Posted tagged ‘USA’

IG Group in Healthy Profits

July 29, 2009

It is the hot new way to invest and is raking in the customers each month – financial spread betting.  The market leader for spread betting, forex trading and CFD platforms, IG Group, have reported healthy profits despite the recession.  Indeed, profits were up 30% to GBP 126 million. 

So why is this trade fashion so huge?  Spread betting firms report 2,000 new customers each month.  In fact, spread betting is attractive to investors and savers who are after a new way to make money.  Low interest rates, no commission – and it is cheap to get cracking.

Spread betting is also extremely exciting to those who have an appetite for a thrill – as markets rise and fall, profits can be large….and so can losses.  Make sure you take out a stop loss!

Futures traders are under a bit of negative attention in the USA, where regulatory watchdogs are trying to prove that Futures trading on the energy market has a direct effect on oil price spikes and dips.  In the UK, the FSA says there is no evidence to suggest speculation on the markets has a negative effect on the price of a barrel of oil and are not taking action. 


Emerging Market Stock Funds Healthier than Ever

July 24, 2009

Improving sentiment in the state of the US export market is having a great effect on emerging markets.  Investors are pouring into the emerging market, and last week saw the best figures since mid June.

Nations such as China, Peru and Sri Lanka saw some of the best results in funds while the BRIC nations are showing growing signs of strength thanks to the slow recovery of established economies.

Emerging market equity funds drew around £1.6 billion last week alone and since the start of the year investors have been flowing around £20 billion into emerging market stock funds.

Oil Down….Again..

July 8, 2009

Oil prices have hit six-week lows and a barrel is now worth $62.30, down 63 cents.  Now, the question is: is there a general increase in caution in the trading community?  Is everyone worried about what is happening in the global recovery that we were all beginning to see?

Things are getting confusing again.  Ok, so let’s do a quick round-up:

  • Oil prices have risen steadily and (fairly) quickly since the start of 2009
  • The general mood of late has been of ‘bottoming out’ of the recession – things can only get better
  • Overall good news from industry sectors as demand and production increased
  • ‘Green shoots’ becomes the word du jour again
  • V-shaped is the shape of the recession, say analysts
  • Business sentiment is up in the UK and Europe

Things were definitely looking up, weren’t they?  But, now the USA as the world’s most powerful economy, has put a couple of spanners into the works – 1. the latest unemployment figures were worse than expected and 2. fresh fiscal stimulus is being speculated over

Over in the UK, the BoE is planning new asset purchasing and Alistair Darling is going to announce the new FSA guidelines for the financial sector – set to be much stricter.

So is there an overall “down” mood or is the recession more W than V?  Some are saying that the dip in oil price is merely a correction on the too-early recent rally.

Stick with risk or head to the havens?  That is the most important question for investors right now!  Commodity traders are reminding us that while oil is down, precious metals are remaining consistent!

BRIC – Emerging Market Economies

June 16, 2009

Combined they cover 25 per cent of the world’s land mass and have 40 per cent of the world’s population.  Their total GDP is in the trillions.  Who are they?  Why, BRIC of course!

BRIC – an acronym coined by US investment bank Goldman Sachs in 2001 – is used to describe Brazil Russia India and China, the four main emerging market economies.  Today, they meet in Russia.  Their influence over the rest of the world has grown since the downturn and they are calling for greater recognition overall.

There was even talk of calling for an alternative global reserve currency – this was overturned by the Kremlin and subsequently drove the value of the remaining reserve currency (the US dollar)up.

Nevertheless, financial markets and US politicians were unsettled.  What if large dollar asset holders were to go elsewhere?

It is hard to imagine an alternative would actually be considered now, but it is true that as the power and influence of the emerging market increases, so does the importance of them as asset holders.

US Dollar Up

June 15, 2009

Earlier this year China wanted a reserve currency other than the US dollar to be considered as the benchmark for international debt.  It called for the IMF to consider possible alternatives and asked that reserves of other currencies be increased.

This call was repeated alongside Russia within the last week, but has now been silenced by the finance minister of Russia who has said this will not be a possibility at this time.  The announcement comes just ahead of a summit meeting to be held on Tuesday in Russia of emerging nations Brazil, China, Russia and India.

Instead, they will discuss such areas as financial regulatory reform.  The news has caused the US dollar to strengthen against 15 of the 16 major currencies on the foreign exchange market.

Brazil will be at the summit and will be highlighted because it has just been announced that their economy has entered a recession after a second consecutive quarter of negative growth.

Is the Recession Over?

June 11, 2009

The recession is over in the UK.  Well, that’s the opinion of one independent analysis body and many might react with surprise at the fact that a recession which was due to last at least until the end of 2009 is suddenly over.

The foreign exchange market has shown that the US dollar as continuing to weaken against high-yield currencies, which certainly backs the view that the worst is over in the USA.  But in the UK, things had been predicted to be really bad, possibly worse than many other developed economies.  So what is being said?

The analysis group is the National Institution of  Economic and Social Research, or NIESR.  So far, they have gained respect in the financial world for the accuracy of their predictions.

They say that because there has been a tiny return to growth in April and May it spells the end of recession.  Many have reacted by saying that in no way is it over and that worse may be yet to come.  That takes us back to the argument as to the shape of the recession – V or W shaped?  The first would mean that if we have reached rock bottom (which is what is being said by NIESR) then the worst is indeed over and the only way is up.  If the latter is true, then we may be going up but could plunge right down again before things get better.

We’ll see!

Japan Shrinks

May 20, 2009

Japan’s headache shows no signs yet of subsiding.  First quarterly results show that the economy there has shrunk at its fastest pace since 1955.

Exports, consumer spending, company output are all down.  The GDP has shrunk more than expected and by a far greater percentage that other regions – such as the Eurozone and the USA.  Japan shrunk by 15.2 per cent, Eurozone by 2.5 and USA by just 1.6 per cent.  Stark contrasts.

The Prime Minister of Japan, who oft faces strong criticism from opposition parties and from the general public, has said the country needs to take fast action to try and recover the economy.  He plans further fiscal stimulus, and large companies such as Toyota have begun more job cuts and lowering of production levels.

Unsurprisingly, this news will already have affected the foreign exchange market – the biggest liquid global market  -as the confidence levels in Japan decrease.  More will need to be done to lure investors back there.