Forex News from InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
Fed’s Brainard Flags High Valuations Even after Stock Correction

Federal Reserve Governor Brainard said that even with this year's correction, equities and other assets are still high in valuation by historical standards.

In a speech shortly after the stock market closed and pared some of the deep losses incurred from Monday, Brainard became the latest U.S. central bank official to voice caution regarding the level of the nine-year-old-bull run in the stock market.

Brainard said that the valuations in a broad set of market appears elevated in relation to historical norms, even after pricing in recent movements.

Price tags on multi-family homes and commercial real estate properties have also increased, while capitalization rates, have hit historical lows, she added.

Aside from stocks and real estate, the Fed official also issued a warning regarding cryptocurrencies such as bitcoin, which have observed big price declines this year after its astronomical surge in 2017.

She also said there are few signs that cryptocurrencies would pose a widespread threat to the financial system. She also noted that corporate bond yields are low, while spreads on high-yield bonds over Treasuries are close to the low-end of their historical range.

Along with her warnings regarding possible over valuations in financial markets, Brainard said Fed policy has helped curb the type of excessive risk-taking that resulted in the financial crisis of 2008.

The Federal Reserve has been gradually tightening policy, raising the benchmark lending rate six time since December 2015, as it looks to prevent the economy from overheating.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
U.S. Private Payrolls Rise in March

U.S. private payrolls grew sharply in March as hiring increased across the board, which indicates a strong labor market that continues to support economic expansion.

Labor market momentum was also highlighted by a recent report that showed solid gains in employment in the services industries in March even though a sharp decline in new orders weighed on growth in the sector.

The Labor Department will publish its closely watched employment report on Friday.

The ADP National Employment Report showed private payrolls increased by 241,000 jobs in March after rising 246,000 in February.

The ADP report is jointly developed with Moody's Analytics. It said construction companies hired 31,000 workers in March and manufacturers added 29,000 jobs to their payrolls. Employment in the services sector increased by 176,000 jobs.

That was corroborated by the Institute for Supply Management's (ISM) non-manufacturing survey, which showed the ISM's employment sub-index rising to a reading of 56.6 in March from 55.0 in February.

The increase in services industry employment came despite the ISM non-manufacturing index falling 0.7 point to a reading of 58.8 as a measure of new orders declined 5.3 points. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
U.K. Economy Weighed Down by the ‘Beast From the East’ Snowstorm

Heavy snow and weak consumer demand weighed on British services businesses in March, which grew at the slowest rate since just after the vote to leave the European Union in June 2016, a survey showed. However, the 'Beast from the East' may not be enough to stop the Bank of England from pushing another interest-rate increase.

The IHS Markit/CIPS services Purchasing Managers' Index (PMI) dropped to 51.7 in March from February's reading of 54.5, its lowest reading since July 2016.

Britain's construction PMI showed a similar decline on Wednesday, although manufacturing held up better.

Looking at the first three months of 2018 as a whole, the figures suggest Britain's economy expanded at a quarterly rate of just below 0.3 percent, down from an already-modest 0.4 percent at the end of 2017, IHS Markit said.

Reports this week showed snow and storms weighed on growth in services to its weakest in almost two years, and saw the construction industry contract for the first time in six months. While the pound fell after the services report, investors are still pricing in an around 85 percent likelihood of the BOE hiking rates in May.

The BOE has already factored in the hit from the bad weather, and downgraded its own estimate for the quarter. According to Markit, that means the Monetary Policy Committee's widely expected rate hike in May is still on the cards.

Not all the weakness in the PMI was weather-related, though.

IHS Markit said British services businesses reported weak consumer demand as well as concern about the country's departure from the EU in a year's time as being behind the slowest growth in new orders since July 2016.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
Wall Street Gains but Dow's 400-point Rally is Nearly Erased after FBI Report

Wall Street's major indexes advanced on Monday as a softer stance by U.S. policymakers on China tariffs powered a rebound from last week's selloff, but stocks pared gains late in the session after a report that the Federal Bureau of Investigation raided the office of President Donald Trump's lawyer.

The Dow Jones industrial average rose 46.34 points to 23,979.10, with Merck and Intel as the best-performing stocks in the index. The S&P 500 climbed 0.3 percent to 2,613.16, with tech adding 0.8 percent. The Nasdaq composite advanced 0.5 percent to 6,950.34.

Amazon shares had risen as much as 2.3 percent before closing just 0.1 percent higher. Boeing gained as much as 2.7 percent before ending the session down 1.1 percent.

