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NFP Trading Strategies You Need to Know

Toroption
06.04.2017

For traders and market analysts in general, the Non-Farm Payroll report is perhaps the most important piece of U.S. economic data that has major implications on the global markets. Usually published the first Friday of each month, this major economic indicator measures the employment situation in the country. Additionally, the NFP is a key indicator for the U.S. Federal Reserve, which bases its monetary policy decisions on the report’s statistics. For the trading markets, the NFP represents a great volatility source which can cause some of the largest rate movements of any news announcement.

The one element the American economy can’t live without

Among the major national economies in the world, the U.S. economy presents a rare picture due to the crucial role of consumers. They account for more than two-thirds of economic activity due to things like the general propensity to borrow, high-labor costs incurred by manufacturers or the popularity of outsourcing. Thus, the health of the American consumer is extremely important for growth and both the central bank and the financial markets attach great value to labor statistics as a result.

Having explained the context, it’s time to move to the most commonly used NFP trading strategies.

  1. The Slingshot Strategy

Out of these three NFP trading strategies it is the Slingshot strategy that is a favorite among traders. It is very useful during a strong NFP reading, because the higher the volatility levels get to, the more profits one can make.

Traders are looking to go into the NFP with their full positions in order to be able to take better advantage from the buzz of the announcement.

The slingshot is based on the breakout that temporarily reverses before continuing. This takes place when a major support or resistance point is broken and the currency price does not hold below support or above resistance and moves back into its previous trading range.

  1. The Trading Reversal Strategy

Another popular strategy for NFP trading is the reversal strategy. It is recommended for traders to have support and resistance levels identified at start before waiting for the news to be released.

After the NFP report is unveiled, traders simply have to watch the prices to check whether the longer-term support or resistance levels come into play. It is up for the traders to figure out if these levels will hold or not and act accordingly.

  1. The long-term trading strategy

Trading on the long-term is sometimes the best idea and it can certainly work great for the NFP. Traders have the advantage of picking up or adding positions at a more favorable price than during the heat of the report’s announcement.


Discover the Top 4 Investing Tips from Warren Buffett

Toroption
30.03.2017

Warren Buffett, more than just a name.

When it comes to long-term investing it’s pretty hard to top Warren Buffett. With an estimated net worth $75.6 billion, Buffett is the richest man in the entire world, which is why when he offers any sort of investing advice everyone tends to listen. Whether you have $10 or $10 million, here are four investing tips from the king himself you should certainly consider:

Invest only in what you understand

Sounds simple enough, right? In theory yes, but in practice maybe not. It’s always easy to get drawn into the next great investing opportunity that is full of potential and promise. We all know at least someone who does this (often repeatedly) and the subsequent results are not too impressive.

Take a long-term approach

Although the experts believe that investing is a more of a long-term venture, it, like the first principal is not as easy as it sounds. In today’s modern world with the advent of 24/7 financial news it is easy to get engrossed in a short-term frenzy. Warren Buffett however, maintains and urges investors to resist the temptation to make a quick dollar and focus on how to sustain long-term growth.

Know when to call it quits

When Buffett was a teenager he once went to the racetrack, bet on a race and lost. In order to recover his losses he gambled on another race and guess what, he lost again. From that point on Buffett never repeated that blunder. Understand when to walk away from a loss and don’t cave into pressure.

Reinvest your profits

You invested in Apple and it rises considerably, giving you a substantial payoff. The easy thing to do is take your profits and simply spend them on whatever you fancy. However, if you want to be like Warren Buffett, repel the urge to spend and reinvest them back in the market.

 

 

 

 

 


OPEC Meeting: Will We See a New Deal?

Toroption
22.03.2017

The Next OPEC Meeting is Scheduled for May 25. Will There be a New Deal?

There are negotiations and there are the OPEC negotiations. With the next OPEC meeting scheduled for May negotiations as to whether or not to extend the existing oil production deal are already starting to heat up. Both OPEC member nations such as the UAE and non-members, including Russia have a vested interest in these negotiations.

