George Soros's new stock picks.

The billionaire investor initiated a position of 4.1 million shares in Morgan Stanley MS -0.31% during the fourth quarter. Morgan Stanley has been struggling with profitability in recent quarters, and severely underperformed expectations at times. Fellow billionaire Dan Loeb's Third Point was also buying Morgan Stanley last quarter, reporting a position of 7.8 million shares after not owning any of the stock at the end of September (find more stocks Loeb was buying). Wall Street analysts insist that the investment bank is a good value, with their expectations implying a forward P/E of 9 and a five-year PEG ratio of 0.6.
 

Citrix Systems CTXS +0.52% , a $13 billion market cap business software and services company, was another of Soros's new stock picks. Lee Ainslie's Maverick Capital increased its own stake in Citrix in the fourth quarter of 2012, to a total of 3.8 million shares. Citrix experienced a 20% increase in revenue last quarter compared with the same period in the previous year, but slimmer margins resulted in net income only rising 5%. With the stock priced for growth at a trailing earnings multiple of 38, performance would have to improve in order for it to be a worthwhile growth stock.

Soros also liked Anadarko Petroleum APC -0.30% , buying up almost 760,000 shares of the oil and gas company. 62 filers in our database reported a position in Anadarko, which made it the most popular energy stock among hedge funds (see more energy stocks hedge funds loved). Anadarko's earnings multiples are in the teens- the trailing and forward P/Es are 17 and 15 respectively- but that represents a premium to the major oil companies and the company's revenue has actually been down. It might be worth looking at on the basis of its popularity but we aren't particularly excited about the stock.
 

The 13F disclosed a new position of about 950,000 shares in Plains Exploration & Production PXP -0.29% . The oil and gas company is an acquisition target as Freeport-McMoRan Copper & Gold FCX -0.88% plans to buy it and a related company. Many investors like to invest in merger arbitrage investments because the returns are uncorrelated with the stock market, though there are of course risks (read more about merger arbitrage strategies). Plains itself had expanded from natural gas to offshore oil assets earlier in 2012.

Ford F +0.63% rounded out the five largest new positions that Soros reported owning at 3.1 million shares. Ford's revenue edged up in the fourth quarter of 2012 versus a year earlier, and many value investors have been bullish on autos for several months. The market in general is quite pessimistic about Ford, as it trades at 9 times trailing earnings. The sell-side generally expects improvements on the bottom line with the result being that the five-year PEG ratio is a bit below 1. Appaloosa Management, managed by billionaire David Tepper, had over 11 million shares of Ford in its own portfolio at the beginning of January

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Business spending plans gauge hits 13-month high

A gauge of planned U.S. business spending recorded its largest increase in more than a year in January, suggesting growing confidence in the durability of the economic recovery.

The case for the economy's resilience was further bolstered by another report on Wednesday showing that contracts to buy previously owned homes approached a near three-year high last month. Housing is expected to underpin growth this year.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, jumped 6.3 percent, the biggest gain since December 2011. These so-called core capital goods orders had slipped 0.3 percent in December.

"The encouraging tone of this report suggests that the business sector is beginning to feel sufficiently confident about the improving economic outlook to commit to investment activity," said Millan Mulraine, a senior economist at TD Securities in New York.

In a separate report, the National Association of Realtors said its pending home sales index increased 4.5 percent to its highest since April 2010, just before a home-buyer tax credit expired.

The rise in signed purchase contracts, which become sales after a month or two, added to data such as building permits and house prices that have suggested a decisive turnaround in the housing market.
Home building added to growth last year for the first time since 2005 and economists expect another contribution this year.

Still, the reports are unlikely to change the Federal Reserve's very easy monetary policy stance. Fed Chairman Ben Bernanke, testifying before Congress for a second straight day, pointed to the pick-up in housing as a sign the U.S. central bank's aggressive easing of monetary policy is gaining traction.
However, he signaled a willingness to press forward with efforts to spur an even stronger recovery and lower the jobless rate, which remains at a lofty 7.9 percent.

Stocks on Wall Street ended more than 1 percent higher on the data and Bernanke's comments, with the Standard & Poor's 500 posting its best daily percentage gain since January 2. The U.S. dollar weakened against a basket of currencies, while prices for U.S. government debt fell.

FACTORY ACTIVITY COOLING

Although shipments of core capital goods, used to calculate equipment and software spending in the government's measures of gross domestic product, fell last month, economists were little worried.
"The balance between orders and shipments of capital goods is looking healthier as backlogs of core capital goods orders rose for the first time in eight months," said John Ryding, chief economist at RDQ Economics in New York.

