World Economy


[02/04/12, 14:00 (EST or NYT)]
The Labor Department said companies hired 243,000 employees in January. That's the strongest job growth in nine months. The unemployment rate down to 8.3 percent (from 8.5%). Its lowest level in three years. Factory orders rose 1.1 percent in December. Hence, We could see the U.S. economy is gaining strength.

[01/18/12, 14:00 (EST or NYT)]
Update Outlook the markets.
The downgrade 17 countries of Euro of S&P firm didn't affect short-term. Major pairs, the U.S. Indexes have come back their values before the downgrade. They could have tools to forecast Economies of countries but they only are measures. Nobody could know state of economies exactly. All as news, operation of finance in and out of countries are reflected into its financial & economic charts. It means that long-term financial charts show economic states of countries exactly. The problem is how to read the charts. Coming News could be chances to investment and trading.
AUD/USD and NZD/USD have hit 200-MVA of daily-charts. They is going sideways and down in the rest of Jan. It is increasing in Feb-May. Their long-term charts as daily & weekly chart show they is going down more although by news traders could drive price going up more but long-term prices is going rebalance and return down side to reflect right economic states of them. These also show global command of commodities is going down because they are commodity pairs.
EUR/USD has a retracement of the down side. Its target is at around 1.4. Its long-term charts show it is going down more after having a retracement. Its target is at lower than 1.18 (the lowest one on june-2009).


[01/25/12, 14:00 (EST or NYT)]
The U.S. Federal Reserve on Wednesday said it will not raise interest rates until at least late 2014.

Billionaire investor George Soros on Wednesday said the EU should do the follow things to save themselve:
  1. The single currency block has to reform the way it is structured.
  2. Economic stimulus.
Read more ...

[01/09/12, 14:00 (EST or NYT)]
Outlook the financial market lately.

[12/08/11, 19:00 (EST or NYT)]
The ECB cut its key interest rate by a quarter percentage point to 1 percent and extend longer-term emergency loans to banks. No plan for large-scale government bond purchases unless Europe's leaders can come up with a credible plan to enforce budget discipline. Some economists said that The ECB has to bond purchases to against inflation. I think that this isn't a problem if the price od oil is decreasing. Techical Analysis at weekly-chart shows Oil's price could down.
Mario Draghi - ECB President has said the eurozone economy could be heading for a mild recession. A slowing economy would only make it harder for European governments to pay down debt. The rate cut is intended to promote economic growth and business optimism.
That is the goal of an EU summit that begins Thursday evening.
It was the second rate cut in only five weeks. From the Great Recession, the ECB never lowered its target rate below 1 percent. By comparison, the U.S. Federal Reserve's target for short-term rates is 0-0.25 percent and the Bank of England's 0.5 percent. This give us a information that buying Euros is a better than USD and GBP.
The financial markets were steady after the rate decision. They have been expected for the results for the EU summit.
S&P 500 has been down from today - Thursday because It hit resistance and need a rebound before It continues going up. Moreover, VIX - fear index is at low.
What is it a truth?
Euro Zone increased rates because the economic growth in europe. They fought inflation by cutting rate interest. The governments weren't quick enough to cut budget spending. This leads to debt crisis and as a result confidence was lost. Hence, The interbank markets have been tightened which created a credit driven slowdown which made it looks like the ECB was wrong.
They have been getting aggressive in fighting the debt crisis.
The U.S. Fed can't raise rates in 2012 by its bond buying plan on 4th-quater-2012. They haven't even begun to cut government spending yet. The situation in the US is getting worse, while in Europe they've started to change structurally for a better future.

[12/02/11, 13:00 (EST or NYT)]
Euro Central Banks plan to prove Up to $270 Billion Through IMF at a Nov. 29 meeting.

[12/02/11, 13:00 (EST or NYT)]
The U.S. government report that jobs are created only 120,000 and the unemployment rate down to 8.6 percent in November. This shows the U.S. economy have been improving but slow.

[11/23/11, 13:00 (EST or NYT)]
Outlook the financial market lately
S&P 500 has been hit 0.618 Fib. (low at 10/03/11 and hight at 10/27/11. see chart) today. It could make a rebound after Thanksgiving - A rally of 4th-quarter.
News talk Euro Zone bad every where. (This means it's time to buy euros, stocks).
Pairs of commodity currencies as AUD/USD and NZD/USD are usually up in 4th-quarter as well.
Dollar index Dxy has been performing A-B-C correction Elliott wave. Its target is at $81.44. (Its current value is at 79.x)

[10/10/11, 16:00 (EST or NYT)]
Outlook the financial market lately

They have blamed deb crisis of Euro zone too much to explain while the world financial markets have been going down. Then, they explain the market going up by European Promise to Help Banks. I don't think the explains are right. I don't think Greece (a small country) defaul making the world economies collapse, either!

The news or a intervention could make the markets going imbalance. Then, the market will return their balance later on.

The value of a currency of a country depends on its economic status. It doesn't change right way by a intervention of its banks. But, it travels its change in its country and to the orther countries. This needs a certain time interval.

Sometime, it affects good to economy, but sometime, it doesn't affect at all.

Economies of a government should know where imbalance of economy and financial markets are to plan a certain polycies to fix its economic status.
I could give some reasons to explain the markets lately.

First, QE2 is a form of intervention of the U.S. government. its purpose makes low interest for loans to stimulate the economy. It put the U.S. stocks going up 23%. The markets went away their balance. The QE2 finished on the end of June-2011. Now, the market is a free market. It is coming back its balance within a certain time interval. Please, Look at S&P 500's monthly chart, you could see S&P 500 hit R3. Here, some traders got profit and buy. Then, S&P 500 have been bounding back. Base on Imbalance points of the S&P 500, I have projected a future price of S&P 500 in a free market. If we have QE3 - another intervention - making the markets change, the chart could change by artificial markets.

