- Sociopaths Bashing Banks
The whole thing is ridiculous, all of it. I listened to Geithner release his “plan” to unfreeze lending markets. I watched some of the charades on Capital Hill involving the bank CEOs and their testimony. Lastly, I saw the vote and reaction of politicians on the most recent bit of financial socialism. What a mess…
If Congress wanted to do something meaningful, they would pass legislation banning themselves from speaking in front of the mass media. Their ignorance embarrasses our … [visit site to read more]
- Stock Dividends: Eliminating The Reasons Your Investments Fail
Believe it or not, when it comes to the stock market, most investors prefer glamour to profits.
Why do I say this? Tell the average investor about a company with a cutting-edge technology, an exciting Phase III drug or a new gold strike and they’re all ears.
But tell them about a blue-chip stock with steady sales, a big order backlog and rising stock dividends and they’re more likely to stifle a yawn.
That’s unfortunate. Because, contrary to what most investors believe, innovation … [visit site to read more]
- Marriott: More Downside Ahead
Marriott International Inc. (MAR) is a leading worldwide hospitality company with a primary focus on property management and franchising. We maintain our Sell rating on shares of Marriott, following the release of 4th quarter results.
The operating environment in the lodging sector is expected to remain weak throughout 2009 with substantial RevPAR declines forecasted. Additionally, the company’s timeshare segment is struggling, with sales down and credit market turmoil preventing the … [visit site to read more]
- Geithner's Hail Mary
Once again I’m having trouble finding the satire here:
Ever get the impression that the government isn’t really studying the problem, they’ve just moving forward with the same old plans based on the conclusions they jumped to months ago? It’s like they have a playbook that they’re determined to use, and they aren’t willing to use anything learned over the course of the crisis to modify it. Case in point: it’s already been proven that loan modification doesn’t work, so why isn’t … [visit site to read more]
- Flicking The Collective Switch
In times of trouble, when does the collective switch get flicked? That is, when does a critical mass of individuals suddenly become less accommodating, less patient, and less passive? When do they stop believing that others have the answers and start taking matters into their own hands? I don’t know for sure, but after reading the following post at The Mess That Greenspan Made blog, “Things Look Even Worse in Black-and-White,” I get the impression it won’t be long now.
This is the first … [visit site to read more]
- EU Economy Contracts 1.5% In Fourth Quarter, Interest Rates Could Be Next
Europe’s gross domestic product (GDP) shrunk 1.5% in the fourth quarter, its biggest decline in the European Union’s 13-year history.
The contraction was higher than the 1.3% fall economist expected. And while it marked the third straight quarterly decline, grim forecasts from the Eurozone’s top economies suggest the EU’s recession is deepening.
Germany and France, the two largest Eurozone economies, posted their biggest economic contractions (-2.1% and -1.2%, respectively) in more … [visit site to read more]
- Why China Can't Sell U.S. Treasuries
Last year, China became the biggest foreign holder of U.S. securities, when it plunked down almost $66 billion for them in October alone. With that big of a stick, some believe that China could bring down the U.S. without ever setting foot here. Will China continue to buy Treasuries? … [visit site to read more]
- Temporary Suspension Of Foreclosures: Time To Get Real
Let’s take a look at Citibank (C), J.P. Morgan [JPM]] and the Mortgage GSE’s plans to temporarily suspend foreclosure proceedings:
(From the Associated Press):
WASHINGTON - JPMorgan Chase & Co. and Citigroup Inc. are expanding their efforts to halt home foreclosures while the Obama administration develops its plans to help the U.S. housing market.
JPMorgan Chief Executive Jamie Dimon said the New York company plans to halt new foreclosures for owner-occupied home loans … [visit site to read more]
- Is Silver ETF Signaling A Bull Around The Corner?
Bullion and the exchange traded funds (ETFs) that track these shiny desireables have seen excitement over the last few months. What does this mean for us?
