The Banking and Strategy Initiative

Chillin' out till it needs to be funded

A Tuesday Mid-Week Trading update: 8 Days and counting, new iPhone, McDonalds sales in Europe, Goldman Sachs is in the Dow, Days of Refi past, ($DJIA, $AAPL, $MCD, $BAC, $GS, $DAL, $V, $JPM, $WFC)

English: Federal Reserve Bank of Minneapolis, ...

English: Federal Reserve Bank of Minneapolis, Minneapolis, Minnesota, USA (Photo credit: Wikipedia)

Bernanke holds the Press Conference next Wednesday and presents the Economic Data presented at the 2 day FOMC and the decisions related to monetary policy in general and the Fed’s decision on the quality and quantity of Taper, to be in force till May 2014 as per the Fed’s own calendar.

Monday thus came with very pleasant surprises for US and European markets and the Dow and the NASDAQ established that most of the Tapering fears are done and Economic improvements may well get a direct ovation in the market trading as they deserve irrespective of any further color being required on the amount of Taper to be posted by the Fed, which the markets realise, still means the Fed is buying and that the liquidity program did not really take off despite the buying for so long. James Bullard and probably one or two more Board members will restrain the Fed from committing too much on Tapering at this meeting itself

Central Banking as even MOOCs point out now, (coursera.org, A course on Economics and Banking by Perry Mehrling, Barnard College, Columbia U) was not a very easy conversion in the United States, The Federal Reserve barely coming into its own by the end of the Second World War well after BoE and the Pound Sterling as Reserve were lost to the trade winds and technology changes in between Consumer Credit report for July again showed Credit Card spending contracted, and truly with Autoloans and other nn revolvers u 7.5% for the month, the Credit Report would have been a big positive for the Economy even as Markets opened jubilantly to the 14 month high in production data from China and the data from the BoJ meeting released on Monday showing inflation was healthy

unemployment

unemployment (Photo credit: Sean MacEntee)

Index Changes in the Dow  and the S&P 500

The price weighted Dow Jones allowed a big change when it exited BofA with HP and penny share Alcoa to allow for Goldman Sachs, Nike and Visa to define the big 30. The price weighted index as CNBC Ricky Santanelli lucidly expresses, also can’t bear the weight of $800 priced Google and $500 ( as soon as the China phone walks into that Cupertino Hall?) Apple. S&P has more than $1.6 Tln in underlying nominal value f derivativs written on it instead and also changes colors, taking in Delta into the 500 share index. The post merger United Continental is yet to be part of the indicesstill. the S&P move has improved demand for Delta by 10% of its outstanding presumably because of Futures hedges and Options(SPY, SPX) on the indices

Europe

The Financial Transaction Tax in the meantime seems to be headed for an early use of the Kill Switch as EU lawmakers find it transcending exsting EU treaties and a unlimited number of national banking and finance laws. Appl launches its new iPhone today and the AAPL stock could well jumpstart the Dow from yesterdays 15063 close. McDonalds’ could also provide great relief as it confirmed the prognosis of a healthier second half across Europe with a 3.3% com sales jump in August making Global figures respectable at 1.9% despite the stillwaters in USA sales Those waiting for a comment on the Jobs report, should note carefully that though the fall in Unemployment continued and mirrors the last post recession trend in the 80s and the 90s, most of it is because of long term unemployment increasing the number of disinterested non returning erstwhile members of the workforce as the articipation rate diped to another low on Friday to 63.2% excluding the children and those in prisons and hospitals ( overall 58.6% Emloyed of total population) Tokyo markets continue to celebrate Tokyo’s winning 2020 Olympics bid and China’s Exports jumped $190.6 Bln in August after a similar jump in US trade data reported last week. Japan GDP also grew close to 0.9% in Q2 higher than expected, meaning good news for US Exports to both Asian countries. That is equal to an almost 4% annual rate Again the Dollar correction globally has timed synchronously in the reducing interest in the Euro even as the currency pair USD-EUR continues to lead trade and derivatives volumes. The proposal for a competing association bank of the BRIC countries to end the IMF monopoly was also reached at this month’s BRIC summit and China has been progressively treating out cross Dollars with Local currency swaps inthe apreciating Yuan with its trading artneers and increasing volumes traded in the currency PPI price data, Import and Export based price inflaion data and more global inflation related statistics will report for around the world this week and next, and no other data s likely to come before Wednesday’s important announcements with retail chains and retail sales havign recovered in August. Neiman Marcus, the 63 store rich retailer, received a $6 Bln offer to start the week. Oil prices are in retreat even as political coalitions, seen to be stable n Europe cause a little rumble in national governments in the periphery

BofA is still xiting 21000 Jobs by October as refis reach a low from the intemperate jump in the interest rates since MAy 21 announcement

Wells Fargo, the top U.S. home lender, said yesterday that third-quarter originations may fall 29 percent to $80 billion. JPMorgan, ranked No. 2, said it expects to lose money on home lending in the second half as volumes drop as much 40 percent from the year’s first six months. (Bloomberg)

However one expects the mrtgage numbers for Q3 to continue the Year on Year jump as in Q1 and Q2 even as the share of refis reced and Fannie and Freddie debate being wound up post crisis with a 68% share of mortgage securities markets. Banks are increasingly keeping mortgages in house apart from the mandatory share of FHFA in securitisation

The Apple events that mattered-(iOS7)- Siri search extended to Twitter -> $500 to $506

The New iPhone in 5 colors:(no score on the stock live) – the iPhone 5c (stock tanking as more physical features are announced)

But Pricing is the killer, $99 for 16GB, $199 for 32 GB and thats withut mobile plans and not just for the Chinese

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