Tag Archives: retail sales

Our Two Cents – Week of 3/5/12

As winter finally greeted Massachusetts last week, I was able to jet down to Florida this past weekend for some warmth, but that didn’t stop me from keeping up on the latest financial headlines.

In the U.S., some more good news about jobs as claims for jobless benefits dropped to a four-year low, reaching 351,000. While claims decreased, the economy increased, growing at a 3-percent annual rate in the October-December 2011 period—the fastest pace since spring 2010. Economists say factors such as busier factories, higher retail sales, more jobs and growth in home sales will continue to help fuel more economic growth. People’s perceptions of the economy keep increasing as 40 percent of Americans believe the U.S. economy is growing—up 27 percent from April 2011 and 3 percent in 2008.

In Europe, the eurozone crisis will not be a big deal for the markets within the next few months, according to an official from Barclays Capital. Larry Kantor, managing director and head of research, said the European Central Bank has helped enough to lessen the financial crisis. Greece awaited a verdict about its bailout after completing 38 mandatory measures for amendments to its economy. On March 1, the country’s parliament passed changes to its health sector, allowing longer opening hours for pharmacies and limitations on drug spending. For Europe’s overall economy, confidence rose for a second consecutive month in February. The European Commission’s economic sentiment indicator increased by a point in the eurozone to 94.4. The rise piggybacked on January’s hike, which was the first improvement in sentiment since March 2011.

In alternative investments, hedge funds are expected to rise 12 percent to a record $2.26 trillion this year, according to Deutsche Bank’s latest Alternative Investment Survey. Hedge funds finished January up 2.34 percent, according to the Dow Jones Credit Suisse Hedge Fund Index, with nine of 10 strategies in positive territory.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

­­Our Two Cents – Week of 1/9/12

With the first week of 2012 crossed off the calendar and the Iowa caucus in the past, the one word to describe the start of January—especially in the United States and European financial markets—is optimism.

The U.S. economy added 200,000 jobs, and its unemployment rate fell to 8.5 percent in December (from 8.7 percent in November). These figures paint an initially positive scene that the long-awaited economic recovery is finally making some positive strides. This good news comes on the heels of news earlier in the week about weekly jobless claims which have dropped to 372,000. Even though the holidays have passed, retailers and the economy also unwrapped a nice financial present. According to the International Council of Shopping Centers’ tally of 25 retailers, sellers collectively reported a 3.5-percent increase in monthly revenue at stores open at least a year. For November and December, retailers saw holiday sales increase 3.3 percent. While consumers were purchasing, hedge funds were gaining. In November, hedge funds raked in $3.6 billion in new money, according to BarclayHedge and TrimTabs Investment Research. Also, investors are confident about the 2012 hedge fund outlook, especially after they experienced a rough 2011.

In Europe, the markets rallied early last week, showing early signs of optimism after the previous year that saw economic chaos. To start 2012, Germany successfully auctioned its bond issuance by selling its 10-year benchmark bund. The nation sold $5.28 billion of the 2-percent January 2022 bund, its current 10-year benchmark paper, with bids reaching $6.52 billion. Successful bonds also found their way to the United Kingdom. British bond experts say U.K. government bonds—seeing record lows at the end of 2011—will remain as safe-haven assets, especially because the euro zone crisis hasn’t been solved. Experts say investors will continue to turn to U.K. government bonds because the country is able to control its currency and enact a monetary policy stimulus if needed.

 

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

­­Our Two Cents – Week of 1/3/12

The crystal ball atop New York City’s Times Square has dropped, champagne glasses have clinked and confetti has strewn—all signs welcoming 2012. As we said goodbye to a year that saw economic commotion, we greeted the new year with a refined sense of optimism for the U.S. and equal thoughts of hope for abroad.

Americans are more confident about 2012 after what they say was a less-than stellar 2011, according to an Associated Press poll. Nearly 70 percent of Americans said 2011 was a poor year because of continuing economic crisis, and 62 percent said they were hopeful for a more positive 2012. About 37 respondents said they saw economic improvements coming within the next 12 months, and almost 40 percent believed their personal financial situations will improve. Signs that the U.S. economy is starting to accelerate are already coming to fruition. Experts say an improving job market and increasing retail sales—especially in the past holiday season—are reasons for why growth in the U.S. economy may hasten even if conditions abroad aren’t replicated. Holiday sales during the week ending Dec. 24 ascended nearly 15 percent from the same period in 2010 to $44 billion, thanks to Christmas Eve falling on a Saturday.

While the U.S. conditions are rebounding, Europe’s markets are starting 2012 on the right foot. Italy’s FTSE MIB index is up nearly 1 percent, and Germany DAX is also up more than 1 percent. Yields in Italy are down to below 6.9 percent.

In the last few days of 2011, Italy’s Treasury paid significantly less to borrow money for six months than it did a month ago, restoring some senses of economic confidence. Even though Spain has slipped into recession, the country’s inflation has eased much more than expected in December to its lowest level in 13 months. Inflation rates also relaxed in Germany for the third straight month.

Speaking of Germany, it received the highest mark on the Bank of Montreal’s economic report card of the world’s most important economies in 2011. The nation earned a score of 89.2 because of its 2.5-percent inflation rate, 7.1-percent jobless rate and 1.2-percent budget deficit. Greece closed the list at No. 12 because of its 3.2-percent inflation rate, 16.6-percent jobless rate and 5.9-percent budget deficit. The U.S. earned the No. 6 spot for its 3.2-percent inflation, 9-percent jobless rate and 10-percent budget deficit. The bank based ratings on low inflation, low unemployment and low budget deficits.

