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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.

Best Month in a Year
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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.
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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

DOW- ended at 10,466 points, rising 7.1% for the month. Earlier in the day the DOW fell almost 120 points, but it ended a point below the day’s opening. It ended with a fall of .01% for the day.

Nasdaq Composite Index– ended three points higher, at 2,255.

DAX- Germany’s DAX index rose .2%.

IBEX- Spain’s IBEX fell 1.2%.

Nikkei- Japan’s Nikkei stock average fell 1.6%.

S&P 500- ended at the same rate at 1,102, rising 6.9% for the month and .01% for the day.

News Events of the Month-

Technology News-

Research in Motion (RIMM) shares jumped 3.3% to $57.53 after announcing its plans to release a tablet competing with Apple’s iPad in November, the “Blackpad.” In addition, it will announce a rival to the iPhone next week.

Economic News-

The US government reported slow growth in the period of April to June, with a GDP of an annual rate of 2.4% in the 2nd quarter compared with the 2.5% predicted by economists.

Spain’s credit rating is likely to be cut, as it faces mounting unemployment at 20% and rising debt.

Congress voted on a $2 billion cash for clunkers program, a new program offering Americans a cash incentive for trading in gas guzzling automobile for fuel efficient alternatives. This program should help stimulate the automobile industry.

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.

Apple’s quarterly profit shot up by 78% due to sales of its iPad and latest version of the iPhone 4. This was in $1 billion more in revenue than Wall Street had predicted, and Apple’s 4th quarter revenue is projected to be $18 billion.

The 3rd quarter increase in sales is in spite of consumer and media reports and media which have both announced a problem in reception with the iPhone4. Steve Jobs’ reaction was to sell free cases for the phones.
It is also in stark contrast to other technology stocks, such as Intel, Hewlett Packard, Cisco Systems, and Yahoo all dropped in the 3rd quarter.

Of these three, Microsoft is the leader in profit, with $4.25 billion compared with Apple’s $3.25 billion and Google’s $1.8 billion. Profit dollars come from the release of Windows 7 (with 175 million copies sold), Bing, and Office 2010. Microsoft has announced that it will later release a smartphone and the Kinect.

Public announcements of stock sales is an excellent time to invest in binary options, as we will discuss in a later post.

In an unprecedented move, China announced that they would ease the peg of the Chinese yuan, or Renminbi (RMB) to the dollar and allow the currency to move more freely.

This move will increase the value of China’s currency, making exports more expensive. In the past, the lower value of the yuan and the cost of foreign workers low, making it an excellent place for American companies such as Walmart and Target to have overseas factories. Now these companies will take a hit with rising prices of production, whereas companies exporting to China, such as General Electric and Caterpillar, will see a rise in sales as their products become cheaper in the Chinese market.

Now, Western products will become more attractive as a cheaper Chinese alternative becomes unavailable. In addition, foreign worker strikes, unthinkable in the past, are occurring in various Chinese factories of American companies such as Toyota and Honda. If workers succeed in increasing worker pay, it will cause an additional rise in the cost of Chinese products.

China is continuing to monitor its currency to allow the rise to happen gradually and dissuade traders from buying currency and easily profiting.

The Chinese market is likely to rally in response to the change. It could be a good time to watch this market or options affected by it, either indirectly or directly, and come to our site and invest.

Oil Prices

Among the different developments likely to influence oil prices for both the short and long-term future are:

Obama’s decision to delay drilling near Alaska until 2011

Increasing general restrictions on rigs and platforms in US territories

Regulations causing fewer jobs than expected for the future

Increased demand for oil during the summer months

Chinese gasoline demand is weak in light of increased sales for vehicles in 2010

When crisis like these happen in the markets, it can be a good time to invest in binary options.
Oil prices this past week rose in light of the public’s sentiment that the world economy is recovering. Crude oil rose to $78 dollars a barrel, in spite of a greater than expected supply of US crude stockpiles, according to the US Energy Information Administration. Oil prices are expected to rise further as the summer progresses and demand for oil increases.

