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Oil prices prop up Wall Street; Nasdaq hits record high

U.S. stocks rose on Thursday, with the Nasdaq hitting a record high, helped by higher oil prices.

Oil prices rose more than 1.5 percent, rising for the second straight day, supported by an unexpected draw in U.S. gasoline inventories. [O/R]

The S&P 500 energy sector .SPNY was up 0.9 percent.
The fourth-quarter earnings season has been largely upbeat, with combined earnings of S&P 500 companies estimated to have risen 8.3 percent, the highest in nine quarters.

However, Wall Street's reaction to corporate earnings has been muted as investors remain cautious given the recent run-up in the market and policy uncertainty under newly elected President Donald Trump.

"Investors are cautiously optimistic about the current environment," said Adam Sarhan, chief executive officer at 50 Parks Investment in Florida. "It's almost like a Goldilocks situation where it's neither too hot, nor too cold."

A report from the Labor Department showed the number of Americans filing for unemployment benefits fell to a near 43-year low of 234,000 last week, pointing to tighter labor market conditions.
At 9:39 a.m. ET (1439 GMT), the Dow Jones Industrial Average .DJI was up 32.66 points, or 0.16 percent, at 20,087.

The S&P 500 .SPX was up 3.94 points, or 0.17 percent, at 2,298.61 - just 2 points shy of its all-time high.

The Nasdaq Composite .IXIC was up 11.43 points, or 0.2 percent, at 5,693.88, easing slightly from its record high of 5,695.94. Apple (AAPL.O) rose 0.38 percent and was its biggest driver.
Eight of the 11 major S&P sectors were higher.

Coca-Cola (KO.N) fell 2.6 percent to $40.96 after the beverage maker forecast a drop in full-year adjusted profit. The stock was the biggest drag on the Dow and the S&P.

Twitter (TWTR.N) sank 10 percent after the microblogging website reported its slowest revenue growth since going public in 2013.
Viacom (VIAB.O) was the biggest gainer on the S&P, rising 4.3 percent as its quarterly profit beat analysts' expectations.
CVS (CVS.N) rose 2.2 percent after the pharmacy store chain reported a jump in quarterly revenue.

Advancing issues outnumbered decliners on the NYSE by 1,675 to 890. On the Nasdaq, 1,512 issues rose and 684 fell.

The S&P 500 index showed 11 new 52-week highs and no new lows, while the Nasdaq recorded 38 new highs and eight new lows.

© Thomson Reuters 2016

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European shares boosted by soothing earnings, SocGen and Total up

Feb 9 European shares rose for a third consecutive session on Thursday, with some major companies such as France's second-biggest listed bank Societe Generale and oil major Total advancing after their results.

Eutelsat rose nearly 5 percent, the top gainer in the pan-European STOXX 600 index, after the company predicted higher Internet and mobile satellite sales and announced plans to buy a Viasat satellite.
France's Total was up 0.8 percent after the company reported better-than-expected fourth quarter net profits, thanks to cost savings that enabled it to raise its dividend, and said it was hunting opportunities to buy assets from struggling rivals after.

Shares in Societe Generale rose 3 percent after the bank reported a better-than-expected net income in the final three months of last year and said it would float a stake in its booming vehicle leasing unit ALD.

However, gains were limited by some poor updates.
Commerzbank fell 1 percent after the German lender said it needed to do more to get back to sustainable growth. Germany's second-largest lender behind Deutsche Bank, however, beat quarterly profit forecasts.

Smith & Nephew fell 4.8 percent after Europe's biggest artificial hip and knee maker reported a 7 percent drop in full-year trading profit, missing average forecasts, on tough market conditions in China and the Gulf.

© Thomson Reuters 2016

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Gold slips from eight-week high as dollar regains poise

Gold retreated on Wednesday from the previous day's eight-week high, as a rebound in the dollar ahead of U.S. inflation data and a speech by Federal Reserve chair Janet Yellen prompted some buyers to cash in gains.

