Jan 18, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

Bull Flag Formation In The US Dollar Index

Posted: 18 Jan 2010 08:01 PM PST

There is a distinct possibility that a Bull Flag pattern formation is setting up currently in the US Dollar Index, and we should know for sure by the end of next week if not early into the following week as to whether this set-up will be confirmed (triggered) or not.

Let’s take a quick look.

Starting with the December lows of $74.50, a $4.00 impulse formed which took price to the $78.50 level.

Now, price has retraced $2.00 to the support level at $76.50 (50 day EMA) and now … [visit site to read more]


Why The Precious Metals Craze Is Bound To Grow

Posted: 18 Jan 2010 07:46 PM PST

The rules of supply and demand are the  biggest factor in determining the price of a commodity. That said, the introduction of precious metal exchange traded funds (ETFs) could be just the beginning of big changes.

Jeffrey Lewis for GoldSeek has reasons why the metals craze is bound to grow and ultimately impact prices:

New Consumer Level Products. Firms are lining up to sell gold and silver coins on TV and in the news, and local coin shops are sold out. The number of companies wanting … [visit site to read more]

Borders Group: A Classic Value Trap?

Posted: 18 Jan 2010 07:30 PM PST

Today, Borders Group Inc. (BGP) reported sales results for the 11 week holiday period ended January 16, 2010. The company reported total sales of $846.8 million, a 13.7% decrease from last year's holiday period. The results proved disappointing considering last year's holiday season fell right in the midst of one of the worst economic recessions. All of Borders' individual business segments reported declines except the international segment which reported a 8.7% sales increase to 44.4 … [visit site to read more]

200 US Banks Are Likely To Fail In 2010

Posted: 18 Jan 2010 07:01 PM PST

Washington has so thoroughly botched its supervision of the banking industry that 200 banks are likely to fail this year - easily surpassing last year’s 140 bank failures … inevitably involving the greatest bank losses in history … and already costing the FDIC ten times more than the great S&L and banking crisis of the 1980s did.

I am not basing these conclusions on conjecture. They come straight from official sources. Specifically …

In her testimony before the Financial … [visit site to read more]

How To Reduce Your Risk In Forex Trading

Posted: 18 Jan 2010 06:01 PM PST

Pair trading is a popular stock-trading strategy. It gives you the opportunity to capture a dislocation between two stocks by taking a long position in one stock and simultaneously taking a short position in another - in equal dollar amounts.

In identifying a good pair trade, you’d look for two stocks that share the same industry, the same sector or simply have a strong historical statistical correlation. Yet for the time being, the share price of one may have gone up (the one you go short), … [visit site to read more]

Singapore Stock Market Update For Tuesday 19 January

Posted: 18 Jan 2010 05:23 PM PST

Morning Highlights
Singapore Share prices edged up in opening trade today with STI up 5.35 points at 2917.31. However, the other Asian shares traded mixed as investors await key earnings reports from the U.S., such that  profit-taking in banks are seen weighing on Australian shares and Japanese shares headed lower as financial stocks weakened.

Lookout on Capitaland 

Singapore News Updates:

Budget airline Tiger Airways said on Monday it had raised $247.7 million (US$178 million) … [visit site to read more]

Where The Jobs Are

Posted: 18 Jan 2010 05:16 PM PST

OK, I admit it. Maybe I’ve been too pessimistic. I know I’ve said the ranks of the long-term jobless continue to grow. I’ve also noted the fact that, based on past history, high levels of unemployment tend to linger for quite awhile in the wake of financial crisis-linked downturns. Moreover, I’ve pointed out that many employers are seeking to boost their bottom lines by squeezing more out of current employees rather than taking on new staff.
But that’s not the whole story. There are jobs out … [visit site to read more]

Treasury Bond ETFs: Why It May Be Better To Short TLT Rather Than Buy Long TBT

Posted: 18 Jan 2010 05:01 PM PST

There’s been a lot of focus of interest rates recently as they finally start edging higher because of the magnitude of the Federal deficit. For example, the NYTimes, in an article entitled “For 'Safe’ Investors, This May Be a Challenging Year”, pointed out that
There are many indications that this herculean intervention has been working. In the bond market, though short-term interest rates are still hovering near zero, longer-term rates have been on an upward trajectory since late … [visit site to read more]

Gold - Potentially Bullish Pennant Formation

Posted: 18 Jan 2010 04:23 PM PST

Price action on spot gold, a daily chart of which is shown, has formed a potentially bullish pennant consolidation pattern within the context of its rebound off December lows. This rebound is represented by a short-term uptrend support line extending from the December 22 support low around 1074. This all occurs within the context of an overall, continuing uptrend.

Any significant breakout above the pennant consolidation could signify a potential recovery in gold and an uptrend continuation … [visit site to read more]

Australian Employment - The Nitty Gritty Details

Posted: 18 Jan 2010 04:01 PM PST

In response to some discussion in my recent “Top 5 Graphs of the Week” article, I have decided to do a little piece that drills deeper into the details on Australian employment stats.

