InvestMacro FX

By TraderVox.com

Tradervox (Dublin) – The Sterling Pound has been up against the US dollar after falling yester after Fitch lowered UK’s rating outlook from stable to negative. Investors were looking for riskier assets and the Great Britain Pound provided that. Despite the negative investment out outlook ratings for the UK economy, Fitch also affirmed the country’s AAA ratings with warnings that this could change in two years if the situation does not change.

Fitch indicated the UK was in a good position for now but lacked ability to absorb further economic shocks from the euro region. This is not necessary a bad report since UK’s triple A rating was confirmed. The positive reports from the US have continued to push the dollar upward against major currencies as traders look for safe haven.

The sterling pound opened trading at 1.5675 and rose to 1.5844 at 13.39 GMT. The numerous positive reports from the US had negative effect on the Dollar against the GBP as investors decided to buy riskier assets moving from the dollar.

Reports from US show that jobless claims dropped by 14,000 for the week ending March 10 to reach 351,000. Another report from the New York Federal Reserve Bank indicated that the Empire State Manufacturing Index rose from 19.5 to 20.2 representing a fourth straight increase. Philadelphia Fed Manufacturing Index edged higher from 10.2 in February to 12.5 in March. Additionally, US wholesale prices increased to 0.4 percent, the fastest increase registered in five months. It rose from a previous rate of 0.1 percent.

The sterling pound has been on a bullish run today against the dollar as investors look for riskier assets. However, the market has been confined to the 100 and 200 day moving averages since February. The resent breakout to 1.5844 may be construed to be a reaffirmation of a bullish outlook for the GBP.

Some of the reports that are expected to change the market during the New York trading session include the US Consumer Price Index which measures the change in the price of goods and services from consumer’s perspective and industrial production Index which is expected to increase by 0.4 percent.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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New York & Co. (NWY) announced that it lost $10.9 million, or 18 cents per share in the fourth quarter versus a profit of $14.9 mllion or 24 cents per share a year earlier.

By The Sizemore Letter

The best way to explain how to use the trading moves of company insiders is with an example.  In the spring of 2011, the shares of tobacco giant Lorillard, Inc. (NYSE: $LO) caught my attention.

Lorillard is the third largest manufacturer of cigarettes in the United States and the oldest continuously operating tobacco company. Newport, Lorillard’s premium menthol-flavored cigarette brand, is the top-selling menthol and second-largest-selling cigarette in the United States.

I’ve made the case for “Vice Investing” repeatedly in the Sizemore Investment Letter, and I’ve given special attention to the tobacco industry.   To briefly summarize, tobacco companies are uniquely attractive investment for a number of reasons:

1. Government regulation and the threat of lawsuits prevent new competitors from entering the industry.
2. Many institutional investors with “socially responsible” mandates are not permitted to invest in tobacco.  This lack of institutional buying has the effect of lowering the valuation, thus making tobacco stocks perpetual value stocks. (For a detailed explanation of this phenomenon, see “The Price of Sin”)
3. Tobacco companies generally pay very large and growing dividends.   The reinvestment of dividends is the single most powerful wealth compounding tool available to investors.

While Lorillard enjoys all of these benefits, in April of last year it also has the bonus of trading at a significant discount to its peers.  It has the lowest P/E and the highest dividend yield of major tobacco companies—a whopping 6.7%.

Lorillard’s depressed price was mostly due to fears that the Food and Drug Administration would make the company’s primary product—menthol cigarettes—illegal.  The FDA decided against such a move earlier in the month, yet the share price still reflected investor fears that bad regulatory news would be coming down the pipeline.

There was one person, however, who was conspicuously confident.  The company’s CEO Murray Kessler spent nearly a million dollars of his own money three months before buying shares of Lorillard on the open market.

Corporate insiders sell stock for any number of reasons.  They exercise stock options and liquidate the shares.  They sell off shares of their concentrated positions in order to diversify their portfolios.  They unload a few shares to buy a nice vacation home in the Hamptons.  There are infinite reasons why an insider might sell the shares of the company they help to manage.  But there is only one reason why they would buy.