At its session high, the Dow rose as much as 440.42 points. The S&P 500 and Nasdaq gained as much as 1.9 percent and 2.3 percent, respectively.

Stocks climbed after Trump's new economic adviser Larry Kudlow told CNBC that the president may be open to forming an international coalition to grapple with trade issues involving China.

Investors will look for further signs of China's stance on trade relations when Chinese President Xi Jinping speaks at the Boao Forum economic conference on Tuesday.

The next corporate earnings season kicks off later in the week with financial companies BlackRock, Citigroup, J.P. Morgan Chase and Wells Fargo all scheduled to release their quarterly results.

Merck gained over six percent after a committee determined Keytruda has helped previously untreated lung cancer patients live longer.

Facebook climbed 1.3 percent ahead of CEO Mark Zuckerberg's testimony on Tuesday regarding the data scandal involving firm Cambridge Analytica.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
U.S. Automakers’ Shares Surge After Xi Announces China’s plan to Reduce Car Tariffs

Shares of U.S. carmakers surged after Chinese President Xi Jinping announced the government's plans to “open the country's economy and to reduce the tariffs on automobiles.

Tesla edged up 5.2 percent while Fiat Chrysler advanced 2 percent. Ford Motor increased 1.8 percent and General Motors increased 3.3 percent. China is an important market for U.S. carmakers. European automakers also rose, with BMW rising 3 percent.

GM sold over 4 million cars in China in the previous year for the first time, while Tesla increased its revenue by twofold from China to $2 billion in 2017.

Xi said that his plans include greatly lowering import tariffs on foreign autos and reducing duties of other products. At the Boao Forum for Asia, Xi said that China is planning to boost imports and reach a greater of balance of international payments under the present account.

The Chinese leader's comments come amid escalating trade tensions between Washington and Beijing. In a retaliatory move against America's tariff plans, China has unveiled its plan to impose fresh duties last week on 106 U.S. products, which then resulted in President Donald Trump threatening more duties.

This weekend, the U.S. softened its tone against China. On Sunday, Secretary Steven Mnuchin told CBS that a full-out trade war between the U.S. and China is not seen to take place. On the same day, Trump said that he will always have friendly ties with President Xi no matter the consequence of their trade conflict. He also said that China will roll down its Trade Barriers because it is the proper action to take.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
U.S. Government Posts $209 Billion Deficit in March

The U.S. government ran a $209 billion budget deficit in March as outlays grew and receipts fell, the Treasury Department said. That compared with a budget deficit of $176 billion in the same month last year, according to Treasury's monthly budget statement.

When accounting for calendar adjustments, the deficit was $165 billion in March compared with an adjusted deficit of $134 billion in the same month the previous year.

The deficit for the fiscal year, which started in October, was $600 billion, compared to a deficit of $527 billion in the same period of fiscal 2017.

Unadjusted receipts last month totaled $211 billion, down three percent from March 2017, while unadjusted outlays increased to $420 billion, which is seven percent higher from the same month the previous year.

The Congressional Budget Office had expected a $207 billion deficit for March. The nonpartisan agency said this March had one less business day than March 2017, and a smaller share of wage income is being withheld this year for taxes.

The CBO recently forecast that the federal deficit will reach $804 billion in fiscal 2018, up from $665 billion in fiscal 2017. It increased its estimate for this year's deficit mostly due to recent legislation that cut taxes and increased spending on the military and domestic programs. It had already expected widening deficits in the coming years as outlays, including spending on programs like Social Security and Medicare, rise faster than revenue.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
Trump Administration Weighs U.S. Options on Syria

U.S. President Donald Trump along with his administration's security aides mulled U.S. options on Syria, where he has threatened missile attacks in reaction to an alleged poison gas attack.

Concerns regarding a confrontation between Russia and the Western allies have been escalated since Trump said on Wednesday that missiles will be launched in response to a chemical gas attack in the Syrian town of Douma on April 7, and criciticized Moscow for siding with Syrian President Bashar al-Assad.

The U.S. leader cooled his heated remarks on Thursday and while he discussed his military options with allies such as Britain and France, who could participate in any U.S.-led strikes on Syria, there were indications of efforts to stop the crisis from going out of control. Trump has spoken to British Prime Minister Theresa May on Thursday, while he is due to speak with French President Emmanuel Macron.

Trump denied on Twitter that he said when an attack on Syria would occur, stating that it could happen 'very soon or not so soon at all'.

