Markets Pulse BlogJust another WordPress weblog

Indices rose Friday, with the S&P closing at 1,065, a 1.7% increase. The DIJA rose by 165 points or 1.7%, ending at 10,561. The Nasdaq Composite also rose by 1.7% that Friday.

Some of our most popular technology stocks, however, have announced important 3rd quarter reports. Intel estimated sales of $11 billion for the third quarter rather than its previous estimate of $11.2 to $12 billion in sales. HP and Dell are both vying over 3Par, a company offering customized storage solutions for mid to large-size companies.

The Federal Reserve Board chairman Ben Bernanke vowed Friday to do all he can to prevent deflation in the US.
The dollar fell along with oil prices, which ended Tuesday at $72.39 a barrel. Gold ended at $1,233.40 an ounce. Wheat prices continue to rise after Russia declared a moratorium on wheat due to a drought.

The US unemployment rate remained at 9.5% this month, although the private sector added 71,000 jobs.

Home sales in the US sunk 27% in July, to their lowest level in 15 years.

World Markets
China reported a fall in growth in July for the first time in 16 months. This week China is expected to release its GDP growth for the 2nd quarter as well as balance of trade reports, which will give analysts information on future growth and investment or if the fall is a trend. India will also release growth figures. Analysts expect 8% growth to be announced. Analysts predict that India will catch up more to China in terms of growth rate this year.

The European Central Bank will unveil latest interest-rate decision on Thursday. It is likely to leave the rate unchanged, a confirmation that continue with relaxed lending policies until the end of the year.

Carrefour reported this week a net profit of Euro 82 million as it seeks to expand to markets in Brazil and China.
Vivendi, French media and telecom group also reported today a 6.6% rise in profit to 1.26 billion Euros for the first half of the year.

Currencies
The dollar fell to a 15-year low against the Yen. The euro fell to a 9-year low against the yen, and the British pound to 3-month low against the yen. The strength of the yen causes concern for exporters.

Of course, not everyone agrees that China will be growing so fast. A couple of major problems loom: China’s GDP has indeed been growing rapidly in the last 30 years, but that could be because it has a while until it reaches a high rank. Chinese GDP is still below the 100th rank in the global economy. Another factor making it difficult for China to climb to the top is the state of the current global economy, the decrease in demand for exports and the rise of unemployment.
Some experts even feel that China’s GDP will fall in the next few years. Hedging might be a great binary options and forex strategy for traders of forex and binary options for those who are cynical about the Chinese takeover of the world.

What this means for traders:
Traders might want to pay attention to the Asian currencies, in particular the yuan, the Chinese currency which the Chinese government decided earlier to peg to the dollar (see our previous post). This in turn makes Chinese exports more expensive, but imports cheaper. Be on the lookout for trades connected to rises in production expense and major companies such as Wallmart and Target, who have overseas factories. Other companies which have been cheaper alternatives to American products, such as Toyota and Honda, may also present good binary options opportunities.

What this means for trade operators:
Chinese stocks and markets are a new opportunity for traders. The Asian market will also be influenced by its #2 neighbor. Read more about online trading in the binary options market.

China has beat Japan as the second-largest economy in the world. With an average GDP growth of 10% for the last 30 years, a population of 1.4 billion, first place in the world’s and consumption and production of coal, steel and energy, and the world’s largest exporter and second-largest importer of good, the country stands a chance at becoming number one soon. (It is also ranks first-place in the world in coal production).

Other news in China is the country’s allowing foreign investors to invest in the Chinese market. A pilot program will allow foreign investors to buy bonds in the Chinese market using Chinese currency.
Shanghai is set to become a world leader in finance by 2020. As a result, they are tapping into corporate investment abroad and could allow foreign companies to sell shares in Shanghai as early as next year. Rumor persists that Shanghai may allow foreign investment in yuan-dominated private equity and venture capital funds as well in the near future.

