Daily Market Reviews by MAYZUS.com

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MAYZUS Investment Company (formerly United World Capital) is proud to provide daily market reviews by the well-known financial expert – Mr. Arne Treholt, a former Political Secretary to the Minister of Shipping and Foreign Trade, then Deputy Minister of Law of the Sea of the Norwegian Royal Ministry of Foreign Affairs. He also held the position of Counselor for Economic Development and Social Affairs at the Ministry of Foreign Affairs, and was member of the Norwegian Mission to the United Nations, New York. At the moment Mr. Treholt is a Vice President and a Business Development Director of MAYZUS Investment Company.

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03 APRIL 2013: EURO WEAKENS AS UNEMPLOYMENT CLIMBS

 

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

 

Euro/USD fell to 1.2803 as unemployment inside the euro zone fell to a record high 12,5%. The euro fell against 12 of its 16 most traded peers as unemployment continued to soar in Greece and Spain adding to concern of an even deeper recession. Unemployment in Greece reached 26,7% with 60% of the youth without jobs. A mix of lower than expected industrial manufacturing data and unemployment paint a grim picture for hopes of a quick recovery inside the euro zone.

 

Asian stocks fell before later publication of new US job numbers. The dollar index (DXY) which has fallen for the last days rose 82,920 as gold prices plunged 35 dollars to USD 1567 an ounce. Copper and silver continue to fall while oil prices are steady. New York crude (YMEX) has been trading above 96 for the whole week and Brent crude above USD 110 a barrel. The European Central Bank (ECB) which along with the EU and International Monetary Fund, IMF, has been strongly criticized for its handling of the Cyprus crisis, meets on April 4th.

 

As indicated in our Daily Report yesterday Cyprus has started a blame hunt for a crisis running out of hand. Finance Minister Michael Sarris who conducted the bailout negotiations in Brussels and afterwards came empty handed back from Moscow, resigned on Tuesday and was replaced by Labor Minister Haris Georgiades. Sarris has for the last year served as President of the Board in the bankrupt Popular Bank of Cyprus, Laiki. Over the last months Laiki received billions of Euros from ECB in emergency funding.

 

The use of these funds will be part of a special investigation conducted by three special judges appointed by President Nicos Anastasiades. The judges shall within three months present a report on whom bear responsibility for the crisis. Bank of Cyprus (BOC) and Laiki Bank were till recently regarded as solid profitable national flagships. The two banks have over the last 2 – 3 years lost billions of euro on speculation in Greek treasury bills and unsecured loans to Greek individuals and companies.

 

President Anastasiades himself came under fire yesterday when it was known that a company headed by his son of law and other relatives presumably transferred 21 million euro out of Cyprus just before the controversial EU decision to raid bank deposits took place. Anastasiades flatly rejected tip-off to close family members or any other wrong doing; “I never knew, and it was never possible for me to wage war until Saturday morning March 16th to avoid what they imposed on us and at the same time supposedly tip-off people”.

 

Other politicians have received similar accusations which would be subject for the investigations. Even if lose accusations, the tip-off suspicions illustrate what the Cypriot public regards as, too, “cozy” relations between bankers and politicians.

 

Copyright: MAYZUS Investment Company Ltd

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11 September 2013: Berlusconi’s Threats Attract Attention Of Investors

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Yesterday stock markets of the United States of America finished the trading session on a positive note due to support given by statements of the Prime Minister of Syria, and statistics from China, which appeared to be better than the average expectations of analysts.

 

The Prime Minister of Syria, Wael al-Halki, declared that his country agreed to the offer from Russia to transfer all Syrian chemical weapons under international control, having officially agreed, thus, on chemical disarmament. The market apprehended this news, taking into consideration the speech of the US Secretary of State, John Kerri, who noted that Assad can avoid military intervention if he transfers all chemical weapons to the international community within the next week.

 

As for Chinese statistics, according to the presented data, retails increased in August by 13.4%, whilst an increase of only 13.2% had been predicted. Industrial production in August increased by 10.4%, which exceeded forecasts of analysts of 9.9%.

 

Following the results of yesterday's trading session - the indicator of "blue chips" the Dow Jones Industrial Average index, got stronger 0.85%, and closed on the level of 15 191,06 points. The index of the wide market S&P 500 increased 0.73% to the level of 1 683.99 points, and the index of the hi-tech companies, Nasdaq, added 0.62% reaching 3 729.02 points.

 

As the Syrian question has been put on hold, prices of Oil of brand Light, started to decrease in price, reaching the price of 106.16$ per barrel this morning . Brent adds 0.10% and is traded on a level of 110.13$. Gold is stable on 1367.09$.

 

While the economic calendar lacks statistical data, attention of investors is now drawn to the subject in relation to Berlusconi and his party. It is an important subject, as Italy is the third largest economy in the 17 member Eurozone, and if a crisis will begin within the country, echoes will be heard throughout the region. Secondly, the threat of the politician to convince the party to stop government support is dangerous, due to the fact that the coalition government of the current Prime Minister won't be able to continue work. If there is a Parliament collapse, the need of carrying out new elections will lead to new expenses, and instability in Italy. Berlusconi didn't voice the decision yet, but can make it at any time, therefore the EUR/USD trades very carefully.

 

Copyright: MAYZUS Investment Company Ltd

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12 September 2013: Investors Await FRS Meeting Where The Destiny Of The QE3 Program Can Be Decided

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Leading stock markets of Europe were growing yesterday. The leader became the German DAX, which added 0.6%. The growth is mainly due to an increased interest from investors towards the largest German energy companies - E.ON (+4,8%) and RWE (+6,6%). The value of the stock of the British chip maker ARM Holdings, developing chips for iPhone smartphones, jumped up yesterday by almost 5%. It occurred after Apple announced two latest versions of the smartphones - multipurpose iPhone 5S and its younger brother - the iPhone 5C.

