Wednesday, March 30, 2016

Recession??


Hey Folk


Maybe there is a chance for Spore stock market to be alive again. But is always a double age sword. More hot money in mean retail investor are easier to lose out.

So let see how things are rolled out.

Last week most important things FOMC

I quote from FOMC statement

Information received since the Federal Open Market Committee met in January suggests that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months. Household spending has been increasing at a moderate rate, and the housing sector has improved further; however, business fixed investment and net exports have been soft. A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months; however, it continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.”


Who say there is recession???

Market continue to go higher.

See this very recent event. Singapore budget day

Find the full text in here http://www.singaporebudget.gov.sg/budget_2016/BudgetMeasures.aspx

Quote “The global economic outlook has softened since the start of the year, alongside a fall in oil prices and increased volatility in global financial markets. The advanced economies are expected to see continuing modest but uneven recovery. US growth is expected to improve slightly compared to 2015 as domestic demand improves. The Eurozone is expected to pick up slightly due to an improving unemployment situation and continued easing of monetary conditions. However, uncertainty remains over whether China’s transition to a more sustainable growth path may encounter short-term challenges. 

The Singapore economy grew 2.0% in 2015, and is expected to continue growing at a modest pace of 1-3% for 2016…..”

Direct copy and paste, see what our finance ministry have said.

I think the market still have some rooms to go up.

Cheer

Saturday, March 12, 2016

Quantitative Easing


Hey Folk

Let take a look at some QE or in long quantitative easing in different places.

QE in short is central bank try to simulate the economy where traditional method is not useful anymore. Layman term…..

US started QE program in Nov 2008 that is call QE1, then QE2 in Nov 2010 and QE infinity in Sept 2012 till 2014.

European Union start QE program in May 2009, argue for very long over EU itself and fundamental problems, still cant solved. Then another QE infinity in Jan 2015. Another expansion of QE is on March 2016. Mario also say that this is about all they have.

Japan is in a very deflation mode ever since 1980s. So they start QE in Oct 2010, Aug 2011, QE infinity April 2013 and expand QE infinity in Oct 2014.

The UK started the QE in March 2009.

We can see that most of the region or country started later than the US. US have a better frequency than EU. EU have got too much internal problems like Greece and their internal structure. Their QE frequency are so long apart so expect them to recover much slower than the US.

Japan had already be in deflation for more than 20 years, the QE now may take much longer to take effect.

Thus this is one of the reason we see US market rallying. The rest of the market are following.
China are getting through its problems. Maybe they are seeing some light at the tunnel.

Cheer


Tuesday, March 8, 2016

Just the way we want it


Hey Folk

After so long…..

The market had perform the way I posted in the many previous post. It had rally!!!

Thank you if you believe in me.

To many of you I can see the portfolio increase in value. It is time to reshuffle the funds. I will let u know but it is still up to you if you want to do so.

This week the most important data is on the 10 March Thursday ECB meeting. Then next week is the FED rate decision.

We might be in a pull back soon after rising up quite abit. However, overall I still see a rally in the stock market going into May. US being the strongest market, Europe second, and Asia weakest. Maybe China will turn out to be the strongest among the weakest. Well for Singapore Index, let just forget about them for awhile.

Let zoom in and see what happen.

US had a GDP growth of 2% and a inflation rate increase from 0.2% to 1.4% in just 4 months. China missed it GDP expectation of 6.9% to 6.8%. Eurozone had a GDP growth of 0.3%. it has been a small fractional growth for quite some time already and a inflation rate of -0.2%.
There aint no region that are in negative GDP growth.
No recession.

But I agree a lot of people are fear of slow growth, which is real. (However, I am thinking certain catalysis are already present in these environment to let growth continue.)
The fear of slow growth lead people to be pessimistic. Which make them sell the stock market.
So I pick up some S&P500 contract up around the 1880s level and 1900s level, took profit for some and holding to some. At current as I am typing S&P500 is at 1993s level.

Until next time....

Cheer