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Signals – From Gold And The S&P
Thanks to High Frequency Trading and the rise of the machines in the electronic markets, gold and the S&P 500 Index are difficult for non-machines to understand and predict on a short term basis. What do they tell us in the longer term? It is an exponentially increasing world! Both gold and the S&P 500 Index have risen exponentially for fifty years. Since they often move counter to each other, take the sum of the gold price plus the S&P 500 Index and you can see the overall trend more easily. The exponential trend since 1990 is clear. We can reasonably expect they will continue to rise until we experience a massive reset in the f... -
Finance 0
FOMC Minutes: June Rate Hike More Than Likely, Dollar Moves Up
The minutes from the April FOMC meeting are out and not everyone is pleased with the content. The minutes increased the likelihood of an interest rate hike, sending the dollar higher Thursday and confusing Asian markets. Fed officials intimated that a rate increase in June was a strong possibility if the economy continues to grow when they last gathered to discuss the economy at their April 26-27 policy meeting. Strong economic data released recently may move the central bank to raise interest rates sooner than later. Traders in futures markets were certain that the Fed would not make the move at its upcoming June meeting and changed course a... -
Finance 0
China Sends Hawkish Fed A Message – Devalues Yuan Near 2016 Lows
Just as we warned was probable, The PBOC sent a message loud and clear to the newly hawkish Fed following today’s surge in the dollar after the minutes were released. With the 2nd biggest daily devaluation since the August collapse, China pushed the Yuan fix against the USD down to its lowest since early February – barely above the January lows. As we warned earlier, the China-Panic trade looms loud now as turmoil appears all that is left to stop The Fed unleashing another round of liquidity-suckiong rate hikes sooner than the market wants. All eyes have been firmly focus on the Yuan’s move against the USD but in fact ... -
Finance 0
Oil Starting To Pull Back From 2016 Highs
Crude Oil futures for June delivery settled yesterday at $48.43 a barrel, with current price action seeing a follow through of the declines from yesterday. The weekly crude oil inventory report showed a surprise 1.3 million barrel buildup in commercial Crude oil stockpiles for the week ending May 13th, less than analyst expectations of a 3.1 million drawdown. In the previous week, crude oil inventories fell 3.4 million barrels. The Energy and Information Administration’s (EIA) report contrasted yet again with the American Petroleum Institute’s (API) weekly inventory report released on Tuesday, which showed a 1.2 million drawdown. The EIA ... -
Finance 0
EU Bullet Report – Dollar Is King
Two FED members are set to speak today and following the surprisingly hawkish comments released yesterday, the market will monitor their words very carefully. Yesterday USD jumped after FOMC minutes were released. The minutes raised hopes for a June rate hike. Policymakers generally judged that it might be justified to increase interest rates in June if economic data suggest growth were picking up in 2Q16, job market continued to improve and inflation were making progress to reach the +2% target, though some were worried that the data by then might not be sufficient for decision making. Stocks: DJIA closed just down -3.35 points overnigh... -
Finance 0
UK100 Forecast Update – Alternative Scenario In Medium Term – Bearish Action
The forecast drawn up on May16 of a bull action seems to be in standby for now: yesterday’s candle has attenuated most of bull enthusiasm (please note how the long white candle had “enwrapped” the body of the previous 7 sessions). Most of the role of the price rejection has been played by the resistance of the upper part of the last week small box range (blue square), but also the round number 6200, the SMA20 (blue) and EMA (green) have contributed. And today’s action, a High Wave candle with long shadows, appeared about in the middle of the box range, shows that the market is confused. So I think is worthwhile to also start c... -
Finance 0
Microsoft Abolishes Lumia Phone Business As Sales Dip
On Wednesday, Microsoft (MSFT) announced that it will sell its Nokia Lumia phone business to Foxconn for $350 million. More specifically, the company is handing over the rights of the Nokia brand to a subsidiary of Foxconn, known as FIH mobile. This news comes as Microsoft continues to struggle with its own Windows 10 platform. Not taking the Windows 10 platform into account, Lumia phones have not been selling well. Nokia now has a new game plan in mind. It will sell rights of its brand to a new phone company called HMD global, which will create Android phones and tablets. Deal First Reached Microsoft had a lot of cash on hand back in 2014,... -
Finance 0
FOMC Minutes Extend Dollar Gains
We felt strongly that the FOMC minutes would be more hawkish than the statement that followed the meeting, and we were not disappointed. However, our caveat remains: the minutes dilute the signal that emanates from the Fed’s leadership, Yellen, Fischer, and Dudley. The latter two speak in the NY morning. Fischer and Dudley’s comment will be scrutinized for confirmation of the hawkish read of the FOMC minutes. Yellen speaks at Harvard at the end of next week. Her comments at the Economic Club of NY at the end of March squashed the earlier discussion by several regional presidents about the appropriateness of a hike last month. Ma... -
Finance 0
The Face Of Deflation
In a recent article, I discussed some of the ways the Fed could brew some inflation. The reason for this action is the central banker’s nightmare of deflation. But what does deflation look like, or rather, what is the face of deflation? Deflation is both a monetary and psychological phenomenon. The monetary part of deflation means there is a reduction of outstanding money and credit. Since people are not in the habit of burning, literally, the cash in their wallets or blowing up other forms of money, the monetary component centers on the reduction of outstanding credit. It’s not just that credit gets extinguished, if there is not ... -
Finance 0
The Best US Cities For Jobs… For Now
The top cities are dominated by the tech community, with San Jose, CA and San Francisco, CA taking the top two spots in the overall ranking. Here is the list of top 25 cities based on their overall ranking – Bloomberg points out that San Jose has risen from No. 7 to No. 1 As Bloomberg points out, Glassdoor Inc., a career website, published its list of the top 25 cities for jobs based on factors such as salary, job satisfaction, and cost of living. Breaking down the details, here is the list for the median salary component – again led by tech heavy cities such as San Jose and San Francisco. Job satisfaction… And cost of l...
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