 

However, shares of Apple after the presentation of the smartphones fell more than 7% in two days . Experts were skeptical in regards to the budgetary IPhone 5C, which obviously didn't reach the target price category. The falling of stock quotes of Apple were negatively reflected yesterday in an index of the technological sector of the USA, which lost 0.1%. In turn, Dow Jones finished the trading day in the green zone, having added 0.7%, thankfully, to growth of stock quotations of IBM corporation. The corporation declared that sales to the Synnex company, the division which is engaged in outsourcing support of clients, grew by $0.5 billion. Shares of Synnex jumped up yesterday over 20%.

 

Another interesting development yesterday was that on the expectations of good performance results, due to increased demand for mobile advertising, Facebook shares rose in price 3.3% and were closed at 45.04$ per share, having exceeded a level of 45.00$ for the first time since the moment of IPO, which was carried out in May, 2012.

 

As for the currency market, main currency pairs approached key levels of resistance. As a result, EUR/USD finished the trading day in the level of 1.3310, and GBP/USD – around 1.5740. News that the U.S. President, Barack Obama, asked the Congress to postpone the vote concerning a potential rocket attack across Damascus, reduced interest in the US Dollar, however, the pair faced quite strong resistance on 1.3280 which could go through only during the American session. This morning, EUR/USD is traded on a level of 1.3302, there is possibility that levels of 1.3320/1.3330 will be difficult to overcome and, as a result, it is possible to expect temporary correction back to 1.3260.

 

Copyright: MAYZUS Investment Company Ltd

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13 September 2013: Markets Stiffened Waiting For FRS Meeting

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Thursday, September 12, the main stock indexes of the United States of America finished the trading session in negative territory. The Syrian problem still remains on the agenda. Intensity in the markets grew again after John Kerri's statements that the probability of military operations from the USA isn't excluded yet.

 

Expectations concerning reduction of the program of the stimulation of the economy of the USA, which could be declared next week, only poured oil on the fire. This speculation has been strengthened by data on the number of primary requests for unemployment benefits, which reached the minimum value since March, 2006. The number made 292 thousand, whereas 330 thousand were expected.

 

Following the results of the trading session, the indicator of "blue chips", the Dow Jones Industrial Average index, lost 0.17% and was closed on a level of 15 300.64 points. The index of the wide market S&P 500 went to a minus for 0.34% to level 1 683.42 points, and the index of the hi-tech companies, Nasdaq, lost 0.24% reaching the level of 3 715.97 points.

 

As the majority of the participants of the market wait for any definiteness concerning the solution of the conflict surrounding Syria, the price of Brent continues to dangle near a key zone of support level, of 110-112$ per barrel. This area separates us from a more essential impulse down. This morning Brent is traded on the level of 111.71$ per barrel, and Light on 107.69$ per barrel.

 

As for the EUR/USD currency pair, prospects of the pair have limited character in connection with unimpressive recovery of the economy of the Euro zone. The area 1.3320/1.3330 still remains to be very difficult for overcoming, so strong data on retail sales could send the pair down with the nearest level on 1.3260.

 

Copyright: MAYZUS Investment Company Ltd

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16 September 2013: Further Movement In The Markets Will Depend On The FRS Decision On Wednesday

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Friday, September 13, the trading session in the stock markets of the USA was influenced by a number of macroeconomic data which have reflected changes in the consumer spirit of the Americans.

 

Statistical data was of mixed character. The greatest disappointment was brought by a preliminary index of consumer confidence of Michigan University, which in September fell to the minimum level since April, to 76.8 points from 82.1 points in August. Retails show incensement the 5th month in a row, August increased by 0.2%, having conceded to a more optimistic forecast of analysts of 0.5%.

 

Contradictory, and generally the adverse macroeconomic statistics were apprehended by investors quite quietly, as unconvincing results of the recovery of the American economy can play a constraining role in the intentions of FRS to reduce scales of financial stimulation at the meeting on monetary policy. It seems that the stock markets reconciled and already, in a certain degree, won back the future gradual turning of the program of "quantitative easing" - QE3. Now the main issue for investors is when the QE3 will actually be closed, and how strongly the program will be cut down. According to a poll of leading economists by Bloomberg news agency, the majority of them consider that the decision on this question will be made during the coming meeting of the FRS and the volume of financial injections will be cut down on 10 billion Dollars.

 

In the previous week, the American Dollar appeared to be under pressure and finished the trading week around the level of 1.3280. This week EUR/USD pair started trading on the level 1.3353 and now trade on a level of 1.3070. Depending on the news coming from the FRS meeting, the currency pair can try the resistance level on 1.3460. In case of a decrease in quotations - the closest level of support there is a level of 1.31.

 

As for the commodity market, there are oil loses in price, in connection with the certain weakening of confrontation concerning Syria, and against unfavorable American data on retails and consumer confidence that strengthened concern in relation to the prospects of demand for energy carriers. In comparison with the closing price on Friday, Oil made a loss of 2.1%. This morning, Brent is traded on a price of 110.58$ per barrel and Light is on 106.44$. Gold is 1.26% up at 1325.09$, Silver increasing for 0.76%.

 

Copyright: MAYZUS Investment Company Ltd

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17 September 2013: Markets Keep Optimistic In Anticipation Of Two-Day Meeting Of FED

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Monday, September 16, the American market finished the trading session with an increase. An inflow of optimism was explained, generally, by news that Lawrence Summers, being the obvious favorite of the president, withdrew the candidacy on the post of the head of FED. Summers has been considered as a supporter of the toughening of monetary policy, and therefore this news caused an increase in demand for risk and sag of the Dollar in relation to the main currencies. Now, the chances that Janet Yellen will be chosen as the new chairman, became even higher. An understanding that a less aggressive candidate will be chosen instead of Ben Bernanke, caused a sharp reaction in the market.