The year 2012 also observes the 10th anniversary of the euro. While some individuals blamed the euro for causing Europe’s economic meltdown, the monetary unit could become the world’s leading single-currency alliance if leaders can succeed in tightening fiscal integration, according to one official from the European Central Bank. ECB policymaker Christian Noyer said if European officials can implement the actions from the Dec. 9, 2011, emergency summit, the union will emerge stronger.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

News broke Sunday night reporting the death of North Korea’s enigmatic leader, Kim Jong Il, followed swiftly by debate about the impact his successor Kim Jong Un will have on the country’s economy and society – as well as the market’s reaction to his father’s death.

Meanwhile Europe continued to dominate world headlines as it devises next steps after proposing a treaty last week designed to strength fiscal discipline for the European Union. In the United States, the economy continues showing signs of improvement as it eases some minds heading into the highly anticipated holiday week.

In Europe, Italian Prime Minister Mario Monti won a confidence vote from officials to expedite its 30-billion-euro budget crafted to restore the country’s economic confidence and revive its stagnant growth. The passage comes after a week of strikes from Italy’s three biggest labor unions because they say Monti’s package will hurt workers, pensions and the country itself. After passing the House, the measure now moves to the Senate where it’s expected to be actioned by Christmas. While Italy seeks to improve its economy, Poland has been recognized for its robust economy. Experts believe that Poland may have the last healthy economy in Europe as the country’s capital Warsaw received revitalization and the country overall experienced economic growth and increased foreign investments. The question, though, is Poland going to remain as strong as it is now? Because many of its neighbors are suffering in the euro zone, residual effects could spill over the borders to Poland—especially because the country’s main stock index is down 24 percent since April. Unfortunately, some other European countries aren’t in as great shape as Poland. France could see a downgrade of its triple-A rating by Standard & Poor’s. French officials say the speculated credit lowering would be “cataclysmic” to its economy. Germany is still trying to lead through the crisis, opposing euro bonds and lifting bailout cap. In Greece, the nation has abandoned the euro and returned to its drachma currency, and in Britain, Prime Minister David Cameron faced hecklers about vetoing the proposed European Union treaty.

There was good news in the United States last week. Retail sales rose for the sixth straight month, increasing 0.2 percent in November and showing signs that the U.S. economy is growing. Consumer prices also remained steady as the consumer price index went unchanged last month in November. Jobless claims dropped to 366,000, marking a three-year low and signal some recovery to the job market. In the hedge fund world, legendary hedge funder Julian Robertson of Tiger Management Co. is explaining why so many hedge funds are now cropping up. He says the hedge funds business is becoming tougher because more hedge funds are being created as they’re the best way to pay the experienced Wall Street guys.

 

 

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Well it didn’t take long for the first Monday in 2010 to kick off the week with a very strong slant towards risk-taking. Equities opened up strong, Commodities were flying and some higher-yielding currencies, such as Aussie, had strong performances as well. We saw this pattern quite often towards the end of 2009 where risk-taking would outperform on Monday before the remainder of the week would be chronicled by sideways or a risk-averse environment. Hopefully that is where the resemblance to 2009 ends right?

In many respects 2009 will be remembered for the global recession, the exceedingly accommodative monetary policy stances taken by the old industrialized leaders and the 4.1m jobs lost in the US. For those keeping track that is 1m more jobs lost than in 2008.

There is good news though and there have been plenty of opportunities to trade during this period of high volatility. We all know about the seismic shifts in the Dow Jones, Crude and currencies, such as the GBP, over the past year or two. Hopefully the worst of the economic crises is behind us but for no reason does that suggest that the moves in our securities are about to stop. If anything the opposite holds true.

For example, in Currensee if you go to the Economic Calendar and click over to this Friday, January 8th you’ll see that the markets are awaiting the December US Non-Farm Payroll (NFP) report. Early expectations are for a Zero reading, or essentially unchanged from the -11k reading in November. Now should we really expect the same reading in back to back months when the US has been losing 300k jobs on average for the past 23 months? I don’t think so.

Just an off-hand look at the last 7 or 8 years shows that there is a 100k or so difference between Nov. and Dec. readings thus expecting a minimal change in employment over the holidays might not be the way to be positioned. In forecasting the NFP figure I analyze the jobless claims and they have been improving quite significantly over the last 2 months. Thus I’ll be expecting a positive job figure for December, to the tune of over 100k, but regardless of what I think, with the markets expecting an Unchanged reading for December then the hurdle for volatility due to moves in interest rates, stocks and currencies should be very low.

Is this the only economic release where expectations may be set up for a surprise? Nope and if you move back to this Wednesday you’ll see that Australian retail sales came in at +0.3% m/m in the prior month and the October reading is also expecting a +0.3% m/m reading. The last few monthly readings in Australian Retail sales have been +0.3%, -0.2%, +0.7% & -0.9%. More of a zig-zag fashion that a trend. If you look back though you’ll notice that the expectations are expecting more of a trend at +0.4%, +0.5%, +0.6%, +0.6%...

Certainly those making the predictions and those trading off the actual numbers have different interests it seems. If you look at the Market Watch on Currensee you’ll notice that 85% of the trader volume in AUD/USD is Long. This is a currency that has gone from approximately form 0.60 to 0.90 over the past year thus one can be certain that a few economic surprises will have this currency on the move again.

Which way? Well here is to hoping for fresh trading moves in 2010 and an Not economic repeat of 2009.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.