As was expected by the consensus of economists, and facilitated by the recent surge of positive economic data out of the UK, moments ago the BOE did not surprise, when it kept its interest rate at 0.25% after a unanimous 9-0 vote, which also included keeping the BOE’s government bond and corporate bond purchases unchanged at GBP 435 and 10bn, respectively. However, while the nine-member Monetary Policy Committee admitted that recent near-term data has been far stronger than anticipated since the Brexit vote, and certainly by comparison to the BOE’s apocalyptic vision, it couldn’t draw inferences for its longer-term forecasts. Of...
US retail sales disappoint with a drop of 0.3%, worse than expected. The small downwards revision does not help. The control group is down 0.1%, much worse than +0.3% expected and with a downwards revision. Other figures are poor as well. The USD is falling. US retail sales were expected to rise by 0.1% m/m on the headline figure in August after remaining flat in July. The control group carried expectations for a rise of 0.3% after remaining flat. Lots more data is released at the same time. If anybody still believes that the Fed will raise rates in less than a week from now, this bulk release of figures is the last chance to receive upbeat d...
OVERNIGHT MARKETS AND NEWS Dec E-mini S&Ps (ESZ16 +0.24%) are up +0.45% and European stocks are up +0.20% ahead of a batch of U.S. economic data today on retail sales, producer prices and regional manufacturing surveys that may give clues as to the health of the economy. The BOE, as expected, voted 9-0 to keep its benchmark rate unchanged at 0.25% and maintain its asset purchase target at 435 billion pounds following today’s policy meeting. A +1.26% rally in crude oil prices (CLV16 +0.39%) is giving energy producing stocks a boost and leading the overall market higher. Asian stocks settled mixed: Japan -1.26%, Hong Kong +0.63%, Chi...
A look at the yield curve by weekly chart. Sooner or later one of these breakouts will be real and it will signal the end of the era of confidence (that began with Bernanke’s heavy handed Operation Twist, a macro manipulation that was very boldly set in motion to “sanitize” inflation) in all-powerful central monetary policy planning. The yield curve will break out because inflation expectations are rising or it will break out because fear and a rush to short-term bond liquidity are running rampant. But these clowns are not going to hold us captive to a manipulated bond market forever. That’s one onlooker’s take, anyway. ...
Mid-cap stocks are often called the “sweet spot” in the market-capitalization spectrum for equity investing. History agrees. Mid-cap performance has delivered a solid premium over large-caps and small-caps over the last two decades. This is a bit of conundrum for financial economics. The academy’s models, after all, insist that small caps are destined for stellar performance over the rest of the field. But the track record over the last 20 years has thrown out the script and awarded the gold to mid-caps. The debate about why mid-caps win the performance race runs far and wide. Some analysts say it’s a matter of faulty benchmarks, part...
NFIB Survey Suggests Weak Economic Prospects Earlier this week, the National Federation of Independent Businesses released their monthly Small Business Survey. While this data is much overlooked by the mainstream media, it really shouldn’t be. Out of the 26 million businesses registered in the United States, only 6 million have active employment and generate revenue. Of that total, almost 80% have fewer than 5-employees. Simply, it is small businesses that drive the economy, employment, and wages.Therefore, what the NFIB says is extremely relevant to what is happening in the actual economy versus the headline economic data from Governme...
Just as the railroad barons of the 19th century came to realize that their business was “transportation” rather than “railroads,” most financial professionals involved with futures and options trading have come to appreciate the fact that our business is not “futures and options,” but rather “risk management.” Futures and options are just one set market mechanisms that can be used to solve risk management problems; and while this mindset is appropriate for virtually all segments of futures and options activity, it is particularly relevant for corporate treasurers facing interest rate risk exposures. Over the years, the futures...
Earlier today Ford (F) announced that it expects operating income to decline in 2017 as the automaker increases investment in electric and autonomous vehicles, before rising again in 2018.This news came after Ford had just lowered its expectations for FY 2016 EBIT to $10.2BN from $10.8BN due to increasing costs associated with an expanded recall related to faulty door latches. So how do you offset rising costs and a top-line that executives recently admitted have “reached a plateau?” Well, you shift more production to low-cost countries, like Mexico of course.According to Reuters, Ford CEO, Mark Fields, confirmed at the comp...
Here’s your swing-trading watch list: Short Accenture (ACN) Short Microsoft (MSFT) Short JetBlue Airways (JBLU) Long Western Digital (WDC) Long CSX Corp (CSX)...
EUR/USD Signal Update Yesterday’s signals were not triggered as there was no bearish price action at 1.1259. Today’s EUR/USD Signals Risk 0.75%. Trades must be entered before 5pm London time today only. Long Trades Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1207 or 1.1177. Place the stop loss 1 pip below the local swing low. Move the stop loss to break even once the trade is 20 pips in profit. Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run. Short Trade 1 Short entry following a bearish price ...