Forex Yellow Pages

Stocks rise sharply as corporate profits beat expectations; Unemployment falls unexpectedly

NEW YORK (AP) — Upbeat corporate earnings reports are injecting stocks with another burst of energy.

Stocks surged Thursday morning as investors jumped on better-than-expected profit reports and a surprise drop in unemployment.

Major stock indexes rose more than 1 percent, including the Nasdaq composite index, which traded above the 2,000 mark for the first time since October. The Dow Jones industrial average jumped 140 points.

Investors looked to stronger earnings as a good sign about the direction of the economy. Motorola Inc. reported a profit even though it was expected to post a small loss, and MasterCard Inc. posted earnings that topped expectations.

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The New Zealand dollar moved sharply lower against US and Australian counterparts following a highly-anticipated central bank rate decision. Reserve Bank of New Zealand Governor Alan Bollard made it fairly clear that domestic economic risks remain to the downside and did not rule out further interest rate cuts through year-end. The fact that the RBNZ remains committed to lower interest rates was less surprising than Bollard’s explicit reference to the New Zealand Dollar exchange rate.

Continued NZD rallies have limited economic recovery in the export-dependent economy, and Bollard effectively implied that lower interest rates would be necessary to support growth. Though forex traders have generally proven less sensitive to interest rate developments through the global financial crisis, it remains fairly clear that much of New Zealand Dollar demand comes from yield-seeking speculators lured by comparatively high domestic interest rates. A downgrade in yield forecasts subsequently hurts the Kiwi, and forex markets made their disappointment quite clear in sending the NZDUSD sharply lower following the RBNZ commentary. Read more…

How’s the economy, you ask? I have the proverbial good news and bad news, but in this case, they’re exactly the same: The U.S. economy appears to be hitting bottom.

First, the good news. Right now, it looks like second-quarter GDP growth will come in only slightly negative, and third-quarter growth will finally turn positive. Compared to the catastrophic decline we recently experienced — with GDP dropping at roughly a 6% annual rate in the fourth quarter of last year and the first quarter of this year — that would be a gigantic improvement.

Furthermore, there is a reasonable chance — not a certainty, mind you, but a reasonable chance — that the second half of 2009 will surprise us on the upside. (Can anyone remember what an upside surprise feels like?) Three-percent growth is eminently doable. Four percent is even possible. Surprised? How, with all our economic travails, could we possibly mount such a boom? The answer is that this seemingly high growth scenario isn’t a boom at all. Rather, it follows directly from the arithmetic of hitting bottom. Read more…

It was a tenuous week; but the dollar was able to ultimately hold its own through the close. However, just because momentum behind the earnings-driven rally in risk appetite has stalled does not mean that the world’s most liquid currency has avoided a collapse all together.

Fundamental Outlook for US Dollar: Bearish

- Fundamentals support a recovery in US and global growth, but how does risk appetite factor in?
- Bernanke sees signs of stabilization, calls focus on the deficit
- Do technicals call for a dollar collapse or recovery.

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Market sentiment is on the verge of a significant shift; and many well-established ranges are now threatening breakouts. Regardless of what currency pair or instrument you trade, risk appetite will always factor in. The best we can do is isolate and reduce this exposure. With EURGBP, there is no doubt a correlation to risk trends; but the direction and severity of this driver is somewhat dampened.

Why Would EURGBP Hold a Range?

· Levels to Watch:

-Range Top: 0.8660 (Trend, Fib, SMA, Pivot)

-Range Bottom: 0.8425 (Trend)

· Risk appetite has been on the rise through the past week; but the situation hadn’t really met a critical point until today. Many of the dollar and yen-based pairs (as well as the benchmark equity indices) have been pushed to the edge as fear that US lender CIT was nearing bankruptcy has eased and the focus is trained back on impressive earnings. For EURGBP, the impact of risk appetite is not so clear cut. However, the UK GDP data on Friday will be.

· From a technical perspective, EURGBP’s general trend from the January swing high has been bearish. The rebound from mid-June is still a correction of this larger trend until a larger retracement can shift momentum. Resistance is formidable though around 0.8650/700. A 38.2% Fib of the April to June bear wave coincides with a trend, pivot and 50-day SMA.

Suggested Strategy

· Short: Half-size entry orders will be placed at 0.8645, well enough below absolute resistance.

· Stop: An initial stop of 0.8725 will cover last week’s swing high and the general trend only. To secure profit, move the stop on the second lot to breakeven when the first target hits.

Target: The first objective equals risk (80) at 0.8565 and the second target is set to 0.8463.

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The Great Economic Recovery Hunt has been underway for about half a year, and the quarry bag is still pretty empty. A few optimists have tried to wring hope from fuzzy statistics showing that retail sales or housing starts or some other indicator aren’t as bad as they could be. But with the unemployement rate at 9.5 percent and going higher, that’s been unconvincing.

A recovery that will actually feel like one is probably a year away, at best. But we may finally be seeing signs that some parts of the economy are turning the corner. Here are six:

Booming bank profits. Goldman Sachs earned a scorching $3.3 billion in the second quarter. JP Morgan Chase earned $2.7 billion. Citigroup and Bank of American reported less impressive numbers, but each still turned a profit despite mounting losses on consumer loans. To be clear, the banks’ profits have been subsidized by the government’s TARP program and a bunch of other emergency measures meant to provide very cheap capital to the banks. And it’s obviously problematic that a few Wall Street banks are earning a fortune with taxpayer assistance. But the whole financial bailout was intended, first of all, to get the nation’s financial system back on its feet. One toe at a time, it’s happening. The real test is whether a healthier financial system will help the broader economy recover–or bankers just gorge on the profits, keeping loans as tight as ever. Read more…

Long-time personal finance columnist Scott Burns writes that by working for four summers starting at age 16, putting the money in a Roth IRA, investing it wisely and waiting until age 67, it’s simple to become a millionaire. That’s the 51-year plan. But what if you’re not that patient – or that young? Lucky for you, there are many ways to hit the million-dollar mark, but the faster you try to get there, the harder it becomes.

$1 Million the Hard Way

Let’s say you want to become a millionaire in five years. If you’re starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you’ll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year. That means taking calculated risks, diversifying and avoiding investment fees like loads and broker commissions. Read more…