Signs of a Bull? Generally, this is indicative of a bull market. Overall, bullion has not made major moves, but gold, on the other hand has seen some sharp rises. Surprisingly, the major reason for this surge in gold is silver. These two precious metals have a rather distinct correlation. In a real true bull market the ratio of … [visit site to read more]
- Charles Schwab Struggles
Charles Schwab Corp. (SCHW) reported disapointing daily average revenue trade volumes for the month of January and also said its client assets fell during the period, sending shares down nearly 5%.
As the financial environment remains murky, the largest online brokerage firm in the country said its total client assets fell 21% to $1.104 trillion in January. Daily average trades fell 11% to 328,400 in the month.
While the San Francisco-based company’s stock fell 64 cents to $12.75 at … [visit site to read more]
- Whistling Past The Graveyard?
The Dreaded D-Word Makes An Appearance…
The site Wiktionary defines to “whistle past the graveyard” in two ways:
1. (idiomatic, US) To attempt to stay cheerful in a dire situation; To proceed with a task, ignoring an upcoming hazard, hoping for a good outcome.
2. (idiomatic, US) To enter a situation with little or no understanding of the possible consequences.
Both meanings seem to apply these days as mentions of the bigger, badder and far more frightening relative of … [visit site to read more]
- How I Called The Breakout In Gold Three Weeks Ago
Back in early January, I wrote an article that focused on a bubble forming in the Treasury bond market. Back then I saw money getting ready to jump from one seemingly safe asset to another…gold. (I wrote about this on January 2nd. I'll include the links to all of these stories at the bottom so you can check it out for yourself.)
This was my first "tip off" that money was about to start flowing elsewhere and gold was the next logical choice since it has held up fairly well in this … [visit site to read more]
- Things You Need To Know About Currency ETFs
Concepts for trading currencies are simple when the are broken down, and the addition of currency-focused exchange traded funds (ETFs) has made investing in currencies and their futures even easier.
Foreign exchange currency trading is commonly called forex trading. In 2007, the forex market garnered $3.2 trillion dollars worth of transactions each day. This makes the forex market the quiet giant of finance, dwarfing over all other capital markets in its world, explains Kathy Lien and … [visit site to read more]
- Wiggle Room In Global Food Markets
By 2050, according to the World Bank (WB), global population is expected to increase by 3 billion people. The global population is always growing (I’m almost done being Captain Obvious), and a direct result of that growth comes the WB’s expectation that food demand will double by 2030 from current levels. While more people are eating more food, farmland remains finite. This is not a groundbreaking issue as pundits have been predicting “peak food” for decades now. Up until now, the fix … [visit site to read more]
- Euro Weakness Bad For Multi-national Companies
The recent panic in the financial markets has reaffirmed the belief that the US dollar is a safe haven. The Euro has been in a free fall ever since it pegged 1.60/usd last year. This weakness has a negative impact on companies that have large foreign sales. Coca-Cola (KO), Pepsi (PEP), Proctor and Gamble (PG) etc are large multinationals that have recently taken a major hit. I would expect this type of price action will continue until the US dollar starts to weaken … [visit site to read more]
- For Dividend-Seekers, Financial Crisis Means It's Time To Dip Into DRIPs
If the global financial crisis has taught investors one thing, it’s that now is not the time to gamble with your money or your prosperity.
More companies have been bought, bailed out or bankrupted since this financial crisis began than most of us have seen in our lifetimes. And even as Wall Street’s dominoes keep falling, no one can be sure if the worst is over.
From here on - recession or not - targeting dividend stocks is one of the few strategies that will deliver income safely and … [visit site to read more]
- VXX And VIX Diverging
It has been an interesting week for volatility, with the VIX seemingly having a mind of its own and responding rather sluggishly to some of the major moves in the market. For the most part, VXX, the new VIX ETN, has been moving in concert with the VIX, if only at a rate of about 80% of the volatility index.
