Stocks Edge Higher in Early Trade; Energy Sector Recovers
U.S. stocks are edging higher in early trading following a three-day losing streak. Energy companies were among the early winners Thursday after being beaten down over the past several days. Consol Energy gained 3 percent. The Dow Jones industrial average … Continue reading at abcnews.go.com
These are the best and worst housing markets since the 2012 bottom
Since housing prices bottomed nationally the start of 2012, the fortunes of homeowners and renters have varied widely based on where they live. For many U.S. housing markets it's been a tale of two recoveries. Nearly four years after housing prices hit … Continue reading at businessinsider.com
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How Goldman made 65% on Chipotle
Chipotle shares have been decimated by the company’s problems with E. coli and norovirus. But the bad news for lovers of burrito bowls and hot stocks has been good news for those who followed an options strategy suggested by Goldman Sachs. In a Dec. 2 note … Continue reading at cnbc.com
Futures are higher and crude oil is sliding
Stock futures are slightly higher ahead of the open on Thursday, following closes in the red all week. Near 8:36 a.m. ET, Dow futures were up 24 points, S&P 500 futures were up 5 points, and Nasdaq futures were up 10 points. This was right after Labor … Continue reading at businessinsider.com
Amazon Brings the Hooch, in 60 Minutes, to Manhattan
Amazon.com is getting into the holiday spirit, adding booze to its one-hour delivery service in Manhattan. Until now it was only Seattle, the company’s hometown, which could imbibe within 60 minutes via Amazon. The company would not say Thursday if it was … Continue reading at abcnews.go.com
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Energy MLPs: Now there’s only pain for investors
When Kinder Morgan made the decision to cut its dividend by 75 percent this week, it represented more than just a pain for investors in the pipeline company, and more than just another sign that the oil collapse continues to cause more casualties. Continue reading at cnbc.com
KFC, Pizza Hut, Taco Bell owner: China sales will improve
Customers exit a KFC fast-food branch in Beijing on July 23, 2014. (Photo: Rolex Dela Pena, European Pressphoto Agency) The food giant that owns the Pizza Hut, KFC and Taco Bell brands said Thursday it can deliver strong profits to shareholders after it … Continue reading at usatoday.com
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Your ComEd bill is going down about a buck a month
The Illinois Commerce Commission has approved a nearly $ 67 million rate decrease for ComEd next year, the first such reduction in three years. The lowered delivery rate announced Wednesday reflects efficiencies generated from the ongoing rollout of ComEd’s … Continue reading at chicagotribune.com
Bank of America Stress-Test Resubmission Gets Clearance From Fed
Bank of America Corp. passed the Federal Reserve's annual stress test after resubmitting its capital plan and persuading regulators it improved internal controls and loss and revenue models. "Bank of America has made progress in remediating the … Continue reading at bloomberg.com
Oil Hits Fresh Seven-Year Low as Global Gut Persists
U.S. crude fell to a near seven-year low on Thursday, as oversupply concerns persisted, and prices were seen as vulnerable to further weakness in the run up to year-end. Brent futures are down more than 11 percent this month and, having dipped below $ 40 … Continue reading at foxbusiness.com
Trading an Accelerating American Industrial Sector
American industry has been on the upswing pretty much since the low point of the recession. Our interest is in trading an accelerating American industrial sector. Trading Alpha noted the surge in U.S. Industrial Production recently.
Industrial output increased sharply in November vs. the previous month, rising at a rate that beat expectations by a wide margin (+1.3% vs. Econoday.com's consensus forecast of +0.7%). This morning's monthly release strengthens the case for expecting that the Federal Reserve will begin raising interest rates next year, perhaps sooner than the mid-2015 forecast that's been widely cited in recent weeks. Meantime, today's numbers clearly show that the US economy so far appears to be immune to the economic slowdown that's weighing on China and the stagnation that continues to afflict the Eurozone. Today's bullish report on industrial activity follows surprisingly strong November numbers on retail sales and payrolls for the US.
With economies in Europe, Asia and many developing nations in the doldrums the US is the sole bright spot these days for growth and investment. Where is the best place to put your money and when is the best time for trading an accelerating American industrial sector?
Oil Prices, Interest Rates and the Value of the US Dollar
The US oil fracking boom plus continued high production by OPEC has driven oil down to unforeseen lows. To the extent that this continues it is time to buy in trading an accelerating American industrial sector. If the US Federal Reserve comes to believe that the US economic recovery is sufficiently far along they will likely raise interest rates which makes doing business more expensive. Depending on how soon and how far they raise rates it may be time to put things on hold in trading an accelerating American industrial sector. And, when the Fed raises rates the value of the US dollar will go up versus other currencies. This will have two consequences. Investment capital will flow more readily into the USA and the price of US exports will rise. The eventual result of this would be a deceleration of US industrial growth and a reason to sell in trading an accelerating American industrial sector.
The consensus seems to be that rates are going up. An article in the Dallas Morning News comments of the effects if interest rates are heading higher.
With the economy gaining momentum, economists generally expect the Federal Reserve to start raising interest rates next year. Although a major boost seems unlikely, any upturn will increase borrowing costs for consumers.
Those increases would most directly affect rates charged on variable-rate credit cards – almost all credit cards these days have variable, not fixed, rates – home equity loans, adjustable-rate mortgages, and student and auto loans.
Fixed-rate mortgages – which were averaging 3.93 percent on a 30-year loan last week, according to Freddie Mac's nationwide survey – should head higher even earlier, McBride said. "You'll likely see them begin to move up as the timetable for Fed action comes into focus," he said.
The effects of an interest rate hike make everyone's life more expensive directly adding to costs of doing business and reducing demand from consumers dealing with higher interest rates. If the Fed raises rates too far and too fast will certainly be time to put any purchase orders on hold in trading an accelerating American industrial sector.
What to Trade
An all-around good way to trade the American industrial sector is the S&P 500 Industrial Sector Index. An ETF such as SP500-20 or SP500-20TR are good choices for tracking this sector. In the last two years or so the INDEXSP:SP500-20 risen from just over 00 a share to 0 a share as seen on Google Finance.
How long with this growth last and when is the time to bail out when trading an accelerating American industrial sector? You will need to track the basics and market sentiment as this story unfolds.