 

Purchases were also supported by the achievement of the agreement between Russia and the USA concerning elimination of Syrian chemical weapons. As a result, the trading session finished with an increase of 0.77% for the Dow Jones, reaching the level of 15494.78, S&P 500 grew up for 0.57% to the level of 1697.60 points, and the index of the hi-tech companies, Nasdaq, has fallen for 0.12% to a price of 3717.85.

 

The information that the Syrian question has been solved also had an influence on the commodity market, where Brent decreased to a level of 109.58$ per barrel, and Light reached the price of 105.40$ per barrel.

 

The majority of the main currency pairs opened the week with gaps, and throughout the day didn't manage to close them. As a result, EUR/USD finished the trading day around 1.3340, and GBP/USD closed the day at 1.5910. This morning, we can see EUR/USD traded on a level of 1.3344. Today, data will be released on ZEW Economic Sentiment in Germany, which once again can confirm the weakness of economic recovery in the region. Indicator growth to 45.3 from 42 the month before, is predicted, however the latest reports are giving grounds to expect lower levels. If this does indeed occur, the pair can try to go through the next support level on 1.3320 and go to the level 1.3280.

 

This week, the meeting of FED of the USA starting later on today, is a key event. Results will be declared tomorrow. There remains less and less doubt that the volumes of the program of quantitative easing will be reduced. The most probable amount of reduction ranges in the sum of $10-15 billion, as predicted previously. Tomorrow’s decision of the FED will dictate further direction of the markets.

 

Copyright: MAYZUS Investment Company Ltd

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18 September 2013: FED Meeting Results To Be Announced Today

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Following the results of yesterday's trading session, the world stock markets showed multidirectional dynamics. The American indexes grew within 0.4% and the index of the wide market Standard & Poor's 500 remained less than in 5 points from the maximum recorded on August 2, closing the trading day at level of 1704.76 points. In turn, the European platforms showed negative dynamics. The London FTSE index declined the most, having decreased by 0.8%.

 

The statistics presented during the day had positive character overall. Consumer Price Index in Great Britain grew in August for 0.4%, a 0.5% forecast had been predicted. The German ZEW Economic Sentiment increased in September to 49.6 points, from 42 points the month before.The index reached the maximum level for the last 4 years, having been affected by raised levels of optimistic expectations concerning prospects of the European economy. In addition Consumer Price Index in the USA in August grew by 0.1%, analysts expected an increase of the indicator to 0.2%.

 

As for the commodity market, prices for Oil are continuing to decrease, Brent is traded this morning on a level of 108.03$ per barrel losing 0.14%, Light is on the price of 104.87$ per barrel. Gold dipped below the level of 1300.00 and is traded on the price 1298.11$ per troy ounce, losing 0.86%. Silver is down to 0.95% on the price of 21.57$.

 

The main event of the day is going to be the announcement of the results of the FED’s meeting, which investors were waiting for, for the last few weeks. Mainly analytics are convinced that the decision on turning off stimulating programs will be the most likely scenario. The American Central Bank will most probably start reducing volumes of the repayment of bonds gradually, no more than $15 billion a month, and will also publish forecasts which will allow the estimation of long-term prospects of the economy of the USA.

 

As for the other statistics today, it is worth paying attention to data on the housing market in the USA, and on stocks of Oil and Oil products in the USA.

 

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19 September 2013: FED Surprised Markets, Having Rolled Dollar Down

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

FED’s meeting keeping the intrigue till the last moment, extremely surprised investors and shook the currency market. Unexpected inaction of the regulator helped the European currencies to beat the strongest levels of resistance. As a result, EUR/USD finished trading day at the level of 1,3540, and GBP/USD closed day at 1,6150.

 

FED declared preservation of the current volumes of stimulation at the level of $85 billion a month and a guarantee of keeping low rates while unemployment remains higher than 6,5% and inflation doesn't exceed 2,5%. Moreover, FRS decreased expectations on gross domestic product growth in the current year from 2,3%-2,6% to 2%-2,3%.

 

Stock markets reacted to this surprises with a steady growth, the S&P500 index grew by 1,22% having updated a historical maximum, reaching level of 1725,52. Dow Jones reached level of 15676,94 having added 0,94%, Nasdaq increased for 1,01% - reaching 3783,64 points.

 

The most interest development we could see in the commodity market, where FED decision stops fall of the oil prices. Brent this morning is traded on a level of 110,87$ per barrel and Light ads 0,49% bargaining next to the price of 107,81$ per barrel. Prices of precious metals are moving up, with Gold adding 4,23% in one day and reaching level of 1362,91$. Silver increasing for more than 7,00%, going over the level of 23,00$ per troy ounce.

 

Today will be presented data on a labor market - level of demands for unemployment benefits can grow again after record-breaking low indicators of last week. EUR/USD currency pair can face problems continuing further increase, due to the political situation in the Eurozone. First, the situation with Berlusconi isn't solved yet, and secondly, fears cause also prospects for elections in Germany which will pass during upcoming weekend. Thus, we don't exclude possibility of correction to the closest level of support which is around level 1,3450. Today from significant events of the European session only the report on retails of Great Britain, where delay of growth rates is expected will be issued.

 

Copyright: MAYZUS Investment Company Ltd

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20 September 2013: Index S&P 500 Set Up A New Record

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Thursday, September 19, the American market finished the trading session with a small decrease. During the session the S&P 500 index established a new historical record on a level of 1729.86 points, but due to profit taking, was correcting to lower levels. Moreover, presented favourable macroeconomic statistical data could not motivate investors for further purchases.

 

As for statistics, it is worth to note firstly, the jump of the index of business activity of FRB of Philadelphia in September, to 22.3 points, at average expectations of an increase to 10 points, and also a 1.7% increase in sales of houses in the secondary market in August to 5.48 million despite expectations of a decrease to 5.25 million. On the labor market, the number of primary requests for unemployment benefits increased to 309 thousand, 330 thousand were predicted.

