InvestMacro FX

Colfax (CFX) was upgraded today by Bank of America/Merrill Lynch (BAC) from neutral to buy with a price target of $42, the the acquisition of Charter should add to the bottom line. Shares are higher by about seven tenths of a percent.

Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.

The International Monetary Fund (IMF) said today that a recession in the Eurozone would likely reduce China’s actual growth by about 50 percent of the current projection. That would place China’s growth for 2012 at roughly 4 percent should the Eurozone crisis devolve into a recession.

It is estimated that China needs to maintain yearly expansion in the range of 8 to 10 percent to meet the needs of its emerging workforce. While growth of this magnitude would result in crushing inflation in most economies, China has sufficient capacity to absorb this rate of growth.

This is due to the migration of China’s rural population to the fast-expanding rural centers in search of work. In fact, it was only in this past year that, for the first time in the nation’s long history, China’s urban residents finally outnumbered the rural population.

Still, this is not to say that inflation has not been a concern. In 2011, China’s economy grew by 9.2 percent even after the government acted to ease price inflation. Food staples in particular rose sharply in the past year far outpacing the rate of wage increases. Property values have also climbed forcing the government to implement a series of measures to curb speculation.

Greece Moves Closer to Default

Underscoring today’s IMF’s warning is the latest news indicating that Greece has failed to come to terms with European officials on the implementation of a second emergency funding package. Several deadlines have been missed to reach an agreement but time is becoming an ever-greater concern. Greece has a 14.4 billion euro ($10.9 billion) bond due on March 20^th and time is running out to get the funding in place and prevent a default.

The failure to agree on a new debt deal is being blamed on Greece’s inability to get the leaders of the three main political parties to consent to acceptable terms. Still, progress has been made in some areas; the Greek leaders have tentatively agreed to spending cuts equal to 1.5 percent of the countries Gross Domestic Product.

Greece’s hesitance is understandable given the degree of public opposition the proposed spending cuts. The country’s largest public sector unions have already threatened to impose a nation-wide strike expected to bring the country to a virtual stand-still later this week.

Regardless of the public hostility, European leaders are clearly losing patience with the Greek government’s continued foot-dragging. French President Nicolas Sarkozy was quoted as saying that European governments “want this accord” at a press conference in Paris earlier today.

“Greece’s leader have made commitments and they must respect them scrupulously,” warned Sarkozy. “Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed.”

Scott Boyd is a currency analyst and a regular contributor to the OANDA MarketPulse FX blog

Source: ForexYard

The US dollar was able to extend the boost it received late last week during trading today, as negative euro-zone news fueled risk aversion and sent investors to the safe-haven greenback. Greece’s inability to reach a debt-swap agreement with its creditors sent the EUR/USD as low as 1.3026 before the pair staged a slight upward correction. Last week’s positive US jobs report helped the dollar maintain its gains against the JPY throughout the trading day yesterday. The USD/JPY reached as high as 76.79 before a minor downward reversal.

Turning to tomorrow, USD traders will want to pay careful attention to a speech from Fed Chairman Bernanke, scheduled for 15:00 GMT. Any positive statements regarding the US economic recovery are likely to give the dollar additional momentum going into the rest of the week. Specifically, should Bernanke indicate that the US may raise interest rates earlier than planned, the dollar will likely see significant gains as a result.

Following Bernanke’s testimony tomorrow, the dollar’s next big test will likely be the weekly US Unemployment Claims on Thursday. While last week’s jobs report was promising, analysts are warning that the fluctuations in the employment number are likely to occur. Should Thursday’s figure come in worse than forecasted, the dollar may give back some of its earlier gains to close out the week.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Investors are ringing in the new trading week sending stocks lower on concerns Greece will be unable to avoid default as it tries to negotiate terms on a new bailout package. Good morning, this is Kristin Bianco with the Week Ahead Market Report for Monday February 6, 2012.

In trading on Monday, shipping shares were relative leaders, up on the day by about 1.5%. Leading the group were shares of Global Ship Lease (GSL), up about 7.6% and shares of Genco Shipping & Trading Limited (GNK) up about 6.9% on the day.

Last week’s Fed statement was a little more forthcoming than normal…

Chairman Ben S. Bernanke said The Federal Reserve is considering additional asset purchases to boost growth after extending its pledge to keep interest rates low through at least late 2014.

“The Committee expects to maintain a highly accommodative stance for monetary policy,” the FOMC said in a statement. “Economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”

The FOMC statement went on to say that policy makers are “prepared to provide further monetary accommodation if employment is not making sufficient progress towards our assessment of its maximum level, or if inflation shows signs of moving further below its mandate-consistent rate.”

It seems the table is being set for QE3 in the very near future because this statement steered away from growth – contrary to past reports.

Fed Not So Bullish on the U.S. Economy

Here’s what has the Fed worried:

• Growth estimates have been lowered for 2012 and beyond. The Fed lowered its forecast for growth this year to 2.2% to 2.7%, down from a projection of 2.5% to 2.9% in November. It predicted the economy will expand 2.8% to 3.2% next year, down from a previous forecast of 3.0% to 3.5%.
• The Fed’s projected range of 8.2% to 8.5% means it doesn’t expect the unemployment rate to get much better this year. Even by 2014, the Fed expects this rate to have improved only to between 6.7% and 7.6%.

Inflation Not Expected to Rise

The Fed also offered an official target for consumer price inflation – 2% a year – the level that was long considered the Central Bank’s implicit goal. The Fed’s congressional mandate includes maintaining rough price stability, allowing neither runaway inflation nor a potentially devastating cycle of deflation that could push investors and consumers out of the market:

“Communicating this inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability,” the panel said in a statement. It also enhances “the committee’s ability to promote maximum employment in the face of significant economic disturbances.”

