Tag Archives: Indices

Will Today’s FOMC Minutes Move The Markets?

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: USD FOMC Meeting Minutes @ 18.00 GMT

WHAT WE’RE WATCHING TODAY

Will Today’s FOMC Minutes Move The Markets?

The Fed is due to release minutes of its March 18-19 meeting today at which it reduced the monthly pace of bond buying by $10 billion to $55 billion. Whether they reveal anything new or just nuance, the minutes from the Fed’s last meeting will be a major highlight of the trading week. Traders are watching to see if the minutes take on a more hawkish tone, particularly after Fed Chair Janet Yellen said that the Fed could start raising short-term interest rates about six months after ending its bond-buying program, expected in the fall. The Fed dropped part of its statement that linked raising rates to an unemployment threshold of 6.5 percent. Unemployment was at 6.7 percent in March. FOMC minutes are known to move markets even when they really provide little new information.

The dollar was at $1.3708 per euro today after strengthening 0.3 percent last week to $1.3705. The yen added 0.2 percent to 103.08 per dollar, extending a 0.6 percent advance on April 4. It gained 0.2 percent to 141.30 per euro, following a 0.7 percent jump at the end of last week to 141.54. Stocks rose slightly Tuesday, with the Dow gaining 10 to 16,256 and the S&P 500 up 6 at 1,851. The Nasdaq rose 33 points or 0.8 percent, to 4,112.

FOMC Meeting Minutes @ 18.00 GMT

Dollar Down, Yen Up As BOJ Dampens Stimulus Hopes

The dollar hovered at three-week lows against major currencies today, having broken decisively lower as the yen squeezed higher and the euro gained a tailwind. The moves were sparked partly by yesterday’s comments from Bank of Japan Governor Haruhiko Kuroda who said there was no need for additional stimulus to escape years of debilitating deflation whilst adding that the world’s third-largest economy can ride out the impact of a sales tax rise. Recent remarks from European Central Bank officials have also suggested no urgency for any immediate policy action. The dollar fell more than 1 percent against the yen in its biggest one-day drop in over seven months to 101.55. It has since drifted back up to 101.91. The euro climbed as far as $1.3812, pulling further away from Friday’s trough of $1.3672. The dollar also slid on a raft of emerging market currencies where investors have been wagering massively on dollar strength that has not materialised, forcing a bailout of long positions. In contrast, the Japanese currency gained ground on the euro, the Australian dollar and many other currencies as well, as investors rushed to cover bearish positions.

China Commodity Demand Not Peaking

China’s economic deceleration has shaken commodity markets, however, according to the International Monetary Fund, its demand for commodities is a long way off peaking and does not mean that its rebalancing away from an investment-led economic model will lead to a decline in consumption of commodities. Observing growth trajectories in China, South Korea and Japan, the fund found that China’s per capita gross domestic product would need to double before that started to happen. Instead, the IMF points out that the composition of Chinese demand for commodities is likely to shift. As Beijing moves to shut down unprofitable steel factories, growth in demand for iron ore and copper should moderate. China is still importing iron ore at record levels but these imports are expected to grow at a slower pace from now on. Concerns over China demand partly explain why iron prices have fallen 12% since the start of 2014. By comparison, the fund said, Chinese demand for high-grade metals like aluminum is likely to prove more resilient in years ahead. The fund also anticipates other commodities will do well as incomes in China rise: high-protein foods and zinc. Losers could include rice, copper and eventually coal.

That sums up today’s highlights! We hope you have a profitable day on the markets.

