InvestMacro Forex News

By JW Jones, OptionsTradngSignals.com

By HY Markets Forex Blog

In Europe, stocks were declining while major companies reported its quarterly results as finance ministers and officials from the G20 gathered for a two-day meeting to discuss global issues. The meeting is to be held in Moscow.

The pan-European Euro Stoxx dropped 0.38% to 2,707.79, while the German DAX fell 0.43% to 8,301.39. The French CAC 40 declined 0.43% to 3,911.08, as the UK’s FTSE 100 lost 0.28% to 6,615.50.

The finance officials from G20  meeting up in Moscow later today for the two-day meeting  and are going to discuss global issues  , such as the increase of the youth unemployment and the slow growth of the economy .

According to reports, the Down Jones and S&P 500 reached its highest level by the market close after Morgan Stanley posted the better-than-expected results and the Federal Reserve Chairman Ben Bernanke said that the central bank would be reducing its bond-buying program if the economic conditions in the US showed further improvement and were stable.

In Spain, the trade balance data for the month of May is expected to show deficit of 200 million euros.

While in Italy the reported industrial orders increased by 3.2% in May month-to-month, as orders declined 1.1% year-on-year, according to the National Institute for Statistics (Istat).

Istat reported industry sales in Italy are likely to pick up by 0.1% in the month of May on a monthly basis.

In Germany, the Federal Statistical Office reported that the producer prices were recorded flat in June monthly, after declining 0.3% in May, while the prices increased 0.6% yearly.

The post Europe market drops ahead of G20 meeting appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

The Western Texas Intermediate was seen traded flat on Friday, after heading to a 16-month high and balanced for nearly four weeks, indicating signs of the U.S economy growth. While oil inventories have dropped for the third week.

The WTI September delivery were traded flat, with a 0.02% drop to $107.81 at the time of writing , while the Brent futures delivery on the ICE Futures  Europe Exchange went up by 7 cents to $108.77 per barrel.

The price gap between the Brent crude and WTI went down to its lowest since October 2010.

The US economic news and high market expectations pushed the New York’s NYMEX crude to its current highs. The better-than-expected increase in manufacturing activity pushed the oil prices higher.

The Labor market also showed improvement as data from the US labor department showed that the jobless claims dropped from 334,000 to 24,000 in two weeks ending July 12, indicating it’s lowest since May.

While Wednesday’s weekly reports released by the Energy Information Administration (EIA) showed a fall in the US crude inventories, lowest since January. New data released showed, stockpiles dropped by 6.9 million barrels to 367 million in the previous week ending July 12.

The most recent US Federal Reserve Beige Book data released on the Wednesday meeting, revealed that the world’s largest economy is growing at a moderate pace ,showing that the economy growth may be stable .

The post WTI trades close to 16-month high on positive US data appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By WallStreetDaily.com

Every Friday, I undergo a transformation: I switch from being the boring professor – who specializes in droning, long-winded lectures – to the nutty professor, who blows crap up.

That might be a bit of an exaggeration.

But instead of boring you with words, I mix it up and enlighten you with a few striking charts.

Longtime readers tell us it’s their favorite column of the week. Let us know if you agree by dropping us a line at [email protected].

Without further ado…

Who’ll Flinch First?

Based on the latest National Association of Homebuilders (NAHB) sentiment index, homebuilders are more cheerful than they have been in a long, long time.

The latest reading jumped from 51 to 57 – the highest in seven and a half years.

The move caps off a two-month, 13-point rise, too, which hasn’t happened since “I’m Too Sexy” by Right Said Fred topped the music charts. (That was in February 1992, in case you stink at pop culture trivia.)

So are investors just as enthusiastic about homebuilding stocks? Er… not so much.

Ever since mortgage rates spiked, they’ve run for the exits, setting up one of the biggest divergences in recent history.