The Dynamics of the Deal

The current deal includes 11 OPEC countries and 10 non-OPEC members. Both sides have slashed their oil production with OPEC member Saudi Arabia leading the way at 1.2 million barrels per day, while non-member Russia is ahead of the pack at 0.578 million barrels per day. However, there is one big caveat. A number of OPEC member countries have yet to limit their oil production to the agreed upon amount. This is of course something that must be hashed out during the next OPEC meeting.

What’s at Stake Here

Many including the Arab Petroleum Investment Corp (Apicorp) believe that the current agreement is not adequate to tolerating a long term oil price recovery. Additionally, Apicorp recently stated that oil prices are likely to remain in the $50-$60 per barrel range through fiscal 2017. First of all, thanks to low prices so many countries have large stashes of crude oil. Finally, the U.S. is steadily gaining traction in shale production, making it a major competitor to OPEC in the international energy market.

OPEC Meeting = New Deal?

With the agreement to limit oil production set to terminate by the beginning of the summer, it is absolutely pivotal a new deal be reached at the next OPEC meeting, scheduled for the 25th of May. Assuming an agreement is ultimately reached, Apicorp believes that 32.5 million barrels per day (the already agreed upon production cap number) will be the maximum allowed quota. Will all of the OPEC member countries follow through? That remains to be seen.

 


Renewable Energy & Australia; Match Made in Heaven?

Toroption
15.03.2017

Renewable Energy is a must for South Australia but is Elon Musk the right man for the job?

South Australia is in the midst of a severe energy crisis but Tesla’s CEO, Elon Musk is coming to the rescue. After an hour long phone call with Australian Prime Minister Malcolm Turnbull, Musk is guaranteeing that he can solve the problem within 100 days. South Australia, the nation’s most renewable energy reliant state has been suffering from a string of blackouts. Is Musk’s claim doable or is it just mere hyperbole?

The Proposal

To save Australia’s most renewable energy dependent state Musk is proposing the following: Install $25 million worth of Tesla battery storage within 100 days (from when the contract is signed), otherwise it will be done entirely free of charge. Sounds bold? It sure does, but he has already proven that he can deliver the results. A little while ago Musk implemented a similar sort of renewable energy project in Southern California. In just 90 days his company installed battery storage in order to combat and offset the risk of winter blackouts.

Are There Challenges? You Bet   

First off Musk has a spotty record when it comes to backing up his hyped-up promises. With the exception of the 90-day Southern California guarantee the company has whiffed on just about every single product milestone it set for itself and to top it all off its electric car is always embroiled in production delays.

Additionally, the topic of renewable energy, something that many consider to be the most effective tool to combat global warming is a pretty combative issue in the Land Down Under. Aside from being the world’s largest coal exporter the government has cast aside a tax imposed on carbon emissions and slashed its forecast for how much energy it seeks to use from wind and solar generation by 2020.

Despite these two inherent challenges many believe that Elon Musk is the right man for the job. Will he get it done? We may get the answer in the next 100 days.


The Shakeup of the European Auto Market

Toroption
08.03.2017

What the Opel Purchase Means for the European Auto Market

PSA Group, the makers of Peugeot and Citroen cars agreed to purchase Opel from General Motors, a deal which is sure to shake up the European auto market. Profit is what PSA promised to bring to Opel and its British Vauxhall brand especially after it recorded its 16th straight full-year loss. The company claims that within three years it can achieve an operating margin of 2 percent and 6 percent by year 2026. Although it may sound like a pretty big claim but not unrealistic by any stretch of the imagination.

What this means for the European auto market

By obtaining Opel from General Motors, PSA surpasses Renault its main French competitor and becomes the second largest automaker in terms of sales in the region. Only Volkswagen leads PSA, commanding a 24 percent market share of the European auto market. This in essence ends GM’s tenure in Europe, a place where it has held ground since the 1920s. It seems as if GM will look to improve its profitability by improving its domestic U.S. business, rather than take the proverbial crown from Volkswagen.

The ins & outs of the deal

If we backtrack just to last year GM Europe and PSA reported a joint 72 billion euros worth of revenue along with 4.3 million vehicle transfers. Officially, GM will obtain approximately 1.32 billion euros for Opel’s manufacturing business. 650 million euros will be in cash while 670 will be in PSA share permits.