 

Prices of Oil continued to fall after keeping flat after the announcement of FED’s decision. The price for Brent fell to 108.69$ per barrel losing 1.66%, Light is traded on a price of 105.61$ per barrel, having lost 1.32% in one day. Gold and Silver are slightly correcting after huge growth we witnessed yesterday, Gold is traded on a level of 1362.68$ loosing 0.48% and Silver is losing 1.19% falling to 23.01$ per troy ounce.

 

As for the currency market, then picture is slightly different from the picture we saw yesterday. The Dollar even managed to become stronger against the British Pound, and restored all losses against the Yen. As a result, EUR/USD finished the trading day around 1.3525, retaining this level this morning, and GBP/USD is trading on a level of 1.6051.

 

Friday becomes, perhaps, the most boring day of the current week, as almost all interesting and important events have been seen, analysed and reacted to. Ahead, there is a large number of reports, but in general they have minor importance. The only thing that can really have an effect on the currencies, is the expected elections in Germany, which will occur this weekend. That fact that Merkel's conservatives will win doesn't raise doubts, however it is all about the ability to create a coalition.

 

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23 September 2013: Angela Merkel Received The Majority In The Parliament Once Again

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

According to the preliminary data of the electoral committee of Germany, the chancellor of the country, Angela Merkel, and her Christian Democratic Party, received the majority in the parliament yet again, having collected about 42% of the votes. It is interesting to note that the results of the elections, which passed in the country this weekend, appeared to be the most impressive for the party since 1990. For the financial markets this news carries, certainly, positive coloring: in any case political stability in the strongest, from an economic point of view, country of Europe has to be present if the 'Old World' wants prosperity in the future of the European Union.

 

At the same time, according to the specified data of exit polls, the Free Democratic Party — the colleague of the block of Angela Merkel, lost fraction in the parliament, which was not a very positive moment. As a whole, participants of the market didn't doubt the victory of Angela Merkel, therefore any essential movements, even in the currency market after this event, we shouldn't be waiting for. The EUR/USD currency pair bargains today without changes, trading at 1.3534.

 

Main macroeconomic releases for the week are going to be preliminary data on the PMI indexes for September and IFO Business Climate in Germany, which will be published today and tomorrow. Dynamics of economic indicators in the leading economy of the Eurozone improved recently, and therefore it is possible to expect an additional positive support for the Euro.

 

From the technical analysis point of view, the next level of the current ascending trend in EUR/USD is the level of 1.37. However for the pair to continue to go up it is important to hold the support level on 1.34.

 

The publication of data on activity index in the industry of China (according to the HSBC version) becomes another important event at the beginning of this week. In September, according to preliminary estimates, the indicator grew to 51.2 points, having completely recovered from summer recession. On this background the Chinese stock market shows moderate growth - for 0.8%. Other Asian platforms are weaker at the moment, Australian ASX200 loses 0.4%, and Japanese Nikkei falls for 0.15%.

 

Copyright: MAYZUS Investment Company Ltd

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24 September 2013: The Asian Markets Decrease Against A Storming Typhoon

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Today's dynamics at the Asian stock markets are generally in a negative zone, the Chinese indexes look worse than the others due to a strong typhoon storming in the People's Republic of China. Also, negative pressure was laid by yesterday's decrease in the American market, that, as a whole, creates a negative external background.

 

In Hong Kong today there are full-scale sales in the real estate sector, in particular China Resources Land and China Overseas Land & Investment decreased by 3.5% and 1.5% respectively, and the reason for it is the same, a destructive typhoon. On the continent, the situation with construction companies is almost the same, China Vanke and Beijing Capital Development decrease by 1.2% and 2.1% respectively.

 

In Japan, meanwhile, representatives of the hi-tech exporting sector are feeling worse than the others, which, by tradition, most sharply react to all-market conditions. Sony, Canon and Pioneer lost more than 2% today, the background factor being the strengthening of the Yen against the Dollar which was promoted, in turn, by yesterday's statement of the representative of FED, regarding the state of the economy of the USA and prospects of turning of QE3.

 

In the commodity market, prices for Oil are slightly decreasing with Brent traded on a level of 108.08$ per barrel and Light is decreasing by 0.12% coming down to a price of 103.46$ per barrel. Gold and Silver are consolidating after steep increases which we witnessed after the decision of FED last week, Gold is traded on a level of 1324.14$ and is losing 0.21%. Silver is down to 21.79$ and is losing 0.68%.

 

As for the EUR/USD, there will be published statistics on German indicators from IFO institute for September. Positive data will effect the currency pair, and give it power to return back to the resistance level of 1.3550. However, if the results are going to be worse than the expected values, Euro can go down.

 

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25 September 2013: Budgetary Problems Of The USA Will Be Under Scrutiny In The Next Few Weeks

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

 

On Tuesday, the stock market of the United States finished the trading session with a moderate decrease, due to the influence of adverse macroeconomic statistics and remaining concern in relation to approaching exhaustion of the limit of loans and funds for the correct functioning of the American government. The only important statistics published yesterday was the index of consumer confidence for September, which didn't reach the average forecasts and made 79.7 points, when analysts expected 79.9 points.

 

Following the results of the trading session, the indicator of blue chips of Dow Jones Industrial Average went down by 0.43% to a level of 15334.59 points, the index of the wide market Standard & Poor's 500 decreased by 0.26% to a level of 1697.42 points, and the index of high-tech industries of Nasdaq Composite increased by 0.08% and reached the level of 3768.25 points.

 

The attention of investors remains on the statements of the heads of the FRS in the last few days, regarding a seemingly possible beginning of turning of stimulating programs in October. Additional risks create proceeding political fights among the American legislators. If the Congress of the USA can't find consensus and coordinate the federal budget, absence can hypothetically lead to financial crisis. In turn, the speech of the U.S. President, Barack Obama, on General assembly of the UN in New York concerning the solution of the Syrian problem, reduced fears of the application of military force.