Currency CHF (France) was high compare to the other currencies recently. It's not good for their export. then, The Swiss banks made some intervention to devalue its currecy on last month. This leads to a imbalance in the market. Now, You could see CHF/x have bounding back to a its balance point. Then, It could affect the market later on.

EUR/USD have been bounding back after some bad news. The chart of EUR/USD and its future chart are similar.

Dowgrade of Euro zone's many banks from some rate agents aren't exactly lately. They have been making traders confusing for their trading. Maybe, they did services to help some funds. the funds' manegers don't undestand where the markets rebound. Suddenly, EUR/USD have been going up. Now, 1.36. They could be lost money by their short positions because they have wondered where the money helps Euro zone. They never think the market going its balance. Its Internal strenght! I think the Euro economy still is better than the U.S. economy.


[09/28/11, 14:00 (EST or NYT)]
The Federal Reserve's "Operation Twist" announcement on September 20-21 launches a new tool aimed at jump-starting weak growth. The Fed said economic growth remains slow, and recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated.
In the first six months of this year, the economy grew at an annual rate of 0.7 percent, the slowest since the recession ended in June 2009.
The Fed announced $400 billion in long-term bond purchases matched with sales of the same amount of short-term securities in a bid to push down longer-term interest rates. The Fed also announced it would resume buying mortgage-related debt in an effort to help depressed housing markets recover.
Lower rates could escalate the risk of high inflation. In recent years, inflation has been low by historical standards, but it has increased over the past year, primarily because of more expensive food and gas. Keeping oil's price decreases is a important thing to control the inflation.
As A view of Technical Analysis
The U.S. stock markets was down last week. But, Gold's price has decreased because intervention of Swiss banks devalue their currency. This leads Dollar has been increasing its value. Dollar index Dxy have finished 5th-Elliott Wave. It has been performing A-B-C correction Elliott wave. Its target is at $ 81.44. This leads EUR/USD down more. It could go to Dhan's Pivot P2 = 1.32982. This is a future price or simulation price of EUR/USD.
About the U.S. stock market (and EUR/USD by the positive correlation), you get more risk if you play short because the program of bond purchases of the U.S. government next year. This is a form of intervention of the government - a QE3. QE2 ignited a 28 percent rally in stocks from its announcement, in August 2010, through April. It's better you play long and control its price by the Average Cost Method.

[07/28/11, 14:00 (EST or NYT)] The Labor Department said that first-time applications for unemployment benefits fell to 398,000 last week. the lowest level in four months.
Investors worry that the U.S. might lose its triple-A credit rating. That could raise interest rates and probably slow down the economy. Then, The dollar rose against other currencies. Treasury prices rose, too.

[07/07/11, 15:00 (EST or NYT)]

ECB has increased interest rates


Euro Central Bank - ECB has increased interest rates by 25 basis points, after raising rates by 25 basis points in April 2011 from historically low levels.

Crude Oil price could be decreasing over the coming month


[06/27/11, 15:00 (EST or NYT)]

The United States and the International Energy Agency have announced that they would sell a combined 60 million barrels of oil into international markets over the coming month. This lead gas price is going down to help the growth of global economic recovery. Crude oil prices have fallen more than 20 percent from their May peak.

Hence, S&P 500 could down more because of its positive correlation with USO (see the chart below). and EUR/USD, too.

062711.jpg

Moreover, economic data as unmployment, spending by comsumers decreased in May. Hence, The growth of the U.S. economy is slow down lately.


[06/21/11, 15:30 (EST or NYT)]

S&P 500 After the Federal Reserve's April 27 meeting affirming end of QE2 in June


S&P 500 has been down 64 points

The Fed acknowledges weakness in the U.S. economy and reiterate its commitment to keeping interest rates low for an extended period. Then, Investors will look for clues on new measures to support the economy as the Fed's second quantitative easing program ends this month.

sp500062211.jpg
[06/14/11, 15:30 (EST or NYT)]

Perspective of the U.S economy under a S&P 500 technical analysis 's Angle


The Stock markets refect economic status because of earnings of firms. Sometimes, emotions of traders and investors could drive the market more down or up by their greedy and fear. But, the markets will return their balance themselves by theory of the free market. This means the market average give us a estimation of economic status better than a short-term estimation.

If you look at 1-year chart of S&P 500, GE2 have pushing it going up in imbalance status of the market (Divergence). GE2 is a bond-buy plan of the U.S goverment. I think that the plan gives the larget financial instition more money. But, individual investors keep staying out of the stock markets. The same thing with EQ1, the goverment have given some banks money. The QE1 would have helped business and homeowner. After bail out, some banks have gotten some asssets and fixed their balance sheet, then returned money to the government by selling their stocks and using earning money to investment instead of helping business and homeowner. for example, JP-Morgan bank bought too much cooper and store them at warehouses in England last year. They understand that the goverment printing will lead to a inflation - increasing price of commodities. Now, They have made money from the investment. They save themselve!

Moreover, Some banks have been continuing down credit line of customers. The customers have been paying but balance of their account is always bigger than half of their credit line. This could make low their FICO's point, and this could leads to the wrong way for the credit market that affects to the bond markets. then, interate rates for loans.

sp061411_0.jpg


If you look at a larger time frame of S&P 500, you could see in last 10 years, the U.S has two economic recessions. It could have another one in the near future if the U.S. won't have a right way of economy.

sp061411_1.jpg

This is a picture jobless claims in a next few years which I have projected from Elliott wave Analysis.

jobless.jpg


Copyright © Jump The Frog. All Rights Reserved.