Tuesday, June 5, 2012

Investing in Game-Changing Companies

JIVE has the potential to really rally up today.

Jive Software, Inc. provides a social business software platform to businesses, government agencies, and other enterprises.

Friday, June 1, 2012

Russell 2000 stocks are most vulnerable to latest weak Job Numbers.

IWM etf will sink fast as economy stumbles.
Why? are Russell 2000 stocks most vulnerable? Small caps don't have the cash the big caps do to be able to survive a downturn in the economy. When economy goes south you see small caps go south quickly. Its just how the world works, the strong survive and the weak die.

Monday, May 14, 2012

Emerging market should be renamed BEAR MARKET


Emerging Stocks Fall to Four-Month Low on Greece, China Concern (Update 1)

Emerging-market stocks fell to a four-month low on concern Greece will exit the single European currency and amid speculation China’s cut in banks’ reserve requirements will be insufficient to stem an economic slowdown.
The MSCI Emerging Markets Index (MXEF) dropped 1.2 percent to 958.75 as of 12:34 p.m. in London, the lowest since Jan. 17. Banks led declines among emerging-market stocks, with OAO Sberbank, the largest Russian lender, retreating 2.2 percent. OAO Gazprom, the world’s biggest natural gas exporter, slid 2.8 percent in Moscow as oil fell below $94 a barrel in New York for the first time since December.
Greece’s political deadlock looked set to continue for a second week as President Karolos Papoulias failed to secure agreement on a unity government. The People’s Bank of China announced on May 12 it is cutting the amount of cash that banks must set aside as reserves for a third time since November, pumping money into the financial system to support lending. Reserve ratios will fall 50 basis points, effective May 18.
“The outlook for global emerging markets continues to be quite challenging, with the deterioration of the backdrop in Europe,” Benoit Anne, head of emerging-markets strategy at Societe Generale SA in London, wrote in an e-mail to clients.

Read more

Thursday, May 10, 2012

Shocking "China import growth comes to screetching halt" at 0.3% vs. 11.0% estimate.

That is a miss of nearly 97% below estimate on a percentage basis.

China Trade Growth Slumps in April

By Published: May 10, 2012 


HONG KONG — As China’s leaders have been preoccupied with a political struggle leading up to a once-in-a-decade leadership change this autumn, there are increasing signs that the Chinese economy may be running into trouble. 

China announced Thursday that growth in imports had unexpectedly come to a screeching halt in April — rising just 0.3 percent from the same period a year earlier, compared with expectations for an 11 percent increase. Businesses across the country appeared to lose much of their appetite for products as varied as iron ore and computer chips. 

China has been the largest single contributor to global economic growth in recent years, and a sustained slowdown in its economy could pose problems for many other countries. Particularly exposed are countries that export commodities like iron ore and oil and depend on demand from China’s voracious steel mills and ever-growing ranks of car owners. 

Exports, a cornerstone of China’s torrid economic growth over the past three decades, grew only 4.9 percent last month — half as fast as economists had expected. And a slump in new orders over the past month at the Canton Fair, China’s main marketplace for exporters and foreign buyers, suggests that overseas shipments by the world’s second-biggest economy, after that of the United States, may not recover quickly. 

Growth in other sectors appears to be slowing, too, particularly in real estate. Soufun Holdings, a Chinese real estate data provider, released figures Monday showing that residential land sales in the country’s 20 largest cities had fallen 92 percent last week from the week before, as declining prices for apartments have left developers short of cash and reluctant to start further projects. 

In a series of interviews over the past week, bankers and senior executives from provinces all over China, in a range of light and heavy industries, cited a broad deterioration in business conditions. Two of them said that some tax agencies in smaller cities had been telling companies to inflate their sales and profits to make local economic growth look less weak than it really was, while reassuring the companies that their actual tax bills would be left unchanged. 

There are early signs of a credit crunch, at least among private sector companies. Many seem to be asking their suppliers for more time to pay debts and complaining of cash flow problems. Zhang Jinmei, the sales manager at Qitele Group, a company that makes playground equipment in the coastal city of Wenzhou, said that local investment and lending pools there were starting to charge higher interest rates for loans, a sign of worries about creditworthiness. 

Wednesday, May 2, 2012

Time to Shift to Bear Mode (May-July)

Why shift to Bear Mode? Well the market is up 6 of the last 7 months. I think the pullback that everyone was calling in Feb.-April will finally start in the May-July period.

The really big money spenders will start going away on vacation now and will pull out their investments so they can enjoy their vacation without thinking about what the markets are doing.

That coupled with the usual problems that always appear during the summer like European crisis, Iran Oil halt deadline in June and slower trading activity will lead to the path of least resistance being down.

 El-Erian: Spain could make or break Europe, Greece is set up to run on borrowed money indefinitely, that is impossible.

A string of horrific PMI data from the Euro Zone economy :

Italy and Spain registering sub-44 Manufacturing PMI’s.

China Manufacturing PMI continuing to show a sub-50 reading.

Germany came in with by far the worst payrolls release since mid-2009.

The overall March Euro Zone unemployment rate coming in at a heady 10.9%.

 The Bears are Back from Hibernation and its not looking Pretty.

Thursday, April 5, 2012

Chinese Stocks Surging on Big news out of CHINA

The Chinese government move that caused massive moves in Chinese stocks:

China has moved to open its country up more to foreign investors, by 
 tripling the amount foreigners can invest in its capital markets
according to The Financial Times.
According to the report, the move is aimed at loosening strict capital controls in the country and internationalising the renminbi, the Chinese currency.
The China Securities Regulatory Commission has ruled that international fund managers can now invest a total of $US80 billion ($A77 billion) in Chinese capital markets. The previous limit was $US30 billion.
The total amount of renminbi that investors can raise in Hong Kong for investment in China has been lifted from 20 billion ($A3.5 billion) renminbi to to 70 billion.