"Our take is that manufacturing activity - especially in the capital goods area - is bouncing back after cautious behavior ahead of the fiscal cliff."

U.S. factory activity, which helped lift the economy from recession, has cooled in recent months, held back by sluggish domestic demand, tighter fiscal policy in Washington and slowing global growth.
While business investment plans looked strong, the report showed that overall orders for durable goods - items ranging from toasters to aircraft that are meant to last three years or more - tumbled 5.2 percent as demand for civilian and defense aircraft collapsed. It was the first drop since August.
Orders for civilian aircraft, which are very volatile and which tend to fall at the start of the year, dived 34 percent.

Boeing received orders for only 2 aircraft, down from 183 in December. Economists said the decline was probably not related to the grounding of Boeing's 787 Dreamliners after problems with overheating batteries.

"I haven't heard any reports about airlines canceling their orders. This could be a one-month lull rather than something greater," said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut.

Defense aircraft orders plunged 63.8 percent after soaring 58.5 percent in December, likely as orders were pushed forward ahead of $85 billion in government-wide spending cuts set to kick in on Friday.
Overall defense capital goods orders plummeted 69.5 percent in January, the sharpest fall since July 2000.

But durable goods orders excluding transportation increased 1.9 percent last month, also the largest gain since December 2011, after increasing 1 percent in December. That was a sign factory activity continues to plod along.

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Gold & Silver Daily Update

 A weaker USD and higher physical demand from China and India
elevated gold prices overnight. The metal opened at
1590.50/1591.50, before quickly moving to an intraday low of
1584.25/1585.25 on profit taking in early morning. Prices
retained most of the overnight gains despite a stronger USD
later in the day, reaching an intraday high of 1592.25/1593.25
before closing at 1588.00/1589.00.

Silver moved in tandem with gold. Prices opened at
28.95/29.00 before dropping to an intraday low of 28.88/28.93
in mid morning. Similar to the movement in gold, silver edged
up throughout the rest of the day, reaching a peak of
29.11/29.16 shortly before closing at 28.98/29.03.
.
Technical Commentary
Gold closed higher today at 1589, consolidating after last week’s
losses. Support sits at last week’s low at 1555, with resistance at
1609, the high from last Wednesday. RSI is now bouncing back
from oversold levels in the 19.3 area which will allow for further
price weakness.

Silver also closed higher at 29.03. Resistance is at the previous
low of 29.24, and support is from the trendline at the bottom of
the bearish channel, currently at 28.06. RSI bounced off of a
new 9 month low of 25.81 and is still trading in bearish territory.
The gold silver ratio is trading lower at 54.85. The risk is still for
a move higher to 56.07, the 2013 high..

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Stocks(Trade Levels)

27/02/2013

 

JPMorgan Chase& Co.  (Public, NYSE:JPM) 

Sell @48.50; Stop above@50, Target @46.50

Ford Motor Company  (Public, NYSE:F) 

Buy@ Market Price. Stop below@11.95, Target@13.20

First Solar, Inc.  (Public, NASDAQ:FSLR)

Buy@ 24.50. Stop below@22.25, Target@30.60

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Gold Rallies Sharply on Bernanke's Dovish Stance, Bargain Hunting, Short Covering, Safe-Haven Demand

Gold futures prices ended the U.S. day session with sharp gains Tuesday and pushed well above the key $1,600.00 level. The yellow metal was boosted in part by Federal Reserve Chairman Ben Bernanke assuaging market place fears that the U.S. central bank could exit its very easy-money ways sooner rather than later. Safe-haven buying was also seen in gold Tuesday, amid fresh concerns about the sovereign debt crisis in the European Union. Short covering and bargain hunting were also featured in both gold and silver, following last week’s strong selling pressure. April Comex gold last traded up $29.80 at $1,616.40 an ounce. Spot gold was last quoted up $23.10 at $1,617.25.  May Comex silver last traded up $0.383 at $29.43 an ounce.

After seeing modest early price gains, gold futures prices took a dip at mid-morning Tuesday when some stronger-than-expected U.S. economic data was released. U.S. home sales rose sharply in January, while the consumer confidence index rose in February. The latest Richmond Fed business survey also showed an upbeat reading. Bernanke’s prepared text for delivery to the U.S. Senate was also released at the same time the U.S. economic data came out. It took gold traders and investors a bit to digest Bernanke’s remarks, but the gold market did start to rally sharply in the aftermath of his comments. While Bernanke's remarks were pretty much what the market place expected, they were nonetheless dovish on U.S. monetary policy, and what the precious metals market bulls wanted to hear from the Fed chief. He said the benefits of a very accommodative monetary policy outweigh the potential risks of such, helping calm worries the U.S. central bank could end its quantitative easing of monetary policy sooner rather than later. In questioning from senators, Bernanke also hinted the Fed may not have to sell off all its asset purchases over a period of time and may just keep them until they expire. That was a bit of bullish surprise for the raw commodity and stock markets, as there was some worry that the Fed selling off those assets, even over time, could put some downside pressure on many markets.