 

Leading share indexes of Europe on Tuesday slightly increased. Support to the market was given by statements of the European Central Bank saying that ECB is ready in case of the need to provide additional liquidity to support loan costs at a low level. Moreover, presented positive data on the IFO index of trust of the German businessmen to national economy, also became a positive impulse in the market. This indicator showed continued growth for the fifth month in a row, having reached a maximum level for the last one and a half years.

 

In the commodity market, futures for Oil of brand Light are this morning increasing by 0.49% and are traded on a level of 103.64$ per barrel, Brent is increasing by 0.42% and traded on a price of 109.10$ per barrel. Gold and Silver are up by 0.97% and 1.17% accordingly.

 

Copyright: MAYZUS Investment Company Ltd

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26 September 2013: Passions Concerning Monetary Problems Of America Start Growing

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Wednesday, the stock market of the United States finished the trading session with a decrease again, and the S&P500 fell for the fifth day in a row and recorded the longest losing series this year. The last time we saw the market falling for so many days was over one year ago, when the American legislators couldn't agree upon the question of a "fiscal break", and this time the reason for the falling market is also connected with fiscal problems of the USA.

 

Uncertainty concerning the budget and a ceiling of the public debt again starts to expand. The American government needs to take all necessary decisions and actions by the 17th of October. Obviously, nobody will allow a default of America, but questions always arise – such as which price will be needed to pay? In general, the heat and debate between republicans and democrats will be going on during the next two weeks and we should keep that in mind.

 

Yesterday, data was published on sales of new homes for August, showing an increase from the reconsidered 0.39 million to 0.421 million; besides, orders for durable goods for the same month grew by 0.1% though zero change was expected after a collapse for 7.4% one month earlier, which was reconsidered to an even more frightening figure – 8.1%. Even solid macroeconomic statistics couldn't shift the markets in a positive direction.

 

Today promises to be volatile, important publications for the markets are expected already from the early morning, and will end late night at the Asian session. It should be noted that following the results of the day, we shall not expect considerable changes in the mood of the traders, but during the day there is going to be a good possibility of opening positions, both according to fundamental analysis, and based on technical levels.

 

As for EUR/USD currency pair, the support level for today is on 1.3490. During the trading session, we can expect the pair to go up to 1.3550-1.3570. In case the Dollar is going to start to strengthen, the first level of resistance to break is based on 1.3490, where the next purpose will be 1.3450.

 

Copyright: MAYZUS Investment Company Ltd

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27 September 2013: Positive Statistics Give The Markets A Chance To Relax

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Thursday, the American market finished the trading session with a small increase. Good news from the labor market and optimistic statements of senator Stein provoked an increase in demand for fallen priced shares after a five day correction period. Primary requests for unemployment benefits unexpectedly fell to 305 thousand from the reconsidered 310 thousand, that became a minimum level almost in 6 years, and the senator from the republicans declared with confidence that neither government termination of work, nor a default according to obligations, will happen.

 

It appeared the news was quite enough to spur the correctional growth of market indexes. However, it should be noted that GDP in the final reading in the 2nd quarter made 2.5%, even though a 2.6% increase had been predicted.

 

Following the results of the trading session, the indicator of "blue chips" the Dow Jones Industrial Average index, was closed with an increase of 0.36% on a level of 15328.30 points, the index of the wide market S&P 500 grew by 0.35% to level of 1698.67 points, and the index of hi-tech companies, the Nasdaq, rose by 0.70% to a level of 3787.43 points.

 

The situation in the commodity market seems to be rather stable. Brent is traded this morning on a level of 108.95$ per barrel losing 0.23%, Light is down by 0.45%, traded on a level of 102.55$ per barrel. The key support level for Brent is still located in the range of 106.00 – 107.00$ per barrel. Recently we are observing a consolidation, volatility has been reduced.

 

In the currency market, we have seen a stronger Dollar in relation to all major currency pairs. EUR/USD is traded on a level of 1.3491, having tested yesterday a support level based on 1.3470. British Pound has been under moderate pressure after the report on the current account of the balance of payments for the first quarter, showing the most considerable deficiency since 1955. That calls into question the possibility of the economy to continue restoration with developed speed due to further strengthening of the Sterling. British Pound is bargaining this morning next to the level of 1.6110.

 

For today, an exit of important macroeconomic statistics aren't planned that could be capable of having an essential impact on Dollar positions, but it will be saturated on significant events. At once, three members of the committee on the open markets of FRS of the USA will make a speech at various actions.

 

Copyright: MAYZUS Investment Company Ltd

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30 September 2013: Turbulence On World Stock Markets In Connection With The Situation In The USA, Starts To Increase

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Following the results of Friday’s trading session, the majority of the world markets showed negative dynamics. The American indexes decreased within 0.5%. Among the European platforms - the London FTSE index became the leader of the fall, having decreased by 0.81%.

 

The statistics published during the day generally displayed mixed character. According to final data, the economy of France grew in the second quarter by 0.5% which coincided with previous assessments and forecasts of analysts. The income of the population of the USA in August increased by 0.4%, and expenses - by 0.3%, that was also completely similar to forecasts of analysts. The index of consumer confidence fell in the USA in September to 77.5 points in comparison with 82.1 points the month before. Analysts expected decrease of the indicator to 78 points.

 

In addition, the head of Federal Reserve Bank of Chicago, Charles Evans, noted that the current monetary policy will allow to hold inflation below the target value of the FRS of 2%, for a long time. In his opinion, the unemployment rate in the USA will reach 6.5%, before the FRS will increase interest rates.

