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Dow Jones New Record Helps U.S. Currency

2013-03-06T14:22:50Z

Follow @RealPOWKEL The Dow Jones average hit a record high on Tuesday, helped by better-than-expected service sector data for the U.S. Such risk-on appetite has traditionally had a negative correlation for safe-haven currencies such as the dollar. But Ian Stannard, FX strategist at Morgan Stanley believes things will be different for the greenback this time, with global currency market dynamics changing quite rapidly. "There's a very big change that is taking place," Stannard told CNBC. "As we start to see equity markets continue to move higher, the dollar could actually remain very well supported." According to Stannard, the dollar (Exchange:.DXY) is becoming an asset currency, instead of being a funding currency – a currency with a low interest rate used to buy one with a higher interest rate. "Over the course of recent months the dollar has in fact become increasingly more positively correlated to asset markets and to new risk," he said. "I think that is a real factor in the market which I think investors haven't really fully picked up on as yet. But I think it will be a feature over the coming weeks, a risk positive environment I think can be supportive for the dollar." (Read More: Is the Dow the New Safe Haven?) The dollar index rallied strongly in February but has taken a bit of a breather over the past week. "The correlation in weekly changes between the S&P 500 (^GSPC) and the DXY index are -43 percent, meaning that "risk on" tends to be negative for the dollar," Marshall Gittler, head of global FX strategy at IronFX said in a research note on Wednesday. "This perhaps explains in part why the dollar's rally has stalled." (Read More: Why Dollar Is Looking Awfully Nice) But Glitter too believes this is going to change. Capital inflows could switch to be more determined by the equity markets instead of bond yields and interest rate differentials, he said. "Risk on could switch to being USD-positive if equity flows begin to dominate." But for investors wanting to go long the dollar, some experts urge caution.Jane Foley, senior currency strategist at Rabobank said the dollar could probably see a fairly "jittery" range against the [...]

Dow Jones New Record Helps U.S. Currency

2013-03-06T14:22:50Z

Buffet and Cramer on Board for Natural Gas Vehicles

2013-03-06T14:20:51Z

Follow @RealPOWKEL During an interview with CNBC, Warren Buffett spoke about a subject that's near and dear to Jim Cramer's heart. That is, using natural gas as a fuel for surface vehicles. "Buffett's Berkshire-Hathaway owns a railroad, Burlington Northern, and he started off talking about natural gas powered trains," Cramer said. "Buffett is telling us that Berkshire is spending real money on nat gas fueled locomotives—that's a big deal." It's an idea that Jim Cramer has been advocating for quite some time. "It's as if he's fully endorsing the idea that I've been pushing for ages. He agrees that natural gas is so abundant in this country and so darned inexpensive, it would be nuts not to at least think about converting your vehicles to run on this cheaper, cleaner fuel," Cramer said "When Warren Buffett speaks, we listen. When he says this transition is real, we take him seriously." And that begs the question – how do you play it, now? Although your knee jerk reaction might be to buy Westport Innovations, the company that makes natural gas powered locomotive engines, or Clean Energy, the natural gas fueling station company, Cramer doesn't think they are the best bets. Long-term both may have potential but, "Those plays have some short-term issues and I don't necessarily want to own their stocks right here." Instead, Cramer's play is Chart Industries. (TICKER: GTLS). "They make precision-engineered cryogenic equipment, which is used to convert natural gas into liquefied natural gas," Cramer explained. "Chart also sells the storage tanks needed to transport liquefied natural gas, and the engine tanks that hold LNG for heavy-duty truck that run on the stuff." And it's not just a domestic play – the company can also benefit from its exposure to China. "China is dramatically ratcheting up its use of natural gas, and they're even building out infrastructure to start replacing diesel with nat gas as a transportation fuel," he said. That has the potential to be big. Now the company is not a pure play – and that's exactly what Cramer likes about it. "The company has a host of other non-natural gas related businesses as well," Cramer explained. "Chart uses its freezing [...]

