NEW YORK – Stocks rocketed higher and interest rates fell Monday after investors were reassured by a nearly $1 trillion plan to avoid a European debt crisis.
The Dow Jones industrial average rose about 390 points. The Dow and broader stock indexes rose more than 3 percent. Markets also barreled higher in Europe.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.55 percent from 3.43 percent late Friday. Read more…
You don’t have to be a daily trader to take advantage of the forex market – every time you travel overseas and exchange your money into a foreign currency, you are participating in the foreign exchange (forex) market. According to the 2007 Triennial Central Bank Survey of Foreign Exchange and Derivative Market Activity conducted by the Bank for International Settlements, the forex market generated $3.2 trillion dollars worth of transactions each day. This makes the forex market the quiet giant of finance, dwarfing over all other capital markets in its world.
Despite this market’s overwhelming size, when it comes to trading currencies, the concepts are simple. Let’s take a look at some of the basic concepts that all forex investors need to understand. Read more…
Despite economists’ expectations that the unemployment rate would climb well into the economic recovery, the percentage of unemployed, job-seeking Americans fell 0.3 percentage point in January to 9.7 percent, its lowest point since August. The unemployment rate is calculated through a separate survey from the payroll count, which found the nation’s employers still reluctant to add new workers, as jobs fell by 20,000.
The report truly brought mixed news. While employers are still not beefing up their payrolls, the Labor Department’s survey of households found major employment gains. The results were altogether better than many were expecting. “All in all, we see encouraging signs of progress in labor market conditions and expect to see much better payroll performance … in coming months,” Morgan Stanley economists Ted Wieseman and David Greenlaw wrote in a morning note. Read more…
The dollar has fallen for much of this decade, and lately the decline is picking up speed. Already down more than 15% against the euro since March, the buck is expected to sink another 10% by the first quarter. Usually, when a once-strong asset falls this far out of favor, the correct long-term strategy is clear: Be a contrarian and buy.
But the dollar isn’t an asset — it’s a vehicle through which investments are made. And the fact that investors around the world are buying more and more non-U.S. assets suggests that the dollar will keep falling. Read more…
Exchange traded funds (ETFs) are listed on an exchange and can be traded intraday. Investors can buy or sell shares in the collective performance of an entire stock or bond portfolio as a single security. Exchange traded funds add the flexibility, ease, and liquidity of stock trading to the benefits of traditional index fund investing.
Exchange-traded funds (ETFs) are increasing in popularity, as they are often responsible for approximately 50% of the daily trade volume on the American Stock Exchange (AMEX). ETFs are passive funds that track their related index and have the flexibility of trading like a security. They are managed by professionals and provide the investor with diversification, cost and tax efficiency, liquidity, marginability, are useful for hedging, have the ability to go long and short, and some even provide quarterly dividends. Read more…
The U.S. economy got to play “trick or treat” early and ahead of the Halloween festivities with several economic indicators. New home sales and consumer confidence clearly were tricks with numbers being very disappointing. But equity investors got a treat on Thursday as real GDP posted a stronger-than-expected 3.5 percent annualized gain for the quarter. The relatively strong number sent the “equities-are-in-correction” traders scurrying for cover—or rather short covering for the day. Nonetheless, the question remains—how strong is the recovery and is there reason to believe equities are a little ahead of where economic growth is really headed? Read more…
The declining value of the U.S. dollar has been making financial headlines lately. After hitting an all-time low in April 2008, the dollar rallied strongly in last fall’s financial crisis as investors sought safe havens, but it has once again fallen as the world economy has recovered. As of Oct. 19, 2009, the IntercontinentalExchange Dollar Index has fallen about 15% from the high it reached in early March.
he causes behind the weak dollar are many and complex, but essentially this means that investors around the world have become less confident in the future stability of the dollar and more confident in other currencies. The effects of the weakening dollar can also be complicated, but the upshot is that it’s cheaper for people in other countries to buy American-made goods and services and more expensive for Americans to buy things sold in other currencies. Read more…
ISTANBUL (Reuters) – The Group of Seven rich nations urged China on Saturday to strengthen the yuan, but gave no sign of how it might overcome Chinese resistance to that suggestion or resolve other tensions over global currency rates. The G7 dominated economic policymaking for two decades, but Saturday’s meeting underlined that it could no longer solve global problems without the cooperation of fast-growing economies in the developing world such as China. G7 finance ministers and central bankers, in a statement after they met in Istanbul, said Beijing should boost its tightly controlled currency to help correct imbalances in global trade, which have been blamed for fuelling the financial crisis. Read more…
One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.
Even more — 80 percent — rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.
The public sentiment also poses a challenge to central elements of Obama’s governing agenda. Half of those surveyed said deficit reduction should be a national priority over increased spending on health care, education or alternative energy. Read more…
The Euro and the British Pound may gain against the US Dollar in European trading hours with equity index futures trading 0.6% higher and pointing to losses for the safety-linked greenback. Germany’s Current Account and Switzerland’s Unemployment data headline the economic calendar.
Key Overnight Developments
• Japan: Current Account Shows Continued Exports Slump, Merchant Sentiment Falls
• Australian Business Confidence Rises to Highest in Nearly Six Years, Says NAB
Critical Levels
Support & Resistance
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