STOCKS TRADE LEVEL

05/03/2013

 

Cameron International Corporation  (Public, NYSE:CAM) 

Buy@ 60, Stop below@59, Target@64

Nabors Industries Ltd.  (Public, NYSE:NBR) 

Buy@15, Stop below@13.50, Target@19

Altria Group Inc  (Public, NYSE:MO)

Buy@33.80, Stop below@33, Target@35.50

Apollo Group Inc  (Public, NASDAQ:APOL) 

Buy@16, Stop below@14, Target @Open

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Asad Rasheed
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News Source: www.marketwatch.com  

Here is another blog that provides regular news and information and is very useful to stay updated
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Worst income dip in 20 years doesn’t stop spending

Consumers boosted spending in January for the third straight month, suggesting that a big drop in income and tax hike at the start of the year did little to alter their behavior.

Consumer spending advanced a seasonally adjusted 0.2% last month, the Commerce Department said Friday. That matched the estimate of economists polled by MarketWatch.

Americans continued their spending ways despite an increase in their taxes and the biggest plunge in income in 20 years. 

A two-year law that reduced payroll taxes by 2% expired in January and the government also raised rates on the very rich. For people earning $1,000 a week, the payroll tax increase takes an extra $20 out of their paychecks. 

Incomes, meanwhile, sank 3.6% in January after spiking 2.6% in December. Companies accelerated the payment of rewards for workers and investors in December to avoid higher tax rates in January, accounting for the big swing.

Consumer spending represents as much as 70% of the economy. When Americans buy more goods and services, businesses generate higher sales and profits and can afford to hire extra workers. Less spending results in slower economic growth. 

In Friday trades, U.S. stocks tacked sharply lower, mainly because of concerns about deep cuts in federal spending and a slowdown in the Chinese manufacturing sector.
  
Danger signs?

Although spending largely held up in the first month of the tax increase, many analysts think it will exert some downward pressure on the economy over the next few months. Consumers don’t always change their behavior immediately after a tax increase. 

In one potentially troubling sign, spending on durable goods such as appliances, furniture, or consumer electronics fell 0.8% in January to mark the first drop in three months. Consumers tend to cut back on big-ticket items if they feel more economic stress.

What’s more, higher gasoline prices and sharp cuts in federal spending could also apply the brakes to the economy in the coming months. 

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On Friday, the government is supposed to begin the process of slashing federal outlays by as much as $85 billion over the next six months under the rules of a so-called sequester. Top Democrats and Republicans were scheduled to meet at the White House to discuss the matter, but no breakthrough was expected. 

Economists say the spending reductions could hamper the ability of the U.S. to grow any faster than the 2.2% rate by which it expanded in 2012. The economy needs to grow much faster to quickly reduce the nation’s 7.9% unemployment rate. 

The incomes of earned by Americans, meanwhile, posted the biggest drop since January 1993. Economists polled by MarketWatch had expected incomes to shrink 2.6% because of sharply lower dividend and bonus payments last month. 

Personal income derived from assets such as stocks, for example, plunged by $365.5 billion last month after jumping $273.8 billion in December, according to Commerce data.

Adjusted for inflation, income after taxes slumped an even larger 4%. Yet excluding special factor such as the accelerated dividends, real disposable income rose 0.3% in January and matched December’s increase.

Still, the combination of modest rise in consumer spending and a steep drop in income reduced the savings rate of Americans to 2.4% from 6.4% — the lowest level in more than five years.

Households typically work to rebuild savings when they fall to such low levels, but rising home values and the surging stock market is making Americans feel a little bit wealthier. What’s more, a slowly improving labor market is giving more people the hope of finding a job or getting a better one. That might make them less inclined to sock more money aside. 

Wages, on the other hand, are still not growing very fast. Incomes after taxes, adjusted for inflation, rose just 1.5% in 2012 after a 1.3% increase in 2011. And even those meager gains could be largely eaten up by the price at the pump if gasoline continue to advance. The average cost of a gallon of gas has jumped 14% since the beginning of the year. 

Yet overall inflation is still relatively tame. The PCE price index was flat in January, putting the 12-month increase at 1.2%. The core rate, which excludes food and energy, edged up 0.1% in January and is up 1.3% in the past year.
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News Source: www.cnbc.com

Here is another blog that provides regular news and information and is very useful to stay updated
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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.

Contact Us:

Asad Rasheed
Direct:04-3841906
Email:asad@cfb.ae
Email:info@cfb.ae


For more information please visit our website:  www.cfb.ae

News Source: www.reuters.com

Here is another blog that provides regular news and information and is very useful to stay updated
on the markets... http://century-financial-brokers-uae.blogspot.ae/

Where next for the Australian dollar?

SYDNEY (Market Watch) — The Australian dollar has survived a drop in commodity prices and lower interest rates this year, but will the world’s fifth-most-traded currency head lower in the new year? 

The “aussie”— which accounts for around 7% of global foreign-exchange trade — presently trades well over the $1.05 mark, near where it started the year. 

Relatively high domestic interest rates, a triple-A credit rating and an outperforming economy have laid the foundations for the currency’s strength over the last few years, after it started 2009 at around 70 U.S. cents.

It stumbled mid-year to as low as 96 U.S. cents, when a drop in commodity prices raised questions about the future strength of Australian exports, and downward pressure on interest rates eroded some of its yield advantage against rivals. 

Since then, however, iron-ore prices are off their worst levels, thanks to signs that China’s economy is stabilizing, and while interest rates are still well above levels found in many other developed world economies. But analysts say these issues alone don’t fully explain the recent revival in the Australian currency’s fortunes. 

“The simplest answer is that some other factor matters more, and the likely candidate is the risk-on/risk-off dynamic,” HSBC currency strategists said in a recent research note.

“Even a cursory glance at the evidence suggests a strong and consistent relationship between the Australian dollar-U.S. dollar pair and the performance of the U.S. equity market, in turn a reliable proxy for the wider risk-on/risk-off phenomenon,” the strategists said. 

From 2009, the Australian dollar’s rate against the U.S. currency has shown a more than 75% correlation with moves in the S&P 500 according to HSBC’s research. 

Fed matters

Risk-on/risk-off trading in the last few years has in itself largely resulted from massive central-bank liquidity injections into financial markets, where the sheer weight of money has created its own trading force. Money has found a home in many assets, pushing prices up. 

One of the banks leading the way in quantitative easing has been the Federal Reserve, which has had something of a knock-on effect on the U.S. dollar’s performance against rivals such as the aussie.

After their initial push following the 2008 global financial crisis, the central banks again ramped up policy-support measures and liquidity in the latter part of this year, with the Fed recently pledging billions more a month to support the U.S. economy, giving fresh legs to the Australian dollar. 

The Australian dollar “is still being influenced by global factors,” said Alvin Pontoh, currency strategist at TD Securities, who has an end-2013 target of $1.03 for the aussie. 

Pontoh believes the Fed is likely to extend quantitative easing at least to the end of next year, and the European Central Bank will also likely cut interest rates further.