Monday, 30 November 2015

German reatail sales fell more than forecast in October

Retail sales in Germany surprisingly reported a decline of 0.4% in October, below analysts' forecasts for growth of 0.3 percent after zero change the previous month.
The result fueled fears that the biggest economy in the Eurozone loses speed and strengthens expectations the European Central Bank to announce an extension of stimulus measures at its meeting on Thursday.
On the other hand, retail sales achieved an increase of 2.1% yoy, although this result was below expectations for a recovery of 2.9 percent. Purchases of food, beverages and tobacco were up by 2.3% and non-food products - by 1.8 percent.
For the first ten months of the year, the index recorded its most significant growth since 1994, or 2.8%, due to the steady performance of the labor market and low interest rates that do not encourage consumers to save money.

Sunday, 29 November 2015

Russia's Central Bank added the Chinese yuan to reserve currency basket

Central Bank of Russia has added the Chinese yuan to the foreign exchange reserve basket, that the country used to purchase gold reserves. However, so far the bank has no plans for purchasing operations of yuan-nominated assets in the near future.

Friday, 27 November 2015

Sharp drop in Japan’s consumption, unemployment hits a 20-year low

The household consumption expenditures in Japan unexpectedly dropped by 2.4% in October, disappointing analysts who had predicted zero annual change after falling 0.4 % the previous month.

The average of monthly consumption expenditures per household for October 2015 was 282,401 yen, down 2.1% in nominal terms and down 2.4% in real terms from the previous year.
The average of consumption expenditures per household was 309,761 yen, down 2.0% in nominal terms and down 2.3% in real terms from the previous year.

The data reinforce the concerns about the economy, which technically is in recession after two consecutive quarters of contraction in gross domestic product.

The question now is whether the central bank will react with further monetary stumulus?
Expectations for further easing of monetary policy find support in the inflation data, that was released today.

Core consumer price index, which excludes fresh food but not the cost of energy keeps the annual pace of decline of 0.1%. We must point out that the result was influenced mainly by the fall in oil prices - a trend that regulators would probably qualify as temporary.

Among the reports published in Japan on Friday, there is good news. Unemployment rate unexpectedly fell to 20-year low of 3.1% compared to forecasts the index to remain stable at 3.4 per cent.

Thursday, 26 November 2015

FANG stocks carrying the market

Do you know which are the companies that have revived US market after August?
Four technology giants have contributed with the remarkable $ 440 billion in market capitalization since January 2015.
Let’s see who they are at Visual Capitalist’s chart!

In the sixth year of the bull run, the U.S. large cap market has had its ups and downs. The S&P 500 peaked at 2134.7 in the early summer months, and promptly collapsed to 1867 points during the August flash crash.Today, it’s back in black, but only trading just over 1% higher than it started the year.
The only reason that has made this possible is the legendary performance of four tech stocks:
Facebook, Amazon, Netflix, and Google (now called “Alphabet Inc.”). Together, the “FANG” stocks have created an impressive $440 billion in market capitalization since January.
For comparisons sake: that’s over 2/3 the size of Apple’s current market cap.

The FANG stocks comprised just over 3.5% of the weight of the S&P 500 index at the beginning of the year, and now they make up 5.1%. They’ve carried the market, and without them the S&P 500 would surely be in negative territory today.

Looking at these companies individually, probably Amazon (AMZN) has been the most impressive over the course of the year. While it didn’t shoot up the 143% that Netflix (NFLX) did, Amazon had a similar performance despite being over 6x the size of Netflix. Amazon is now bigger than Facebook in terms of market cap, and achieved a gain of 116% through the year.
The only problem is that it is now the most expensive stock on the index, at a seemingly ludicrous P/E ratio of 966. The other stocks are expensive as well:Netflix and Facebook are trading at 329 and 108 times earnings respectively.Google is the lone palatable company from that perspective, trading at only 35times earnings.
How long FANG will keep this highest level?