Wall Street to Drive Rally Further on Hiring News

2013-03-06T14:18:47Z

Follow @RealPOWKEL Wall Street was set to drive the rally further on Wednesday, the day after the Dow set a new record, as hiring by companies rose strongly last month. Signs of a strengthening U.S. economy, continued support from the Federal Reserve, and fairly attractive valuations compared with other assets have helped U.S. equities rally this year. On Tuesday, the Dow ended at 14,253.77, breaking through October 2007's record close of 14,164.53. For the year, the Dow is up more than 8 percent. The S&P has gained 8 percent in the first three months of the year and is less than 2 percent below its record close. The larger S&P 1500 .SPSUP has already reached record highs, thanks to help from smaller-cap companies. "I think this is a happiness hangover," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. "What's happening today is probably people that had been extremely risk-averse during the roller coaster ride are now feeling comfortable and, sadly, that's really not the time to buy in when we're hitting new highs." Forrest said investor attention should start to turn to the labor market, with the closely watched non-farm payroll report due on Friday. Despite signs of strength in some areas of the economy, the labor market has been healing only slowly. But an early look at the jobs market on Wednesday was surprisingly strong, with companies adding 198,000 jobs last month, above estimates for 170,000. January's job gain was also revised up to 215,000. Futures added to gains following the data. "The ongoing level of the labor market recovery continues to impress investors and that is once again reinforced by these numbers," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co LLC in New York. "Manufacturers and business leaders are telling us that the demand has picked up, that they are short of inventory and that they are adding workers." S&P 500 futures were up 7.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 57 points, and Nasdaq 100 futures added 7.75 [...]

Wall Street to Drive Rally Further on Hiring News

2013-03-06T14:18:47Z

European Markets Rose to Highest Since 2008

2013-03-06T14:17:16Z

Follow @RealPOWKEL European stock markets rose to their highest since the 2008 financial crisis on Wednesday, helped by signs the U.S. economy is improving and expectations of more pledges of support for growth from major central banks. U.S. stock index futures also pointed to fresh gains on Wall Street, after the previous session's stellar run saw the Dow Jones Industrial Average .DJI hit an all-time high. .N The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick to ultra-easy monetary policy at meetings this week, following on from reassurances by U.S. Federal Reserve officials that their stimulus program remains in place. Analysts even see some scope for fresh action in Europe on Thursday, giving a 40 percent chance for more bond buying from the Bank of England and a 10 percent likelihood of an interest rate cut from the ECB. That, combined with some encouraging U.S. economic data this week and China's promise of record government spending to help sustain growth, pushed world and European share indexes higher on Wednesday. "It's panic buying," said Nick Xanders, who heads up European equity strategy at BTIG. "At this stage everyone wants to buy it, everyone wants to get involved, and everyone is scared of underperforming." The pan-European ESTOXX 50 .STOXX50E was up 0.5 percent ahead of the start of U.S. trading as Frankfurt's DAX .GDAXI jumped 1 percent and London's FTSE 100 .FTSE and Paris's CAC-40 .FCHI added 0.2 percent. Those gains, coupled with a rise in Asian shares overnight, pushed the MSCI world index .MIWD00000PUS up 0.3 percent and just short of a new 4-3/4 year high. "Indexes are breaking above big resistance levels, and this is creating room on the upside," said Lionel Jardin, head of institutional sales at Assya Capital, in Paris. "The sentiment is that central banks are going to remain very accommodative for a while, and at the same time companies are in really good shape, with strong cashflows." EUROPEAN OUTLOOK Still, with the ECB's meeting in view and worries over the euro zone's debt crisis again on the rise due to Italy's political deadlock, German government bonds recovered some poise after a sell-off [...]

European Markets Rose to Highest Since 2008

2013-03-06T14:17:16Z

Stock Futures Poised to Rise, Dow in Sight of Record

2013-03-05T13:05:31Z

Follow @RealPOWKEL Stock index futures rose on Tuesday, with the Dow within reach of a record closing high, as investors awaited data on the services sector. Also boosting equities was China's announcement of its 2013 government spending plans, with outgoing Premier Wen Jiabao announcing record spending that will sustain growth in the country. China's new rulers will focus on consumer-led growth to narrow the gap between rich and poor. The Dow on Monday closed within 40 points of its all-time closing high. Stocks have rallied since the start of the year as investors continue to view equities as more attractively valued than other asset classes. Loose monetary policy around the world has also driven risk assets. Federal Reserve vice chair Janet Yellen on Monday backed the current aggressive monetary stimulus. A report on the vast U.S. services sector is expected to show the pace of growth was relatively unchanged in February, with economists looking for the Institute for Supply Management's non-manufacturing PMI index to dip to 55.0 from 55.2 in January. The report is due at 10:00 am (1500 GMT). Markit's Eurozone Composite PMI, a broad gauge of activity at thousands of companies across the 17-nation bloc, fell to 47.9 in February from 48.6 in January. The reading was better than expected, although still below the 50 mark dividing growth from contraction. S&P 500 futures rose 3.3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 24 points, and Nasdaq 100 futures added 9 points. Japan's aviation regulators said there are still "several steps" required before any battery fix for Boeing Co's (BA.N) troubled Dreamliner jet can be approved. Boeing said this week it was ready to make fixes to its batteries after regulators have approved the proposed solution. The U.S. Department of Justice is seeking additional details of AMR Corp (AAMRQ.PK) and US Airways Group Inc's (LCC.N) proposed $11 billion merger which aims to create the world's largest airline. (Reporting by Leah Schnurr; Editing by Chizu Nomiyama) Embedded Link Stock futures rise with Dow record within sight Follow @RealPOWKEL

