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Source: ForexYard

More negative news for the Euro-zone as the Euro weakens against the Yen and the Dollar. The Euro took a slide due to an index of the euro -area manufacturing and services which contracted for March,more than  then expected.The Euro-zone takes another hit, as such a result can only add to concerns of a slowing European economy.

Over the last few months we have seen the Euro-zone economy show signs of improvement and some surprisingly positive outcomes, however this latest setback will cast even more shadows over the future of the Euro.

This morning saw the greenback appreciate over most rival currencies with the exception of the Yen.The Dollar rose against its Australian and New Zealand counterparts after the news that Chinas’ purchasing managers’ index fell to a weaker then expected 48.1 in March.

We head to the Yen as the major currency strengthened against 16 currency rivals after Japan reported an unexpected trade surplus for the month of February, another indicator of the Japanese economy showing good signs for the future.

More positive news for the Yen as the currency moved towards its first five-day advance in 7 weeks against the Greenback as a result of Japans’ finance ministry reporting the amount of exports exceeding imports by 32.9 billion Yen. This latest data suggests that Japans economy is showing signs of  improvements. Continue reading “Euro Takes A Hit whilst Dollar & JPY Strengthen”

Unemployment is high. Gas prices are soaring past $4. And the stock market has doubled within the past three years. Does this bull market really have legs?

It’s hard to argue with someone who just won’t see the facts for what they are.

Over the weekend, I was talking to an acquaintance about the stock market. He said he didn’t believe we were in a bull market.

“The stock market has doubled in three years!” I said incredulously. “What more proof do you need?”

Apparently a lot more. The person pointed to high unemployment, gas prices soaring above $4, and every other negative in the economy and geopolitical scene that you can point to as a reason not to own stocks.

And that’s just fine with me. The more doubters we have, the more likely the market is going to run up. I’m going to start getting worried when people are extremely bullish and talk at cocktail parties revolves around the stock market.

Here’s why I believe the market still has legs:

• Headlines – I’m still seeing headlines about market corrections, the market going up too much too fast, etc. On Sunday, the Financial Times had a story titled “Wall Street Braced for Hit to Soaring Markets” chronicling analysts’ bearishness. Let them be scared. When was the last time those analysts made anyone money, anyway? When those headlines become bullish, I’ll get worried.
• Wall Street “Experts” – The market has already topped the expectations of most Wall Street strategists. At the beginning of the year, the average forecast was for the S&P to hit 1,363 by the end of the year. The highest target price was 1,515. Goldman Sachs’ U.S. Equity Strategist said last week that he’s sticking with his end of the year forecast of 1,250 for the S&P 500.
• The “fear” trade is over – We’re seeing bonds and gold head lower. These are investment vehicles people buy when they want safety. They’re rotating out of these assets and are putting them to work in stocks. The market is sending a very clear message that the panic of the past few years is finished.

I’ve said this many times before – the market is a forward-looking mechanism. Over the past few years, as stocks were heading higher, even when the economic picture was still bleak, I told you that stocks were telling us things were going to improve.

And while unemployment is still too high, things are much better. Joblessness has dropped from 9.9% at its recent high to 8.3%. Underemployment, which includes part-time workers who want full time jobs and people who have stopped looking, is at a three-year low at 14.9%.

Sales at restaurants were up 8.7% in February, indicating people feel more comfortable with their financial picture. Personal income was up 5.1% in 2011 and personal savings rose 4.6% in January, suggesting that Americans have more money in their pockets now than they have had over the past three years when both of those figures were declining.

Business is picking up all over. Try to get into a decent restaurant these days. They’re packed. Revenue in Las Vegas was up 29% in January. When was the last time you had an empty seat next to you on an airplane? My conversations will realtors all indicate a significant pick up.

Are things perfect? Absolutely not. There are still people hurting and businesses that are struggling. And although the problems of the past few years were very real and significant, this time wasn’t different, and the economy and markets rebounded like they always have.

I suspect there’s plenty of upside left in this market. I expect us to hit the recent highs in the S&P 500 of 1,576. Strong stocks like Apple (Nasdaq: AAPL), Las Vegas Sands (NYSE: LVS) and Qualcomm (Nasdaq: QCOM) should continue to lead us there.

Good Investing,

Marc Lichtenfeld

Article by Investment U

These five U.S. banks are not only financially fit… they're on track for share buybacks and high dividends in 2012.