Companies that will suffer from deterioration in Russian-Turkish relations

The losses of Russian and Turkish companies could be huge if relations between the two countries worsen. Russia was the biggest importer of raw materials and products to Turkey in 2014, surpassing China with import of $ 25 billion, according to data compiled by Bloomberg. Over 12% of tourists in Turkey are Russians, which ranks them second only to Germany.
After Russian plane downed on Syrian border on Tuesday, Russian President Vladimir Putin said that this incident would have "serious consequences." The lira and the ruble fell immediately.
Analysts believe that from the deterioration of Russian-Turkish relations may suffer some major companies.
Bloomberg is pointing the following Russian and Turkish companies that have much to lose if ties between the two nations worsen.

Gazprom PJSC
Rosneft, Lukoil
Magnitogorsk Iron & Steel OJSC
Turkish Airlines
Sberbank PJSC
Yandex NV
Anadolu Efes
Enka Insaat

Wednesday, 25 November 2015

European stocks crashed after Turkey downs Russian jet

The European stocks crashed on Tuesday after Turkey shoot down a Russian plane near the border with Syria and thus the worries about geopolitical stability reached a critical point.

Vladirmir Putin said:
“Today’s loss was a stab in the back by the accomplices of terrorists. Our pilots and our aircraft never threatened the territory of Turkey. That much is obvious."

He accused Turkey of backing Isil and trying to drag Nato into the conflict alongside Islamist extremists.

The German business sentiment index Ifo shows that in Germany indicated improvement before the terrorist attacks of November 13. Ifo has increased from 108.2 to 109.0 in October. Earlier in the day the government in Germany published data showing that the gross domestic product for the third quarter decreased from 0.4 to 0.3 %.

US stocks closed Tuesday session at slightly higher levels after oil prices jumped.
The shooting down of a Russian warplane by Turkey has raised questions about a possible energy crisis in the region.
The growth of both Dow industrials and S & P 500 was thanks to energy and raw materials sector. Crude oil jumped by 2.7 %, which led to a rise in shares of energy companies with 2.2%.
Earlier in the day all US indices were in red territory after mixed US economic data and increased international tension.

Sunday, 22 November 2015

Nike plans to buy back $12 billion in stock shares

The sporting goods manufacturer Nike plans to buy back shares worth $ 12 billion and split shares in the ratio of 2 to 1.

The news comes after the company announced last month that it would increase the annual sales by about 60% to $ 50 billion by 2020, helped by growth in its online business. Since the beginning of the year until the end of trading on Thursday Nike's shares rose 31%. On Friday the shares rose 5.5 %to $132.65.

Divident boost

Friday, 20 November 2015

Do not miss the earning season: trade shares with ActivTrades

Very important events are forthcoming! The end of the year is knoking on the door and that reminds me  that the earnings season for the final quarter of the year is about to begin. This is an amazing opportunitity for the stock trading because most of the public trading companies will announce their quarterly earning reports. Earning seasons are always so exciting, the market will be very volatile and this would give additional opportunities of which we should benefit!
I feel ready to meet the earings season with the professional support from my broker ActivTrades, that provides me with low margin rates as well as with access to the following stock markets: NASDAQ, NYSE, Euronext, London Stock Exchange, Deutsche Borse and Borsa Italiana.

Thursday, 19 November 2015

Gold rises slightly

Today gold is attempting to increase after reached yesterday more than five-year low during a temporary retreat of the dollar, which eased pressure on raw materials and make the gold more affordable for buyers using other currencies.
Yesterday representatives of the Federal Reserve continued to hint for a rates hike in December after seven years of near-zero levels. They expressed confidence that the markets will accept the changes smoothly, despite some concerns about a sharp reaction.
Gold spot price is $ 1077 per ounce compared with yesterday's drop to $ 1064.95, which is the lowest value since the beginning of 2010.
U.S. housing starts in October fell to a seven-month low assingle-family home construction in the South tumbled, but a surge in buildingpermits suggested the housing market remained on solid ground.
The dollar today retreated from seven month highs due to withdrawing gains.