When you see the man who runs the company putting his own money behind it, you can be reasonably certain that good news will be forthcoming.  While it is illegal for corporate insiders to trade on material non-public information, there is nothing at all illegal about them using their intimate knowledge of the company and industry to handicap the odds of, say, an FDA decision and trade accordingly.  I’ll trust the judgment of an informed insider over the uninformed masses.

In Lorillard I saw the conditions for the perfect trade lining up.  In Lorillard, we had:

• A solid vice investment at an attractive price
• A 6.7% dividend that was likely to grow in the coming quarters
• Aggressive buying of the company’s shares by the CEO—a man who ought to know a thing or two about Lorillard’s prospects

As luck would have it, the trade worked out even better than I had hoped.  The FDA clarified their position on menthol cigarettes, and the shares of Lorillard rose over 40 percent in less than a month.

Not all trades work out this cleanly, of course.  There is not—and never will be—such a thing as a perfect, risk-free trading strategy.  In the case of Lorillard, it was entirely possible that the CEO could have been wrong or that the FDA arbitrarily changed its mind.  These things can and do happen

Still, following the trading moves of company insiders gives you one more tool at your disposal and allows you to trade with more confidence.  When you’re putting capital at risk, it pays to use every tool at your disposal.

This article originally appeared on InsiderEdge.com.

China's economy has grown by over 1000% since 1990. For similar growth opportunities, look no farther than Asia's frontier markets.

You may be reading quite a bit about China’s property bubble, higher manufacturing costs, slowing economic growth and its attempt to shift gears to a consumer-led economy.

What’s next for China is debatable, but there’s no question that it’s achieved tremendous progress in a short time.

For some perspective, China’s exports for the entire year of 1980 are equal to one day of exports in 2012! China’s economy of 1990 was equal to that of Taiwan – now it’s 12 times larger. At least 200 million Chinese have been pulled out of poverty.

You are probably thinking, “If only I could go back in time and invest in the China of 1980 or 1990.”

You can.

Just go to Asia’s new frontier of growth…

Asia’s New Frontier

These are countries that are 10 to 20 years behind China, such as Vietnam, Sri Lanka, Philippines, Indonesia, Cambodia, resource rich Mongolia and Papua New Guinea, and even Myanmar/Burma (more on this later).

Here’s a quick overview of the advantages of investing in frontier Asia.

• Faster Growth – Faster growth than emerging markets like Brazil, Russia, India and China.

• Youthful Population – 40% of the world’s 14 to 25 year olds are in frontier markets, while North America, Japan and Europe together make up only 10% of this key consumer group.

• Low Debt – On average, frontier markets have better balance sheets with only half the debt to GDP of developed markets.

• Integration With the Global Economy – cellphones and the internet have made “catch up” easier and faster.

• Attractive Market Valuations – Cheaper than both emerging and developed markets despite higher growth rates.

• Inefficient Markets – Offer experienced fund managers opportunities to pounce on bargains.

• Low Correlation to Other Markets – Frontier markets don’t move in tandem with emerging or developed markets, offering the potential for lower portfolio volatility.

The case for looking closely at these markets is compelling. This is why I’ll be covering these markets at the upcoming Investment U Conference in San Diego.

Frontier Market Snapshot

Here’s a snapshot of just some of the markets I’ll be talking about.

• Vietnam – Market Vectors Vietnam ETF (NYSE: VNM)

Vietnam’s market is on fire, up 20% so far in 2012.

Still, it offers good value as it evolves into one of Asia’s lowest-cost manufacturing hubs with wages about half that of China. With a 97% literacy rate and a youthful population of 87 million and ample natural resources, Vietnam offers huge potential if its government will only get out of the way.

• Indonesia – Aberdeen Indonesia Fund (AMEX: IF)

Indonesia has been one of my favorites for quite some time.

Three times the size of Texas, Indonesia is a democracy with the fourth-largest population in the world. The country is on a roll, fueled by better fiscal policies. It’s the only country in the G 20 (largest 20 economies in the world) to have declining government debt/GDP, which also has a balanced budget. Foreign investment and exports are rising and the country is home to natural resources such as oil, natural gas, coal, tin, rubber and palm oil.