In January, bank regulators voted to release a proposal for how banks with more than $10 billion in assets should conduct stress tests annually. The purpose of the tests is to gauge whether or not individual banks can withstand another major economic downturn.

The tests are now a required cost of doing business due to the 2010 Dodd-Frank financial oversight law. Stress tests have become a key component of how regulators will assess the health of the banking industry.

The Federal Reserve also decided to put banks with more than $50 billion in assets through separate tests to gauge whether they have sufficient capital. The results of these tests came out last week…

Such tests presented a worst-case scenario under which the unemployment rate peaks at 13%, the equity market dives 50 % (which would put the S&P 500 at 685) and housing prices could somehow be more awful and decline by 21%.

Another of these differing scenarios includes a “supervisory stress scenario,” meant to capture the likely environment if another U.S. recession would affect banks with simultaneous slowdowns in other major economies, like those of Western Europe or China.

Withstanding Financial Shock

The Fed is attempting to ensure that banks have enough capital reserves on the books to withstand a financial shock like the one back in 2008 and be able to withstand it without that venomous phrase “government bailout.”

“Strong capital levels are critical to ensuring that banking organizations have the ability to lend and to continue to meet their financial obligations, even in times of economic difficulty,” the Fed said, noting that U.S. firms have rebuilt their capital levels on its watch since the first government stress tests of early 2009.

And the public will be made privy to much of the information from these tests. The Fed expects to release bank-by-bank results based on the projections – as it did in 2009, but did not last year. The Fed said the results will consider losses, revenue, expenses, and capital ratios over the planning horizon.

Investing opportunities?

The Federal Reserve also said it will allow a number of the big U.S. banks to raise dividends to a ceiling of as much as 26% of earnings as part of the latest round of stress test results released last week.

“Even with stressful scenarios, the stress tests will demonstrate that banks are in a stronger place, far stronger than in 2008,” said Fred Cannon, Director of Research at Keefe, Bruyette & Woods Inc. in Washington. “We think companies like J.P. Morgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC) and U.S. Bancorp (NYSE: USB) will show meaningful increases in dividend and share repurchase plans.”

The big news for investors is that how the institutions graded on this last set of tests determined the possible extent to which they can provide dividends and share buybacks.

Well, the grades are in…

And here are a few of the 15 out of the 19 banks that passed who have already made known their fairly aggressive stock buyback plans and increased dividend:

• American Express (NYSE: AXP) – Passed stress test with 10.8% capital ratio. Raised dividend to $0.20, from $0.18, and authorized $4 billion 2012 buyback, up to $1 billion in 2013.
• Bank of New York Mellon (NYSE: BK) – Passed stress test with 13 % capital ratio and said it will move ahead with $1.16 billion stock repurchase. Also affirmed dividend of $0.13 per share.
• BB&T (NYSE: BBT) – Passed stress test with 6.4% capital ratio. Upped dividend 25% to $0.20 and said Fed did not object to planned redemption of $3.2 billion in trust preferred securities.
• J.P. Morgan Chase (NYSE: JPM) – Passed stress test with 5.4% capital ratio under stressed scenario, including proposed capital actions through 2013. Increased its dividend 20% to $0.30 per share, from $0.25 and authorized a $15 billion stock buyback.
• Regions Financial (NYSE: RF) – Passed stress test with 6.6% capital ratio, announced $900 million common stock offering to go toward repurchasing $3.5 billion in preferred shares owned by the Treasury Department dating back to loans from the Troubled Asset Relief Program (TARP).

Good Investing,

Jason Jenkins

Article by Investment U

By TraderVox.com

Tradervox (Dublin) – The USD is nearing above the initial resistance signaling the end of the recent downward trend registered yesterday. Many analysts have taken this to mean that upward trend is gaining momentum. Euro declined after the Manufacturing and Services Purchasing Manager’s index came below the expectation.

Economists and investors had expected the Euro region PMI composite indicator to come at 49.6 but the actual value has been reported at 48.7. The economists also expected the PMI manufacturing to come in at 49.5 but came in at 47.7. The services sector registered a value of 48.7 against an estimated value of 49.2. These readings indicate that the euro market contracted during this period.