 Where Will the Money Go?

Look to the BRICs. The already-emerged markets of China and Russia should do quite well.

“QE3 is very, very good for emerging markets because it means there’s lots of cash in the system,” says Mark Mobius, who oversees about $40 billion as Executive Chairman of Templeton’s Emerging Markets Group, said in a phone interview from Bangkok on Jan. 27. “I would expect more institutional flows into stocks, generally, and of course, emerging markets as well.”

Valuations in developing nation stocks are “attractive, almost globally,” Mobius said. He continued on to say “rallies should continue” as markets have “already anticipated” a global economic slowdown. “Emerging markets, even this year, are growing at four times that of developed countries.”

Good Investing,

Jason Jenkins

Article by Investment U

Last Thursday, Swiss miner Xstrata (LSE: XTA) and commodities trader Glencore (LSE: GLEN) announced a potential blockbuster merger that would shake up a few of mining’s biggest industries.

According to Reuters, the deal is set to total $80 billion. And the newly combined firms “would rank as the world’s largest thermal coal exporter, the largest zinc producer and third-largest copper miner…”

Many analysts are already predicting a jump in the price of coal, copper and zinc in the coming weeks.

But the all-share merger would also disrupt another big mining industry… iron ore. And investors will want to pay close attention.

Iron Ore Equals Big Profits

Over the past 10 years, iron ore has had a run even gold can’t touch.

From August 2001 to August 2011, prices jumped 1,266%. Gold jumped 566% comparably.

Today, about 70% of iron ore traded in the world is accounted for by three companies – BHP Billiton (NYSE: BHP), Vale (NYSE: VALE) and Rio Tinto (NYSE: RIO). And they’re raking in massive profits.

Reuters reports, “Iron ore sells for around $140 per tonne to China… and only costs about $20 to $30 per tonne to mine.” China’s steelmakers aren’t very happy about paying such high prices. But since October 2011, they’ve had a little bit of a reprieve.

The “big three” have flooded the market with iron ore supplies, driving the price lower, to around $120.

As mining.com explains, the iron ore’s big players are “concentrating on building market share rather than maximizing prices. This way the giants drive high-cost producers out of the business.”

If Glencore and Xstrata don’t want to get left out in the rain, they should make this merger happen.

And there are two main reasons it’s more likely to happen than not.

Glencore and Xstrata Make Sense

First, Glencore already owns 34% of Xstrata. So both companies already understand the risks and advantages this merger carries. And it should make it that much easier for them to agree on a final price.

Second, Xstrata has been trying to gain a stake in the iron ore industry for years. In 2009, the company attempted to purchase Anglo American (LSE: AAL). The deal would have made Xstrata the fifth-most-profitable company in the iron ore market. But talks fizzled and the deal fell through.

Now the proposed merger between Glencore and Xstrata has reignited speculation of another takeover attempt coming for Anglo American, the world’s fourth-largest iron ore producer.

A few other companies also stand to be bought up if a deal is reached, as well.

Iron Ore M&A Heating Up

First Quantum Minerals (LSE: FQM), Fortescue Metals Group (PINK: FSUMF) and Freeport McMoRan Copper & Gold (NYSE: FCX) are also being seen as potential targets.

But Freeport may also be too expensive for Xstrata and Glencore and could end up as more of a competitor than potential takeover.

Only time will tell. But this is one development that should begin unfolding in just the next few weeks.

Good investing,

Mike Kapsch

Article by Investment U

By TraderVox.com

The stalemate on the Greek deal continues as the members of the European countries fail to agree on the conditions of the deal. Finance ministers will be meeting next week and the details of the deal must be agreed upon if Greek default is to be averted. The next coupons of Greek bonds are due in March. The delay on the deal continues to punish Euro. The single currency has managed to rise above 1.3100 and is trading at 1.3111, still in red. The support is at 1.3070 and below at 1.3030. The resistance is at 1.3120 and a stronger resistance at 1.3200.

Unlike Euro, the sterling pound managed to turn into green. It is currently trading at 1.5816, marginally up from Friday’s close. The immediate support lies at 1.5800 and below at 1.5750. The resistance will be seen at 1.5820 and 1.5850. The anticipated asset purchase this week by Bank of England will put pound under close scrutiny this week.

The good unemployment report continued to surge US dollar against Swiss frank even in US session today. Although the pair lost the 0.9200 level and is currently trading at 0.9196, virtually flat. The support may be found at 0.9180 and below at 0.9160. The resistance will be seen at 0.9250 and 0.9300. The Swiss intervention to keep EUR/CHF at 1.2000 level is something to keep an eye at.

The USD/JPY pair traded in a narrow range of 76.55 to 76.68 in the US session. Presently it is trading at 76.59, flat for the day. The support lies at 76.30 and resistance at 76.80 levels.

The Australian dollar has managed to regain the important 1.0700 level after losing it during the European session. The pair is currently trading at 1.0734, marginally down for the day. The resistance lies at 1.0760 and above at 1.0800. The support lies at 1.0700 and 1.0680. Tomorrow is an important day for the Australian dollar when interest rate will be determined.

The dollar index has lost the steam in the last hour and is currently trading, 79.21, near the low. The low for the day till now stands at 79.13. 

Article provided by TraderVox.com

Source: ForexYard

Silver prices rose significantly in the last week and peaked at $27.75 an ounce. However, the 8-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on silver now, and at a great entry price!

• Below is the 8-hour chart for silver by ForexYard.

• The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range.

• Point 1: There is a “doji” candlestick formed in the chart, indicating that a reversal should take place.

• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.

• Point 4: Williams Percent Range also supports the downward direction.

Silver 8-Hour Chart

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.