The metal peaked at $1,218.64 an ounce on Tuesday as the dollar index slid to a four-week low, hurt by U.S. president-elect Donald Trump's claim that the currency's strength against the yuan "is killing us", and as a soothing speech on Brexit from UK Prime Minister Theresa May sparked a surge in the pound.

It struggled to maintain those gains as the dollar index recovered some lost ground on Wednesday. [FRX/]

Spot gold was down 0.4 percent at $1,211.99 an ounce at 1300 GMT. U.S. gold futures for February delivery fell by $1.30 to $1,211.60.

"It is normal that prices take a breather after the strong gains we witnessed over the past few days," Commerzbank analyst Carsten Fritsch said.

"All in all the sentiment for gold has clearly improved. The U.S. dollar rally has run out of steam, bond yields are coming down, inflation is picking up, political uncertainty is rising. Without any clear hint from Trump regarding his tax cuts and spending plans, and (if we have) more comments towards protectionism, gold can rise further."

Trump's campaign calls for tax cuts and infrastructure spending boosted U.S. shares and the dollar after the election, while driving a sell-off in Treasuries. As yields rose, gold slid to its lowest since February.

However, his protectionist statements and a lack of detail on policy have since led some investors to opt for gold, often seen as a hedge against uncertainty in the wider markets.

Chinese President Xi Jinping offered a vigorous defence of globalisation on Tuesday, pushing back against the "America First" rhetoric of Trump and signalling Beijing's desire to play a bigger role on the global stage.

"The extent to which globalisation retreats, and the mood and sentiment coming out of Davos, may impact gold," HSBC said in a note. "Clearly there is enough investor concern to send gold higher ... but (it) has come a long way fast and we may need a period of consolidation before trading higher."

Traders are awaiting U.S. consumer inflation data at 1330 GMT and a speech by the Fed's Yellen on interest rate policy to give fresh direction to the dollar and to gold.

Silver was down 0.4 percent at $17.10 an ounce, while platinum fell 1 percent to $965 and palladium dipped by 0.4 percent to $744.60.

© Thomson Reuters 2017

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European shares retreat as Pearson plummets

* Europe's STOXX 600 down 0.2 pct

* Pearson plunges after cutting outlook

* Updates help ASML, Novozymes (Recasts, adds quotes and detail, updates prices)

By Kit Rees

LONDON, Jan 18 European shares edged lower on Wednesday as a slump in education publisher Pearson's shares weighed on media stocks, though ASML and Novozymes gained after robust updates.

The pan-European STOXX 600 index was down 0.2 percent in choppy trade, while Britain's blue-chip FTSE 100 index was flat, having fallen 1.5 percent in the previous session when a rise in sterling put pressure on its dollar-earning firms.

Shares in education publisher Pearson tumbled more than 27 percent, on track for their biggest one-day loss ever, after the firm cut its profit outlook for the next two years and said that it would have to reset its 2017 dividend.

"Our argument has been, and remains, investors have no visibility on what this company looks like in five years," Gary Paulin, head of global equities at Northern Trust Capital Markets, said in a note.

The STOXX 600 media index dropped 1.8 percent, on course for its worst day in three months.

Pearson is "just in a difficult kind of business. Publishing in general is suffering at the hands of the Internet and I think they're struggling to come up with a solution," said Jasper Lawler, senior market analyst at London Capital Group.

British satellite telecoms company Inmarsat was also under pressure, down 4.6 percent and among the biggest STOXX fallers after JPMorgan cut its rating on the stock to "neutral" from "overweight".

"The near-term story seems clouded by ongoing legacy pressures, a slower than hoped ramp up in Aviation revenues and rising GX/aviation investment needs," analysts at JPMorgan said in a note.