 

This morning Asian platforms significantly decrease. Japanese Nikkei fell by 1.46% after the release of data on industrial production for August, which was significantly worse than expectations. Decrease for 0.7% was presented, against the expected 0.4%. The Korean KOSPI decreases by 0.57%, the Hang-Seng index fell by 1.27%. The exception makes the Chinese Shanghai Composite which rose by 0.6%. The index of business activity in the industry for September, according to the HSBC version grew by 0.1 points, and made 50.2 points. Official PMI will be published on Tuesday.

 

Oil quotations fall within 1% due to the decrease in intensity around the Syrian conflict. In particular, on Saturday it became known that the UN Security Council adopted the resolution on Syria. However, a military scenario isn't excluded, in case of violation of the resolution by any of the conflicting parties. Brent is traded on a level of 107.66$ per barrel – loosing 0.89%, Light is down by 1.30%, traded on a price of 101.52$ per barrel.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

01 October 2013: The Government of the USA will Partially Suspend the Work for the First Time in 17 Years

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

The congress of the USA didn't manage to compromise concerning financing of work of the government. Last night, on September 30, the senate for the third time for the last some days rejected the offer of republican opposition to coordinate the sanction on temporary financing of activity of the government to blocking of funds for large-scale reform of health care.

 

It should be noted that 54 voices against the 46, senate of the USA voted against amendments to the bill, offered by republicans. As a result, the federal budget for 2014 fiscal year, beginning on October 1, wasn't accepted.

 

The government of the USA for the first time for the last 17 years started partial dissolution of civil servants, having left about 800 000 people without work. It should be noted that date of the next negotiations on a question of the federal budget wasn't determined yet.

 

Analysts of Goldman Sachs consider that three-week holiday of federal employees can lead to delay of growth rates of economy of the USA in the fourth quarter on 0,9 percentage points to 1,6%.

 

Till October 17th, the problem with a national debt ceiling in the USA will stand sharply. Some lawyers, in particular the former president Bill Clinton, claim that the constitution gives the chance to the President to lift this ceiling to avoid a default on a public debt. As Obama pathologically is afraid of responsibility and wants to become history as the indecisivest U.S. President, won't lift a national debt ceiling.

 

Following the results of the trading session, the indicator of "blue chips" the Dow Jones Industrial Average index was closed with a minus of 0,84% - on a level of 15129,67 points, the index of the wide market S&P 500 lost 0,60% reaching 1681,55 points, and the index of the hi-tech companies Nasdaq decreased for 0,27% to a level of 3771,48 points.

 

Brent is traded on a level of 106,75$ per barrel, losing 0,62%; Light is down for 0,36% traded on 101,53$ per barrel. Gold and silver stable on 1329,46$ and 21,75$ accordingly. EUR/USD in the morning is jumped to 1.3570.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

02 October 2013: The Markets Are Ignoring American Budgetary Problems

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Yesterday's trading session confirmed confidence of participants of the market that the political debate in the USA will soon end and won't render a negative effect on the economy. The American stock markets grew by 0.4-1,2%, the Dollar remained under pressure, and Gold, which wasn't demanded as a traditional safe investment, dropped by $40, to a two month low.

 

The majority of the European trading platforms carefully bargain in a "green" zone, however this positive can instantly be replaced by sales against events in the USA. Apparently, investors can't estimate the end of the suspension of work of the government of the USA, which is the first time such an event has occured in 17 years. From now on, more than 800 thousand civil servants will be sent on leave, and that will definitely be reflected in the first economy of the world.

 

Yesterday in Washington, museums and national parks were closed. At 8:00 o’clock in the morning, the police partitioned off (with iron barriers) all avenues to the Lincoln Memorial, state galleries and showrooms announced termination of work "for an unknown period" on their doors, where signs were hung out.

 

The previous day, the budgetary office of the White house informed the staff of federal departments that all state institutions to the USA pass to an extraordinary mode. 90% of specialists of NASA, nearly 70% of employees of the Ministry of Energy and 50% of civil servants of the Ministry of Defence, were sent on compelled leave. In such workplaces, only the officials were left who's work is recognized as " vital for the country’s safety". However, they will remain unpaid.

 

In Washington, no forecasts have been done regarding how long there will be a budgetary crisis. Since 1976, US authorities have declared partial termination of work of the federal government 18 times. The shortest of these crises proceeded for only 24 hours, and the longest fell on Bill Clinton's presidency. In the winter of 1996, federal institutions in the USA didn't work for 21 days.

 

The main event of the day is the speech of the Chairman of European Central Bank, Mario Dragi, with comments regarding the decision on an interest rate. We believe that his speech won't effect the optimism surrounding the Euro, which is gradually approaching the upper bound of a comfortable range for the European Central Bank 1.2750-1.3700.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

07 October 2013: Volatility Remains To Be High On Stock And Currency Markets

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Friday, the trading session was based on hopes that Friday's round of negotiations on the American budgetary problems would be successful, and new moves would be outlined in a resolution of conflict between republicans and democrats. However, a constructive solution didn't appear, but Barack Obama strengthened pressure on republicans who blocked acceptance of the budget. Also, the president declared that he is open to discussion on health care reform. Negotiations of politicians helped the stock markets to finish the trading week with an increase, Dow Jones added 0.50% reaching level of 15072.58 points, Nasdaq increased by 0.88% traded on 3807.75, S&P-500 added 0.70% reaching a level of 1672.97 points.

 

It is necessary to mention that, as every first Friday of the month, a package of statistical data on employment of the Ministry of Labour of the USA for the previous month, became the main information event for the American stock exchanges. However, the habitual schedule was violated for the first time in many years, because of the compelled inaction of many government agencies, and publication of results of labor markets is postponed for an uncertain time period.

 

On Friday, the price of futures of gold fell for 7.70 Dollars or 0.6% to the value of 1309.90 Dollars for troy ounce – this morning it is traded on 1311.76 adding in price 0.14%. Gold fell in price due to the strengthening of the Dollar against all competing reserve currencies, and proceeding reduction of stocks of a precious metal in the largest world Gold index funds. As a whole in a week gold lost 2.2%, having suffered the first failure for the last 3 weeks.