The European Union and its sovereign debt problems are back on the front burner of the market place after a few months’ hiatus. Italian elections that just concluded and failed to show a clear winner indicated voters ostensibly rebuked present government austerity measures meant to repair Italy’s damaged economic and financial structure. It also suggests political instability in Italy in the coming months. The Italian vote left the market place wondering when the next shoe will fall in the EU debt crisis that remains a serious matter in the world market place. Flight-to-safety buying of U.S. Treasuries, German bunds, gold and the U.S. dollar all quickly came back into vogue. Risk assets such as world stock markets and many commodity markets, and the Euro currency, were pressured on the Italian vote news. Other than the safe-haven German bunds, European bond yields were on the rise as fears of an EU debt contagion are again surfacing. There are Italian government debt auctions Tuesday and Wednesday that will be very closely scrutinized by the market place.

The U.S. government’s likely inability to agree on a taxing and spending plan by the March 1 sequestration deadline has added to a nervous and uncertain atmosphere in the world market place this week.

In Asia, the Japanese stock market fell as the yen rallied on safe-haven investor demand due to the resurfacing of the EU debt crisis. The yen had been on a steady decline for the past four months, but made an abrupt about-face on Monday afternoon.

The U.S. dollar index was higher again Tuesday and hit a fresh six-month high. The U.S. dollar bulls have gained upside technical momentum recently to suggest the dollar index has put in a market bottom and can continue to trend higher in the near term. Meantime, Nymex crude oil futures prices were lower Tuesday and hit a fresh two-month low. The crude oil bears have gained fresh downside near-term technical momentum recently. These two key “outside markets” were in a bearish posture for the precious metals Tuesday, but traders and investors chose to buy the recent dip in gold prices anyway.

The London P.M. gold fixing is $1,590.50 versus the previous London P.M. fixing of $1,586.25.
Technically, April gold futures prices closed nearer the session high Tuesday. Recent serious chart damage is starting to be repaired but the bulls have more heavy lifting to do in the near term to suggest a price uptrend can be sustained. Gold prices are still in a six-week-old downtrend on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,650.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the February low of $1,554.40. First resistance is seen at Tuesday’s high of $1,619.70 and then at the January low of $1,627.90. First support is seen at $1,600.00 and then at $1,590.00. Wyckoff’s Market Rating: 4.0

May silver futures prices closed near the session high Tuesday and saw more short covering and bargain hunting following recent strong selling pressure. Serious near-term technical damage has been inflicted in silver recently. May silver bears have the near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $30.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of $28.315. First resistance is seen at Tuesday’s high of $29.495 and then at $29.67. Next support is seen at $29.00 and then at this week’s low of $28.60. Wyckoff's Market Rating: 3.5.

May N.Y. copper closed up 235 points at 358.45 cents Tuesday. Prices closed nearer the session high on short covering after hitting a fresh three-month low early on. Serious near-term chart damage was inflicted last week. Copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 365.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at 360.00 cents and then at 362.50 cents. First support is seen at 355.00 cents and then at Tuesday’s low of 353.35 cents. Wyckoff's Market Rating: 4.0.

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Italy could reignite euro crisis.