Elsewhere, however, well-received company updates helped shares in chip-making equipment manufacturer ASML gain 5 percent, hitting an all-time high after its earnings beat forecasts. Biotech firm Novozymes also rose 2.8 percent after its Q4 report.

Fish farmer Marine Harvest was up 4 percent after its fourth quarter earnings beat forecasts.

© Thomson Reuters 2016

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Dollar rises, boosted by strong wages in U.S. jobs report

Jan 6 The dollar rose to session highs against a number of major currencies after December's U.S. non-farm payrolls report showed a slowing in hiring but an increase in wages, setting the economy up for further interest rate increases from the Federal Reserve this year.

The dollar rose to a session high against the yen of 116.42 yen, while the euro, after hitting a one-week high immediately after the report's release, fell to a session low of $1.0547.

The dollar also hit session highs against the Swiss franc and the British pound.

© Thomson Reuters 2016

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Oil prices fall on doubts over OPEC production cut compliance

Oil prices fell on Friday, reversing earlier gains, on concerns that not all OPEC producers will cut output in line with an agreement reached in November, and a stronger U.S. dollar.

Brent crude futures LCOc1, the benchmark for international oil prices, were trading at $57.75 per barrel at 1443 GMT (9:43 a.m. ET), down 14 cents from the previous close after trading as much as 58 cents higher earlier in the day.

In the United States, West Texas Intermediate (WTI) crude futures CLc1 were $53.74 a barrel, 3 cents below their last settlement, after trading as much as 56 cents above it.

"There's a lot of volatility, or at least changes in direction," ABN Amro senior energy economist Hans van Cleef said. "People think the long-term trend is up, but after a gain of a few dollars, they take profit."

The contracts are largely flat on the week.

While top exporter Saudi Arabia, along with fellow Gulf members Abu Dhabi and Kuwait, have shown signs of cutting production in line with an agreement reached by OPEC and other producers, market watchers have doubts about overall compliance.

Saudi Arabia cut output in January by at least 486,000 barrels per day (bpd) to 10.058 million bpd, fully implementing the agreement to curb a global supply glut. [nL1N1EV1GM]

State oil producer Saudi Aramco has started talks with customers globally on possible cuts of 3 percent to 7 percent in February crude loadings. [nL1N1EV1GM]

On Friday, a Kuwaiti oil official said that country had also reduced production in line with the deal, and there are also reports of supply cuts from Abu Dhabi. [nL1N1EV1GM][nL4N1EV1PI][nL5N1EW1SB]

But there are still doubts about other producers' compliance.

"There will be some countries who will cheat...we expect zero compliance from Baghdad... And we definitely do not expect the Kurds to join in, given that they are autonomous from the federal government," Energy Aspects said in its 2017 oil market outlook, published this week.

Iraq Prime Minister Haider al-Abadi said this week the autonomous Kurdish region was exporting more than its allocated share of oil. Iraq is the Organization of the Petroleum Exporting Countries' second-largest producer. [nL5N1ET320]

Overall supply from OPEC in December fell only slightly to 34.18 million barrels per day (bpd) from a revised 34.38 million bpd in November, according to a Reuters survey this week based on shipping data and information from industry sources. [nL5N1EU34H]

Analysts also said the strong dollar, which edged higher on Friday following U.S. jobs data, capped oil prices, as it made oil more expensive for holders of other currencies. [MKTS/GLOB]

© Thomson Reuters 2016

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Dear clients!

Forex Optimum Company wishes you Happy New Year from all our heart!

Let the New Year bring you prosperity, make your most cherished dreams come true and make you faith in the future stronger. Let the success follow any your undertakings at all times and in all places.
We wish you peace, harmony, patience, goodness, happiness and of course, high profits! Happy New Year!

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Asia stocks mostly higher, dollar claws back some losses

Asian stocks were mostly higher on Tuesday, in thin trade and with little to guide them as most major markets were closed on Monday for Christmas holidays, while the dollar reclaimed its losses from Monday.