Analysts: Sequester, U.S. Fantasy World

2013-03-05T13:04:07Z

Follow @RealPOWKEL As a deadlock continues over automatic spending cuts in the United States, analysts told CNBC that the country is living in a "fantasy world" and will need to implement trillions more in budget cuts. U.S. markets seemed to have shaken off worries over the $85 billion of automatic spending cuts known as the "sequester" that went into effect over the weekend, with the S&P 500 finishing in positive territory for the first Monday in 2013 and the Dowclose to hitting its record closing high on Monday. (Read More: Kudlow: No Sequester Catastrophe) Despite the sanguine reaction of markets, analysts told CNBC that sequestration, which constrains the country to make $1.2 trillion in budget cuts over ten years – with $85 billion in 2013 alone – would have a negative impact on the economy and more would need to be done. (CNBC Explains: Automatic Spending Cuts) Stephen King, chief global economist at HSBC, said that the U.S. was living in a "fantasy world" over its growth forecasts. "If you look at the projections from the Congressional Budget Office (CBO) they assume that growth goes back to between 4 to 5 percent in real terms between 2014 and 2018. Their numbers suggest that the U.S. will post the fastest rate of productivity growth of any decade in the last 50 or 60 years," King told CNBC's "European Closing Bell." "Even allowing for the fact that there's some [debt] reduction coming through the sequester, there's still a degree of wishful thinking with regard to the economy which probably isn't going to come true," he said. (Read More: The Pro-Growth Sequester?) "What happens in a year or two when we see that the growth rate is nothing near to what the CBO is assuming and actually that the underlying budgetary arithmetic is not much better than Southern Europe's?" King added. David Riley, global managing director of sovereign ratings at Fitch Ratings, told CNBC's "Closing Bell" that the failure to resolve the sequester would not see the U.S downgraded. Fitch, however, has had a negative outlook on the U.S.' AA rating since 2011. "You'd rather have the cuts less front-loaded but we don't live in an ideal world. [...]

Degrees that Promise a Job Offer

2013-03-05T13:01:33Z

Follow @RealPOWKEL If you're graduating this year, you may be biting your nails about what will happen in terms of finding a job. Everywhere you turn, people are saying they're just not hiring. What's a new grad to do? Fortunately, the economy is getting better, and we're seeing movement in the job market, specifically in a few industries. According to the National Association of Colleges and Employers' Job Outlook 2013 study, employers plan to hire about 13 percent more new grads than they did last year. And they're looking for graduates in specific industries: –chemical/pharmaceutical manufacturing–retail trade–computer and electronics manufacturing–insurance–real estate–finance–management consulting–professional services If you haven't yet decided what job you want, you could consider the above-mentioned industries as potential career opportunities. Hot Degrees This YearIf you happen to be finishing up a degree in one of these areas listed below you may have an easier time finding a job. Employers are valuing these degrees and the information you learn with them more post-recession. Computer/Information Sciences. We're not likely to see a slowdown in demand for high-tech skills, thanks to the burgeoning business Silicon Valley and other tech areas of the country are doing. If you've been trained in programming, coding, or other highly technical skills, you may find many companies waiting to snap you up. Business Administration/Management. Business degrees have long been considered among the most utilitarian, simply because they can be applied to so many jobs. If you're wrapping up your Bachelor of Science in business or management, or if you're completing an MBA program, you've been exposed to numerous areas of business, including marketing, finance, statistics, and economics. You're an employer's dream come true. Just be aware that business degrees are now extremely popular, so you'll have serious competition for any job for which you apply. Interning may give you a leg up. Accounting/Finance. Another solid degree choice is accounting or finance. Both appeal to companies that need number crunchers, and given that the Baby Boomers are now knocking on doors for advice on retirement, estate planning, and investments, working as a financial adviser may be a lucrative role for you, and one that's currently greatly in demand. Accounting, too, is a [...]