Can the Italians be serious? That is likely to be the reaction of financial markets and the country’s euro zone partners as they ponder a disastrous election result, which could reignite the euro crisis. More than half of those who voted chose one of two comedians: Beppe Grillo, who really is a stand-up comic; and Silvio Berlusconi, who drove Italy to the edge of the abyss when he was last prime minister in 2011. Both are anti-euro populists.
This comedy could easily end in tragedy. The inconclusive result has echoes of last year’s first Greek election – except that Italy is bigger and more strategic. The country faces political paralysis, while its economy is shrinking and its debt is rising. The European Commission forecast last week that GDP would fall a further 1 percent this year after last’s year 2.2 percent drop. Debt, meanwhile, would reach 128 percent of GDP by the end of this year.
The euro crisis went into remission after the European Central Bank’s president Mario Draghi promised last summer to do “whatever it takes” to preserve the single currency. But, if Italy proves ungovernable during this critical time, even the ECB’s safety net may not work.
Investors are already getting nervous. Italian 10-year bond yields jumped 0.4 percentage points to 4.7 percent on Tuesday morning. Spanish yields also rose 0.2 percentage points to 5.3 percent, in the first sign of contagion. These are, though, admittedly still a far cry from the 7 percent-plus yields when the crisis was raging last July.
The risk is not that Berlusconi or Grillo will be prime minister. It is rather than nobody will be able to form a stable government. The electorate split into three roughly equal groups: Berlusconi’s centre-right group, Grillo’s uncategorisable 5-Star Movement and the centre-left coalition led by Pier Luigi Bersani. The centrist coalition led by Mario Monti, the technocratic who saved Italy from Berlusconi’s antics but whose austerity policies were deeply unpopular, came a poor fourth.
Italy’s convoluted electoral system gives the coalition with the largest number of votes an automatic majority in the lower house of parliament. This means Bersani will get the first chance to be prime minister, even though his coalition beat Berlusconi’s only by a whisker.
However, a different electoral system in the Senate, which has equal power as the lower house, means nobody will have a majority there. Bersani will not even be able to form a government in alliance with Monti – a scenario which pre-election polls had suggested was a likely outcome. At least Greece has only one house of parliament.
So what happens next? One idea is that Bersani could team up with Berlusconi to form a new grand coalition. This, though, seems unlikely given how they stand for completely opposite policies – unless Italy is dragged right to the brink. It’s also hard to see who would run such a government. If Monti hadn’t made the terrible mistake of running in the election, he would have been the natural choice. But his credibility has been shot to bits.
Grillo has said he won’t form a coalition with anybody, so a formal alliance with him isn’t an option. But Bersani could conceivably try to govern on his own, getting support on a case-by-case basis from the comedian. That, though, would be a recipe for extremely weak government.
Another option is a fresh election, as there was in Greece last year. Indeed, it’s hard to see how a new ballot can be avoided. The snag is that it isn’t obvious this would resolve the deadlock given that there are three roughly equal forces which don’t want to work together.
Some pundits think a solution could be to change the electoral system. That could conceivably clear away the old political caste, preparing the way for new parties and new leaders such as Matteo Renzi, the young centrist mayor of Florence. But Italy’s parliament has been debating new voting rules for years without coming to a conclusion and it may find it tough to reach consensus now.
Meanwhile, investors will give their verdict. A key question is whether Italy can still rely on the ECB’s support – its promise to buy potentially unlimited quantities of sovereign bonds. While this a very powerful drug, it contains important fine print: the ECB will only engage in so-called “outright monetary transactions” if the country concerned agrees to a reform programme with its euro zone partners.
It is hard to see Italy being able to sign such a programme without a stable government – which means the safety net has holes in it. If investors start thinking this way, bond yields could spiral upwards and capital flight could resume. The prospect of crisis could become a self-fulfilling prophecy.
Contagion could return with a vengeance too. Other countries may have more stable governments than Italy. But Spain, Greece and even France share its problems of a shrinking economy, rising debt and increasing popular anger against austerity. The longer recession bites, the greater the appeal of populist policies. Investors may worry anew that the race between populism and the return of growth will be lost across the euro zone.
A market fright could, of course, restore Italian voters to their senses when and if there’s a second election. That is what happened in Greece last year. But the next few months could be extremely jumpy and a happy outcome is not sure.

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One Quarter of US Has More Card Debt Than Savings,"America is broke''

Rumors of the spendthrift American consumer may be slightly exaggerated. Bankrate's 2013 February Financial Security Index found that a majority of consumers — by a narrow margin — say they have more savings than credit card debt.

For more than half the country, 55 percent, an emergency fund outweighs credit card debt. Nearly a quarter, 24 percent, admit to having more debt on plastic than money in the bank, while 16 percent say they have neither credit card debt nor savings. That puts 40 percent of the population close to the edge of ruin while everyone else seems to be sitting pretty.

If most people have more savings than credit card debt, "Why are so many people broke?" asks Howard Dvorkin, CPA and founder of ConsolidatedCredit.org

It's a curious question. The answer may be that although credit card balances came down through the financial downturn that began in 2007, consumers' fundamental behavior of not saving enough did not change.
According to the Department of Commerce, for 2012, the overall savings of the average household were 3.9 percent, much better compared to the 0.9 percent Americans were saving in 2001. However, this is down from the average 5.4 percent savings rate in 2008.
Even with a low savings rate, why wouldn't a supposedly low credit card debt rate put Americans in better financial shape?
"The fact of the matter is that America is broke — whether it's mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months' of savings," Dvorkin says."If you talk to people, most don't have two pennies."
Who's in trouble?
In Bankrate's survey, men were more likely than women to say their emergency fund outweighed credit card debt, at 60 percent, compared to 49 percent of women.
But credit card debt hits all kinds of consumers. Bankrate's survey has found that roughly a quarter of all income levels has more credit card debt than savings.