Wednesday, 18 November 2015

USD in stronger positions after released data on US inflation rates

The expectations that the Federal Reserve will raise interest rates next month are growing. The dollar rose after the publication of positive data on US inflation.
The published data showed that consumer price index increased 0.2% in October on a seasonally adjusted basis. In the previous period the it was 0%. Economists had expected a rise of 0.1%.
Theindex for all items less food and energy has risen 1.9 percent over the past 12 months;this is the same figure as the 12 months ending September. Indexes that have increasedmore rapidly include shelter (3.2 percent) and medical care (3.0 percent). Among the indexes that posted smaller increases arerecreation (0.6 percent) and new vehicles (0.1percent). Indexes that declined over the past year include airline fares(-5.2 percent), apparel (-1.9 percent) and used cars and trucks (-1.4 percent).
As a result, the greenback reached a 10-month high against the Swiss franc and also followed appreciation against the euro and yen. In stark contrast to the Fed is European Central Bank, which at the December meeting is expected to take a decision to expand the quantitative easing program. The possibility of reducing the interest rate on deposits keeps the euro under pressure.

The dollar index rose 0.1% to 99,681 - the highest level since April.
The dollar rose 0.4 percent against the Swiss franc to 1.0128.
The euro retreated against the dollar by 0.2%, reaching 1.0662.
Against the Japanese yen, the greenback rose 0.2% to 123.37 yen.
The British pound managed to rise against the dollar by 0.1 percent, reaching 1.5216.

Tuesday, 17 November 2015

Inflation in the UK remains negative

The UK's inflation rate as measured by the Consumer Prices Index remained negative for second consecutive month in October, amid lower prices of food, alcoholic drinks and tobacco.
According to the Office for National Statistics of United Kingdom, the indicator registered a decrease of 0.1% as in September, in line with analysts' forecasts.
However, core inflation, which excludes volatile product groups such as food and energy is increased to 1.1%, above expectations to remain unchanged at 1%.
Compared to September, consumer goods and services rose 0.1 percent after dropped by 0.1 percent the previous month.

Sunday, 15 November 2015

Trade surplus in Eurozone increased in September

Eurozone surplus rose in September more strongly than expected, according figures from Eurostat published on Friday.
The seasonally adjusted trade surplus in September rose to 20.1 billion euros from 19.0 billion euros in August compared with a forecast for surplus of 19.1 billion euros.
The main reason for the improvement of the trade surplus is the increase of exports by 1.1% on monthly basis, while imports grew by only 0.5%.
The surplus in international trade of goods and services in the euro area on unadjusted base increased  in September to 20.5 billion euros compared with a surplus of 17.4 billion euros a year earlier and a positive trade balance of only 11.2 billion euro in the previous month.
On an annual basis, exports from the euro area increased in September by only 1.0 %  after jumping 6% in August, while imports declined by 1.0% after rising by 3% in the previous month.

Friday, 13 November 2015

Asian stocks ended the week on red

Asian stocks finished the week in red after sharp falls in commodity prices amid the increasing expectations that the US Federal Reserve will raise interest rates in December.

China’s benchmark Shanghai Composite Index ended the session with a 1.4% decline, influenced mainly by commodity companies. With 5 % each fell shares of Baoshan Iron & Steel Co and China Northern Rare Earth. Shares of PetroChina and Sinopec fell by 1.9 and 2.1%.
Hong Kong's Hang Seng Index fell 2.2% after the aluminum producer Rusal reported a 11% drop in third-quarter profit and its shares fell 2.4%.
Japan's Nikkei 225 index recorded a decline of 0.5%, but appetite for banks helped to offset some losses.
Shares of Mitsubishi UFJ Financial Group rose 1.5% after the company announced a plan to buy back shares worth 100 billion yen.
Toshiba's shares fell 5.9% after the electronic giant confirmed that Westinghouse account losses in 2012 and 2013
The Australian index S&P ASX 200 reported a decrease of 1.5% and reached its lowest level since October 2, mostly because of unsatisfactory performance of companies in the resource sector.
South Korea's Kospi index recorded a decline of 1% and ended trading near six-week lows. Shares in Kia Motors and Hyundai Motor fell by over 2%.
The Malaysian economy grew at its slowest pace in more than two years in the third quarter - 4.7% and the benchmark KLCI recorded a decline of 0.1%.