Both France and Germany, which are the region’s greatest countries registered weaker than expected values. The values showed that both markets contracted with German PMI coming at 48.1 for March from 50.2-value registered for February. The European session opened to the news of lower than expected Chinese PMI result weakening risk appetite hence increasing the value of the dollar against major currencies.

The negative reports from the euro zone indicate that the region’s crisis is far from over and much more will have to be done to bring the situation back to normal. Despite the euro zone leaders’ positive comments about the situation in Greece, it seems like investors are shying away from the region. Comments by one of the ECB’s member that the ECB should gradually exit the crisis mode may not augur well with investors as reports indicate otherwise. Investors will now be keen on the efforts by the ECB to stick to its long-term refinancing operations as it maintains momentum for growth in the region.

The dollar rose against the euro by 0.4 percent to settle at 1.3159 after the results of the Euro zone PMI. The euro declined by 1.1 percent against the yen to sell at 108.98 at the start of the New York trading. China manufacturing figures negatively affected the Australian dollar declining 0.8 percent against the buck to sell at $1.0377.

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FedEx (FDX) reported that it earned $521 million, or $1.65 per share, versus $231 million, or 73 cents per share, in the same period last year. Revenue increased by $10.56 billion from $9.66 billion in the same period last year.

A year after the tsunami, Japan is trying to get the country back on track. But there’s a long road ahead. How is Japan going to reshape its energy future?

On March 11, the world paused to reflect the one-year anniversary of Japan’s tragic tsunami.

Over 15,800 lives were lost from this single event. It’s estimated over 3,000 people are still missing.

I don’t know about you, but disasters like this remind me to really appreciate the life I have. There are some incredible survival stories that still send chills up and down my neck every time I read them.

Of course, Japan is working hard to figure out a way to get the country back on track. But there’s a long road ahead.

One of the biggest challenges… How is Japan going to reshape its energy future?

Japan’s New Energy Outlook

Over the past year, the tsunami forced Japan to depend much more on fossil fuels…

• Liquefied natural gas (LNG) imports hit an all-time high in January and jumped 28% during 2011.
• Coal imports for electricity generation increased more than 26% in January from a year earlier and increased nearly 8% last year.
• Japanese imports of crude oil exploded 350% this month compared to March 2011. Overall oil consumption increased 9%, or by 275,000 barrels per day, over the year.

Barclays Capital says, “Neither the Japanese government nor environmentalist groups are happy about relying more heavily on fossil fuels.”

It’s pretty much guaranteed Japan’s dependency on fossil fuels will continue to surge for several years.

In January, Japan’s trade deficit hit a record high of $7 billion.

Meanwhile, all but two of its nuclear reactors are shutdown and renewable energy only accounts for 2% of its electricity output.

Before the tsunami, Japan was the world’s third-largest producer of nuclear power. It provided 30% of the nation’s entire energy needs. Today, there’s plenty of debate about whether or not the country will ax its nuclear energy program altogether.

If this happens, fossil fuel imports would likely stay at record highs for years to come.

This is simply the new reality Japan must deal with. It’s going to be a tough challenge for the country for a long time.

But for companies like Total S.A. (NYSE: TOT), Japan’s new energy landscape provides unique opportunities to profit…

Total S.A.: A Backdoor Play on Japan

Total S.A. is already a major oil and gas company.

Based out of France, the company has a market cap of $126 billion, and owns and operates major energy projects all over the world.

In Indonesia, it’s the country’s leading producer of natural gas.

According to The Jakarta Globe, Total produces 30% of Indonesia’s gas production and has 14 trillion cubic feet of reserves.

Much of this comes in the form of LNG, which Indonesia is the second-largest exporter in the world of. And Japan is currently Indonesia’s biggest LNG customer.

Rigzone.com reports Japanese “LNG imports are expected to remain the largest incremental gainer in 2012.”

In other words, as Japan continues to ramp up its demand of fossil fuels, especially LNG, Total will be one of the first companies to benefit from the extra spending.

Good Investing,

Mike Kapsch

Article by Investment U

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 22 March, 09:15 EST

WHOLESALE bullion fell hard in early London trade on Thursday, with the gold price dipping to nearly its lowest level in 2012 as world stock markets and commodity prices also fell.

India’s jewelry sector remained on strike in protest at last week’s doubling of import duties, and “with physical demand not at full strength and waning investor enthusiasm, the potential for further downside in [the gold price] remains exposed,” says today’s note from Standard Bank.