"Credit card debt will eat you alive no matter who you are," Dvorkin says.
Those people with incomes more than $75,000 were less likely to have no savings or credit card debt compared to those at the opposite end of the spectrum, with incomes less than $30,000. Only 7 percent of high earners have no credit card debt or savings, while 28 percent of the bottom rung of earners say they aren't in debt but have no savings.

While staying out of credit card debt is a good place to be,having no savings puts low-income earners in danger of falling into a payday-loan cycle or needing to borrow from family or friends.
"People who earn less than $30,000 may not have the credit score to get credit cards. That keeps them from getting into trouble with debt, but it also keeps them from saving," says Xavier Epps, CEO and founder of XNE Financial Advising in Woodbridge, Va.

For the rest of the population, there may be a fundamental divide between consumers who are fine with carrying credit card balances and dedicated savers who strictly avoid debt.
"It tends to be that debt and savings are very lumpy; you rarely find someone that has both. It's either someone has a lot of debt and little to no savings, or someone has savings and very little debt,"says Elliott Orsillo, CFA, co-founder of Season Investments in Colorado Springs, Colo.

"There isn't much of a fluid spectrum of people with a ton of savings and no debt and a nice mixture down to people with no savings and lots of debt. It's usually either one or the other," he says.
"One of my clients had $400,000 in credit card bills. He came to me because it was impeding his ability to fuel his jet. The credit card companies would not allow him to charge his fuel anymore," he says.

No matter how much money you have coming in, learning to save and live beneath your means is the key to getting ahead.

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U.K. Loses Top Aaa Rating From Moody’s as Growth Weakens

Britain lost its top credit rating by Moody’s Investors Service, which cited the continuing weakness in the nation’s growth outlook and the challenges that presents to the government’s fiscal consolidation program.
The rating on the U.K. was lowered one level to Aa1 from Aaa and the outlook on the nation’s debt changed to stable, Moody’s said in a statement today. With the U.K.’s high and rising debt burden, a deterioration in the government’s balance sheet is unlikely to be reversed before 2016, Moody’s said in the statement.
The cut will increase political pressure on Chancellor of the Exchequer George Osborne, with the opposition Labour Party calling on him to scale back his fiscal squeeze as the economic recovery struggles to gain traction. Still, investors often ignore such actions, evidenced by the drop in French 10-year bond yields following a downgrade last year and a rally in Treasuries after the U.S. lost its top rating at Standard & Poor’s in 2011.
“Tonight we have a stark reminder of the debt problems facing our country -- and the clearest possible warning to anyone who thinks we can run away from dealing with those problems,” Osborne said in a statement in London. “Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it.”

Pound Slumps

The pound slumped after the downgrade in the last half hour of trading in New York, dropping 0.6 percent to $1.5163. Sterling has depreciated 5.6 percent this year, the second-worst performer after the yen among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes.
“They have drawn a line in the sand that if we don’t put forth a formidable plan we don’t deserve a triple-A rating,” said Joseph Balestrino, senior fixed-income strategist for Pittsburgh-based Federated Investors Inc., which oversees $51.4 billion of assets.
Britain’s debt as a percentage of gross domestic product will climb to 98 percent next year from 90 percent last year and 95.4 percent in 2013, the European Commission said in its winter forecast today.
Osborne’s austerity policies will squeeze the budget deficit to 6 percent next year from 10.2 percent in 2010, when his Conservatives took over in an unprecendented coalition with the Liberal Democrats, according to the predictions by the commission.

‘Shock Absorption’

“Because of the combination of weak growth outlook, substantial fiscal challenges, high and rising debt burden, and the deterioration in shock absorption capacity, we see that the credit worthiness of the U.K. has deteriorated to a level that is more commensurate with Aa1 rating,” Sarah Carlson, a senior credit officer at Moody’s in London, said in a telephone interview.
Osborne said in his autumn statement on Dec. 5 that he’s no longer likely to meet his target to begin cutting the burden of government debt in 2015-16 after his fiscal watchdog cut its growth forecasts. Standard & Poor’s put the U.K.’s rating on a negative outlook a week later.