Thursday, 12 November 2015

Gold fell to 3-month low

Gold fell to a three-month low on Wednesday session, after failing to take advantage of a weaker dollar. The precious metal remains under pressure due to the expected increase in interest rates by the Federal Reserve.The spot price of gold fell 0.5% to $ 1084.61 per ounce. This is the lowest level since August 7th.
US futures for delivery in December fell by $ 3.60 to 1084.90.Pressure also remained on platinum, which fell for tenth consecutive session of decline and reached its lowest level since December 2008. It is trading at around $ 875 per ounce.Palladium registered a decline and fell by 3.5 % to $ 574.25.

Wednesday, 11 November 2015

Euro under pressure

The euro fell significantly on Tuesday as a result of the rising political uncertainty in Portugal. Concerns about the stability of another European economy undermined the already shaky positions of the single currency. Yet we cannot speak about association with the situation in Greece, as the fiscal problems of Portugal are more susceptible to correction and stabilization. Moreover, expectations of quantitative easing initiated by the European Central Bank (ECB) will continue to weigh on the single currency. Contrary to the policy of ECB the US Federal Reserve (Fed) tries to exert tightening monetary policy, which would provide support for the dollar.

After the euro suffered a further blow, the dollar managed to advance against a basket of six major currencies. The single currency fell to 1.0674 dollars yesterday. Expectations that the Fed will raise interest rates after nearly a decade, will support the greenback until the meeting of central bankers on 15-16 of December. Against the yen, the dollar recorded a slight depreciation to 123.08 yesterday, while today even fell to 122.73 during the Asian session. This is partly due to the statement of ECB President Mario Draghi that the conference in London today is expected to give more information about the upcoming monetary policy of the institution.

Tuesday, 10 November 2015

European and U.S. stocks closed lower

European and US stocks closed lower on Monday upon the speculation that the Fed will raise rates in December this year.
Britain's FTSE 100 closed down to 6288.95, while the German DAX ended with a fall of 1.6 % to 10,808.89.
Among the European companies, Aggreko plc, the leading provider of modular, mobile power and adjacent product solutions, reported a decline in sales for the third quarter, but also announced that has been commissioned to supply Guam Power Authority with a 40 MW power package in Guam for the next 12 months, which increased the price of the company's shares up by 3%.
The tires manufacturer of Continental raised its profit forecast for the end of the year after seeing sales increase for the third quarter, but the company's shares closed about 5.3 % down.
Shares of Lufthansa closed with more than 3 % down after the carrier canceled hundreds of flights Monday because of the ongoing strike of the crew.Across the Atlantic Ocean the S&P 500 finished the day with a fall of 1%, closing at a price of 2078.28, while Nasdaq dropped to 4,653.50.

Friday, 6 November 2015

Trading Continuations With A Simple Pattern

Great webinar was held yesterday on Trading continuations with a simple pattern, 
organized by the competitive online broker ActivTrades.

The webinar was led the professional trader Paul Wallace who showed how to trade the continuation of a trend with one simple strategy.
If you want to learn how to trade on the continuation or to be more confident when recognizing the trend continuation, you may watch it at webinars archive.
Even more interesting promises to be the forthcoming event next week.
On 12 November Rishi Patel will talk about Price Action Patterns. 
Rishi Patel is Co Founder of Master the Markets, successful trader and coach with wealth of experience. To learn more, follow this link.

Thursday, 5 November 2015

Bank of England keeps the bank rate at 0.5%

Interest rates in the UK will may at record low levels in 2016 and without a risk of an excessive inflation, says the published today quarterly inflation report from the Bank of England .
The institution foresees the slowing of the global economy to balance consumer spending growth and productivity locally. Thus the consumer prices will remain under control and without increase in rates before spring in 2017. Apart, the high exchange rate of the pound also has a downward pressure on inflation, and it will take time before this effect lose power.
Regulators downgraded the forecast for economic growth in 2015 and 2016 respectively to 2.7% and 2.5%, while expectations for 2017 were revised upwards to 2.7%.
According to the majority, price tension so far is not sufficient to justify an increase in interest rates.