BOJ Holds Off Boosting Stimulus

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: BOJ Press Conference

WHAT WE’RE WATCHING TODAY:

BOJ Holds Off Boosting Stimulus as Economic Recovery Seen

The Bank of Japan has held back adding extra stimulus as policy makers said the world’s third-biggest economy can maintain a recovery even with last week’s increase in the sales tax. Governor Haruhiko Kuroda maintained a pledge to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($681 billion) per year. The economy has continued to recover moderately, albeit with some fluctuations due to the consumption tax hike, according to the BOJ. While the central bank highlighted a pickup in private investment and increasing industrial production, economists predict that the BOJ will boost stimulus by July when the strength of an economic rebound will become clearer. The BOJ is gauging the extent of an anticipated setback to the economy and prospects for achieving its 2 percent inflation goal after last week’s 3-percentage-point increase in the sales tax, the first since 1997. The price goal excludes the effects of changes in the sales tax. Kuroda has stated that Japan won’t see a repeat of the recession that followed the sales tax increase in 1997, pointing to Japan’s now-stronger financial system and an absence of a regional financial crisis that hurt the country’s exports then. The yen weakened after the announcement, trading at 102.96 per dollar in Tokyo, up 0.1 percent. The Topix index, which has climbed 6.8 percent over the past year, fell 1.7 percent, down for a third day after technology shares extended a retreat.

UK Economic Recovery ‘Not Yet Secure’

The UK’s recent economic growth might be short term and recovery is “not yet secure”, according to the British Chambers of Commerce (BCC). Recovery could stall as it relies on consumer spending, while personal debt levels are said to be too high. The BCC’s economic survey for the first quarter found that UK export orders and sales in services were at all-time highs and that manufacturing was growing consistently but challenges persist despite the progress. UK growth is still reliant on consumer spending, driven by a resurgent housing market and a declining savings ratio. Personal debt levels need to fall and it will be hard to maintain growth in the medium term without significant structural changes to the UK economy. Britain’s current account deficit was the largest in the G7 group of major industrialised nations, and could pose long-term risks if left unchecked. On Monday, Chancellor George Osborne announced further measures to help boost British exporters which would make it much less risky for banks to lend to exporting firms.

Tech Stocks Sell-Off Penetrates Through World Markets

Growing concerns over technology stocks weighed hard on stock markets around the world early this week. The latest bout of nerves started last Friday when mainstays of the Internet economy such as Google, which has surged over the past year, was hammered as investors had a change of heart and decided prices were too high. The technology-heavy Nasdaq dropped 2.6 percent on Friday, its biggest one-day drop since February. It was down a further 1.4 percent Monday at 4,072. In Europe, the FTSE 100 closed down 1.1 percent at 6,622.84 while Germany’s DAX fell 1.9 percent to 9,510.85. The CAC-40 in France ended 1.1 percent lower at 4,436.08. In the U.S., the Dow Jones industrial average was down 0.8 percent at 16,278 while the broader S&P 500 index fell 1 percent to 1,847. Renewed concerns over Ukraine also unsettled investors, particularly in Europe where investors will be looking for further clues on the economic outlook later today.

That sums up today’s highlights! Remember to keep in touch via our Facebook, Twitter, Google+ and LinkedIn pages for all the latest news and developments in the financial markets today.

We hope you have a profitable day on the markets!

As Twitter Takes Off, Who’s Next On The Runway?

For technology executives weighing market flotations for Silicon Valley startups, this week’s gangbusters Twitter Inc initial public offering sent a powerful signal: full speed ahead. About a dozen private companies are valued at more than $1 billion and many of them have already been holding informal talks with bankers with a view to accelerating their IPO plans. File-sharing company Box has picked Morgan Stanley, Credit Suisse and JP Morgan to lead its IPO. The company has been valued at more than $1.2 billion by private venture capital investors but it remains unclear whether it is profitable. Twitter’s lack of profits proved to be no obstacle to the micro-blogging site raising as much as $2.1 billion in its IPO. That opens the door for other big-name private companies including Square, the payments company founded by Twitter co-founder Jack Dorsey which has begun exploring the possibility of an IPO next year. Profits are not expected until 2015. Airbnb, an accommodation service, is also often cited as a potential IPO candidate. “They don’t have inventory and have pretty low overhead,” said analyst Michael Pachter, who believes the company is profitable. Social media service Pinterest, meanwhile, raised $225 million at a $3.8 billion valuation in October even though it had only begun to make money in September by showing ads. Snapchat is perhaps one of the furthest down the line. Used by 9% of U.S. mobile phone users, Snapchat raised $60 million earlier this year at a valuation of $800 million. The market’s embrace of Twitter comes right as the IPO market enters what is typically a seasonal lull around the time of the Thanksgiving holiday and do not really get started again until February or March. With many in Silicon Valley believing that the appetite is growing for tech IPOs, there are a number of similar companies also taxiing along the runway ready for take-off. Watch this space!

