Daily FX Turnover Hits $4 Trillion Mark
September 1, 2010 by Seeking Alpha
Filed under Tips
Original Article from Seeking Alpha Dollar Currencies
Clemens Kownatzki submits:
If you had slept through 2008/2009 you would truly wonder what that financial markets hysteria was all about – in the world of FX, it’s as if the credit crisis never happened. At least that is the impression one gets by taking a first glance at the recently released data from the Bank of International Settlements (BIS) in Basel, Switzerland. The growth of the foreign exchange appears relentless reaching a mind boggling $4 trillion in average daily turnover in April 2010. Here are a few of the highlights of the BIS report:
• Global foreign exchange market turnover was 20% higher in April 2010 than in April 2007, with average daily turnover of $4.0 trillion compared to $3.3 trillion.
• The increase was driven by the 48% growth in turnover of spot transactions, which represent 37% of foreign exchange market turnover. Spot turnover rose to $1.5 trillion in April 2010 from $1.0 trillion in April 2007.
• The increase in turnover of other foreign exchange instruments was more modest at 7%, with average daily turnover of $2.5 trillion in April 2010. Turnover in outright forwards and currency swaps grew strongly. Turnover in foreign exchange swaps was flat relative to the previous survey, while trading in currency options decreased.
• Foreign exchange market activity became more global, with cross-border transactions representing 65% of trading activity in April 2010, while local transactions account for 35%.
• The percentage share of the US dollar has continued its slow decline witnessed since the April 2001 survey, while the euro and the Japanese yen gained relative to April 2007. Among the 10 most actively traded currencies, the Australian and Canadian dollars both increased market share, while the pound sterling and the Swiss franc lost ground. The market share of emerging market currencies increased, with the biggest gains for the Turkish lira and the Korean won.
• The relative ranking of foreign exchange trading centres has changed slightly from the previous survey. Banks located in the United Kingdom accounted for 36.7%, against 34.6% in 2007, of all foreign exchange market turnover, followed by the United States (18%), Japan (6%), Singapore (5%), Switzerland (5%), Hong Kong SAR (5%) and Australia (4%).
Read more articles from Seeking Alpha Dollar Currencies
Apple $400: A Look at Apple’s Fundamentals (Part II)
August 12, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Editor’s Pick
Andy Zaky submits:
In Part I of this series, I discuss the general risks of using valuation as basis for placing short or intermediate price targets on Apple (AAPL), and how having a long-term viewpoint is the only appropriate way to rely on fundamentals for investment decisions. That the day-to-day fluctuations in Apple’s stock price are more determined by the larger concerns of the broader market than they are with the company’s strong fundamentals.
So keeping these concerns in mind, what investors want to know is: what is Apple worth and is the company currently undervalued? The short answer – Apple is definitely undervalued, and it should be trading at around $400 come 2012.
Read more articles from Seeking Alpha Editor’s Pick
Trade Deficit Jumps to $49.9B in June: Bad News Indeed
August 12, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Editor’s Pick
Zacks.com submits:
By Dirk van Dijk
In June, the nation’s Trade Deficit jumped to $49.90 billion from $41.98 billion in May, and from just $27.14 billion a year ago. That is an 18.9% rise for the month and a 83.9% increase from a year ago. It is far worse than the expectations which were for the trade deficit to be more or less unchanged from May.
Read more articles from Seeking Alpha Editor’s Pick
A $1 Million Bet From 5 Months in Gold
August 10, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Long Investment
Chris Mack submits:
In April 2008, legendary gold investor Jim Sinclair made a $1 million bet that gold would exceed $1650 by January 14th, 2011. At the time, Sinclair had stated that he believed his bet was conservative and that gold would probably be much higher. However, with gold hovering near $1200, the market is betting against him and there are only 5 months remaining. Intrade, a predictive betting market, currently has the odds of gold exceeding $1550 by the end of 2010 at 5%. This implies that anyone willing to take Sinclair’s bet today from the long side is unlikely to win – but also that the payoff would be enormous if payouts were based on the perceived odds using call options.
A $450 increase in gold would be an increase of 37.5%, a rate of $90 per month or roughly $4 per trading day for 5 months. On an annual basis, this would be near a 100% return. Perhaps there is something that Sinclair knows and others don’t.
Read more articles from Seeking Alpha Long Investment
NXP Semi’s IPO: $4.5 Billion in Debt Makes the Underlying Business Irrelevant
August 9, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Editor’s Pick
Bill Simpson submits:
This analysis of NXP Semiconductors (NXPI) was provided to TradingIPOs subscribers in advance of its Friday, August 6 IPO. NXP priced 34 million shares for $14 each, raising $476 million. It had expected shares to sell for $18 to $21.
____________
Read more articles from Seeking Alpha Editor’s Pick
Is Crude Oil Headed Back to $57?