Today (Friday), however, marks the first significant divergence between VXX and the VIX (^VIX) since VXX started trading on January 30th. As I write this, VXX is down 0.84% for … [visit site to read more]
- Video: Vegetarian Children Becoming More Common
In a recent study, it has been discovered that the eating habits of American children are changing as more and more identify themselves as vegetarian. The question now is whether or not the trend is a good/healthy choice? … [visit site to read more]
- Video: Oil Prices Spike 10% Prior To Holiday Weekend
Oil prices managed to snap its week long drought this past trading session as an upcoming holiday weekend sent prices soaring more than 10%. … [visit site to read more]
- Video: Risk Appetite Resurfaces
The currency markets saw a revival of risk appetite this session as optimism over a proposed US homeowner assistance plan spread through the market. … [visit site to read more]
- Video: Consumer Confidence Weighs On Stocks
Consumer confidence fall more than thought and bank shares continue to weaken. … [visit site to read more]
- Maintaining A Negative Outlook On US Banks
We continue to maintain a negative outlook on the U.S. banks. The new Financial Stability plan announced by the Treasury Secretary recently falls short on the details, and we think that the benefits, if any, will take a long time to come by. While the earlier programs launched by the Treasury and the Federal Reserve to boost the capital levels and alleviate the liquidity problems (including capital injections and debt guarantee programs) have helped the capital and funding concerns to a … [visit site to read more]
- Video: Asian Markets Rally To Close The Week In The Green
The major Asian/Pacific markets managed to post gains this past trading session due mostly in part to optimism over a proposed plan to assist US homeowers that are facing mortgage-related debt. … [visit site to read more]
- Video: Abercrombie & Fitch's 4Q Profit Slides 68%
Teen apparel retailer Abercrombie & Fitch (ANF) announced today that due to a number of reasons, its 4Q profit managed to slide a total of 68% when compared to last years figures. … [visit site to read more]
- Video: Likely Lackluster Trading Ahead
No one wants to commit on a lomg weekend, says James McGuire Jr., and that could mean lackluster trading. … [visit site to read more]
- US Regional Banks In Trouble
While the first six weeks of 2009 have seen pockets of bullishness in stocks, one sector that has been notably absent from the occasional bursts of buying activity has been financials. Within the financial sector, the weakest of the weak has been regional banks, which will see little in the way of benefits from TARP 2.0 and stand to lose a great deal if the consumer credit crisis continues to deepen, as almost everyone now expects will be the most likely scenario.
In the three month … [visit site to read more]
- Emerging Markets Infrastructure ETF May Provide Significant Long Term Capital Growth
With real gloom and doom hanging over many of the world economies, governments are poised to throw funds into projects that may revitalize growth. One way that is popular is make-work jobs within infrastructure. Although one can rightfully contest the value and immediacy of infrastructure ventures to stimulate out of a recession, infrastructure itself will be a large, ongoing gift that keeps giving to investors well beyond the current malaise into the post-recession period.
An … [visit site to read more]
- Goldman Sachs - One Of The Best Financial Stocks In 2009
Although the financials sector plummeted over 57% during 2008, there are many opportunities to invest in good companies with solid balance sheets at discounted prices. I believe that Goldman Sachs (GS) will be one of the stocks to hit it big in 2009.
Goldman Sachs (GS)
Goldman Sachs continued its “best of breed” stance on many of the league tables during the year. Unlike many of their competitors, Goldman’s management has survived and has been proactive with the … [visit site to read more]
- US Dollar Index In Tight Consolidation
Seems like this week I spent a good deal of time discussing Gold and Crude Oil this week, so let’s look at a related market that normally trades inverse these commodities - The US Dollar Index. It might give us clues as for what to expect in these markets.
US Dollar Index Daily:
I wish the Dollar chart was showing more clarity, but like all other markets including the S&P 500 (US Equity Indexes), it seems to be poised in a tight consolidation (perhaps even ascending … [visit site to read more]
- Lloyds 'Fesses Up To Huge HBOS Losses
Even an HBOS belter from Lloyds (LYG), and a further fall in US confidence, couldn’t knock stubborn equity markets for long. A panicky sell-off was met with buying ahead of the long US weekend.
