The Trump administration is steadily moving toward restructuring the federal healthcare law. Such an action comes as no surprise since President Trump has always been an outspoken critic of the Affordable Care Act, or ACA, popularly known as Obamacare. Trump Alternative In place of Obamacare, the Republican proposal called The American Healthcare Act (AHA) means to bring far-reaching changes. The alternative proposes radical changes like eliminating taxes mandated under Obamacare. The most controversial topic from the new Republican health draft is the phasing out of the Affordable Care Act’s Medicaid expansion. At the same time, it seeks t...
The big story coming out of the November presidential elections was the flurry of “Trump Trades” that soared on an incremental surge of optimism and expectations. Now the growing story includes the sprouting list of trades that have completely reversed post-election gains. The recent rapid decline in oil prices on the heels of surging U.S. inventories finished the post-election wipe-out for the United States Oil Fund (USO) and the Energy Select Sector SPDR ETF (XLE). I drew The horizontal bars on the charts below to mark prices at the close of trading on election day. The United States Oil Fund (USO) enjoyed one month of post-election gai...
It is fitting that just a few hours until the Fed’s second rate hike in two quarters, and one day after Goldman downgraded global stocks to Neutral for the next 3 months, not to mention with the results of the anticipated Dutch election due shortly, that global stocks as well as S&P futures are higher, while crude oil has finally managed to stage a rebound as the Dollar DXY index is fractionally in the red. In addition to the Fed, a barrage of monetary policy decisions at the BOE, the BOJ, the SNB and Bank of Indonesia within the next 36 hours were further reasons for investors’ cautious stance. East Coast traders return to ...
Share markets in India finished flat as the sentiment turned tepid ahead of the outcome of the US Federal Reserve’s meeting later in the day. At the closing bell, the BSE Sensex stood lower by 45 points, while the NSE Nifty finished down by 2 points. Sensex Is Fairly Valued If we look at the historical valuations of the Sensex, one thing becomes clear immediately. The market is not overvalued. Yes, individual stocks are overvalued, but not the entire market. However, the markets aren’t cheap either. Interestingly, the Sensex P/E hasn’t crossed 25 since mid-2008.If we were to tentatively consider a P/E of 25 as an upper ...
Bob Shiller is concerned about the rise of “everything is different” chatter. Seeing parallels in the dot-com bust in 2000-2002 with current conditions, the Yale Professor tells Bloomberg that the equity market looks frothy, based on his calculation of the cyclically-adjusted price-earnings ratio (CAPE). Shiller’s valuation metric is now at 29.77, based on the current calculation — the highest level since 2002. There’s no rule that says the stock market can’t go higher from here, perhaps much higher and for a lengthy stretch of time. But Shiller’s research, summarized in his book Irrational Exuberance, advises that relativel...
Wary FX traders kept the US Dollar subdued as they await the latest policy update from the Federal Reserve Bank. Analysts expect that the Fed is likely to raise interest rates at the conclusion of the policy meeting, with investors of Fed Funds futures pricing in a 90% likelihood. The question, however, is how many rate hikes might be on the table for the remainder of 2017 and onward into the coming years. Markets have already priced in a rate increase of 25 basis points, with two more hikes likely this year. As reported at 9:50 am (GMT) in London, the USD/JPY was trading at 114.654 Yen, down 0.07%; the pair ranged from 114.5900 Yen at the lo...
Previous: On Tuesday, trading on the euro closed in negative territory. The price corrected by around 61.8% after a rally from 1.0525 to 1.0714. During the US session, the euro weakened against the dollar to 1.0600. The EUR/USD broke the support at 1.0628 as the euro index slid (euro sales on the crosses) and US 10Y bond yields rose slightly. Market expectations: Yesterday, the two-day meeting of the FOMC began. Their decision regarding interest rates will be announced at 21:00 EET. It’s widely expected that the US Federal Reserve will raise rates by 0.25%. Given that the market is already prepared for this, participants will be looking...
Income investors should consider adding some U.S. utility stocks to their portfolios. Utilities are extremely stable. Electricity and gas are defensive industries. They see continuous demand, even during recessions. This allows them to be consistent dividend payers over long periods of time. Duke (DUK) and Xcel (XEL) are both Dividend Achievers, a group of 271 stocks with 10+ years of consecutive dividend increases. You can see the full Dividend Achievers List here. Duke has paid dividends for more than 90 years. Xcel, going back to its days as Northern States Power, has paid dividends for over six decades. Duke and Xcel are very similar com...
The US dollar is paring yesterday’s gains as the market awaits the outcome of the well-telegraphed FOMC meeting.In recent weeks, the combination of data and official comments have swayed market, which had previously anticipated a hike in May or June. A hike today is as nearly a foregone conclusion as these things can get. The idea of not wanting to surprise the market, which some Fed officials underscored, works both ways. It means market expectations are primed. It also means that when there is a nearly 100% chance discounted, not to deliver would also be a destabilizing surprise. Investors will quickly look past a 25 bp hike. ...
This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources. – Yuan’s overnight borrowing cost, HIBOR O/N, bounced up on Tuesday following a drop on Monday. – Fixed assets investment and retail sales show weak momentum in Chinese manufacturing firms. Yuan Rates The overnight Yuan’s funding cost in Hong Kong, HIBOR, rebounded to 3.5887% on Tuesday, after it dropped to 3.0000% on Monday from 3.1647% last Friday. Amid the elevated ...