Homebuilders’ sentiment and homebuilding stocks traditionally move in lockstep with one another. But that’s not happening right now, setting the stage for the biggest game of “Chicken” on Wall Street.

As Bespoke Investment Group notes, “Going forward, it will be interesting to see if this recent divergence corrects itself – either by housing stocks picking back up again, or homebuilder sentiment pulling back.”

My money is on housing stocks reversing course. Anyone care to wager with me on that?

Yes, Mobile is Kind of a Big Deal

Occasionally, I get ridiculed for my over-the-top enthusiasm regarding all things mobile and the runaway growth in the sector.

But it’s warranted. And here’s the proof…

In the last decade, the number of mobile phone subscriptions has surged from 662 million to 6.4 billion, according to the International Telecommunications Union.

That translates into a 91% global penetration rate, making mobile phones one of the most ubiquitous technologies in the world. Only steel blades, cotton t-shirts, aluminum pots and plastic bottles are more prevalent (if they actually count as innovations).

Even more staggering is the uptick in mobile internet usage. The number of users recently topped two billion.

So forget Ron Burgundy… mobile is kind of a big deal. Invest accordingly. Or miss out.

That’s it for today. Before you sign off, though, do us a favor: Let us know what you think about this weekly column – or any of our recent work at Wall Street Daily – by sending an email to [email protected], or leaving a comment on our website.

Thanks, and enjoy the weekend!

Ahead of the tape,

Louis Basenese

The post Friday Charts: A Nasty Game of Chicken… Wall Street Style appeared first on  | Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Friday Charts: A Nasty Game of Chicken… Wall Street Style

By www.CentralBankNews.info

By Profit Confidential

In the first quarter of 2013, we saw an interesting and unexpected development. While the corporate earnings of S&P 500 companies were better than expected, their revenues weren’t nearly as impressive.

Just 46% of S&P 500 companies reported revenues above estimates. (Source: FactSet, May 31, 2013.) And the second-quarter corporate earnings might be similar—if not worse.

As we are just entering the earnings season, many S&P 500 companies have yet to report their corporate earnings, but some of the big household names have already started to strengthen my opinion.

Take The Coca-Cola Company (NYSE/KO), for example. The S&P 500 company not only reported a decline in corporate earnings, but also showed a decline in revenues. For the second quarter, Coca-Cola’s net revenues declined three percent from a year ago. Similarly, the company’s corporate earnings also dropped three percent, registering at $0.59 per share in the second quarter, compared to $0.61 in the same period a year ago. (Source: The Coca-Cola Company web site, July 16, 2013.)

In much the same vein, Mattel, Inc. (NYSE/MAT)—the world’s largest toy maker and constituent of the S&P 500—reported corporate earnings that were 25% lower than a year ago, noting that sales missed analysts’ expectations. Revenues registered at $1.17 billion, while analysts had been expecting $1.22 billion. Corporate earnings for Mattel declined to $0.21 per share from $0.28 per share year-over-year. (Source: Reuters, July 17, 2013.)

Another big name that’s reporting negatively is Yahoo! Inc. (NASDAQ/YHOO). This S&P 500 company reported corporate earnings that were above the consensus, but revenues witnessed a slight decline—$1.071 billion compared to $1.081 billion in the second quarter of 2012. In the near future, the company expects revenues to be lower than what it previously anticipated. (Source: Reuters, July 16, 2013.)

Keep in mind that before second-quarter earnings season began, we had 87 S&P 500 companies issue negative earnings guidance. The information technology and consumer discretionary sectors of the S&P 500 had the largest number of companies issuing negative guidance about their corporate earnings relative to their five-year average. (Source: FactSet, June 28, 2013.)

It’s odd that all these troubling developments in the corporate earnings of big-cap companies are going unnoticed in the mainstream media. What I see in the media are just stock advisors staying optimistic and not taking into consideration the reliability of corporate earnings.

