Tag Archives: Samsung

Fed Outlook: Geopolitical Concerns, Rates Set To Rise

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

Main Trading Event Of The Day: Several today including USD FOMC Statement @ 18.00 GMT & GBP Annual Budget Release @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Fed Outlook: Geopolitical Concerns, Rates Could Rise At Turn Of The Year

Janet Yellen will chair the FOMC today with wide agreement on Wall Street over the outlook for policy this year and a forecast for stronger U.S. growth this year and next. There are some divisions over what happens to Federal Reserve policy in 2015 with a cloud of geopolitical concern hanging over the outlook but most analysts see the Fed tapering at the meeting today and at each of the remaining meetings this year. On average, analysts see the Fed tapering by around $10 billion at each meeting. The Fed currently is purchasing $65 billion in assets every month to try and drive down interest rates and stimulate the economy. It has signaled it would reduce or taper its purchases by $10 billion at each meeting this year, which would effectively end its purchase program by December. However, investors pricing in a federal funds rate hike in mid-2015 could get caught off guard, according to former Federal Reserve Governor, Robert Heller. Heller believes that markets will force the Fed to tighten a little bit earlier than that, probably around the turn of the year as we approach 2015, which is around the time that the tapering operation should be finished. The Federal Reserve has kept its benchmark interest rate near zero since 2008, when a global financial crisis that plunged financial markets into turmoil. As the Fed now unwinds its massive stimulus program and the U.S. economy recovers, markets anticipate an interest rate increase to follow not too long after the end of tapering. According to Heller, as investors become more become more bullish about the domestic recovery, yields on U.S. government bonds will be pushed higher, encouraging the Fed to follow suit. Other factors being taken into consideration are the recent weak U.S. economic data due to extreme weather conditions and new economic risks on the horizon, particularly China and Ukraine. Nevertheless, the general feeling is that Wall Street is reasonably comfortable with its outlook for Fed policy.

FOMC Statement/Press Conference @ 18.00 GMT

UK Budget 2014: Osborne Supporting A Resilient Economy

George Osborne will set out his plans to support a “resilient” economy in today’s Budget, which will be focused on boosting economic security and aspiration. The budget comes against a backdrop of a strengthening economic recovery, with unemployment and inflation falling and growth this year projected to be the among the strongest of any Western economy. Business groups have forecast that the UK’s total economic output will exceed its pre-recession peak in the second quarter of 2014 after the economy grew by 1.9% in 2013. Osborne is expected to address the UK’s historic economic weaknesses, particularly the need to increase manufacturing output and improve the UK’s balance of payments by boosting exports. He is also expected the chancellor to unveil schemes, incentives and tax breaks for some businesses. Alongside details of proposed tax and spending changes, Osborne will announce the Office for Budget Responsibility’s latest forecasts for economic growth and government borrowing for the years ahead. Deficit reduction remains his number one priority, with the ultimate goal of delivering an annual budget surplus before 2020.

Stocks: Google To Launch New Smartwatch Platform

Google announced earlier this week that smartwatches based on its Android mobile software will be available later this year, enlisting a variety of partners including Samsung Electronics, LG Electronics and Intel, signaling the company’s intent to play a leading role in what could be the next big computing market. Android Wear will allow people to speak into their watches to check sports scores, control music, send replies to text messages and even open their home garages. By aligning itself with a broad spectrum of partners to develop the smartwatches, Google is hoping to replicate the success that helped make its free Android software the most popular smartphone operating system, analysts said. Many believe wearable computers represent the next big shift in technology. More than 130 million smart wearable devices are predicted to ship by 2018.

That sums up today’s highlights! It’s a busy day on the markets so make sure you keep up to date with all the events via our Facebook, Twitter, Google+ and LinkedIn pages.

We hope you have a profitable day on the markets!

Just A Minute!

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

Main Trading Events Of The Day: EUR German ZEW Economic Sentiment @ 10.00; USD Building Permits @ 12.30; USD Core CPI m/m @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

U.S. Markets Look To German Stocks As German ZEW Economic Sentiment Awaited

Markets around the world have been becoming more jittery by the Russia/Ukraine crisis and the possibility of slowing economic growth in China. The situation is having a profound impact on U.S. markets with traders up and down Wall Street pointing to a renewed sense of risk aversion and questioning whether or not this is the beginning of that long-awaited correction for U.S. stocks. Slowing growth in China and worries about Russia’s tense relationship with Ukraine continue to fester but many traders have been paying even more attention to what’s happening in continental Europe for signs of what’s ahead for U.S. stocks. In particular, they are looking at Germany’s stock market which has relatively close economic ties to Russia. The two are trading partners, so weakness in Russia’s markets will reverberate through Germany’s markets to a certain degree. In turn, Germany is an important trading partner with the U.S. and there is a very high correlation between the value of the S&P 500 and Germany’s DAX stock index. In other words, the direction of both indexes seems to track each other fairly closely, hence many traders are also keeping a close eye market developments in Germany. While there has been selling pressure on U.S. stocks, some traders note that there isn’t a sense of panic selling. They also note that the current downside pressure isn’t a result of a massive flood of sell orders hitting the market. Rather, it’s been a lack of any real buy orders. With stocks near record highs, caution is still the prevailing sentiment. However, the trading relationship between German and American stocks is perhaps one reason why some traders are taking some profits just in case the global geopolitical or economic situation takes a turn for the worse.