July 22, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Editor’s Pick
With all of the hoopla surrounding the recent rally in crude oil prices, such as the excitement and bullish implications of spot crude hitting its highest price in three weeks, it is time for a bit of a reality check. With the US economy in continuing decline as evidenced by moribund housing and employment numbers, there is little reason to be a perma bull based on US demand. Those that insist on taking the bullish slant look to China as the godfather of consumption, but cracks are beginning to show in China’s economic situation. Besides – does the Shanghai Composite (down 22% for the year) have the look of a world economic leader? Weakness in the Shanghai Composite has been evident since its August 2009 top:
(Click to enlarge)
Next let’s have a look at one of my favorite charts that shows the performance of XLE versus the S&P 500. Many equity traders use energy stocks as proxies for the crude oil market. If the price of crude is expected to rise, traders buy the stocks of companies who would benefit most from the rise (energy companies). The same is true of gold and gold stocks.
Read more articles from Seeking Alpha Editor’s Pick
The Euro Rally Is Toast, Next Stop $1.18 – Morgan Stanley
July 17, 2010 by Seeking Alpha
Filed under Tips
Original Article from Seeking Alpha Dollar Currencies
The Business Insider submits:
Remember when some were calling for the euro to hit parity with the dollar? It wasn’t that long ago, back when the euro broke below $1.20.
Then in early June, Iran’s Mahmoud Ahmadinejad caved in, with his nation announcing they were selling their 45 billion euros for dollars and gold. Whoops. Since then the euro rallied hard, and just broke $1.29.
Read more articles from Seeking Alpha Dollar Currencies
2010: Apple’s $63.5 Billion Revenue Year
June 28, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Editor’s Pick
Andy Zaky submits:
As excitement over the iPhone 4 hits a fever pitch, I’ve decided to look at what’s in store for the rest of 2010, and the numbers appear to be absolutely blockbuster. While I’m still working on a full income statement model for Q4 (saved for another article), I did run estimates for total revenue and was very surprised by what the seasonal trends seem to indicate for the rest of the year. After taking a look at patterns in consumer behavior for Apple’s (AAPL) various operating segments, I’m looking for Apple to do roughly $63.459 billion in revenue in 2010 driven largely by staggering iPhone, Mac, iPad and iPod sales. That’s an explosive 47.91% rise in revenue from the $42.905 billion recorded in 2009. Not bad for a mega-cap tech company that currently holds the second largest market cap among U.S. publicly traded companies. Whenever one looks out further than one quarter ahead, in this case Q4 2010, very careful analysis of the trends in product cycles need to be thoroughly considered.
Years ago, I presented some of my method to analyzing Apple, and while those methods haven’t changed much in recent years, it’s always good to revisit those methods and lay them out for my readers to see. In a recent article, I simply posted my estimates and a received a lot of questions as to how I arrived at those first call numbers. A lot of those methods will be presented in this article, and a more detailed breakdown will be given when I revise my Q3 estimates ahead of Apple’s results in July.
Read more articles from Seeking Alpha Editor’s Pick
Where Is BP Headed: $70 or $0?
June 13, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Long Investment
Joseph L. Shaefer submits:
I normally don’t post anything on SA that is in the current issue of Investor’s Edge ®. It’s only fair that our clients and subscribers should hear our suggestions first. But since they’ve now had the chance to act if they choose to, let me provide the following from our June issue. I think this is too timely to postpone:
Many people will tell you BP is a walking bankruptcy. But I believe the media has castigated “BP the company” based on the idiocy and arrogance of its current management, without reviewing the logical outcomes of what might happen with BP. Let’s see if we can’t assign a reasoned probability to those outcomes.
Read more articles from Seeking Alpha Long Investment
Eurozone Core, USD Index and the Swiss Knife
June 12, 2010 by Seeking Alpha
Filed under Tips
Original Article from Seeking Alpha Dollar Currencies
Ashraf Laidi submits:
The 1.2% decline in US April retail sales deals a rude awakening to the low-volume rally in equities as well as the recent bounce in the euro. Just when EURUSD was attempting to make its 4th daily increase (EUR hasn’t had more than 3 straight daily gains since December), the risk aversion stands in the way. EURUSD would have had to close Friday above $1.21 in order to overcome its inability to post 4 consecutive daily gains this year. Once again, this won’t happen. And despite Fitch’s positive remarks on Hungary, stating that the central bank has sufficient funds to cover its financing needs into the rest of 2010, the euro continues to struggle below $1.21. But the impact of risk aversion on the single currency has extended losses towards a preliminary target of $1.2040 (morning report to clients). Frequent readers of my analysis and followers on Twitter are familiar with my $1.1650 target in EURUSD. Friday’s failure to regain $1.21 is another step into that objective.
The only time when we saw the opposite of the above situation i.e. (rising euro, falling stocks and falling gold) was three weeks ago, when Chancellor Merkel’s ban on naked short selling, prompted the Swiss National Bank to intervene aggressively. As a result, EUR rallied across the board, dragging gold against it (and rest of currencies), while global equities sold off. We expect the single currency to head back below the $1.1870 later this month, before calling up our interim target of $1.1660. Selling the rallies remains the name of the game, only this time, the rebounds are short-lived and the reasons to attack core-nations more plentiful.
Read more articles from Seeking Alpha Dollar Currencies