Financial spreadbetter IG Markets is predicting a flat start for Germany's DAX .GDAXI and France's CAC 40 .FCHI, with Britain closed for a holiday in lieu of Christmas.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was marginally higher, with Australia, New Zealand and Hong Kong closed.

Japan's Nikkei .N225 closed little changed.

"It is the time of the year when markets trade with hushed tones," Jingyi Pan, market strategist at IG, wrote in a note. "The magnitude of moves could remain capped with thin market trades expected to remain the case."

China's CSI 300 index .CSI300 was down 0.1 percent and the Shanghai Composite .SSEC slipped almost 0.2 percent, despite positive data released on Tuesday.

The mainland's industrial sector profit rose 14.5 percent in November from a year earlier, suggesting the economy was improving, but policymakers noted growth was too dependent on a rebound in the prices for oil products and iron and steel.

Southeast Asian stocks were up, with markets including Indonesia .JKSE and the Philippines .PSI posting gains of as much as 1 percent.

On Friday, Wall Street closed slightly higher in thin trade.

The 10-year U.S. Treasury yield extended gains by almost 1 percent on Tuesday, more than recovering Monday's losses.

The previous session's declines came after data on Friday showed U.S. consumer spending increased modestly in November as household income failed to rise for the first time in nine months. The data suggested the economy slowed in the fourth quarter after growing briskly in the prior period.

Still the slowdown in growth is likely to be temporary, with the labour market near full employment, house prices rising and the stock market rallying close to record highs. Consumer confidence, in addition, is at its highest level since July 2007.

European stocks were little changed on Friday, although banks rose after Deutsche Bank (DBKGn.DE) and Credit Suisse (CSGN.S) settled investigations into U.S. mortgage securities sales, while Italy's government approved a bailout for Monte dei Paschi bank (BMPS.MI).

"Shares are overbought and due for a bit of profit-taking but moves toward a resolution of bank woes are helping in Europe, global economic data is mostly good and the period around Christmas/New Year is normally positive for shares," Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

The bounce in U.S. yields boosted the dollar, which also recovered Monday's losses with a 0.2 percent gain to 117.37 yen on Tuesday. JPY=D4

The yen retreated after data on Tuesday showed Japan's ion's core consumer prices posted the ninth straight month of annual declines in November, and household spending fell.

The dollar index .DXY, which tracks the greenback against a basket of six global peers, was little changed at 103.01, about 0.6 percent below the highest level since December 2002 hit a week ago.

The euro EUR=EBS was steady at $1.0449 on Tuesday.

In commodities, oil prices were steady, as markets took a wait-and-see approach to output cuts by both OPEC and non-OPEC producers that are due to start in less than a week.

U.S. crude CLc1 added 0.1 percent to $53.10 a barrel. Global benchmark Brent LCOc1 slipped 0.1 percent to $55.10.

Spot gold XAU= rose 0.5 percent to $1,139.42 an ounce, although the stronger dollar capped gains.

© Thomson Reuters 2016

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Dollar dips vs. yen after U.S. yields pull away from highs

The dollar dipped against the yen on Monday, edging lower down after U.S. Treasury yields dipped on mixed economic data.

Trading was subdued with many key markets shut on Monday for the Christmas holidays.

The greenback was down 0.2 percent at 117.300 yen JPY=. The euro was steady at $1.0457 EUR=.

Currencies took stock of the U.S. debt market, which saw the benchmark 10-year note yield US10YT=RR end lower on Friday.

The yield pulled back from 27-month peaks scaled mid-month following Friday's release of U.S. economic indicators that included strong housing and consumer confidence data but also numbers that pointed to slower household income.

"The currency market is likely to lack incentives as major markets in Asia, Europe and North America will be closed. That said, dollar/yen risks drifting below 117 on caution toward the Trump administration's protectionist policies," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

U.S. President-elect Donald Trump last week named economist Peter Navarro, known as a China hawk, to head a newly formed White House National Trade Council.