The consequences for the European auto market

A combination of PSA and Opel would include 28 production facilities spanning over nine European markets. Although conventional wisdom would call for job and production cuts, PSA CEO Carlos Tavares stated that PSA would preserve the preexisting labor contracts and stated that shutting down factories would be to “simplistic” of a solution. Seemingly on paper at least this appears to be a good deal for PSA simply because it gives the French carmaker complete access to GM’s electrification and fuel cell technologies. However, such implementation is sure to take time, which could in fact reduce PSA’s margins. Time will tell.

 

 

 

 


Bullish Market? Under Trump Anything is Possible

Toroption
02.03.2017

A Bullish Market is Donald Trump’s Best Friend

For the past number of months the U.S. stock market has underwent a rather bullish rally. Indices such as the Dow and the S&P 500 have grown exponentially. In fact the very last time S&P 500 experienced even a one percent drop-off was at the end of October, the longest streak since 2006. As of now it is clearly a bullish market. However is that all about to change? Is the bullish market looking at a massive correction with Tuesday’s latest drop-off?

The Trump Affect

At first glance the answer is a resounding no. Why? Look no further than President Donald J. Trump. Since he won the U.S. presidential election the stock markets have been on an absolute tear and Tuesday night he provided us with another reason why this bullish market has the potential to remain for a long time. In his speech to congress Trump vowed to implement “massive” tax reprieve to the middle class along with corporate tax slashes. Additionally, he pledged to ease regulations and spend heavily on infrastructure development.

Despite his speech lacking finer details on his plans especially pertaining to tax reform Wall Street rallied immensely on Wednesday. This has primarily offset the pullback that indices market experienced during much of Tuesday’s session. Even investors that were once skeptical are now more at ease thanks to Trump’s reassurances, potentially setting the tone for a long-term bullish market run.

Is the Bullish Market Really Sustainable?

This is obviously the most important question that must be addressed. In order for Donald Trump to implement his economic policies he needs congress to be on his side. If congress decides to filibuster his policies or if he begins acting in way that is anything less than presidential (which is of course entirely realistic based on his track record) the bullish rally may be short lived.

 

 

 


Tesla Model 3 will Define Tesla’s Earnings Report

Toroption
22.02.2017

Tesla Model 3 is the Topic of this Earnings Report

With its stock trading close to record highs, American electric automaker Tesla is scheduled to report its quarterly earnings today after the markets close. However, analysts and investors will be fixated on all of the particulars regarding the Tesla Model 3 sedan, which is slated for production, starting in July. CEO Elon Musk has vowed to significantly ramp up production to half a million vehicles in 2018. How the Tesla Model 3 performs can make or break the company.

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And the World’s Most Valuable Brand is…

Toroption
16.02.2017

Who is the most valuable brand? An old friend.

Android users rejoice, Google is on top, again. The mega search engine has reclaimed its crown as the most valuable brand in the world. For the past six years its arch nemesis Apple held that prestigious position, mainly because of the success of its iPhone. However, the times have changed.

Apple’s Fall from Grace

It’s not so much that Google’s superior numbers made it the most valuable brand. Rather it was Apple’s notable decline. Last year Google’s fiscal value improved to $109.5 billion, a stellar 24 percent increase. It’s advertising revenues increased by a staggering 20 percent in 2016 alone. Apple on the other hand plunged to $107.1 billion from $145.9 billion, a colossal 27 percent decrease in overall brand value.

Lack of Innovation Hurts

Charles Darwin once said “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” That is preciously the reason why Apple is no longer the most valuable brand. According to a David Haigh, the CEO of Brand Finance, Apple for the most part has really struggled to maintain its technological advantage compared to other global brands such as Samsung and Huawei.

Diminishing yields for its new versions of the iPhone seem to indicate that its brand has finally struck the saturation point. China, where Apple was once commanding the majority of the market share is becoming far more competitive, with local brands leaving their imprint. Conversely, Google has no real competitors in its core search business, making it the most valuable brand.

Any New Challengers?