Wednesday, 4 November 2015

US trade deficit declined in September to the lowest level in seven months

The US trade deficit declined by 15 percent in September to $ 40.8 billion against the forecasts for a more moderate decline of $ 48 billion to $ 42.7 billion. 
Exports increased by 1.6% to $ 187.9 billion, after the previous month reached a three-year minimum. At the same time imports decreased by 1.8 percent to a seven-month minimum of $ 228.7 billion, mainly due to lower costs for oil and manufactured abroad consumer goods such as mobile phones.
Despite the improvement in September, however, for the first nine months of the year exports remained 3.8% below the volume for the same period of 2014, while export companies are hampered by weaker demand overseas markets as well as from higher exchange rates of the dollar.

Tuesday, 3 November 2015

USD at lower levels

USD remained at lower levels  against other major currencies on Monday after data showed that manufacturing activity in the US has increased by the slowest pace in more than two years.
PMI index fell to 50.1 from 50.2 in September, as the expected result  for October was of 50.0.
EUR/USD remained largely unchanged during the day and closed at 1.1015.
The data on Monday showed that the growth of the manufacturing sector in the euro zone rose in October, jumping to 52.3 in comparison with its level of 52.0 in September.
GBP/USD closed at 1.5414, while USD/CHF ended the day at 0.9867.
The British pound was supported during the day from data on manufacturing PMI, which posted the highest score of 55.5, compared with the previous month, when the index showed 51.8.
The dollar remained stable against the yen, USD/JPY closed the session at 120.74, while the Australian and New Zealand dollar closed the day respectively of 0.7145 and 0.6743.
At the same time, USD / CAD rose by 0.09% to 1.3092.
US dollar index fell to 96.92, as gold also closed lower at a price of 1133.28 dollars per ounce.
We should pay particular attention to the data on non-agricultural sector on Friday for further guidance on the likelihood of an increase in interest rates in December.

Monday, 2 November 2015

Manufacturing growth in Euroarea

Eurozone Markit manufacturing PMI data for October 2015, that was published today, showed an improvement. 
The indicator has gone to 52.3 points in October, which exceeded average expectations for a value of 52 points. For comparison - in September, its value amounted to 52 points.
A value above 50 indicates an improvement in the sector. Best result in the eurozone showed Germany. In the largest European economy PMI index amounted to 52.1 against expectations of 51.6 points and 52.3 points a month earlier.
Italy is another country where the result is significantly ahead of average market expectations. The index amounted to 54.1 points with expectations for 52.9.
In France, the value of the index is 50.6 points, or again below expectations of 50.7 points.
Spain also performed worse than expected with a value of 51.3 points with expectations for 51.9 points.
„The eurozone manufacturing recovery remains disappointingly insipid. The October survey is signalling factory output growth of only 2% per annum, a lacklustre performance given the amount of central bank stimulus in place”, said Chris Williamson, Chief Economist at Markit.

Sunday, 1 November 2015

Bank of Japan downgraded its economic forecasts

At the Monetary Policy Meeting held on 30th October, the Bank of Japan abstained from further easing of monetary policy  and left its stimulus program unchanged. The institution, however, has cut its economic forecasts and postpone the deadline, when it’s expected to be reached the key inflation target, which strengthened the assumption that it is not ruled out expanding the incentives in one of the next meetings of the managing board.
The regulators already foresee the increase in gross domestic product for the fiscal year ending in March 2016, amounted to 1.2 percent, as previously estimated 1.7 percent. Inflation target of 2% is expected to be reached in the six months ending in March 2017, or about half a year later than former assessments.
Also series of economic reports were published that do not show much hope for recovery. Household spending unexpectedly declined by 0.4% yoy in predicted by analysts slowdown in growth from 2.9% to 1.2%. The basic annual inflation remained at minus 0.1%, more than the projected -0.2% but remains on negative territory. The unemployment rate was stable at 3.4%.