European Index Futures Falls

European stock-index futures dropped yesterday. The Euro Stoxx 50 Index futures fell 0,5 percent and Standard and Poor’s 500 Index (SPA) contracts slid 0.4 percent.

Data scheduled for release later today is forecast to show consumer confidence in euro area to have climbed since July 2011.

The Stoxx Europe 600 Index, however, rose for the ninth day yesterday, recording its longest upwards trend since June 2010.

Suspicious Minds? Dubious Trades Before Jobs Report in Three Charts

Another major economic report, another round of speculation about suspicious trading activity seconds before its release. A number of futures contracts Tuesday morning showed “distinct activity just before 8:30:00,” says Eric Hunsader, founder of Nanex, a Chicago firm that studies and distributes stock-market data. He illustrated the moves in a number of charts on his firm’s website. The September jobs report was released at 8:30 a.m. Eastern Time after being delayed by more than two weeks due to the partial government shutdown. The report showed U.S. employers added just 148,000 jobs last month, a sign the labor market stumbled heading into Washington’s latest round of budget battles. Mr Hunsader is no stranger to pointing out suspicious trading and some critics contend his data doesn’t always tell the full story. Yet, these days, it’s no longer a question of whether some players are getting a faster look at market-moving news, but whether it should be allowed. Government agencies and other producers of widely-watched economic reports are pondering new ways of releasing information with the aim of leveling the playing field. Not for the first time, suspicions are rife…the time has surely come for ‘fair game’.

Asian Stocks fall before delayed U.S. NFP data

Asian stocks took a hit, with regional benchmark index falling from a five-months high, as investors everywhere await the release of the delayed U.S. payrolls data to gauge when the Federal Reserve will proceed with its stimulus-cutting plan.

The MSCI Asia Pacific Index fell 0.1 percent to 143.53 yesterday as nine out of ten industry groups on the measure retreated.

The Chinese Shanghai Composite Index (SHCOMP) dropped 0.7 percent, while Hong Kong’s Hang Seng Index fell 0.5 percent. South Korea’s Kospi index and Taiwan’s Taiex also fell 0.1 percent each.

Topix Climbs to Three-Week High

The Japanese Index Topix climbed to a three-week high with investors speculating corporate earning to surpass predictions and a weaker yen boosting the country’s exporters.

As Markets closed in Tokyo, the Topix rose 0.6 percent to 12,212.36, its highest level since late September, as all but three of its industry groups advanced. The Nikkei Stock Average also gained today to 14,693.57, adding 0.9 percent. With the yen falling 0.4 percent against the dollar, optimism has risen regarding corporate earnings as the companies you haven’t fully priced in a weaker yen can increase their profit projections.

Crude Rises

Monday morning market opening saw U.S. light sweet crude rise 25 cents, or 0.26 percent, to $96.13 per barrel. Other commodities also went up on indication that the world’s second largest economy China is becoming more dynamic, coupled with sanguinity that the nastiest eurozone debt crisis is over and that Japan’s efforts to revive its stagnant economy are paying dividends.

Moreover, Brent oil prices move near a three-month high at $113 a barrel before the Fed’s two-day meeting starting on Tuesday and the employment data on Friday that is expected to show more signs of recovery.

In general, stock indexes showed diversity on Monday as oil prices rose following strong U.S. durable goods data and earnings results from Caterpillar, NBC news reported as markets in the US opened.

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