The Australian dollar was flat at $0.7178 AUD=D4 after dipping to $0.7160 on Friday, its lowest since May, following a media report saying Chinese President Xi Jinping was open to growth China's economy falling below 6.5 percent.

Australia is sensitive to the economic prospects of China, its major trading partner.

© Thomson Reuters 2016

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Stocks could suffer as Trump trade policy takes shape

The year-end stocks rally on the heels of the election of Donald Trump as U.S. president was built on expectations of reduced regulations, big tax cuts and a large fiscal stimulus.

Now signs are emerging from the Trump camp that harsher trade policies that could jeopardize the honeymoon are likely in the offing, and investors would be well advised to give those prospects more weight when gauging how much further an already pricey market has to run.

By naming China hawk Peter Navarro as head of a newly formed White House National Trade Council, the incoming administration is signaling Trump's campaign promises to revisit trade deals and even impose a tax on all imports are very much alive.

Among the policies favored by Navarro and Trump's pick for commerce secretary, Wilbur Ross, who has the president-elect's ear on a range of economic issues, is a so-called border adjustment tax that is also included in House Speaker Paul Ryan's "Better Way" tax-reform blueprint.

If implemented, economists at Deutsche Bank estimate the tax could send inflation far above the Federal Reserve's 2 percent target and drive a 15 percent surge in the dollar.

Analysts calculate that, all else being equal, a 5 percent increase in the dollar translates into about a 3 percent negative earnings revision for the S&P 500 .SPX and a half-point drag on gross domestic product growth. The dollar index .DXY has already gained more than 5 percent since the U.S. election.

Harsher trade policies may not cause a full economic slowdown, "but I'd expect a localized recession in manufacturing and smaller gains in factory employment as well," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

He said the border tax could trigger retaliation, pouring uncertainty into the market.

"Even if the drafters of the legislation have pure intentions, other countries could use this as a pretext for propping up or subsidizing their own favorite industries."

TOP ECONOMY RISK

Stocks have rallied broadly since Nov. 8, with the S&P 500 advancing by 5.7 percent and the Dow Jones Industrial Average .DJI surging nearly 9 percent to brush up against the 20,000 mark. Some sectors, such as banks .SPXBK, have shot up nearly 25 percent in the post-election run.

U.S. equities have gotten substantially pricier from a valuation vantage as well. The forward price-to-earnings ratio on the S&P 500 has risen by a full point since Election Day, from 16.6 to 17.6, Thomson Reuters data shows. That makes stocks about 17 percent more expensive, relative to their earnings potential, than their long-term average multiple of around 15.

Small caps have gotten pricier still. The forward multiple on the Russell 2000 has risen to 26 from 22 on Nov. 8, up 18 percent, while the index price has climbed 14 percent.

S&P 500 earnings are expected to rise 12.5 percent next year, according to Thomson Reuters Proprietary Research estimates. Anything that impedes companies from achieving that target, such as a bump from a trade spat or further dollar appreciation in anticipation of new trade barriers, would undermine equity valuations.

In the latest Reuters poll of U.S. primary dealers, economists at Wall Street’s top banks cited Trump’s evolving trade policies over other factors, such as fiscal policy, a strong dollar and higher interest rates, as the greatest risk to the near-term economic outlook.

The idea of a tax on imports "should alarm people," according to Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

"If we do have a trade war that's going to be a major negative" for stocks, he said, adding that the upward momentum in equities, alongside the lack of participation due to the upcoming holidays, have so far prevented a repricing but "we could cap the rally here, that could very well happen."

O'Rourke said technology, a sector that represents the globalization trade, would be among the hardest hit by taxing imports.

Deutsche Bank's auto sector equities analyst estimated the border tax could slam other industries that rely on global supply chains, with the cost of a new car, for instance, jumping by as much as 10 percent.

© Thomson Reuters 2016

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