Fitch Ratings

Fitch Ratings said on the day of the budget that missing the debt target “weakens the credibility of the U.K.’s fiscal framework.” It will conduct a further formal review of the rating in 2013 incorporating the budget, due March 20. Fitch lowered its outlook on the U.K. to negative from outlook in March 2012. Moody’s lowered its outlook the previous month.
Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of 32 upgrades, downgrades and changes in credit outlook last year, according to data compiled by Bloomberg published in December. Investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by S&P. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974.
“Ultimately it’s a fairly minor action and shouldn’t result in a massive bond market response,” said Eric Lascelles, chief economist for RBC Asset Management in Toronto. “This is an era where developed countries are being downgraded on a regular basis..

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Fed, uneasy over ‘QE,’ plans bond-buy debate One idea: Hold balance sheet even during exit

Get ready for a rock’ em, sock ‘em debate over quantitative easing in March.

Minutes of the Federal Reserve’s January meeting released Wednesday reveal that many Fed officials are worried about the costs and risks arising from the $85 billion–per–month asset-purchase program. And they all seem to have their own ideas on how to proceed. 

Several Fed officials said the central bank should be prepared to vary the pace of the asset-purchase plan depending on the outlook or how the program was working. One wanted to vary it on a meeting-by-meeting basis. 

One new idea backed by a “number” of Fed officials would have the central bank promising markets that it will not sell its massive holdings of Treasurys and mortgage-backed securities as quickly as the market now expects. Read selected text of Fed meeting minutes.

This could be a substitute for asset purchases, they argued. 

But that was only one of a flurry of proposals.

“The minutes ... show a committee that is far less unified than at any other time in the past few years,” said Millan Mulraine, senior economist at TD Securities.

The Fed said a review of the program had been set for March. Fed Chairman Ben Bernanke will hold a press conference at the end of the two-day meeting on March 20. 

Without the Fed’s unconventional program, the 10-year Treasury would yield 3% or more, according to research published by Goldman Sachs. See related blog post on The Tell.

 

A number of Fed officials said the central bank may have to taper off or end the purchases before reaching the stated goal of a substantial improvement in the labor-market outlook. On the other hand, several Fed officials warned that ending the asset purchases too soon would damage the economy. 

They stressed that it was important to communicate that the Fed would hold to an ultra-easy policy stance as long as warranted by the weak economy. 

One Fed official said that the central bank could adjust the size of the asset-purchase program every meeting.

Some officials said they were worried about the effects of more asset purchases on “the functioning of particular financial markets.” 

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Billionaire Hedge Funds Most Recent Moves: SPDR Gold Trust, Apple Inc., Family Dollar Stores, Inc., Dollar Tree, Inc.

After reviewing hundreds of the quarterly filings from some of the world’s biggest and best Billionaire hedge funds this weekend, a few investment trends have emerged.
1) Be Cautious of owning Gold- Both George Soros and Billionaire Louis Bacon of Moore Capital substantially reduced their holdings in the SPDR Gold Trust (NYSEARCA:GLD). Moore Capital sold off their entire position in GLD and George Soros reduced his position in GLD by 55%, signaling that a lot of the smart money is moving out of Gold.
2) The Majority of Billionaire Hedge Fund sold their position in Apple Inc. (NASDAQ:AAPL) this is not surprising as the stock has dropped more than 30% from its peak last quarter. I still think based on Billionaire Smart Money Flows that Apple (AAPL) still has more room to fall, so be caution on Apple as well.

3) Three top Billionaire Hedge Funds, Lone Pine Capital, Farrallon Capital and Tiger Consumer all took major positions in the “Dollar Stores”, both Family Dollar Stores, Inc. (NYSE:FDO) and Dollar Tree, Inc. (NASDAQ:DLTR). This to me is the most significant move I found as both stocks Family Dollar and Dollar tree are near their 52 week lows. Furthermore as I have explained before it is very bullish, based on my backtesting and research, when Billionaire Hedge Fund Managers acquire or add to their stakes in companies that have declined or are near a 52 week low, and that is the case here with both DLTR and FDO.

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News Source: www.marketwatch.com 

Gold: Time to get worried? Or greedy?

With gold falling sharply recently — and the gold ETF GLD -0.02% held in so many individual investors' portfolios these days — let's explore some smart work on the yellow metal.

Mark Dow continues to see gold declining: "all the 'tail-risk reasons' for owning gold and silver are melting away"

• Kid Dynamite encourages some perspective on the gold price decline: "the 6 month chart looks ugly, the 1 year chart looks almost as ugly, the 2 year chart looks the best of all" 

• Gwynn Guilford at Quartz explores how Chinese gold demand could impact prices going forward. 

• Cam Hui compares the Amex Gold Bugs Index (HUI) of miners against the metal price and finds "my inner trader... wants to play the golds for a bounce." 