The World Bank reports that Indonesia has the planet’s fastest-growing middle class, and they’re a savvy group. Indonesia represents the world’s third-largest user of Facebook, behind the United States and the U.K. Challenges include the need for much better infrastructure and confronting corruption.

• Myanmar/Burma

Burma is in transition to ending 50 years of economic and political isolation.

It was once one of the wealthiest countries in the region as a major port and source of natural resources. To get a feel for its potential, just look at neighboring Thailand, which has an economy 10 times larger. A beautiful country with many historical sites, the country’s biggest opportunity out of the box is tourism. While Thailand had more than 12 million visitors in 2011, Burma had only 200,000.

Despite my enthusiasm for frontier Asia, the biggest challenge, for me, so far has been finding easy ways to capture frontier Asia growth. Investing directly in frontier Asian companies is a daunting task for most investors, and frontier market funds have most of their assets in the Middle East and Africa.

This is why I’m so interested in learning more about Leopard Capital’s upcoming Leopard Asia Frontier Fund. I have watched Leopard’s progress in frontier Asian private equity with keen interest. I’m thinking this on-the-ground experience will give them a serious leg up on competitors.

I look forward to meeting those of you who are coming to San Diego. Don’t miss Leopard Capital CEO Doug Clayton’s speech on investing in frontier Asian markets.

Good Investing,

Carl Delfeld

Article by Investment U

London Gold Market Report
from Ben Traynor
BullionVault
Friday 16 March 2012, 09:15 EDT

THE SPOT MARKET gold price dropped to $1641 an ounce shortly after US market open – a 4.4% fall on the week – as stocks and commodities were broadly flat, with stock markets looking set for a weekly gain by Friday lunchtime in London.

On the currency markets, the Pound and Euro both rallied against the Dollar following the release of the latest US inflation data, while over in India the government announced it is to double its duty on gold imports as a percentage of the gold price.

Silver prices fell to $32.14 per ounce – a 6.3% loss for the week as we headed towards the weekend.

“Gold still appears to be taking a hit,” says a report from German refiner Heraeus.

“If it is to escape the downward trend in the short term, it will have to overcome the price resistance at $1726 per ounce…only then will it begin moving up again.”

“Near-term resistance ,” add technical analysts at bullion bank Scotia Mocatta, “is at the 200 day moving average, currently at $1682…key resistance is at $1716, last week’s high.”

The gold price in Euros fell to a 10-Week Low at €40,266 per kilo (€1252 per ounce) on Friday. Sterling gold prices also hit their lowest levels in 10 weeks, dropping to £1041 per ounce.

Both currencies jumped against the Dollar immediately following the release of US consumer price index inflation data. The seasonally-adjusted CPI rose 0.4% in February, its biggest rise for 10 months, while the unadjusted annual rate held at 2.9%, according to the Bureau of Labor Statistics.

“Inflation is rearing its head,” says Bill Gross, head of the world’s largest bond fund Pimco.

“We’re seeing that in oil prices and other commodities, and we’re seeing it in the numbers.”

The BLS says 80% of the monthly rise is accounted for by higher gasoline prices. Gas prices rose 6% last month, compared to 0.9% in January and the biggest jump since December 2010, following recent gains on the oil futures market.

Britain and the US meantime look set to co-operate on releasing strategic oil reserves, Reuters reports.

“This has to be discussed broadly,” Britain’s prime minister David Cameron, who has been on an official visit to the US this week, said on Thursday.

“It’s something worth looking at.”

The Brussels-headquartered Society for Worldwide Interbank Financial Telecommunication (SWIFT), the world’s major international messaging service for financial transactions, is to cut services to Iran’s financial institutions effective from tomorrow.

“Disconnecting banks is an extraordinary and unprecedented step for SWIFT,” said chief executive Lazaro Campos yesterday.

“It is a direct result of international and multilateral action to intensify financial sanctions against Iran.”

Over in India, the world’s largest gold consumer last year, the government announced Friday that it is doubling the import duty on gold from 2% to 4%. This follows a similar increase in India’s gold import duty back in January.

