Latest Posts

  • Finance 0

    Chinese Seizing Golden Opportunity; Gold Demand Surging

    Generally speaking, rising prices tend to temper demand, but when it comes to gold in China, the recent price rally has created the opposite effect. As the Wall Street Journal put it, “Chinese investors see a golden opportunity.” Demand for gold has surged in China over the last several weeks, during a period generally considered out of season. And it’s not typical Chinese jewelry purchases driving the demand. Chinese investors are buying gold coins and bars. Typically, gold purchases in China are strongly associated with jewelry buying around the Lunar New Year holiday, which this fell in early February. But the uncertainty confro...
    On March 28, 2016 / By
  • Finance 0

    Core PCE Inflation Disappoints +0.1% M/m

    The Fed can remain in no rush to raise rates: its favorite inflation measure is not going anywhere fast: only 0.1% m/m. The upside is that y/y, the figure remains unchanged at 1.7%. This is still below the 2% target but not too terrible. Personal income rises 0.2%, slightly better than expected, and personal spending is up 0.1%, as expected, but on top of a significant downwards revision. The goods trade balance comes out at a deficit of 62.9 billion, as expected. The US dollar ticks a few pips down. It is important to remember that the trading volume is still low due to the Easter holiday in many markets. The US released a bulk of figures: ...
    On March 28, 2016 / By
  • Finance 0

    Brexit Impact On British Pound Sterling

    Brexit impact on value of British pound sterling: With a potential “Brexit” approaching, Goldman Sachs says regardless of the outcome the British pound sterling will be a “fashionable” and “actionable” currency in 2016. This isn’t the first time this has happened, and a price pattern has emerged over time, with such a “fashionable” event occurring five times since the 2008 financial crisis. Brexit impact: Two price probability paths for British pound sterling There are two probability paths for the pound, with a Brexit impact weighing heavy: either the U.K. exits the European Union or it remains. Both of these fundamen...
    On March 28, 2016 / By
  • Finance 0

    Dollar Continues Strong, Awaits Fed Comments

    The dollar edged up against the euro and yen on Monday continuing its rebound last week following hints from U.S. Federal Reserve officials that an interest rate hike could be introduced sooner than anticipated. The coming week should provide investors with a series of indicators that will help gauge whether the U.S. economy is robust enough to bear a series of rate hikes. According to Shusuke Yamada, chief Japan FX strategist at Bank of America Merrill Lynch in Tokyo, “The dollar’s near-term performance will hinge on data, notably Friday’s Japanese tankan, U.S. non-farm payrolls and the manufacturing PMI.” Additional ...
    On March 28, 2016 / By
  • Finance 0

    Weekly Market Outlook – At A Crucial Juncture

    Weekly Market Outlook – March 28, 2016 After five straight weeks of gains, the market finally buckled. It wasn’t a big pullback last week – only 0.6% – but all big trends start out with that first small step. We at least have to acknowledge the possibility that last week’s weakness may be the beginning of something bigger. And that possibility isn’t just the result of one losing week. The S&P 500 (SPX) (SPY) bumped into a major resistance line, and if the bears were/are going to make a stand anywhere, it’s where the index peaked last week. We’ll look at it in detail below, as we always do. ...
    On March 28, 2016 / By
  • Finance 0

    Wilshire 5000 Attempting To Accomplish Something Rare

    This picture caught my eye, as some think certain things are hard to accomplish, due to age.  Speaking of “age and accomplishments,” the chart below of the Wilshire 5000 came to my mind. CLICK ON CHART TO ENLARGE As mentioned above, this very broad index remains inside of 5-year rising channel (A), as the 5-year trend remains up (higher lows and higher highs). Over the past year, the Wilshire 5000 has made a series of lower highs and lower lows, inside of falling channel (B), as the 1-year trend remains down (lower highs and lower lows). The rally over the past 6-weeks, now has the Wilshire 5000 testing 1-year falling resistance at (1) ...
    On March 28, 2016 / By
  • Finance 0

    China Beige Book Reveals Employment Plunges To 4-Year Low, Capex Worst In History

    Back in December, New York-based China Beige Book International released what they called a “disturbing” set of data that pointed to pronounced weakness in the Chinese economy. “National sales revenue, volumes, output, prices, profits, hiring, borrowing, and capital expenditure were all weaker than the prior three months,” the firm – whose CBB is modeled on the Fed’s survey of US economic conditions and is supposed to provide a more objective assessment of China’s economic health than the goal-seeked figures that emanate from the NBS – remarked. In the three months since the CBB’s last report, we haven’t seen a w...
    On March 28, 2016 / By
  • Finance 0

    Market Cap To GDP: An Increase In The Buffett Valuation Indicator

    Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that “it is probably the best single measure of where valuations stand at any given moment.” The four valuation indicators we track in our monthly valuation overview offer a long-term perspective of well over a century. The raw data for the “Buffett indicator” only goes back as far as the middle of the 20th century. Quarterly GDP dates from 1947, and the Fed’s balance sheet has quarterly updates beginning in Q4 1951. With an acknowledg...
    On March 28, 2016 / By
  • Finance 0

    Morning Call For March 28, 2016

    OVERNIGHT MARKETS AND NEWS Jun E-mini S&Ps (ESM16 +0.23%) are up +0.28% after last Friday’s data showed the U.S. economy expanded more than expected in Q1. European markets are closed for Easter Monday. Also, May crude is up +0.51%, which is giving a boost to energy producing stocks. San Francisco Fed President Williams said that global developments were “the real issue” for policy makers as they decide on the pace of rate hikes. Asian stocks settled mixed: Japan +0.77%, Hong Kong and Australia closed for holiday, China -0.73%, Taiwan -0.17%, Singapore -0.60%, South Korea +0.07%, India -1.46%. China’s Shanghai...
    On March 28, 2016 / By
  • Finance 0

    Economy Healthier Than Expected

    There are a number of economic reports due out this week that should point to the health of the U.S. economy. U.S. economic growth slowed in the fourth quarter, but not as sharply as previously estimated, with the gross domestic product showing an increase of 1.4% annual rate instead of the previously reported 1% pace, the Commerce Department said on Friday in its third GDP estimate. GDP Better than Expected GDP growth was initially estimated to have risen just 0.7%. The economy grew at a rate of 2% in the third quarter and expanded 2.4% overall in 2015. The GDP report did show, however, that corporate profits were falling for a second straig...
    On March 28, 2016 / By