Later in the day, Trump convened with his national security team on the Syrian crisis. In a statement, the White House said that “no final decision” has been made and that they are continuing to evaluate intelligence and are in talks with partners and allies. But such statement did not necessarily indicate that Trump was pulling away from the idea of military action.

Global stock markets showed signs of recovery after Trump's hint that a military attack might not be imminent.

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
Inflation and Trade Disputes to Weigh on Prospects for Global Economy

Momentum in the global economy has peaked and risks ranging from higher inflation to trade disputes and debt appear likely to weigh on prospects for 2018, according to the tracking index compiled by the Brookings Institution think-tank and the Financial Times.

The latest update to the index shows that forces contributing to growth remain strong but have levelled off below 2017's peak, while financial markets suggest more difficult times ahead.

The findings follow a series of unsatisfactory business surveys across the world and weak industrial data, which have reduced confidence among economists that 2018 would be the most successful year of the decade so far.

Christine Lagarde, managing director of the IMF, recently warned of an “inexcusable, collective policy failure” if trade tension undermined the world economy. She suggested the fund would not downgrade its 3.9 percent global growth forecast on Tuesday, when it releases its latest economic outlook.

The more up-to-date Brookings-FT Tracking Index for the Global Economic Recovery (Tiger) shows the latest data suggest that momentum is fading.

According to Eswar Prasad of the Brookings Institution, “the world economy's growth momentum remains strong but is levelling off as the winds of trade war, geopolitical risks, domestic political fractures, and debt-related risks loom, with financial markets already reflecting mounting vulnerabilities.”

The index compares many indicators of real activity, financial markets and investor confidence with their historical averages for the global economy and for individual countries.

In advanced economies, the composite index has fallen in 2018 on the back of slightly weaker hard data on output and jobs and a sharp decline in financial market prices.



Member since:
Follows: 0
Followed by: 0
Started topics: 3
China Makes Biggest Treasury Purchase in Six Months in February

China increased its Treasury holdings in February by $5.8 billion, its biggest purchase in six months. On the other hand, Japan's Treasury holdings fell.

According to the Treasury, China's Treasury holdings increased to just under $1.18 trillion. Foreign net buying of Treasurys was $43.2 billion for the month.

As trade tensions between the U.S. and China escalates, so has rumors that the Chinese government could reduce purchases of Treasuries or even sell some of its holdings. The Trump administration on March 1 announced tariffs on aluminum and steel, which affect China. The U.S. also announced its intention to put tariffs on $50 billion in Chinese goods, and Trump has since threatened to add tariffs to another $100 billion of goods.

In December, China's holdings of Treasuries stood at $1.18 trillion before falling to $1.17 trillion in January.

China is the biggest holder of U.S. Treasuries, with Japan coming in at second place. Japan's holdings declined by $3.6 billion, to a total of $1.06 trillion.

Buyers abroad also purchased $11.8 billion in agency debt and $4.1 billion of corporate debt. They reduced equity holdings by $1.2 billion

Prime News are provided by InstaForex


Member since:
Follows: 0
Followed by: 0
Started topics: 3
Twitter Shares Jump After Morgan Stanley Upgrade

Shares of Twitter Inc. soared almost 11 percent on Tuesday and were bound for their best session in two months after Wall Street firm Morgan Stanley raised its recommendation on the social network company to “equal-weight” from “underweight”.

In a report, Morgan Stanley analyst Brian Nowak said that investors are likely to continue to pay a premium for the company's stock due to projections of accelerated revenue growth in 2018 and indications of progress in the firm's turnaround.

The analyst raised his target price for Twitter from $28 to $29. At midday trading, Twitter traded at $31.69 on the New York Stock Exchange.

Nowak cited the company's constructive advertiser conversations, improving user growth and positive revisions for the upgrade.

An unexpected swing to revenue growth caused the stock of the company to rise 12 percent following its last quarter report on February 8 and to date, the stock is up 32 percent.

Despite the increasing popularity of the social network, it has struggled to book a profit and consistently grow its revenue.

In general, analysts are cautions. Nine has a 'sell' recommendation on the stock, 21 have neutral ratings and seven recommend buying, according to data from Thomson Reuters. Overall, they anticipate Twitter's stock to fall to $27.58.

The stock is trading at 45 times projected ratings, against Facebook's valuation of 21 times earnings, Thomson Reuters data showed.

On average, Twitter is expected by analysts to report a 10 percent increase in revenue to $605 million and non-GAAP EPS of 12 cents when it reports its March quarter results on April 25.

Prime News are provided by InstaForex