 

Oil increased in price in connection with tropical storm Karen, which has arisen in the Gulf of Mexico, threatening to develop into a hurricane and to cause serious damage to the American objects of Oil branch, the part from which already suspended the activity and made an evacuation of drilling platforms. Following the results of the week, the cost of Oil increased by 0.9%. This morning Brent is traded on a price of 107.78$ per barrel and Light reached price of 102.72$ per barrel.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

08 October 2013: Movements In The Market Are Not Expected Whilst Crisis In The USA Is Unresolved

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Monday, the stock market of the United States finished the trading session with a moderate decrease of the main indexes, thus the index of the wide market Standard & Poor's 500 fell to the minimum level for the month. After a losing week, the market didn't find within itself a force for growth - legislators remain at the former deadlock concerning the future exhaustion of means in the budget, and can't seem to find a compromise.

 

At the same time, we will note that the international rating agency Moody's, called the probability of a default of the USA, according to debts "very low", and it promotes a rather quiet situation in the world markets, at the same time giving support for the strengthening of the Dollar.

 

Following the results of the trading session, the indicator of blue chips of Dow Jones Industrial Average went down by 0.90% to level of 14936.24 points, the index of the wide market Standard & Poor's 500 decreased by 0.85% to a level of 1676.12 points, and the index of high-tech industries, Nasdaq Composite, went to a minus on 0.98% and reached the level of 3770.38 points.

 

The European indexes also showed a decrease following the results of the day. Gross domestic product of the Eurozone grew by 0.3%, which coincided with expectations of analysts. However, the index of business trust of Sentix for October decreased from 6.5 to 6.1 points when analysts expected growth to 8 points. As a result, DAX decreased by 0.36%, FTSE 100 fell by 0.37%, and CAC 40 lost 0.19%.

 

The Asian markets are showing multidirectional dynamics, however, with prevalence of small growth. Nikkei bargains in a green zone, despite a decrease in quotations of the companies of exporters, due to the strengthening of the Yen. The main chinese index, Hang Seng, increased by 0.89% during yesterday's session. The Australian and Korean indexes, on the contrary, are in a small minus.

 

Oil is stable with Brent on 108.70$ per barrel, and Light on 102.88$ per barrel. Gold and Silver are slightly loosing, traded on levels 1324.87$ and 22.34$ accordingly.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

09 October 2013: Nervousness Increases On Wall Street

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Tuesday, the American market finished the trading session again with a decrease. Democrats and republicans continue to insist on their positions, and all week negotiations didn't move from a 'dead point'. Yesterday, president Barack Obama declared that he agrees to resume negotiations only after governmental departments will re-open, and the national debt ceiling, without any conditions, is raised.

 

In statistical data, we note that the index of economic optimism of IBD decreased in October to 38.4 points, from 46 points. The statistics on trade balance of the USA was not announced.

 

Following the results of the trading session, the indicator of "blue chips" the Dow Jones Industrial Average index, was closed in 1.07% minus on a level of 14776.53 points. The index of the wide market S&P 500 lost 1.23% reaching a level of 1655.45 points, and the index of the hi-tech companies, Nasdaq, decreased by 2.00% to a level of 3694.83 points.

 

The price for Brent this morning is decreasing by 0.11%, traded on a price of 109.27$ per barrel. Light is flat on the price of 103.30$ per barrel. Precious metals are losing in price with Gold and Silver traded on 1316.81$ and 22.26$ accordingly.

 

On the currency market, the Dollar is weakening in relation to major currencies. EUR/USD is traded on 1.3527. Problems in the USA are pushing the Dollar to go down and against all this, even the publication of the protocol from the last meeting of the FOMC will barely be able to strengthen USD positions.

 

Great Britain will publish a whole series of reports on industrial production, trade balance and gross domestic product from NIESR today. If indicators will continue to show stable growth of the national economy, it can push the currency pair to reach the next resistance level, based on 1.6150.

 

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

10 October 2013: Republicans Refuse Attacks On Health Care Reform In The USA

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

For the first time this week, the atmosphere in the markets seem to be moderately positive. News on different subjects coming from the USA are giving investors hope that the situation in the United States will be resolved soon.

 

Yesterday, the White House unofficially announced that on Wednesday Obama will announce that Janet Yellen will become Ben Bernanke's successor, and will take the post of the head of the FED. Bernanke's term expires on January 31, and Yellen had high chances to replace him, given the fact her views are similar to Bernanke's in regards to monetary policy and the support of QE. The rumors came true - Obama declared that Yellen will replace Bernanke unofficially. After this news, indexes started to strengthen their positions, winning back potential preservation of the softened monetary policy when the new head of FED will take her place.

 

It should be noted that powers of the current head of FED will expire on January 31, 2014, so the question of QE coming to a halt is still within his right to decide. According to the "minutes" of the FED, halting the program of quantitative easing is supposed to begin this year, however, we should not forget that it has been reconsidered prior to the beginning of shutdown, so the situation could still change. Especially as, in September, the decision on preservation of volumes of QE was made after the analysis of macroeconomic data, which were unsatisfactory. Now, key reports simply aren't published because of the compelled holiday of state employees, so bankers will have nothing to analyze at the next meeting.

 

Also, markets are supported by messages that the republicans refuse attacks on reform of health care and pass to lobbying of other articles of the budget. According to some of them, attempt to influence destiny of this law failed.

 

As for the numbers, Dow Jones increased yesterday by 0.17% reaching the level of 14802.98 points, Nasdaq lost 0.46% traded on a level of 3677.78 points and S&P 500 increased by 0.05%, reaching the level of 1656.40 points.

