TopSage : Daily Market Talk ....

[nutbush]

Yellen stays the course, says Fed to keep trimming stimulus

http://www.reuters.com/article/2014/02/11/us-usa-fed-idUSBREA1A06O20140211

(Reuters) - Janet Yellen, fresh from taking the helm of the Federal Reserve, made it clear on Tuesday she would not make any abrupt changes to U.S. monetary policy, saying the central bank was on track to keep reducing its stimulus even though the labor market recovery was far from complete.

In her first public comments since becoming Fed chief earlier this month, Yellen had testy exchanges with some Republican lawmakers over Wall Street regulation and central bank independence. But she managed to keep financial markets calm by emphasizing continuity with the policy approach taken by her predecessor, Ben Bernanke.

Yellen said the central bank must keep its eye on the "unusually high" incidence of long-term unemployment and the "exceptionally high" proportion of Americans who can find only part-time work as it plots a tricky reversal of its very accommodative policy stance.

"By a number of measures our economy is not back, the labor market is not back, to normal," Yellen told the U.S. House of Representatives' Financial Services Committee. "There's a great deal of slack in the labor market still."

 

[Zanniel620]

Online is just sharing n learning together n not an inducement. Gold hit 1300, IMHO can rise further.

 

[nutbush]

i think otherwise, 1300 is psychological level and that's it! besides both stoch and rsi has been hit and inidcate it is overbought. it will only go up unless NK tries to be funny with its nuclear facilities.

<img src="http://charts.mql5.com/3/885/xauusd-d1-oanda-corporation.png" width="800" height="600" alt="Chart XAUUSD, D1, 2014.02.13 23:59 UTC, OANDA Corporation, MetaTrader 4, Demo" title="Chart XAUUSD, D1, 2014.02.13 23:59 UTC, OANDA Corporation, MetaTrader 4, Demo">

Online is just sharing n learning together n not an inducement. Gold hit 1300, IMHO can rise further.

 

[Zanniel620]

All tools including charts give us a guide. Couple with wider FA view, my humble opinion is gold will still go higher. Just sharing my two cents, not an inducement. Gold hit 1320 high...

 

[MarcoReus]

All tools including charts give us a guide. Couple with wider FA view, my humble opinion is gold will still go higher. Just sharing my two cents, not an inducement. Gold hit 1320 high...

Zanniel, what are u doing up at this hour?

 

[nutbush]

you so smart...

All tools including charts give us a guide. Couple with wider FA view, my humble opinion is gold will still go higher. Just sharing my two cents, not an inducement. Gold hit 1320 high...

 

[ByTheWay]

By the way market is closed now.

 

[ByTheWay]

All tools including charts give us a guide. Couple with wider FA view, my humble opinion is gold will still go higher. Just sharing my two cents, not an inducement. Gold hit 1320 high...

By the way did u make a killing?

 

[nutbush]

:( i lost 5k USD...:( adding up my total losses for last 6 months was 9K USD...

 

[nutbush]

not forgetting to add that thanks to the siao char bors from sph and channelnewsasia for publishing fake insinuating news data.:oIo:

:( i lost 5k USD...:( adding up my total losses for last 6 months was 9K USD...

 

[roastgoose]

DJ Chaori Solar: Should We Worry About China''s First Onshore Bond Default? -- Barron''s Blog (2014-03-05 13:06:00)


By Shuli Ren
Shanghai-based Chaori Solar said it may not be able to make a $14.6 million interest payment in full on March 7 (this Friday), in what would be the first default of a bond in mainland China. The size of the bond is RMB 1 billion, with 8.98% coupon rate.
Chaori Solar''s bond trouble gets some market participants worried. Bank of America Merrill Lynch strategist David Cui called it a "China''s Bear Stearns Moment":

If a default indeed occurs (especially on principal), we believe that the market will have reached the Bear Stearns stage (when the market started to seriously re-assess subprime debt risk). We doubt that the financial system in China will experience a liquidity crunch immediately because of this default but we think the chain reaction will probably start. In the US, it took about a year to reach the Lehman stage when the market panicked and the shadow banking sector froze. We assess that it may take less time in China as the market here is less transparent.

So should we be worried too?
I would be if it were a property developer. But China''s solar industry is known for overcapacity and leverage, thanks to cheap financing and excessive local government support, which led to sharp price drop in solar materials between 2009 and 2012. Chaori Solar is not the first solar company that is in financial trouble. Two other solar power companies, LDK Solar (LDK) and Suntech Power (STPFQ), defaulted on their bonds last year - but in the off-shore market.
And this bond default is not surprising, nor systematic, says Nomura Securities analyst Zhiwei Zhang, who tends to be more worried than the street about China''s shadow banking system:

This default is not surprising. The bond is listed on the Shenzhen Exchange but trading was suspended in July 2013 after SCSEST experienced two consecutive years of losses. SCSEST was downgraded from BBB+ to CCC by the Pengyuan credit rating agency in May 2013.