Since the yuan ended its peg against the dollar on June 19 it has risen by .5 percent. Announcement of the end of the peg causes a 4.8 percent increase in Hong Kong yuan deposits in June. China is now making it easier for yuan transactions between banks and companies in Hong Kong as well as those transferring cash in order to buy wealth-management products.
The rise of the yuan currency combined with rising sentiment about China’s future could make it a good short-term investment for binary options and forex traders.

Best Month in a Year
——————————————————————————————
One great way to make binary options work to your advantage is to trade based on monthly and quarterly earnings reports. Options can be predicted to rise or fall shortly before these news releases. If you do the research you can capitalize on these movements in the market. But more on this strategy at a later posting. Now let’s concentrate on our monthly report.
——————————————————————————————–
Stocks did better this month than they have in an entire year. Sixteen of the thirty DOW stocks ended higher at the end of July, including Home Depot (up 1.6% at $28.51) and Boeing (up 1.4% at $68.14). Intel (down 1.7% to $34.46) and Merck (down 1.7% to $34.46) ended lower than expected.

Stock Market Summary

News Events of the Month-

Technology News-

Economic News-

Currencies-
The dollar rose against the British pound and Euro but fell against the yen.

Savings and Consumer Spending-
Consumer sentiment for July rose to 67.8 and not the expected 66.5.

Commodity Market
Oil, gold, and copper all rose in price.
Gold- $13.30 to $1,181.70 per ounce.
Copper- up 2.15 cents to $3.3115 a pound, up 12% for July.
Oil- closed at $78.95, up 4.39% from last month.

Employment
Increased to 9.6% from 9.5% for last month for the US market.
Private employers added 90,000 jobs to the payroll, an improvement since June.

Sales and Manufacturing
Manufacturing activity slowed to its lowest level since December. Reports of Midwest manufacturing rose to 62.3 this month from 59.1 for last month.

Major Events of the Week

A short look at the week’s closing:

Stock Market Summary
The Dow Jones Industrial average fell by 164 points at one point and closed at 10120.53
S&P Stock Index fell by 13.89 points to close at 1069.59
The Nasdaq fell by 35.16 points to close at 2,187.33 due to the drop in technology stocks.

Commodity Market
Oil dropped to below $78 a barrel

Currencies
Dollar rose against the Euro
Yen rose against the dollar

North Korea announced Tuesday that it would sever ties with South Korea and no longer continue to adhere to the non-aggression pact with Seoul.

In response, the Asian markets fell – Japan’s Nikkei Stock Average by 3.1%, Hong Kong’s Hang Seng Index by 3.5%, Taiwan’s Taiex by 3.2%, Thailand’s SET Index gave up 3.1%, and Singapore’s Straits Times Index by 2.7%. Other indices throughout the world also fell, including Australia’s S&P/ASX 200, India’s Sensex, and Indonesia’s JSX.

But by Wednesday many of these markets had recovered, at least for the short-term. Many market analysts explained the rise of world markets as a reaction of investors looking to buy investments cheaply due to the fall in stock prices.

It remains to be seen how the market will continue to react with the rising political tensions in Korea and the continued economic turmoil in Europe. These political tensions can be a good time to invest in binary options, especially in currencies like the Euro and yen.

In our last post we asked how the world markets will respond to the Greek crisis. We mentioned that it could be a good time to wager on the rise or fall of the Euro.

But we neglected to mention that the crises could cause fluctuations (and opportunity for you) in world indices.

Yesterday at 2:30 pm in , the Dow Jones Industrial Average plunged 1,000 points, then rebounding within a matter of minutes, closing for the day with a decline of a rate of 3.24%.

The Nasdaq fell 82.65 points and the Standard & Poor index dropped 37.75 points.

At first investors thought that the market was reacting to the Greek crisis more strongly than first anticipated. The crisis was more dangerous than previously imagined.

It seems instead that the decline was due in part to an incorrect order- an amount of $16 billion that should have been $16 million. The Nasdaq has said that it will cancel trades occurring from 2:40 pm to 3:00 pm. that day.

Although this incident is rather unprecedented, intraday and intrahour trading can offer many such surprises for traders. Will binary traders also get their money back for trades during this Wall Street glitch period?