Consider the Investors Intelligence Advisor Sentiment index. It has been increasing for three consecutive periods and is closing in on highs made in mid-May of 2012. (Source: Investors Intelligence, July 17, 2103.)

But I still see big-cap companies still trying their best to boost their corporate earnings through other means—call it financial engineering.

Take Yahoo!, for example. In the past few quarters, the S&P 500 company has purchased $3.65 billion worth of its own shares back, and in its first-quarter corporate earnings announcement, the company was very clear that it plans to purchase another $1.9 billion worth of its own shares back.

These anemic revenues mean that companies are not really selling more, and deteriorating earnings combined with key stocks heading higher continues to add more evidence to my belief that what should be a bear market is rallying by doing a masterful job at luring investors.

While it’s certainly not popular to be bearish in this market, the facts appear to be in my favor.

Michael’s Personal Notes:

The Federal Reserve has made it very clear that it wants to stop quantitative easing. But it has also made it just as clear that it won’t begin to taper its quantitative easing program until certain conditions are met.

While speaking in front of the Committee on Financial Service, here’s what the chairman of the Federal Reserve, Ben Bernanke, said about ending quantitative easing: “I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course. On the one hand, if economic conditions were to improve faster than expected, and inflation appeared to be rising decisively back toward our objective, the pace of asset purchases could be reduced somewhat more quickly. On the other hand, if the outlook for employment were to become relatively less favorable, if inflation did not appear to be moving back toward 2 percent, or if financial conditions—which have tightened recently—were judged to be insufficiently accommodative to allow us to attain our mandated objectives, the current pace of purchases could be maintained for longer.” (Source: Board of Governors of the Federal Reserve System, July 17, 2013.)

But no matter when quantitative easing ends, one thing has become certain—it will have its victims. And the biggest victim of quantitative easing I see will be the bond market.

In its meeting in May, the Federal Reserve hinted that the quantitative easing will be slowing sometime later this year and ending completely next year. Since then, the bond market has seen selling. I have mentioned in these pages how the bond prices have declined and yields have soared higher.

The Investment Company Institute (ICI) reports that for the week ended July 2, 2013, the outflow from bonds mutual funds was $5.9 billion. (Source: Investment Company Council, July 10, 2013.)

And from the week ended June 5 until the week ended July 2, $66.65 billion was pulled from the bond mutual funds. If the bond mutual funds register a net outflow for June, then this would be the first net outflow since August of 2011.

What you need to realize is that the bond market is very big in size—much bigger than the stock market—and, if it declines, it could have a significant impact on the economy.

Consider this: if the bond market starts to see higher yields, then the mortgage rates will increase. We are already starting to see this. Just look at the chart below. It shows that companies that borrow to run their daily expenses will be paying more and in general, the cost of goods can increase.

Quantitative easing in the U.S. economy hasn’t done much for the economy, and it’s just a matter of time until things turn sour.

What we saw in the bond market since May is just a minor episode of what might happen when the Federal Reserve starts to taper its quantitative easing program.

To all bond investors: be careful—to enter the bond market now would be to tread in dangerous waters.

Article by profitconfidential.com

By Profit Confidential

The Federal Reserve has made it very clear that it wants to stop quantitative easing. But it has also made it just as clear that it won’t begin to taper its quantitative easing program until certain conditions are met.

While speaking in front of the Committee on Financial Service, here’s what the chairman of the Federal Reserve, Ben Bernanke, said about ending quantitative easing: “I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course. On the one hand, if economic conditions were to improve faster than expected, and inflation appeared to be rising decisively back toward our objective, the pace of asset purchases could be reduced somewhat more quickly. On the other hand, if the outlook for employment were to become relatively less favorable, if inflation did not appear to be moving back toward 2 percent, or if financial conditions—which have tightened recently—were judged to be insufficiently accommodative to allow us to attain our mandated objectives, the current pace of purchases could be maintained for longer.” (Source: Board of Governors of the Federal Reserve System, July 17, 2013.)

