a foul smell, an insect infestation and no hotel employees on the premises to assist them. Upon leaving, they did what so many travellers do these days. They wrote an online review warning others about the hotel’s shortcomings. Sometimes, negative reviews prompt apologies and compensation from their subjects. But in this case, the coupleTRAVELLERS have grown accustomed to annoying hidden fees, from the baggage charges that bring airlines tens of billions of dollars a year to the resort fees that account for nearly a fifth of American hotels’ revenue. But a new one that has popped up in recent years might be the most irksome of all due to its sheer perversity: fees for leaving bad reviews.

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Read more here: Some hotels charge visitors for bad reviews

Category: Business and finance, Gulliver

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