Silver prices also dropped over 1% in London trade, touching their lowest level against the US Dollar since Jan. 25th at $31.70 per ounce.

Worse-than-expected European data was this morning preceded by news that China’s manufacturing activity has now contracted for five months running.

“Shrinking manufacturing activity in March signals slower demand for resources,” notes a column from Thomson-Reuters Breakingviews.

“Strong imports have heightened the risk of overstocking in precious metals.”

Late-January’s Chinese New Year – a peak season for consumers to buy gold – coincided with sharp falls in the volume of bullion being imported to China from Hong Kong, falls which followed an earlier surge in China’s gold imports during late 2011.

Albert Cheng of global market-development organization the World Gold Council said earlier in March that Beijing and Shanghai stores had reported “fantastic” sales over the Lunar New Year, “completely clear[ing] out the inventory they had built up.”

In the wholesale market, “A lot of people are on the sidelines at the moment,” said Yuichi Ikemizu, commodities chief in Tokyo for Standard Bank, to Reuters early on Thursday.

“We saw some bearish signs, but the [gold price] seems to be holding well. The upside at $1,800 is still looking quite heavy, and investors are waiting for a cue.”

“We feel that gold is consolidating and remains vulnerable to the next leg lower,” reckons Russell Browne at Scotia Mocatta, commenting shortly after Wednesday’s US close.

“Silver also continues to consolidate…[in] a daily downtrend providing near-term resistance around $32.60.”

The ratio of silver to gold prices yesterday hit a 1-month high at 51.6. The Gold/Silver Ratio rises when the gold price outperforms silver, and vice versa.

Last April the Gold/Silver Ratio hit a 32-year low, with each ounce of gold equivalent in price to just 30 ozs silver. It peaked near 85 in the wake of Lehman Brothers’ collapse in September 2008.

Early Thursday, “Speculation of reduced demand for raw materials from China has continued to weigh on risk sentiment,” says Swiss refinery and finance group MKS in a note.

“People are concerned about China’s economic growth,” Reuters quotes a Hong Kong bullion dealer.

“If growth slows down and inflation eases, people may choose not to buy gold.”

Following the Chinese news on Thursday, European economic figures also came in below analyst forecasts, with Germany’s manufacturing PMI contracting faster and Eurozone industrial orders falling 3.3% in January from 12 months before.

UK retail sales also undershot analysts’ predictions, shrinking 0.3% last month from January.

Crude oil prices meanwhile fell 1% Thursday morning, with Europe’ benchmark Brent price slipping to $122 per barrel after French industry minister Eric Besson said that major G7 governments are considering a co-ordinated release of emergency stockpiles to push prices down.

A Gallup poll this month found that 85% of US citizens think Washington “should take immediate actions to try to control the rising price of gas.”

Brent crude hit fresh all-time highs in mid-March for both Eurozone and UK oil consumers, peaking 3% above the previous all-time high of July ’08, reached two months before the global banking crisis accelerated with the Lehman Bros. collapse.

“We can reel off a whole load of airlines that are teetering on the brink or are really gone,” said Tim Clark, president of Emirates Airlines in Dubai, the world’s biggest international carrier, to Bloomberg on Wednesday.

Pointing to record oil prices and a slump in demand, “Roll this forward to Christmas, and we’re going to see [the airline] industry in serious trouble,” says Clark.

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

ConAgara Foods (NYSE:CAG) is scheduled to report quarterly earnings on Thursday.Analysts are expecting EPS of $0.49 and revenues of $3.35 billion.ConAgra Foods (NYSE:CAG) has potential upside of 4.7% based on a current price of $26.31 and an average consensus analyst price target of $27.56.ConAgra Foods is currently above its 200-day moving average (MA) of $25.39 and should find resistance at its 50-day MA of $26.63.In the last five trading sessions, the 50-day MA has remained constant while the 200-day MA has remained constant.

By The Sizemore Letter

Apple (Nadaq: $AAPL) made headlines this week by announcing that, at long last, the company would start paying a dividend.  This is fantastic news, not just for the Apple shareholders that had been agitating for the change, but for the broader investing public.  Apple is one of the most closely watched and admired companies in the world; perhaps other technology companies (ahem…Google?) will follow Apple’s lead and start moving in the direction of shareholder friendliness.