The importance of the German market is once again highlighted in today’s German ZEW Economic Sentiment @ 10.00 GMT. Economic expectations in the euro zone declined in February by 5.4 points to 68.5. Analysts had expected a higher reading of 73.9. The decline in sentiment may attributed to concerns about U.S. economic recovery, and market volatility in emerging markets. Despite the relatively weak reading, ZEW President Clemens Fuest believes this decline in economic expectations is a temporary setback, since the majority of surveyed financial market experts remain optimistic. A further decline to 67.3 is expected.

Markets Eye Housing Data & FOMC For Market Buzz

Economic data and the Federal Reserve are expected to receive most of Wall Street’s attention this week with the big question being whether we are we looking at ongoing weather-related data, or if we are likely to see incremental improvement. Traders will of course be keeping their eyes on the Ukraine but it may come off the trader screen for the next few days, as we head to the FOMC on Wednesday. Reports scheduled for release include the consumer price index, typically scrutinised by analysts and investors for any sign of inflation, along with housing starts and building permits, all for February. The report, along with one on mortgage applications on Wednesday and existing home sales on Thursday, should give investors a clearer view on the health of the housing sector, an important piece of the U.S. economy. The expectations there a little stronger than they have been with the addition of 175,000 jobs in February and separately, a 0.3 percent rise in retail sales last month. The economic reports should begin to answer whether equity investors made the right call in writing off a large number of economic reports as being adversely affected by the weather. On Monday, stocks rallied, with the Dow rebounding from a five-day losing streak, as voting in Crimea passed without violence and after economic report had U.S. manufacturing output jumping the most in six months.

Apple Favorite Brand In Emerging Markets

Apple is the most desirable mobile-phone brand among inhabitants of emerging markets, according to a report. In a study conducted this year, Apple edged out Samsung Electronics, which was the leader in a separate survey last year. Samsung saw a slight decline in its share of developing-market consumers who favour its phones from 32 percent to 29 percent while Apple’s share jumped dramatically from 21 percent to where Samsung was last year. The brand halo for Apple is a good thing, but it won’t help the company overtake Samsung in sales, at least not immediately. Samsung Electronics is the world’s largest maker of smartphones partly because it makes low-margin, cheap handsets in addition to Galaxy products. The bright side for Apple is that the new emerging middle classes may switch to iPhones when they can afford them.

That sums up today’s highlights! Keep an eye on the markets today for important data releases via our Facebook, Twitter, Google+ and LinkedIn pages. We hope you have a profitable day on the markets!

Can Japanese Electronic Giants Adapt To The Software Era?

Remember the days when the Japanese electronic giants were huge household names? Just 10 years ago, Sony, Panasonic and Sharp built their global empires on making appliances such as televisions, radios, refrigerators and washing machines. But has it become a case of “Where are they now?” as they have been overtaken by the digital revolution and are now struggling to profit? These days, commuters are more likely to spend their journeys on an Apple or Samsung device rather than a Sony Walkman but they could still be in a position to survive and compete in the market. Not every firm needs to be Apple to generate revenue so investors should not write these firms off. Oren Laurent’s latest article examines the current situation and possible investment opportunities. Read more…

Is Samsung Set For Greater Losses?

Samsung Electronics Co. (005930) has recently experienced a $28-billion loss in a stretch of only six weeks, and the stock’s most accurate forecaster expects the drop to deepen as Apple Inc. (AAPL) and Chinese competitors bite off greater chinks of the market.

Samsung, which is based in Suwon, South Korea, saw its shares plummet 13 percent since 29th November, making it the quickest market-capitalisation losing company worldwide. According to Adnaan Ahmad, the Brerenberg analyst with the most accurate and best-returning forecasts over the last twelve months, the stock is set to decline another 11 percent.

The last quarter of 2013 marked the first quarterly decline for the word’s largest smartphone maker, ending a nine quarter stretch of increases, losing customers not only to Apple’s iPhones, but also to budget solution by Chinese makers. Despite bulls’ expectation for a rebound following the drop that brought the stock to its lowest level in three years, Ahmad anticipates more selling as Samsung’s profit margins shrink.

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