But no matter when quantitative easing ends, one thing has become certain—it will have its victims. And the biggest victim of quantitative easing I see will be the bond market.

In its meeting in May, the Federal Reserve hinted that the quantitative easing will be slowing sometime later this year and ending completely next year. Since then, the bond market has seen selling. I have mentioned in these pages how the bond prices have declined and yields have soared higher.

The Investment Company Institute (ICI) reports that for the week ended July 2, 2013, the outflow from bonds mutual funds was $5.9 billion. (Source: Investment Company Council, July 10, 2013.)

And from the week ended June 5 until the week ended July 2, $66.65 billion was pulled from the bond mutual funds. If the bond mutual funds register a net outflow for June, then this would be the first net outflow since August of 2011.

What you need to realize is that the bond market is very big in size—much bigger than the stock market—and, if it declines, it could have a significant impact on the economy.

Consider this: if the bond market starts to see higher yields, then the mortgage rates will increase. We are already starting to see this. Just look at the chart below. It shows that companies that borrow to run their daily expenses will be paying more and in general, the cost of goods can increase.

Quantitative easing in the U.S. economy hasn’t done much for the economy, and it’s just a matter of time until things turn sour.

What we saw in the bond market since May is just a minor episode of what might happen when the Federal Reserve starts to taper its quantitative easing program.

To all bond investors: be careful—to enter the bond market now would be to tread in dangerous waters.

Article by profitconfidential.com

By Profit Confidential

I just filled my gas-guzzling SUV that only uses premium gasoline; trust me when I say it wasn’t pleasant. And I know I will need to visit the gas station again in just a few days.

I accept that, but what I don’t understand is the surging increase in oil prices. Oil is now more than $106.00 a barrel.

I realize we have the uncertainties in Egypt after the ousting of the country’s former leader Mohammed Morsi by the army. Of course, while Egypt is not a major oil producer, the Suez Canal does run through it. And a huge amount of Middle Eastern oil is carried through the canal to the Mediterranean Sea from the Red Sea.

At the current price for oil, the technical picture continues to point to gains in the near term. But I would look at an upside move in oil prices as an opportunity to sell if you currently have oil exposure. Oil is not in a sustainable upward move or bull market.

But the commodity is still advised for traders. I would expect a return to normalcy in the near future, with oil prices retrenching back to less than $100.00 a barrel.

The chart of the West Texas Intermediate crude (WTIC) oil prices below shows the overextension from the previous sideways channel, with $98.00 on the top end. I doubt the breakout will hold as the underlying fundamentals are not supporting a situation of a demand-supply imbalance.

Chart courtesy of www.StockCharts.com

The U.S. economic recovery is ongoing, but it’s also showing signs of stalling. U.S. companies are struggling to grow revenues and that implies a potentially lower demand for oil.

The global economy isn’t going gangbusters either, with muted growth from Europe to Asia and Latin America.

For oil prices to have a sustainable upward move at more than $100.00, we need to see the demand side explode upwards. And no signs indicate that will happen.

In addition, the Organization of Petroleum Exporting Countries (OPEC), the oil cartel, can no longer really influence world oil prices as much as it did in the past when it often held world markets captive.

Also America is producing much more oil now than in the past and this will continue to increase as shale oil from North Dakota and Montana is being pumped via fracking techniques. (Read “Why This Cold Prairie State Is an Investment Hotspot.”)

It’s wise to take a look at the oil companies and those supplying services to them. The prices of these oil stocks are headed higher, but not at the same rate as oil, because traders know the jump in oil prices is only temporary; it’s not sustainable.

Article by profitconfidential.com

By Profit Confidential

In what can only be described as another excellent quarter of performance and growth, Johnson & Johnson (JNJ) once again beat Wall Street consensus with its earnings.