Don’t get me started on Google, by the way.  That company has a rare talent for pouring shareholder cash down the drain on quixotic pet projects that add little to revenues and even less to profits.  None of this would be possible were it not for the gargantuan monopoly-like rents that the company is able to collect on its search franchise.  The responsibility of paying a dividend might force Google to grow up and be an adult company befitting its size and importance to global economy rather than continue as a spoiled adolescent with too much money.  But I digress…

In the case of Apple, it was about time.  With $100 billion in cash sitting on the company’s balance sheet more or less inert,   Apple was doing a real disservice to its long-term shareholders.

And herein lies a key point: long-term.  The growing popularity of dividends in recent years may be the most positive development in the capital markets in my lifetime.  It’s a return to a more sober, rigorous form of investing that favors stable, long-term returns.  It takes away the casino gambling mentality and replaces it with something far more constructive.

Money managers of my generation grew up in the hot-money, high-turnover markets of the late 1980s and 1990s, a period that saw the average holding period of a stock investment shrink from years to just months.  In this kind of market, the payment of a quarterly cash dividend seemed almost anachronistic.  Besides, dividends were taxed more heavily than capital gains, so why not use the cash for share buybacks?  The market always rises, after all.

It is amazing how two bear markets and twelve years of P/E multiple contraction will change investors’ thinking.  Part of this too is the math of demographics.  The same Baby Boomers that were aggressively investing for growth a decade ago are now at a different stage of their lives.  Income is now far more important than it was before, particularly given the poor yields on offer on the bond market.  As the largest and richest generation, the investment preferences of the Boomer become the de facto standard.

With all of this as an introduction, I’d like to leave readers with two ETF recommendations that focus on dividends.  One focuses primarily on current income, the other on long-term growth.

We’ll start with current income.  On this count, I consider the very first dividend-focused ETF to still be the best—the iShares Dow Jones Select Dividend ETF (NYSE: $DVY).  DVY’s underlying index takes the universe of dividend-paying stocks with a positive dividend-per-share growth rate, a payout ratio of 60 percent or less, and at least a five year track record of dividend payment and then selects the 100 highest-yielding stocks.  The result is an ETF loaded with high-yielding, reliable dividend payers.

Not surprisingly, DVY is heavily weighted in utilities and defensive consumer staples, currently 30 percent and 16 percent of the portfolio, respectively.  The current dividend yield is 3.3 percent—significantly higher than what the 10-year Treasury pays.

As it is currently constructed, DVY is not likely to outperform the S&P 500 in a normal, rising market.  It should, however, hold up far better during a market rout. (Looking back at the ETF’s history, DVY took a beating in 2008 because it had a high allocation to the financial sector at the time; today’s high allocation to more defensive sectors makes DVY far more conservative than it was five years ago.)

DVY is fine for current income.  But if it is growth you seek, try shares of the Vanguard Dividend Appreciation ETF (NYSE: $VIG).  At 2.0 percent, VIG yields far less than DVY, more or less in line with the broader S&P 500.  But you don’t buy VIG for its dividend today; you buy it for its dividend tomorrow

VIG is based on the Dividend Achievers Select Index, which requires its constituents to have at least 10 consecutive years of rising dividends.  Any stock currently in the portfolio raised its dividend during the crisis years of 2008 and 2009.  These are companies that can survive Armageddon because, frankly, they already have.

Experienced investors can eschew the ETFs and cherry pick their own dividend-focused portfolios.  A recent dividend payer like Apple will not be found in either ETF, and even a dividend-raising powerhouse like Apple’s rival Microsoft (Nasdaq: $MSFT) lacks the history to be included in the Vanguard ETF.  I would be tempted to include both in a custom-built dividend portfolio.

Disclosures: DVY and MSFT are held by Sizemore Capital clients.

Apollo Global Management (NYSE:APO) announced Wednesday that it plans to purchase Bank of America’s (NYSE:BAC) Irish consumer-credit-card portfolio that consists of more than 200,000 customer accounts with a balance over $800 million.Terms of the deal were not disclosed.Bank of America is currently above its 50-day moving average (MA) of $7.80 and above its 200-day of $7.58.In the last five trading sessions, the 50-day MA has climbed 2.86% while the 200-day MA has slid 0.31%.