First up, the graph that started it:

This chart shows a reasonably clear topping out of the unemployment rate. This is somewhat intuitively sensible given that the Australian economy has been performing reasonably well on a GDP basis, helped in part by fundamental strength, lack of banking sector … [visit site to read more]

Aussie Inflation Sneakily Creeping Upward

Posted: 18 Jan 2010 03:15 PM PST

Throughout the financial crisis the Australian real economy has managed to remain somewhat resilient, largely thanks to its reliance on commodity exports to its nearby Asian neighbor, China.
Despite that strength, and 2009's substantial appreciation of the Australian dollar relative to its US cousin, Australia is sneakily developing signs of inflation. The measure is now at a recent high according to The Sydney Morning Herald:
"December's annual rate rose to 2.6 per cent – the highest … [visit site to read more]

A Broad Field Of Corporate Idiots

Posted: 18 Jan 2010 03:00 PM PST

Our inbox is so full of idiots, anyone snooping might think we operated a website ending in ".gov"…
Our faithful (and unfaithful) readers were busy over the weekend, nominating their choices for this year's Daily Reckoning Financial Darwin Awards. It's a tough field, to be sure, so we're keeping the polls open for a couple more weeks. The contestants thus far are varied and plentiful…
One reckoner raised a hand for "Arnie Schwarzen-begger"…while another voted for the … [visit site to read more]

Gov’t Is Leveraging Up… For Entitlement Spending

Posted: 18 Jan 2010 02:22 PM PST

Why learn lessons the easy way? Or, better yet, why learn them the first time around? Or, at all?
With the carnage of financial crisis temporarily in the rearview mirror and only more, along with fiscal deficits, visible outside the windshield, the Obama administration is driving this nation headlong into the money pit… blindly following the trillions it's hopelessly poured in beforehand.
Turns out it's not only Wall Street that likes the gas … [visit site to read more]

Gap Earnings Preview

Posted: 18 Jan 2010 02:19 PM PST

Gap Inc. (GPS), a premier international specialty retailer, is scheduled to report its fiscal 2009 fourth-quarter results on Feb 25, 2010. The current Zacks Consensus Estimate for the quarter is $0.44 per share. Estimates appear to be trending up, with year-over-year growth of 28.5%. Of the 27 analysts having a fourth-quarter earnings estimate, seven have raised their estimates in the last 30 days, while only 1 has reduced.
The Zacks Consensus Estimate for the current fiscal year is $1.51 … [visit site to read more]

Cartoon: Spotting A Wall Street Executive

Posted: 18 Jan 2010 02:01 PM PST

Source: Steve Breen, Comics.com, January 15, … [visit site to read more]

Economic Breakdown On The Financial Highway

Posted: 18 Jan 2010 02:00 PM PST

The stock market fell 100 points on the Dow index on Friday. We hope Daily Reckoning readers are out of US stocks. Sooner or later this jig is going to be up. You don't want to be heavily invested when it does.
Right now, the market is dilly-dallying. Investors are enjoying a picnic. Alas, they've spread their picnic blanket on the side of Vesuvius. It could blow up at any time.
We are in a depression. Not yet a 'great' depression. But it's a pretty good depression; and we'll take … [visit site to read more]

Roubini On The Massive Debts Of The Wealthiest Nations

Posted: 18 Jan 2010 01:41 PM PST

Government debt continues to be one of the most written about topics of 2010… and for good reason. The most developed and wealthy economies can't seem to refrain from spawning the extraordinary levels of debt that were historically seen only in emerging markets (which for the most part, seem to have improved their balance sheets).
Today Nouriel Roubini points a finger at some of the worst offenders:
"Indeed, rating-agency downgrades, a widening of sovereign spreads, and failed public-debt … [visit site to read more]

Rating Action On MGIC

Posted: 18 Jan 2010 01:34 PM PST

 
Last week, rating agency Fitch withdrew its long-term issuer rating "B-" of MGIC Investment Corp. (MTG) along with withdrawing the "BB-" insurer financial strength rating of its subsidiary, Mortgage Guaranty Investment Corp. The rating agency also pulled back the rating on MGIC's senior notes and convertible junior subordinated debentures.
 
Back in July, Fitch had downgraded MGIC's rating following the company's announcement of its business restructuring. After … [visit site to read more]

Earnings Preview For JCI

Posted: 18 Jan 2010 01:16 PM PST

On Friday, January 22, 2010, Johnson Controls (JCI) will release its sales and earnings results for the first quarter of fiscal 2010 ended December 31, 2009. The Milwaukee, Wisconsin-based supplier of automotive interiors, batteries and other control equipment showed a profit of $402 million or 52 cents per share, excluding non-recurring items, for the fourth quarter of its fiscal year ended September 30, 2009. This was above the Zacks Consensus Estimate of 48 cents.

Johnson reported … [visit site to read more]

Here’s Some Dividend Stock Ideas

Posted: 18 Jan 2010 07:31 AM PST

Many long-term investors, particularly value investors, are attracted to the income provided by stocks that pay healthy dividends. The major stock indexes have seen a remarkable run since last March, creating the strong possibility that the market is overvalued. Moreover, the weak global economy is cutting into profits, often resulting in smaller dividend payments. In this environment, value investors need to be highly selective in the search for companies that stand to maintain … [visit site to read more]
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