The company defied the odds and posted genuine business growth—not just domestically, but abroad as well. Similar to its first-quarter performance, the company seems to be on a bit of a roll.

Johnson & Johnson reported revenues of $17.9 billion for the second quarter of 2013, a solid increase of 8.5% over the comparable quarter in 2012. Domestic sales grew eight percent, which was expected; the surprise was in the company’s international sales, which grew 11.8% in total, with a negative currency impact of 2.8% for a net growth of nine percent. This growth measure includes acquisitions and divestitures; excluding those, global operational sales growth was 5.6%.

Global pharmaceutical revenues were $7.0 billion in the second quarter for a net gain of 11.7% comparatively. Domestic pharmaceutical sales grew 9.1%.

Johnson & Johnson’s operational top-line growth really is solid, considering today’s economically challenged global economy. The company appears to be in the right businesses at the right time, at least according to the numbers.

On the stock market, Johnson & Johnson’s shares have soared as the marketplace chases the safest, dividend-paying stocks that are actually able to generate real economic growth.

The company’s stock chart is featured below:

Chart courtesy of www.StockCharts.com

Earnings were $3.8 billion (including a gain on sale and an after-tax gain), and diluted earnings per share (EPS) were $1.33, handedly beating Wall Street estimates.

Not only did Johnson & Johnson’s numbers beat consensus, but the company also increased its full-year 2013 guidance. The company raised its earnings forecast to a range of $5.40–$5.47 a share excluding items. At the beginning of the year, Johnson & Johnson forecast earnings between $5.35 and $5.45 a share.

Speaking of beginnings, Johnson & Johnson’s share price is up a whopping $20.00 a share (not including dividends) since the beginning of the year. The company is now worth a quarter of a trillion dollars, which is truly amazing for such a mature brand.

Johnson & Johnson exemplifies the kind of stock that institutional investors want to own in this kind of market. The company has diversified operations, so there are good prospects for dividend increases going forward, and there’s a lot of safety in what this company is selling.

Revenues and earnings growth, while not robust, were still very impressive for a company of this size. (See “The One Market Sector That’s Consistently Outperforming the Rest.”)

The company really hasn’t done much on the stock market over the last seven years—until recently, when all of a sudden it did. But that is how so many large-cap, blue-chip companies trade: periods of nonperformance are met with increasing dividends followed by a comparatively short breakout representing the majority of the position’s capital gains over a period of time.

The opportunity cost of not being in the position while it is experiencing its breakout capital gains is significant.

Johnson & Johnson serves to illustrate that great businesses tend to remain just that—great—and that long-term ownership with dividend reinvestment is an excellent way to generate meaningful investment returns.

Without question, this company is due for a stock market correction.

Article by profitconfidential.com

By Profit Confidential

The eurozone is still a mess. Instead of improvements, I just see more troubles. Economic slowdown in the region’s debt-infested nations is already staggering, but even those that were able to fight it are now experiencing huge problems.

Around this time last year, the European Central Bank (ECB) was very clear about its plan for the eurozone crisis. It said that it’s “ready to do whatever it takes.”

Back then it was the greatest relief to the market—the announcement calmed the rising debt rates in the eurozone and sent a wave of optimism toward the key stock indices.

But it was just a short-term fix. Take my word for it: economic slowdown in the eurozone is here to stay for a long time.

Take, for example, France—the second-biggest economy in the eurozone. France used to have a credit rating of AAA, according to credit rating agency Fitch Ratings, which is the best rating among its other eurozone peers. But France has since been downgraded a notch by the credit rating agency. (Source: Wall Street Journal, July 12, 2013.)

Fitch cited that the eurozone country’s national debt compared to its gross domestic product (GDP) reached 91.7% in the first quarter of 2013. It expects the French national debt ratio to peak at 96.0% in 2014.

Fitch also provided an anemic outlook for the French economy. The credit rating agency expects the country to witness an economic slowdown this year, following mediocre growth in 2012. Unemployment in this France is also troublesome. It stands at a 15-year high of 10.9%.