• Respected geologist/mining sector analyst Brent Cook came out very bearish recently on the gold miners. 

• Mark Hulbert provides five reasons to avoid gold for anything other than the very long term. 

• Gary Tanashian on how sentiment and technical analysis can help at a time like this for gold and gold miners: "It is okay to feel greedy now, in anticipation of coming opportunities in the precious metals." 

• At ZeroHedge, chartist Guy Lerner likes gold futures: "Despite the questionable fundamental picture, I believe this represents a good buying opportunity as price sits at support." 

• Global Macro Monitor finds gold heavily oversold. 

This commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.

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News Source: www.wsj.com

Trade Level for Stocks 19/02/2013

19/02/2013

Exxon Mobil Corporation  (Public, NYSE:XOM) 

Buy@87.80., Stop below@87, Target@90

Amazon.com, Inc.  (Public, NASDAQ:AMZN) 

Buy@260., Stop below@255, Target@269

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Gold Advances in London as Price Slump Seen Increasing Demand

Gold gained for the first time in a week in London on speculation that prices near a six-month low will increase purchases.
Gold is down 3.7 percent this year and global equities are up 4.8 percent as speculation grew that economies are improving. About $1.2 trillion in automatic spending cuts stemming from a 2011 agreement are scheduled to take effect in the U.S. in March. Morgan Stanley said in a report yesterday it expects “bargain hunting” in gold this week.
“It’s very cheap,” said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to gold. “The U.S. has still got to deal with budgetary and debt constraints, they’re not going to go away. While that’s still there, we think there’s opportunity for gold to rally robustly.”
Gold for immediate delivery added 0.2 percent to $1,612.90 an ounce by 11:26 a.m. in London. Prices reached $1,598.23 on Feb. 15, the lowest since Aug. 15. Futures for April delivery were 0.2 percent higher at $1,612.60 on the Comex in New York.
U.S. markets were shut yesterday for the Presidents’ Day holiday. Futures trading volume was almost triple the average in the past 100 days for this time of day. Bullion at the morning “fixing,” used by some mining companies to sell output, was at $1,613.50 in London, up from $1,610.75 yesterday afternoon.
Silver for immediate delivery rose 0.5 percent to $30.045 an ounce. It reached a six-week low of $29.6912 on Feb. 15. Palladium gained 0.6 percent to $766.83 an ounce. Platinum was up 0.1 percent at $1,694.97 an ounce.
Clashes between labor groups at Anglo American Platinum Ltd.’s Siphumelele mine in South Africa disrupted operations and caused one serious injury, according to police and the company, the world’s largest producer of the metal. Nine workers were shot with rubber bullets and three security guards were hurt in the fighting at the mine in Rustenburg yesterday.

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News Source: www.bloomberg.com

Currency war likely between Germany, France

So here’s the good news. The overhyped threat of “currency wars” is off the table for the time being after G-7 officials said they won’t censure Japan over Prime Minister Shinzo Abe’s go-for-growth strategy built around looser credit policy and a weaker yen.

The bad news is that, if a currency war does break out, it’s most likely to be between France and Germany.

French President François Hollande has set the stage, with a Gallic mix of pragmatism and panache, by admitting there’s little chance for France to meet its growth and budget-deficit targets this year.

At the same time, he’s made clear — in a move soundly rebuffed by the Berlin government, the European Central Bank and the Bundesbank — that the euro’s EURUSD +0.01%  heady rise on the foreign exchanges needs to be brought under control.

The issues of growth and the exchange rate are linked. Germany is projected to exceed France’s economic growth in 2013 for what will be the seventh year out of the last eight, It ran a current-account surplus of 6% of gross domestic product last year against a deficit of 2% for France.

So the Germans can live with a euro above $1.30 (or maybe even $1.40) much easier than their western neighbors.

On the budgetary front, Jörg Asmussen, the former German finance ministry state secretary who is now Germany’s man on the ECB’s six-member executive board, fired a warning shot last week by calling on France to stick to its plan to bring the budget deficit down to 3% of GDP. 

Only six weeks ago, Pierre Moscovici, the French finance minister, solemnly pledged in a German newspaper article that 2013 would be a “milestone” and a “year of progress” in which France would meet the 3% goal.

Lower economic growth after the poor showing for the fourth quarter of 2012 — when the euro area contracted 0.6% after a 0.1% fall in GDP Q3 — has put paid to French hopes,

France needn’t fear direct European repercussions, Paris will face merely a polite rap across the knuckles. Olli Rehn, the EU’s monetary commissioner, carefully signaled last week that countries such as France and Spain may be given an extra year — until 2014 — to meet their deficit targets if they can prove that they are making efforts in structural reforms.