I put aside my irritation at resilient equity markets to score gains in long GBPUSD, short EURGBP and GBPJPY, and short Lloyds bets. None of the profits were massive in their own right, but they came together to give me a warm glow going into the weekend. Here’s a silly chart:
I’d been … [visit site to read more]
- Australian Dollar: Caution
Update on supports and resistances. … [visit site to read more]
- Canadian Dollar: The Bias Remains Bullish
Update on supports and resistances. … [visit site to read more]
- Swiss Franc: The Upside Prevails
Update on supports and resistances. … [visit site to read more]
- Japanese Yen: Further Advance
Update on supports and resistances. … [visit site to read more]
- British Pound: Continuation Of The Rebound
Update on supports and resistances. … [visit site to read more]
- Euro: Rebound Expected
Update on supports and resistances. … [visit site to read more]
- Friday Market Notes: Microsoft Jumping Into Retail Sector
With the majors hovering around the flat line for most of the morning trade, the one thing that’s easy to determine is the market’s general lack of direction. Stimulus news dissemination could be the main culprit, but more than likely its the sparse rash of headlines that paint a directionless picture.
Making waves this morning are further retail struggles at Abercrombie & Fitch (ANF) with a 4th quarter year over year drop of 68% in earnings. Despite the profit fall, the company … [visit site to read more]
- EUR/USD Moves Lower After Weak 4Q GDP
The advance Eurozone GDP was weaker than expectations. The figure showed that the quarter on quarter GDP fell by 1.5%, the largest since 1995. Germany led the decline contracting by 2.1% for the quarter alone. This is the 3rd decline for the largest European economy.
The decline increases the pressure on the ECB to cut rates and for nations, meeting this weekend at the G7 meeting to stimulate economies through coordinated fiscal policy measures (other points of topic include bank … [visit site to read more]
- Gold Market Update - US, UK Credit Ratings Look Set To Be Downgraded
Gold rose again yesterday (Thursday), briefly rising above $950/oz and was up 0.6% on the day. Determined selling on the open in Asia saw gold fall and profit taking has seen gold fall in Asia and in early trading in London. This is to be expected as gold had risen by more than 15% in less than a month.
US, UK Credit Ratings Look Set to Be Downgraded
The credit rating agency Moody’s has said that the UK and US credit ratings were being “tested”. In a novel and somewhat bizarre … [visit site to read more]
- Stock Trading: Awaiting Confirmation That The Breakout Move Has Begun
Before the last hour rally (Thursday), the DJIA index (^DJI) had declined more than 200 points, hitting a 3-month low. An unexpected rise in January retail sales failed to have any positive impact on early market action. Without the end of the session reversal, equities were on pace to the largest weekly decline since the week of October 20 due to recession concerns and uncertainty regarding the government’s stimulus and bank bail out plans.
Stocks sold off early in the afternoon, but … [visit site to read more]
- Today's Market Moving Stories
JFK once inspired a generation of young Americans with the immortal line “think not what your country can do for you, but what you can do for your country”. How ironic, in the era of bailout nation, does that sound now! And with an hour to go to the New York close last night it was more of what your country may do for you that helped the market claw back heavy early losses. A hazy Reuters report was enough, which suggested that the Government would soon (perhaps within a week) announce … [visit site to read more]
- Global Investment News Briefs: Rio Tinto, Viacom, Coca-Cola, GM
Foreclosures Continue Falling; Chinalco Invests $19.5 Billion in Rio; 4Q Profit Falls for Viacom; Coca-Cola Beats Expectations; GM May to Bail on China Venture; Australia Senate Nixes Senate
Widespread foreclosures caused home prices to fall in 134 U.S. metropolitan areas. Foreclosure filings eclipsed 250,000 in January, their tenth straight month above that figure, Bloomberg reported.
Aluminum Corps of China Ltd. (ACH), China’s state-owned aluminum group, will invest $19.5 … [visit site to read more]
- Natural Gas: Put It On Your Radar Screen
Figure 1 is a monthly chart of natural gas (cash data) with the “next big thing” indicator in the lower panel; the “next big thing” indicator quantifies those technical factors typically seen prior to secular trend changes in an asset.