The duty hike “will reduce demand for gold significantly” reckons Bombay Bullion Association president  Prithviraj Kothari. Kothari forecasts that gold demand in India could drop by 30% this year, the Wall Street Journal reports.

“Today’s duty increase will dampen Indian demand,” agrees UBS precious metals strategist Edel Tully.

“The Indian market will wait for lower prices and there is also the risk that this duty hike will lead to increased smuggling.”

India set a record last year when it imported 969 tonnes of gold bullion.

“One of the primary drivers of the current account deficit has been the growth of almost 50% in imports of gold and other precious metals in the first three quarters of this year,” said Indian finance minister Pranab Mukherjee, who was announcing next year’s budget.

There are also potential signs that gold imports to China, the world’s second largest gold market, are starting to concern authorities.

China’s National Bureau of Statistics meantime has revealed that officials in the northern city of Hejin reported “seriously untrue” economic data last year, newswire Bloomberg reports.

Here in the UK, chancellor George Osborne is considering cutting the top rate of income tax from 50p to 45p in next week’s Budget, according to press reports.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

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.

By TraderVox.com

Tradervox (Dublin) – Minutes of the BOJ meeting have indicated that another asset purchases program is on the making confirming what BOJ’s governor has been saying. The yen has declined 1.3 percent over the week against it major pairs. Yen’s weekly drop comes as US economy shows some signs of recovery with more positive data expected to be released today. The sentiments by BOJ of further stimulus have prompted investors to look for higher yielding assets.

Sean Callow a Senior Currency Strategist in Sydney has indicated that the BOJ meeting has consistently been aimed at weakening the yen and this is yielding fruits as the currency has been the worst performer in all sixteen major currencies. The BOJ minutes released yesterday indicate that some members of were concerned of sending the wrong signal with the increased asset purchases and insisted that the BOJ should be very clear in explaining it actions to the public. They feared that the large bond purchases may be construed as financing government deficit spending.

The yen opened trading at 83.56 per dollar in London but later increased to 83.92 at 12:40 GMT. It had reached its weakest since April 13 yesterday when it traded at 84.18. The yen has dropped 1.3 against the dollar this week and 1 percent against the euro.

Bank of Japan has continued to put more effort in weakening the Yen as they expanded loans to the banks aimed at enhancing long-term growth on March 13. The announcement came the same day when the Fed raised their US economic outlook saying that the unemployment is set to reduce gradually and the economy expected to register a moderate growth.

Measures taken by the BOJ seem to be working as the economy has shown some signs of recovery from last year’s tsunami and earthquake. The BOJ has put on hold this month’s asset purchases as it monitors the situation and effects of the last asset purchases. Positive reports from the US seem to be aiding the BOJ’s plan to weaken the yen.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

By TraderVox.com

Tradervox (Dublin) – Euro retraced back below the 1.3100 levels as it was under the pressure all day. It is trading near the opening price at 1.3073. Trade balance data from EMU came below expectation at a deficit 7.6 billion Euros against the expected surplus of 4.6 billion Euros. The support may be seen at 1.3060 and below at 1.3040. The resistance may be seen at 1.3100 and above 1.3140.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

On late Wednesday, Capital One Financial (NYSE:COF) announced an offer of $1.25 billion of common stock to assist HSBC’s (NYSE:HBC) U.S. credit card business.Capital One plans to purchase HSBC’s credit card business that consists an estimated $30 billion in loans, for $2.6 billion.Capital One Financial (NYSE:COF) has potential upside of 9.6% based on a current price of $52.88 and an average consensus analyst price target of $57.95.

Source: ForexYard

The U.S. dollar dropped off its recent rally Friday morning. Analysts are suggesting the greenback is at last hitting resistance against the Japanese yen. As of early Friday afternoon, the USD/JPY had fallen from a very strong showing on Thursday and hovered close to 83.47. The recent rally against the yen surprised some traders as the Japanese currency was showing signs of life earlier in the week. The current position of the USD/JPY also remains well above the psychologically significant mark of 80.00. This could be an indication of overall confidence in the American economic recovery as well as the BoJ’s actions not quite having the effect that many were expecting.

Read more forex news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

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