Psychologically and politically, though, the implications are more severe. The episode badly weakens France’s negotiating hand as the euro area heads for a choppy period in which the period of financial market stability wrought by the ECB’s bond-buying pledge last summer may be coming to an end. Optimists such as Jacek Rostowski, the Polish finance minister, who bravely said in London last week that the euro crisis is “effectively over,” are in the minority.

If Greece, Cyprus, Italy and Spain again make negative headlines in the next few months, it will be much more difficult for France and Germany to muster a common position on economic rigor in all these countries now that Paris and Berlin are far apart in other elements of policy.

The French government is likely to draw encouragement from Japan. Abe has had some early successes in his campaign to clip the wings of the Bank of Japan to steer the Japanese economy out of years of deflation.

Yet Germany’s euro negotiating line may get tougher, not more generous, as we approach the federal elections in September. Chancellor Angela Merkel’s personal lead in the opinion polls looks far less likely than many had earlier predicted to give her Christian Democrat party the power to lead a new government this autumn. 

Commentators and market analysts should heed one salient fact.

If the Social Democrats and their Green former coalition partners do manage to return to power in Germany after September, they may be slightly more accommodative on Europe than the present Berlin government. 

But Merkel’s Christian Democrats and their current coalition partner, the Free Democrats, will be far more rigorous on euro bailouts than the present SPD-led opposition — so, overall, Germany’s hard-line position on the euro will likely get more stringent over the next 12 months. 

In its almost ritualistically uncompromising stance on the euro, the Frankfurt-based Bundesbank has been a lonely voice on the European stage in the past two years. But now, just as other central banks like the Bank of Japan are starting to lose their autonomy, the Bundesbank may be coming back into vogue. 

Probably it was a mistake to think that more than one big central bank in the world could ever be properly independent. As George Orwell might have put it, all central banks are independent, but some are more independent than others. The Bundesbank, as ever, will be the last institution standing firm. 

There may be less of a gap between euro policies in Frankfurt and Berlin in the next 12 months than over the past year. And, for governments that miss their targets in Europe, this could spell troubling times ahead. 

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News Source: www.bloomberg.com

Are Central Banks Still In Love With Gold?

The recent price action of gold may lead some to believe the precious metal has fallen out of favor with the market, but central banks across the globe continue to love the safe-haven metal.

While some central banks print money in historic amounts, others are buying gold. According to the World Gold Council’s latest report, central banks purchased 145 tonnes of gold in the fourth quarter of 2012, the highest quarterly haul since the sector became net buyers in 2009. For the entire year, central bank buying surged 17 percent to 534.6 tonnes, the highest annual total since 1964. In comparison, central banks bought 456.8 tonnes in 2011.

Nations like Russia and China continue to find gold attractive. According to the WGC, Russia added approximately 75 tonnes to its reserve holdings last year by purchasing domestically produced gold. This echoes recently released IMF data that shows Russia added 570.1 metric tons of gold to its stash over the past decade, more than any other nation in the world. According to data from the Census and Statistics Department of the Hong Kong government, gold imports into mainland China from Hong Kong nearly doubled to an all-time high last year. China, the world’s second-largest economy and gold consumer, imported a record 834,502 kilograms (834.5 metric tons), including scrap and coins, in 2012.

Diversifying with gold…

Due to diversifying needs, gold is an easy answer for developing markets. The WGC explains, “The list of countries actively adding to their official gold holdings remains heavily concentrated in developing markets, which partly reflects the scale of growth in the reserves of these markets over recent years. As the official reserves of these countries swell, with their heavy emphasis on U.S. dollars- and euro-denominated assets, the need for diversification also increases. With a focus on high quality, liquid assets as desirable alternatives, gold is a natural destination for a proportion of these increased reserves. A number of research papers have addressed the issue of gold’s characteristics and benefits as a reserve asset, as well as optimal allocations for gold within a standard reserve asset portfolio.”

Since becoming net buyers in 2009, central banks have added almost 1,100 tonnes to global gold reserves, a sharp contrast to the 1,143 tonnes of net sales seen in the preceding three years. In fact, very few central banks are selling gold. The WGC reports  that under the Central Bank Gold Agreement, which caps gold sales, only 5.5 tonnes were sold throughout last year. This amount was fully accounted for by Germany and its need to mint commemorative gold coins.

Overall, gold demand in the fourth quarter reached 1,195.9 tonnes, the highest fourth quarter haul on record. Annual demand in value terms reached its highest amount in history at $236.4 billion.

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 News Source: www.marketwatch.com