Figure 1. Natural Gas/ monthly
As you can see from this very long term view, natural gas has sold off rather nastily over the past eight months. Prices have found support at a long term trend line. While it is difficult to know for certain that … [visit site to read more]
- Video: Help Wanted: Car Czar
With all the focus on the bank bailout and the stimulus package the auto industry has remained out of spotlight in recent weeks, but that will soon change. … [visit site to read more]
- US Housing Price Decline To Put Huge Strain On Major Banks
This post highlights the following companies: Citigroup (C), Wells Fargo (WFC), Bank of America (BAC), Wilmington Trust (WL) and Key Corp (KEY).
How Much More Will Housing Prices Decline?
This morning, the National Association of Realtors announced that the median price of an existing home declined 12.4% in 2008 and now stands at $180,100 — its lowest level since the second quarter of 2003. Median home prices are not the best measure of housing prices, since they can be skewed by … [visit site to read more]
- Dow Chemical Cuts Dividend 1st Time Ever
Dow Chemical (DOW) today cut its dividend by 64%. This is the first cut in 97 years and the first cut in the company’s history. This was signaled by the CEO on January 27, so it is not a surprise. With a dividend yield over 17%, compared to the Fed Funds near zero, this was not a surprise to the market (the yield is still over 6% after the cut).
In fact, this is part of a cash saving move involving a reduction of 5,000 employees and the closure of 20 plants. There is a need to … [visit site to read more]
- Stock Trading Ideas For Friday - AAPL, FCX
Chart courtesy of stockcharts ( click to enlarge )
Freeport McMoran (FCX) shares closed at 29.40 on Thursday. The price is now within the Bollinger band and is sitting near the 20 day moving average. It looks like moving into consolidation phase after the recent decline. The MACD indicator is above its signal line and is indicating further strength. In addition, the ADX is increasing and is near 20 level which shows a strong trend is developing. The RSI indicator is moving up … [visit site to read more]
- Video: Pre Market: Consumer Sentiment
The stories, data, and stocks that may have the greatest impact during the next trading session. … [visit site to read more]
- S&P 500 And Freeport McMoran: Reversal Patterns Are Building
The riders on that roller coaster to the right is exactly how I felt watching today’s (Thursday) market. Of course, we all have probably heard that, according to CNBC, the Obama Administration announced
“it’s hammering out a program to subsidize mortgages in a new front to fight the credit crisis, sources familiar with the plan told Reuters Thursday, firing financial markets.”
It’s the “firing financial markets” that I want to focus on. At about 2:45, I wrote on Twitter “Will 3:00 hour … [visit site to read more]
- Forex Trading: A Longer Term Perspective Of EUR/USD
The Euro’s retracements north might be coming to an end with the world now bracing itself for the worst and the economic situation in Europe is deteriorating at different paces throughout the continent, putting even more pressure on the Euro. … [visit site to read more]
- UK: Foxes Guarding The Banking Hen House
Apparently our cousins across the pond (well my cousins at least) have their own problems around foxes guarding regulatory hen houses, and government officials living in glass houses:
From the WSJ:
LONDON — A Parliamentary committee examining the banking crisis claimed its first victim Wednesday, as the deputy chairman of the U.K.’s financial watchdog agency stepped down amid allegations he silenced the risk director at one of the UK’s troubled banks several years ago.
Sir James … [visit site to read more]
- Apple Stock: Daily Structure And Support
Seems that a lot of stocks are making possible rounded reversal patterns - Apple (AAPL) is no exception. We’ll soon know if these patterns are actual reversals… or massive bull traps. Let’s look at Apple’s daily chart - if it is to mount a reversal to the upside, it will do so off current levels. If not… then it won’t take much risk (stop-loss) to know.
