What is new in the financial markets for the past weeks – where we go in the trading.
The financial markets in the past week were under the influence of USA news as we often come to see. In the middle of the week the investors were a bit shocked after the decision from FED to continue cutting expenses from their program for monetary stimulating the economy. This is the second cut in the expenses of monthly buy out of debt securities on behalf of FED, which from 85 billions has dropped to 65 billions US dollars.
The decision has come of a surprise to the traders, since the expectations were the cut to be delayed after the bad situation in the developing markets in Turkey and Argentina as well and the bad situation in China, where the economic growth has been slowed down for months and continues to drop. On opposite FED showed that they have no intention to change their plans after the good signals for stable and growing USA economy.The whole growing situation in USA is confirmed after the positive numbers for the last quarter GDP for USA for the past year as well and the growing numbers in the financial results of leading tech companies like Facebook.
Even though all the positive news from USA this didn’t help to the leader stock index S&P500, as it continued to drop for third week in a raw and it burned the hopes of the traders that had hope there will an end soon to the long lasting increasing trend.SO for January 2014 the index has total drop of 3% after 4 up in the past months.
Winners, losers, Japan and what is next
The leader in increasing its price the Japanese index Nikkei 225 has marked a significant drop in its value with losing over 8% of its networth which is the worst month since May 2012. The information that the local investor and institutions are lowering their investment portfolios in Japanese stocks due to their too high appraisal values, the growing inflation, the 16 years bottom in unemployment and the freeze in the wages is facing Japan gov vs some hard choices and politics to be made.
Following the FED decision to cut support for markets, the Japan central bank could follow with same tactic which will result in the japan yen in sweet spot for gaining some nice profits there if you invest smart with the proper forex and stock brokers.
The value drop in the world markets has led to increasing the power of US dollar and lowering the cost of gold, a correlation so familiar to traders back in the years, which we though was left in the past but it seems not. The euro lost some its value as well loose around 1.5 dropping to exchange rate 1.3530 us dollar combined with the gold drop of 1.5 as well down to 1180 us dollars, marking a double bottom break to potentially happen.
That was it for the past week, stay tuned for more news, tricks and tips.