Despite not being the most valuable brand Apple is still in an excellent position. However, there may be some up and coming challengers on the horizon. Facebook’s overall brand value shot up in just a year, propelling it from number 17 to number 9, an incredible 82 percent jump. Whether or not Facebook catches Apple or Google it is almost certain that it will be in the top tier in the coming years.

 

 


Weaker Regulations Means Another Trump Controversy

Toroption
08.02.2017

With weaker regulations set kick in financial stocks are ready for a boon

It’s good to be a member of the S&P 500’s financial division at this very moment. Over the past year alone it yielded a 39% return and with President Trump promising weaker regulations for the financial sector, the fun may have just begun for banking stocks such as J.P. Morgan Chase.

Executive Orders = Weaker Regulations

On Friday, February 3, President Trump officially signed executive orders thus commencing the process of cutting back the “fiduciary rule”. This pivotal rule stresses that financial consultants must act in the best interests of their consumers, thereby putting their consumers’ interests well beyond their own. Additionally, Trump indicated that the Dodd-Frank bank reform law, implemented in 2010 after the disastrous financial collapse will be seriously overhauled. It should be noted that Dodd-Frank eliminated weaker regulations across the financial world.

Weaker Regulations = Higher Earnings

To many in the financial sector, banks in particular have been harmed by an excessive regulatory environment over the past six or seven years. Without a doubt weaker regulations have the potential to boost much of their earnings power. However, that is not all. Banks can return surplus capital, meaning higher dividends and a lot more buyback action.

A Score for Investors

Generally, increasing dividends can maintain greater share prices and larger buybacks often imply that share counts will be reduced at a faster rate. Less share counts drive a stock’s earnings-per-share higher (EPS), which supports higher prices.

Cause for Concern

Unsurprisingly many are concerned over this latest development including Mario Draghi, President of the European Central Bank (ECB). Draghi has been openly critical of the new U.S. administration on whole variety of issues spanning from protectionism and regulatory reforms to the euro’s overall valuation. The ECB president expressed his concern with Trump’s plans to significantly roll-back the Dodd-Frank financial procedures along with Trump’s open antagonism to multilateral trade deals. As weaker regulations are due to set in one can only wonder how this will all turn out.

 


Money Transfer World Takes an Interesting Turn

Toroption
02.02.2017

Ant Financial is Staking its Claim in the Money Transfer World

Alibaba is yet again making waves in the U.S. Its affiliate, Ant Financial Services Group, the biggest financial technology firm in the world, recently said that it will obtain MoneyGram International, a U.S. money transfer company for approximately $880 million. This deal is projected to stir up the global money transfer landscape.

MoneyGram, an Impressive Money Transfer Service

MoneyGram, a Dallas, Texas-based money transfer service takes care of cross-border currency transfers in approximately 200 countries, with nearly 350 thousand actual physical locations. In 2015 alone, the firm documented $1.4 billion in total revenue. Interestingly enough, only 13 percent of the total transactions were digital, emphasizing its enormous offline presence.

A Push Towards Globalization

This major acquisition is pretty much in lockstep with its whole globalization scheme. Back in 2015 Ant Financial decided to claim a 25 percent stake in India’s One97 Communications as part of a tactical agreement. One97 runs Paytm, India’s number one money transfer platform, with over 23 million users. Additionally, Ant Financial attained a stake in Ascend Money, a Thailand-centered money transfer company. These deals have enabled Ant Financial to move beyond the China region. Just by itself, MoneyGram’s international influence massively outperforms these two aforementioned firms, bolstering its globalization push

A Major Stepping Stone

As a payment affiliate of the mega e-commerce titan Alibaba Group Holding, Ant is the leading online payment service in China. Undoubtedly, this key acquisition will considerably bolster its overseas money transfer presence. Assuming the Committee on Foreign Investment in the United States (CIFIUS) approves the deal, Ant Financial will pay $13.25 per share, approximately an 11.5% premium. However, CIFIUS has been a throne in the side of numerous Chinese companies making deals in the United States.

Rumors are swirling that Ant Financial will go public in possibly a year or two, probably in China, following the path Alibaba took. Last year Ant Financial amassed a whopping $4.5 billion in a funding round, with a $60 billion valuation. No doubt it will be interesting to see where the mega financial technology company decides to go from here on out.