Germany, the biggest economic hub in the euro region, is experiencing turbulence as well. It’s not seeing an outright economic slowdown, but it’s certainly not far from it. Exports from the country plummeted nine percent in May to 38.1 billion euros. German investor confidence also declined for the first time in three months—suggesting that the economic outlook isn’t very bright. (Source: Bloomberg, July 16, 2013.)

Here’s what all the economic slowdown in the eurozone comes down to: the corporate earnings of the companies trading on key stock indices.

Dear reader, you need to keep in mind that the eurozone, all 17 member nations combined, consumes a significant amount of goods and services. If the unemployed in the region hits a record high, major hubs start to slow down, and demand becomes the next victim.

In the first quarter, we saw 11 of the 30 Dow Jones Industrial Average companies provide their sales figures from the eurozone. Nine of the 11 reported a decline year-over-year. (Source: FactSet, May 28, 2013.)

We are currently in the midst of second-quarter earnings season. I expect more companies to show struggles in the region. My reason is very simple: even if we disregard the already struggling eurozone nations like Greece and Spain, stronger nations like France are suffering an economic slowdown, and Germany is struggling. There will be consequences.

Michael’s Personal Notes:

Face it: there is no real economic growth in the U.S. economy. The only reasons the key stock indices keep rising are nothing more than easy money and false optimism. They are anything but a key indicator, and you should not use them as one.

The reality of the U.S. economy is completely the opposite of what’s happening in the markets.

I often say in these pages that economic growth only occurs in the U.S. economy when consumers feel good and spend money. But I see more and more evidence of consumers not spending—many are actually struggling. Don’t buy into the mainstream media’s belief in economic growth.

Instead, look at indicators like the U.S. retail and food services sales for June. They increased 0.4% from the previous month to $422.8 billion and have increased 5.7% from June of 2012. In the second quarter (April through June), retail and food services sales in the U.S. economy were up 4.6% from the same period a year ago. (Source: U.S. Census Bureau, July 15, 2013.)

While that might sound impressive, the chart below will show you something you won’t see the in the mainstream. It shows the percentage change in retail and food services sales from a year ago.

 Clearly, the retail sales increases aren’t nearly as amazing as they seem at first glance. The rate of change is actually slower than it was a year ago—and has been trending downward since 2011.

But there’s further proof consumers are not buying. Manufacturing and trade inventories for the month of May have increased 0.1% from April, and 3.8% from a year ago.

And some industries are feeling it worse than others. Inventories at motor vehicle and part dealers were up 12.7%, and inventories for clothing and clothing accessories stores increased 4.6%. (Source: U.S. Census Bureau, July 15, 2013.)

Here’s what is actually happening: consumers in the U.S. economy are spending their money on basic needs. From April to June, consumer spending at gas stations has increased little more than 3.3%.

What’s even more troubling is that crude oil prices have jumped due to tensions in the Middle East. That means that gas prices will soar even higher. And that will result in even more trouble for consumers in the U.S. economy.

On top of all this, contrary to economic growth, Americans have another problem. Instead of getting full-time jobs, many are only able to get part-time work. This year, on average, the number of part-time jobs that have been added each month in the U.S. economy, seasonally adjusted, sits at 93,000. But only about 22,000 full-time jobs have been added. (Source: Wall Street Journal, July 14, 2013.)

Dear reader, I find myself tired of saying this, but numbers don’t lie. They are saying economic growth in the U.S. economy is simply a myth. You must keep in mind that consumers are the driving force behind any economic growth in the U.S. economy. The longer they suffer, the longer it will take the U.S. economy to get back on its feet.

We may see higher corporate earnings from big-cap companies for now. They are buying back their shares, but consumers are the ones who buy their products. The numbers will eventually catch up, and their corporate earnings will suffer.

Article by profitconfidential.com