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Showing results for tags 'fundamental analysis'.
Found 11 results
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The forex traders are still peering into the darkness searching for the dim light at the end of the tunnel, but currently to no avail. Major indicator readings have been starkly depicted the gloomy economic outlook. But there are shades of hope, but unfortunately not in the short term. So the fundamental forex indicators have read as follows: Services PSI (Performance of Service Index) edges closer to tip into the expansionary phase of a reading above 50 points but fell short at 49.3 residing in the contraction zone. Respondents reiterated a lack of confidence and particularly dullness of the domestic demand weighing on business activity. Australian Performance of Construction Index (PCI) went into contraction zone by declining 2.6 points and reaching 48.2. There was mixed performance across industry sectors, with falls in employment and deliveries albeit an expanding industrial activity. Tight credit conditions and lack of public sector tenders, were attributable reasons for decline. However, ABS building approvals showed that the number of dwellings approved rose by 1.5% and consistently rising for the preceding 24 months. Also the value of approved buildings, both residential and non-residential, rose. Fundamental currency analysis of the Aussie The forex traders are still peering into the darkness searching for the dim light at the end of the tunnel, but currently to no avail. Major indicator readings have been starkly depicted the gloomy economic outlook. But there are shades of hope, but unfortunately not in the short term. So the fundamental forex indicators have read as follows: Services PSI (Performance of Service Index) edges closer to tip into the expansionary phase of a reading above 50 points but fell short at 49.3 residing in the contraction zone. Respondents reiterated a lack of confidence and particularly dullness of the domestic demand weighing on business activity. Australian Performance of Construction Index (PCI) went into contraction zone by declining 2.6 points and reaching 48.2. There was mixed performance across industry sectors, with falls in employment and deliveries albeit an expanding industrial activity. Tight credit conditions and lack of public sector tenders, were attributable reasons for decline. However, ABS building approvals showed that the number of dwellings approved rose by 1.5% and consistently rising for the preceding 24 months. Also the value of approved buildings, both residential and non-residential, rose. Quite contrastingly National Australian Bank (NAB) has shown business confidence holding onto gains made in December. However, their overoptimistic notion of a cut in interest rate of RBA by 75 basis points has been met with a snub given that interest has been rolled over at 2.5%. Business confidence has improved 1 point to reach 3, after reaching very poor levels in November, and even though business conditions have improved from a -5 to -2, they still remain in a negative zone, showing a below trend growth. Capacity utilization has fallen, and is now lowest since 2001, and the consumer demand is near record low. Labor costs have softened, in line with sharp deterioration in employment conditions, and final product prices are flat. These prices may come under pressure, due to a very soft downstream demand pattern. Still quite surprisingly 1st quarter demand forecast is a growth of 2.75%, which seems a bit farfetched given the above economic fundamental indexes. On a slightly more positive note, still exasperating the notion of uncertainty, trade balance ran a surplus of $184 million in December, 2013, which was a turnaround of $250 million deficit in December. After a review of the above economic indicators, fundamental forex forecast for Australian Dollar, Aussie, remains bearish in the medium term.
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Financial market participants new to the game of investing or trading should think carefully about whether they approach the subject matter focusing either on fundamental analysis or technical analysis or an integrated approach. Technical analysis is easy to define: it basically involves the study of past and present market prices in an attempt to forecast the direction of future prices. However, with fundamental analysis (in its traditional sense) the definition becomes a little blurry as one analyses whatever factors one expects to eventually have an impact on market prices. Therefore, for the purpose of this discussion, I would like to expand the definition to incorporate the analyses of underlying factors as well as how financial market participants interact with those factors (as implied by market prices), thinking more in terms of a “strategic” analysis. I would like to outline two reasons why an integrated approach is desirable, where fundamental analysis decides the broad strategy (direction and position size) and technical analysis the tactics (entries and exits). First: What do the world’s top traders such as George Soros, Bruce Kovner and Paul Tudor Jones have in common? Two answers are immediately apparent: they are all listed on the Forbes Billionaire List; and they all use an integrated approach. Second: central bankers. Judging by the reactions of the market to fundamental news announcements, one can argue that central bankers are one of the most important pieces of the puzzle. It is somewhat amusing that some traders who swear to be purely technical in their approach are the first to react to the release of such information. Central bankers most certainly do not use technical analysis in their decision making process, although the state of markets does enter the equation; however, most of their decision making does involve a specific type of “fundamentals” analysis, not necessarily the type taught in business school. Furthermore, given the fact that they do not necessarily have any more information at hand than what the public is able to obtain, the key question becomes how they actually string together all these bits of information to derive their decisions and news blabber. Thus, there is a clear advantage to be gained over one’s competitors by learning to think like a central banker instead of just being a reactionary market participant. In conclusion, why should one limit oneself to one or the other and treat this as a mutually exclusive choice if a balanced approach between technical analysis and some in depth strategic analysis of fundamentals clearly reaps much better results? --- Rene Riedel is a professional financial speculator and founder of Pulse Research, an independent macro-level fundamentals research and analysis company, geared specifically towards forex, bond, stock indices and commodities traders who are utilising technical analysis and are seeking an additional edge in their trading
