Currencies  |  February 28, 2013 13:33:20

Revenue growth in the U.S. is not a bad signal

Dow Jones at this year's new maximách

Equity markets in the U.S. yesterday recorded their second strongest growth this year. The Dow Jones is moving even at the highest level since October 2007. Helped in the growth of the Italian bond auction is good, better result unrealized sales home and also even better to order goods in the long-term consumption figure excluding volatilnej component transport. Yester cocktail stock: Dow Jones +1.26% SP500 +1.27%, Nasdaq Composite +1.04%.

Apple actively decreases

Markets yesterday carefully watched especially investor day at Apple. Due to the pressure of investor David Einhorn, and not only his company started to distribute the cash which the company has been expected of an initiative by the company's chief Tim Cook to prezradil what the largest U.S. company by a marketcapitalization plans. Cash in excess of 130 billion dollars for investors is extremely interesting, as they were not yet receiving dividend through only to a very small part of this package sources. Cook yesterday but said only that management is in a very, very active talks about what to do with the cash. It was very little for investors administrations and companies therefore shares yesterday fell by 1%. Technology sector so yesterday was weakest, well anyway to shares is greatly prospered.

Revenue growth is positive

Supported them even Fed chief Ben Bernanke, who yesterday had its second part of regular half-yearly testimony before Congress. On Tuesday he was before senátom and yesterday before the House of Representatives. Bernanke said that the last U.S. earnings growth in its opinion, indicating that the U.S. economy is gaining momentum.They also said that the central bank may decide to retain assets purchased in the programs due to QE as part of a strategy by ústupovej extremely relaxed monetary policy.

Debt securities may not be sold

In a nutshell it means you do not have to worry about the growth yields per debenture market in a situation where the Fed decides to initiate the siphon stimuli. Happen is the thing that traders begin to sell assets at the moment, when the Fed tells them that will also be sold. This step of traders would be logical, but probably would cause major problems. If the Fed decides to terminate the stimulus, probably will do it through the suspension of purchases and where the economy is really in good condition, also increased interest rates. The team would certainly rate hike followed behold remuneration of surplus reserves, so that commercial banks would have had no reason to withdraw them.Should the bank but gradually began to reach the reserve, it would be a positive signal. It would mean that the demand for loans from the beginning on for years finally up.

The biggest enemy: deflation

Just credit growth is something that is up to date economy needs. New monies are created as debt and debt is not growing and the means to that in an economy is deflationary pressures. Deflation is falling prices, which is causing the declining value of the property, no value of debt remains the same. This is of course negative, and therefore there will Bernanke make anything to later stifled economic growth, and the result can also be a temporary tolerance of higher inflation.

The Fed made ??the maximum

Bernanke on the part of monetary policy probably did all that was in his power. He added liquidity, and subsequently were buying assets directly from the market, helped foreign countries through dollar swaps, helped weaken the dollar and even rescued Bear Stearns and AIG insurance undertaking. The U.S. government has done a number of similarly daring pieces, no recovery is now imperiled through automatic cuts. Tie is also necessary, since they look catastrophic debt projections, no cuts can wait some time. The private sector must first gain the necessary momentum in recovery, otherwise there is a risk that, due again škrtom growth will slow significantly.

Debt ceiling a risk to stocks

And it is the failure of Congress to address issues of debt reduction are the reason that may later withdraw financial markets down.Until now, of course, the U.S. markets were able to resist most of the negative news aa the last four years saw stock index SP500 only one drop more than 20%, but now things can be different. If politicians do not agree, can occur reallocations of capital back into the dollar and bonds, which can have a very negative market impact. While the actual cuts to begin in June, the shares may react to this uncertainty is now. Consequently, attention to the fact that stock markets may be in phase creating a larger peak.

View on today

Strong reflection that They electrified the U.S. markets yesterday, again postponed the possibility of closer this year's growth to new highs. Since the level of 1520-1525 points, we could see a drop down, and traders would not consider growth over the last signal of short-term bottom, so today's intraday trading, could be the sign of a downturn and despite the expectationbetter informations with help of the revision of the U.S. GDP.

Author: John Benaki | TRIM Broker, as | Trading on exchanges TRIM Broker

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