In a recent report I was prompted to look at the NAFTA economies and equity markets. A key reason was the Canadian rate hike that had the Bank of Canada joining the US Federal Reserve and Banco de Mexico on the rate hiking path. But aside from being exposed to a certain common political risk, and sharing geographic proximity, having their central bank hiking interest rates was where much of the similarities ended. From a cyclical perspective the NAFTA economies look to be on fairly divergent paths judging by composite leading economic indicators. On the stock market front, PE10 valuations were 3 different stories (US = expensive, Mexico...
With no expectations of a rate-hike this week, and traders rapidly giving up on The Fed’s dream of a steadily higher rate trajectory, a funny thing happened in the markets… In the eyes of The Fed, their monetary policy has not been this ‘tight’ since October 2008. However, in the eyes of the market, financial conditions just hit their easiest level in history (easier than the September 2005 previous record easiness level). This is what happens when you constantly flip-flop, constantly miss forecasts, and constantly lie. Simply put, this is the death cross of Federal Reserve Credibility. Picking up on the dramatic d...
USD/JPY 4 hour The USD/JPY has broken above the resistance trend lines (dotted) after completing wave 3 (orange). The bullish price action could still be part of a wave 4 (orange) as long as price stays below the 61.8% Fibonacci level. 1 hour The USD/JPY could be building an ABC (purple) correction within wave 4 (orange). The resistance top (red) at 112.50 is a key resistance level for wave 4. EUR/USD 4 hour The EUR/USD continued the uptrend and managed to reach 1.17. The new higher high is most likely completing the wave 3 (orange) and starting a wave 4 (orange) correction. Price could use the Fibonacci levels of wave 4 vs 3 as potential bou...
Gold prices fell $5.03 an ounce on Tuesday as equities gained and the dollar rallied after the Conference Board reported that its consumer confidence index jumped to 121.1 from 117.3 the prior month. The support at 1250 initially held yesterday but finally was broken. Consequently, XAU/USD retreated to test the 1247/6 as anticipated. Focus is on the Federal Reserve’s Open Market Committee meeting that began yesterday. No rate hike is expected, but the central bank could use this meeting to provide more clarity on the timing of reducing its big balance sheet. The short-term charts are slightly bearish at the moment, with the market trading b...
Real estate brokerage Redfin Corp. (Pending:RDFN) filed an S-1/A with the Securities and Exchange Commission detailing its upcoming initial public offering. The IPO is expected to place on Friday, July 28. Since its launch in 2004, Redfin has grown to be the #1 visited brokerage site in the US. Through its IPO, the company aims to raise $120 million, offering 9.2 million shares at a price range of $12-14. The company has an additional 1,384,650 shares as an overallotment option for its underwriters. Assuming Redfin prices at the mid-point of its expected price range, it would command a market cap value of $1.1 billion, making it the third u...
Chipotle Mexican Grill, Inc. (CMG), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outs...
At Sure Dividend, we define blue chip stocks as companies with 100+ year operating histories and 3%+ dividend yields. While there is no ‘perfect’ definition of a ‘blue chip stock’, we believe these criteria fit the term’s intended meaning for the following reasons: A long operating history indicates that a company’s business model can endure through time. A high dividend yield often means a company is quite mature. Young, fast-growing companies tend to retain their earnings to fund internal growth. There is a surprisingly large number of stocks that fit our definition of a blue chip stock. The size of the blue chip stocks list i...
The US Dollar Index remained close to a 13-month trough as FX traders hold onto the sceptic’s view that the Federal Reserve Bank will do little to impact the greenback’s weakened trend. Analysts believe that the Fed will maintain the interest rate at the current level, however the market’s attention will be on any clues as to whether more rate hikes might be forthcoming. Also under close observation will be clues as to the timing of the paring of the Fed’s bond holdings as a result of the QE program it has long embarked upon. One concern is that the recent weak inflation data will send any previously hawkish sentiment back over into t...
The Australian Dollar fell as disappointing second-quarter CPI data pushed back against RBA rate hike speculation. Central bank Governor Philip Lowe echoed the dovish sentiment outlined by his deputy Guy Debelle last week as expected, compounding selling pressure. The New Zealand Dollar advanced, moving inversely of retreating front-end US Treasury bond yields. The move looks corrective after US borrowing costs rose yesterday while the so-called Kiwi weakened. Seesaw volatility seems to reflect churn in yield-seeking capital flows ahead of the Fed policy announcement. Officials are expected to leave the currency policy mix in place an...
If you’re in the dark about how much you’ll need in savings/investments for retirement, you’re not alone. Juggling an unknown life expectancy, medical expenses, surprise big-ticket items, and being in an environment with unpredictable inflation and interest rates is a daunting task. And most don’t have a clue how much they’ll need to survive it all – much less thrive – during their golden years. But there may finally be a simple way to accurately estimate how much you’ll need. It’s a one-size-fits-all system that allows you to lock in a good estimate and track your progress. It’s called the “back of the envelope” syste...