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There appears to be a tentative and gradual uplift in the US economy but the data variance is detracting from the notion of a secure growth rate. As per advanced estimates the Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.2 percent in the fourth quarter of 2013 compared to real GDP increased 4.1 percent in the third quarter. And the real GDP increased YoY from 2.8% in 2012 to 1.9% in 2013. On the consumption side, the price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.2 percent in the fourth quarter, compared to an increase of 1.8 percent in the third, which shows deceleration. Current-dollar personal income increased $69.4 billion (2.0 percent) in the fourth quarter, compared to an increase of $140.0 billion (4.0 percent) in the quarter preceding it. Personal income increased $2.3 billion, or less than 0.1 percent, and disposable personal income (DPI) decreased $3.8 billion, or less than 0.1 percent, in December according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $44.1 billion, or 0.4 percent. However this Personal Consumption expenditure increase is lower than the increase in November, when a 0.6% increase was registered that is $74.8 billion in value. Total nonfarm payroll employment rose by 113,000 in January, lower than the 2013 monthly average of 194,000, but unemployment rate remained near the benchmark at 6.6%. Personal income (DPI) increased at a reduced rate in December by $2.3 and so did Personal Consumption Expenditure (PCE) by $44.1 billion. However, Personal Savings (DPI less PCE) were lower at $495.2 billion in December down from $541 billion in November. The Pending Home Sales Index fell 8.8% and was lowest since October 2011 reaching 92.4. While the sales was down due to abnormal weather conditions, however, structural problems of demand supply gap, due to limited inventory, and tighter regulation, is capping the sales. As can be seen from the graph, that home sales were almost flat November to December which delineates these issues. On a more positive note The Conference Board Consumer Confidence Index®, which posted a rebound in December, once again improved in January. The Index now stands at 80.7 (1985=100), up from 77.5 in December. The Present Situation Index increased to 79.1 from 75.3. The Expectations Index increased to 81.8 from 79.0 last month. Given that these measurements are subjective and may vary between geographical disparate regions, still do permeate a sense of optimism. The recently issued Market Flash U.S. Services, Business Activity Index, signaled a further expansion of service sector output from 55.7 in December to 56.6 in January. The increasing levels of activity have improved the business outlook. Further the Markit U.S. Composite PMI output index, based on Services and Manufacturing PMI, was similar to 56.1 a month earlier. The Federal Open Market Committee meeting, reaffirmed that while growth did pick up in the recent quarters, still it was important not to lose sight of the consistent achievement of the employment target while maintaining an inflationary target of the targeted 2%, which has run below the Committees objectives. So the option to modulate the purchase of Treasury and Mortgage back securities would be conditional to the steadily improving labor market conditions in the context of price stability, which figuratively are two sides of the same coin. Given the general variability of the data, the medium term outlook is pointing to a flattish fundamental outlook, even though the biggest economy in the world is purported to be set for a rebound in 2014.
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This thread is for those who like to discuss about the Fundamental Valuation (Relative valuation / Discounted Cash Flow valuation) of stocks listed on NYSE. I am waiting for your thoughts in this thread and their usefulness in trading. We all know valuation is done by Research analyst and if the current market price is below (above) than the Intrinsic value of the stock, then the stock is Undervalued (overvalued) and we do the trading accordingly. Awaiting more inputs to this thread so that it helps in trading decision making. Happy Learning -
Market speculators can use a wide variety of trading strategies tomake their investment. The two most common approaches involve “technical” and “fundamental” analysis.
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Forex Training usually involves an overview of technical and fundamental analysis so that traders can understand how economic data affects currency prices and how technical chart patterns can help to forecast later price activity.
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Forex Signal Systems can be based on technical or fundamental analysis of the currency markets. These signals can be manual or automated, depending on the level of risk that can be tolerated for certain trading styles.
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Typically, Forex Analysis is either Technical or Fundamental in nature. Technical Analysts use chart behavior to forecast price activity while Fundamental Analysts tend to watch economic reports and news events in order to determine trade direction.
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Forex markets are extremely liquid and this adds a certain element of flexibility for the types of strategies that can be used from speculation in these markets. Both technical and fundamental analysts strategies are often implemented by Forex or FX trad
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The Big Mac PPP is used my many fundamental forex traders to determine whether or not a country's is properly valued. *When using the actual exchange rate between two nations, the cost of a Big Mac is used to calculate the relative performance of the forex rate. *If the cost of a Big Mac is more expensive than the cost in the US, that currecy will be viewed as overvalued.
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I was browsing the stocks people are watching over at Investopedia and one that came up was Atmel Corp. I decided to investigate them a bit further and after doing a few quick calculations in my head and looking at the P/E, ROA, ROE and ROI data calculated by Reuters I thought they were nothing special and seemed to be underperforming versus the rest of their industry and over priced. That was fine until I looked at the Reuters rating and it was 'Buy' and quite highly recommended at that. It was about this point that confusion set in Seeing as I've only been looking at this stuff for about a week I'm assuming that they have it correct and I've messed up but for the life of me I can't tell why. From the data here though I don't see why this would be an attractive purchase at all. I had a look at their balance sheet and income statement and while they have their dept well covered I can't see anything that makes me think I should buy. I made an attempt at calculating their ROCE but came up with approx. 1/120 so I think I did that wrong. Going on what wikipedia told me I had pretax operating profit (10) divided by total assets (1713) - current liabilities (562) which gave me my result...which in my rather inexpert opinion seems like a pretty crap return if it's correct. Any suggestions on how I've misread the data and/or miscalculated the ROCE are appreciated. Cheers