 

Oil prices are increasing, with Brent and Light growing in price by around 0.50%. Brent is traded on 108.91$ per barrel, and Light on 101.92$ per barrel. Gold and Silver are flat on 1307.22$ and 21.97$ accordingly. EUR/USD went down to 1.35.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

11 October 2013: Hopes For Fast Achievement Of A Compromise Caused Rally In The US Market

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

On Thursday, the market of the United States of America finished the trading session in positive territory, based on the information that republicans and democrats will shortly be able to reach a compromise for the solution of the budgetary question.

 

Following the results of the trading session, the indicator of "blue chips" the Dow Jones Industrial Average index, grew by 2.18% and was closed on a level of 15 126,07 points. The index of the wide market S&P 500 increased by 2.18% to level of 1 692.56 points, and the index of hi-tech companies, Nasdaq "recovered" by 2.26% to a level of 3 760.75 points.

 

It has been reported that the parties are ready to consider the possibility of a temporary increase of the upper bound of the national debt. Republicans suggest to raise the ceiling for 4-6 weeks during which it will be possible to resolve issues with the budget and, thereby, avoiding a default. This idea was supported by the Administration of the President Barack Obama also.

 

The macroeconomic statistics on the labor market issued yesterday didn't cause a rough reaction of investors. Notice that the number of primary requests for unemployment benefits made 374 thousand, whereas 310 thousand were expected. It is still not clear, whether the increased numbers are related to the temporary suspension of sectors of government work, or they are connected with some technical problems in California, which were mentioned previously.

 

Currently indexes are increasing in price, although we cannot see the same positive development with the Dollar. The Dollar still remains to be under strong pressure. This morning, EUR/USD currency pair bargains around the level of 1.3534.

 

The financial markets remain hostages of the events occurring in the USA, and any sign of progress in this case causes a surge in the emotions of investors. However, each time increased demand for USD carries a short-term nature, as the American government only delays it's decision-making on the national debt. Occurrences will unambiguously have echoes in data on consumer and business confidence in the future, which will result in weak demand for the purchases of goods during the Christmas season, and will effect profits of the corporate sector. It will create conditions for a decline of the American currency in the future.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

14 October 2013: Possible Compromise Of The Congress Of The US, Sets Mood At The Stock Markets

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

 

On Friday, key stock indexes of Europe showed positive dynamics the second day in a row, based on the information that the Congress of the USA can agree on raising the level of the national debt of the country, having reduced, thereby, the threat of a possible default. It should be noted that negotiations of politicians will proceed, thus republicans already put forward offers on a temporary increase in the ceiling of the national debt of the USA.

 

In the light of the latest events, the government of the USA hasn't worked since October 1, and meanwhile, October 17 is approaching, when it will be necessary to make the decision on the increase of the ceiling of the national debt of the country.

 

As a result, the Dow Jones finished the trading week at 15237.11 increasing by 0.73%, Nasdaq increased by 0.84%, S&P 500 added 0.62% traded on a level of 1703.29 points.

 

From the macroeconomic statistics published on Friday, the consumer price index of Germany for September did not change, as expected. Meanwhile, in the USA, the new reporting season started which brought optimistic vibes on the market. The reporting of the American banks JP Morgan and Wells Fargo, surpassed market expectations. JP Morgan showed a loss following the results of the last quarter, but it is mainly connected with legal costs. Except for this article, the profit on a share made $1.42, whereas an increase to $1.29 was expected. This week, many important corporate publications are expected, tomorrow will we see reports from Coca-Cola, Johnson & Johnson, Intel and Yahoo.

 

Commodity and currency markets are stable, upward movement of Gold and Silver can be seen, which again left below levels of 1300.00 and 22.00 accordingly. This morning, Gold is traded on a price of 1275.87$ per troy ounce, adding 0.60% and Silver is up by 0.73% at 21.41$ per troy ounce.

 

Monday in quite poor regarding macroeconomic statistics. Consumer price index has been published in China which recorded unexpectedly high growth of the indicator in September by 3.1%, when -2.9% had been forecasted. In the European region, data on industrial production of 17 countries of the Eurozone will be published.

 

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

15 October 2013: The Problem In The US Will Be Resolved Hollywood Style - At The Last Moment!

 

DAILY MARKET REVIEWS

By Kristina Leonova: Analyst in Portfolio Asset Management Department.

 

Last night, the leader of the democrats in the Senate, Harry Reid, declared that essential progress in the solution of the budgetary question has been made, and an agreement between the parties could be reached within the next 24 hours.

 

However, it has been reported that an agreement on the two main points still hasn't been able to be reached, namely the terms of a possible increase of the ceiling of debt, and financing of the bill of the renewal of activity of the government, which are still being discussed.

 

The trading session in the USA finished with the Dow Jones increasing by 0.42% reaching the level of 15301, 26 points. S&P 500 increased by 0.41% traded on a level of 1710.14 points and Nasdaq reached 3815.28 having added 0.61%. The trading session in Asia passed with an increase of the main indexes against positive expectations whilst the budget of the USA was observed.

 

The price of Oil futures of the Light brand this morning is falling by 0.26%, traded on the price of 102.20$ per barrel, Brent is also decreasing by 0.26% traded on the price of 109.95$ per barrel. Gold and Silver continue to loose in price. Gold is traded on the price of 1268.79$ per troy ounce losing more than 0.61%. Silver is down by 1.16% traded on the price of 21.11$ per troy ounce.

 

As for the currency market, if yesterday we observed a decline in demand for the US Dollar, it doesn't mean that today the situation will continue to be the same! The market actually doesn't believe that the American authorities will bring the matter to a default, therefore after correction of positions on Monday, currency pairs can fall into a consolidation mode up until the announcement of the agreement or approaches on October 17. Today, economic releases from Europe can influence the trading dynamics of the currency pairs. The Eurozone will publish the report on business moods from ZEW institute in Germany.

 

As for the time being, EUR/USD currency pair bargains around level of 1.3559.

 

Copyright: MAYZUS Investment Company Ltd