Apple (AAPL) Daily:
Similar to the chart of Research in Motion (RIMM) I discussed earlier today, Apple is making some … [visit site to read more]
- Why S&P 500 Might Be Headed Down
The above chart is my best rationale for why I think that we should be headed down in the ES contract tomorrow (Friday). There are several reasons:
Indicators all have more room to run before becoming oversold.
We formed a Head and Shoulders Pattern - 3 circles
We retested the head and that retest failed.
We dropped hard and have started to form a channel.
I think that this channel will lead us to a retest of the lows (eventually)
If we can close below the Wedge for two … [visit site to read more]
- ETFs For Intrepid Investors Hunting For High Yields
For those who fancy bonds as the preferred investment tool, the most common quandary would be in deciding which type of bonds, along with related exchange traded funds (ETFs), are most suited to one’s needs.
One eye-catching asset class for intrepid investors is in high-yielding corporate bonds, writes Chance Carson for Seeking Alpha. High-yield bonds, also known as junk bonds, are debt instruments issued by corporations with BBB or lower credit ratings. Interest rates on high-yield … [visit site to read more]
- ETF Wrap-Up: Stocks Erase Initial Losses On News Story Leak
After a week of market unimpressive starts the administration tossed out another trial balloon in the form of housing assistance which produced a 3 PM short squeeze. It’s that simple I guess. This is a script that’s hard to make-up but the new powers that be are roadtesting whatever might work.
The S&P 500 (^GSPC) traded down to near its recent 805 low as it hit 808. That’s when the news from the White House was leaked to Reuters of another plan. The timing was important and … [visit site to read more]
- As Big Banks Are Criticized For Not Lending, Small Banks Find They Can't Lend
While congressional leaders this week excoriated the leaders of banks that have received billions of dollars in government bailout money for not doing enough to end the credit crisis, it may actually be consumer fear of borrowing that’s blunting banks’ efforts to lend.
Chief executives of eight big U.S. banks that have received the taxpayer-provided rescue money were in Washington this week to testify before Congress told U.S. lawmakers that their institutions have lent out more than … [visit site to read more]
- Pioneer Exits Flat Panel Display And Home A/V Businesses
Despite making arguably the best HDTV display in the business (or perhaps the one I lust after the most) Pioneer has decided to exit the Television business:
From the NY Times:
Surprise! Pioneer has now confirmed the rumors that it previously only responded to tepidly, and announced that the company is quitting the television display business. Instead, Pioneer will try to remake itself as a car-electronics company.
The company will close its British plasma production plant this … [visit site to read more]
- US Stock Market's Base Is Not Necessarily Bullish
Investing in the financial markets is about assessing probabilities of both positive and negative outcomes. You should approach the market with neither a bullish nor a bearish bias. The S&P 500 (^GSPC) has been holding up relatively well since the November 20, 2008 low. A sideways pattern in the markets is often referred to as a base. Wall Street as a whole approaches the markets with a significant bullish bias. As a result, the S&P 500’s recent basing pattern has been met with almost … [visit site to read more]
- Profit From The End Of Cheap Oil
I knew I had made a mistake only seconds after I did it. I had decided to sit down and watch CNBC’s Power Lunch with the sound ON for a few minutes while I ate my sandwich. I figured - how many brain cells would I possibly kill off in just a couple of minutes?
However, I had forgotten about my high blood pressure. Bill Griffeth was talking to some oil trader about oil which was up a few pennies on the day. Bill Griffeth began lecturing the trader, “Why in the world is oil up? How can oil … [visit site to read more]
- New Banking Bailout Plan Reconstitutes Some Of The Same Ingredients That Caused The Financial Crisis
By relying on asset-backed securities, large amounts of leverage and unregulated hedge funds as its key elements, the U.S. Treasury Department’s overhaul of the banking-system bailout plan is essentially relying on some of the same ingredients that caused the financial crisis in the first place.
This time around, someone should take the punch bowl away before the party even gets started. Otherwise, as Yogi Berra once said, it will be “Déjàvu all over again.”
The only difference … [visit site to read more]
Forex Blog by Lloyd