BP Stock Prices

BP stock has risen more than 9% as budgeting of $20 billion has been set aside for a clean-up policy. BP insists that they will find companies who carry responsibility for the disaster and have them pay their due. BP seems to have enough money to carry the financial burden of cleanup, according to most sources. In addition to the cleanup costs, Obama has said he will demand that an additional fund be set up to compensate those affected by the oil spill.

Today’s announcement that day-to-day operation will be handled by managing director Robert Dudley, who is experienced in handling sensitive assignments for BP in Russia and Africa could also affect stock prices.

After the BP oil catastrophe, President Obama banned drilling in US waters deeper than 500 feet on May 30, opponents of the ban warned of a possible surge in oil prices.

Futhermore, his decision to delay drilling near Alaska until 2011 caused deep concern to oil companies already expected to open operations in that area, ConocoPhillips and Shell Oil Co. Opponents of the regulations warn of unemployment rising in the oil industry in particular and related industries as well as fewer jobs will be available than expected.

In addition to the ban additional regulations were proposed by government officials that include increasing standards and frequency of safety inspections of rigs and platforms operating in the Gulf of Mexico.
The question remains as to what these regulations will do to the price of oil and the price of stocks of oil companies over the long and short term.

Oil from a BP underwater oil rig has been gushing into the Gulf after an explosion and fire April 22. After many failed attempts at controlling the leak, BP finally managed to contain the oil by placing a cap on the well and direct oil out of the water into the surface for use. Oil however, continues to leak into the Louisiana coast and the Florida Gulf.

Past estimates of oil leaks of 12,000 to 19,000 barrels a day (504,000 to 798,000) have now been raised to 20,000 to 40,000 barrels a day (840,000 to 1,680,000 gallons) before the leak was contained by BP.
The London-based oil company has broken the record for the worst oil spill in US history. Oil from an Exxon Valdez tanker off the coast of Alaska’s Prince William Sound spilled over 10 million gallons into the ocean. This was previously the worst oil spill in US history.

Oil spill cleanup has cost BP thus far $1.4 billion on cleanup.

Investment analysts recommend buying BP stock, using an old investment strategy of buying cheap stock during a crisis, waiting out the storm and selling when the price goes up. Stock prices have dropped to almost half of what they were before the oil spill, although intraday trading prices fluctuate enough for the binary options trader to predict the hourly movement of the stock.

Oil prices are recorded at a three-month low of $71.61 a barrel after the US Department of  Energy announced US stockpiles had risen by 1.9 million barrels, double the amount predicted earlier. Demand has not yet caught up with this sudden supply. Investors are speculating that fuel consumption will decrease in response to the European crisis.

It is also likely that this low is due to the ECB’s decision to buy foreign bonds, which artificially caused oil prices to rise last week from $75.11 to $76.80 a barrel.  Phil Flynn, a senior market analyst at PFG Best, likened this move to the equivalent of giving the market a shot of heroin , explaining that one the high wears off, the problem still remains.

The Euro also reached its lowest point ($1.28) against the dollar since 2008, causing prices of oil to fall. In intraday trading prices fell below $70 a barrel, prompting market analysts to predict that prices may continue to fall. If prices do fall below $70 a barrel, OPEC may cut production to keep prices steady.

In the last 10 years,  gold has risen steadily (see chart on side), breaking an all-time previous high of $1,241 an ounce on May 12. Due to the Greek crisis, foreign investors are cautious about investing in the Euro and prefer to invest in the seemingly more stable commodity of gold.

The price of gold, like other commodities is affected by demand and supply. However, since the total amount of gold in the world is already mined and currently in existence, the price of gold is affected more by demand than other commodities. For the right price, market suppliers can sell gold in the marketplace.

But the sudden growth in demand for gold could also contribute to global inflation, especially in light of the current global crisis and the European Central’s bank’s surprising decision to buy bonds of weak government economies. Investors are currently speculating as to whether gold will continue to rise, or if it truly did hit the breaking point on Wednesday.

Gold and other commodities are offered as investment options on our binary options platform.

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?