The default was, to some extent expected given the financial stresses the company had been under for several years. As such, the immediate repercussions in the bond market may not be systemic.

It is hard to believe there haven''t been any defaults onshore since the central bank started regulating it in 1997. I would be more worried if there is NEVER any default.
In this case, a default is actually good for China''s domestic bond market. Here is Zhang of Nomura Securities again:
We believe SCSEST"s default will help go some way to correct the moral hazard problem in China"s financial sector and that it is positive for the long-term development of the onshore bond market.
Bank of America Merrill Lynch seems to be sending conflicting messages. The bank''s economist Ting Lu agrees this is a good sign:

First, we think it''s a good thing as a normal economy needs defaults to better price bonds and other debt products.


Second, no need to worry . Let''s not underestimate Chinese onshore investors'' resilience. Defaults of some debt products are not on a similar scale to a collapse of a major financial institution. As we think corporate bonds and incoming trust loan defaults will not lead to a credit crunch, and we are reasonably confident with our 7.6% GDP growth forecast for this year (note growth target was just confirmed at 7.5%).


Third, bond defaults are likely to widen spread, so these defaults can be seen as good for riskless and less risky debt products, but negative for riskier debt products, in our view.


Finally, we believe the Chinese government needs to improve its bankruptcy law and legal procedures to promote healthily growth of the corporate bond market, which has seen rapid growth to RMB8.7tn (outstanding) in January 2014 from only RMB800bn at the end of 2007.

China solar companies are opening soft today. Pre-market, Trina Solar (TSL) is down 1.1% having advanced 11.1% yesterday. JinkoSolar (JKS) is down 2% after a 17% rally. The iShares China Large Cap ETF (FXI) and the iShares MSCI China Index Fund (MCHI) were up 1% yesterday.

More at Barron''s Emerging Markets blog, http://blogs.barrons.com/emergingmarketsdaily/

(END) Dow Jones Newswires
March 05, 2014 08:06 ET (13:06 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.

 

[Asterix]

Galaxy, stock code 27, is a prime candidate for shorting.

 

[Asterix]

Galaxy, stock code 27, opens gap down today. Kachin.

[video=youtube;Wj_OmtqVLxY]http://www.youtube.com/watch?v=Wj_OmtqVLxY[/video]

 

[Asterix]

Galaxy 27 breaks out on the downside, between 50% to 100% return in the course of a few days, depending on the leverage of one's choice of derivatives.

[video=youtube;x-5HBKrC4dE]http://www.youtube.com/watch?v=x-5HBKrC4dE[/video]

 

[Asterix]

Global equities and bonds may retreat in the next three months, with stocks at risk of a brief selloff, as rising inflation boosts yields, according to a quarterly strategy report by Goldman Sachs Group Inc.

The bank cut its rating on stocks to neutral, the equivalent of hold, for the next three months, a note to clients from its portfolio strategy group showed. Goldman Sachs also lowered corporate credit to underweight and predicted that government bond yields will increase.

“We are concerned that a selloff in government bonds will lead to a temporary selloff in equities in line with what we saw last summer, though the magnitude is likely to be smaller as the need for bond yields to correct is lower,” a group of 11 strategists, including David Kostin, Kathy Matsui and Peter Oppenheimer, said in the report, known as the global opportunity asset locator.

The MSCI All-Country World Index lost 8.8 percent from May 21 to June 24 in 2013, a period in which yields on 10-year Treasuries (USGG10YR) rose to about 2.54 percent from 1.93 percent, data compiled by Bloomberg show. The 10-year yield is about 2.46 percent now. Goldman forecasts it will rise to 3 percent by the end of 2014 and to 4 percent by the end of 2017.

http://www.bloomberg.com/news/2014-...k-of-stock-decline-on-rising-bond-yields.html

 

[SgGoneWrong]

Asterix, thanks for this market news.

 

[LeMans2011]

The sage has disappeared long ago after all his predictions went wrong. What are the followers still hanging around for??

 

[LiuKang]

Loss making stocks are good buys. Those cheapo ones. besotted loves them. For long term investment if u have cash surpluses. For keeps like wine... the longer u keep they will taste better.

Not for me cos in this thread u can see what kind of stocks i have invested in. That's right, winners stocks. Blue chips.