Chinese Stocks surging today: (HEAT), (CLNT), (NFEC), (CREG), (GPRC), (JRJC), (KONG), and the (EDC) Emerging Mkt 3x bull is also surging showing a broad rally in Chinese Shares. Others to watch for future gains: (ZOOM), (SGOC), (CO)

Update: April 7th,2012 

China increases investment quota for foreigners - Bloomberg

Saturday, 07 April 2012 17:13

China accelerated the opening of its capital markets by more than doubling the amount foreigners can invest in stocks, bonds and bank deposits as the government shifts its growth model to domestic consumption from exports.

The China Securities Regulatory Commission increased the quotas for qualified foreign institutional investors to US$80 billion from US$30 billion, according to a statement on its website last Tuesday.
Offshore investors will also be allowed to pump an extra 50 billion yuan (US$7,95 billion) of local currency into the country, up from 20 billion yuan.

China, the world’s second-biggest economy, has pledged this year to free up control of the yuan and liberalise interest rates as the government deepens reforms to revive growth and offset slowing exports and a cooling housing market.

China needs to rely more on markets and the private sector as its export-oriented model isn’t sustainable, World Bank president Robert Zoellick said in February.
“More action on opening up their markets to outside investment is definitely a positive,” Jeff Papp, a senior analyst in Lisle, Illinois, at Oberweis Asset Management Inc, which oversees about US$700 million, said in a telephone interview.

“It’s not a huge amount. They’re taking a small-steps approach to see how markets will react with more participants.”

Chinese stocks
The regulator had granted a total of US$24,6 billion in quotas to 129 overseas companies since the programme first started in 2003 through the end of March. About 75 percent of assets were invested in Chinese stocks, with the rest in bonds and deposits, according to the statement.
The CSRC accelerated the programme last month, granting a record US$2,1 billion of quotas to 15 companies. It was more than the US$1,9 billion in 2011 as a whole.

“The QFII programme enhances our experience of monitoring and regulating cross-board investment and capital flows,” the CSRC said in the statement.
“It is a positive experiment to further open up the market and achieve the yuan convertibility under the capital account.”

Premier Wen Jiabao is seeking to attract international investment as economic growth cools, prompting the benchmark Shanghai Composite Index to slump 24 percent in the past year.
The country posted its largest trade deficit since at least 1989 in February as Europe’s sovereign-debt turmoil damped exports.

Sustaining investment
“Wen is signalling that China can’t afford to let investment slow down too much,” said Shen Jianguang, a Hong Kong-based economist for Mizuho Securities Asia Ltd, who previously worked for the International Monetary Fund and European Central Bank.
Separately, Credit Agricole SA said that a cut in benchmark interest rates or banks’ reserve requirements is likely this month after Wen said policy may be fine-tuned soon.
China needs to break a banking “monopoly” of a few big lenders that make easy profits, the premier told private company executives in Fujian province on Tuesday, as cited by China National Radio.
Foreign investment under the QFII programme accounts for 1,1 percent of the total market value of domestic A-shares, according to the statement.

The Shanghai Composite Index of domestic stocks has lost 31 percent since the end of 2009, compared with a 26 percent rally in the Standard & Poor’s 500 Index of US stocks as of March 30.

Restrictions remain

The increase of the QFII quota “certainly helps foreign investors,” said David Semple, director of international equity at the Van Eck Emerging Markets Fund in New York, which oversees US$35 billion of assets, including Chinese stocks.
“But there are still restrictions in terms of the amount, the transparency and repatriation of money. It’s still a long way from being ideal for a foreign investor.”
The government has lowered the target for the expansion this year to 7,5 percent from the 8 percent goal that had been in place since 2005.
Gross domestic product probably grew 8,4 percent in the first quarter from a year earlier, according to the median estimate of analysts surveyed by Bloomberg, down from 8,9 percent in the fourth quarter.

Chinese President Hu Jintao told US President Barack Obama in Seoul on March 27 that China plans to “let the market play a greater role, improve the flexibility of the yuan exchange rate, and maintain a basic stability of the rate at reasonable and balanced levels.”
The yuan’s effective exchange rate has gained 30 percent since the link to the US dollar ended in 2005, he said.

Asian equities
The Bloomberg China-US Equity Index of the most-traded Chinese shares in the US fell 0,3 percent on Tuesday, paring its gain this year to 15 percent.
Asian stocks fell on Wednesday after a report signalled that the US Federal Reserve may refrain from more monetary stimulus.
Exchanges in mainland China are closed for a holiday
Twelve-month non-deliverable forwards rose 0,1 percent to 6,323 per dollar in New York, indicating traders are expecting the currency to be little changed over the period, data compiled by Bloomberg show.

The increase of the foreign investment quota comes     ahead of a once-in-a-decade leadership transition later this year and amid concern that the new government may not continue pursuing the opening up and reform policies that sustained China’s growth since 1978.
Hu and Wen will step down from their roles and let a younger generation of leaders step in that will probably include Vice-President Xi Jinping and Vice-Premier Li Keqiang.

“Lasting Impact”
Bo Xilai, who promoted a larger role for state-run companies to ease the wealth gap between the rich and poor as the head of the Communist Party in south-western municipality of Chongqing, was ousted in March.

“Maybe one of the last points of emphasis for the outgoing administration is to focus on some sort of reforms that have a lasting impact — opening up certain industries to foreign participants,” said Papp, whose Oberweis China Opportunities Fund returned 19 percent this year, beating 98 percent of peers, according to data compiled by Bloomberg.

“That could be the bigger  sign than what it actually   means for the markets.”— Bloomberg