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Sunday, 7 August 2011

Outlook for this week

After US debt rating was downgraded after market closed last Friday (Saturday in Asia) by S&P to AA+ from AAA, we still can't see the market reaction toward this downgrade, but we can see that Tel Aviv Stock Exchange has plunged >6%.

In my opinion this can't reflect our market for the upcoming week, but this can be a warning for us by now. From the global sentiment, the news are almost all bearish, but the data came out on Friday was bull data. We're digesting what will it be.

Let's see the Dow 1st. In the chart of Dow, we can see that August is a bad month that can be said as one of the worst month. We can see that in the Seasonality Index averagely in 40 years, Dow has August as it's bottom, so if August is dropping should be a fair thing. Overall Dow doesn't seem good in the current state. As we can see that the MACD weighted has just dead crossed and also the Stochastic has moved downward broken the 80 level. Yet the candle is showing no bull power at all as there are 4 blacks. Based on the Seasonality Index chart we can see that there's still a chance of plunging as the bottom might not achieved yet. The index has broken the uptrend line, which is not good for the medium term. See the chart.

That's Dow, back to Indonesia, which has a better future outlook and the higher possibility of gaining investment grade by the rating agencies, with a better economic, cultural outlook, and also higher yield of investment, Indonesia will be a better investment target.

Technically, we can see that our index is still performing better and can be said best among all indices in the world as we are still scoring positive year-to-date. Our chart is still showing positive movement of our index, well, this is undeniable that our index is still in bull mode but flattened by the bad global issues. Well, stochastic is still above 80 line which shows the strength of JKSE, Yet seasonality index of JKSE shows that JKSE has its bottom at July and September not August, and the good news is, we are still on track of the bull.

What I can suggest is trade wise not wasting any penny of yours...

Happy weekend...

Happy Investing^^

Disclaimer ON!!!

Saturday, 6 August 2011

(BN) U.S. Loses AAA Credit Rating as S&P Slams Debt levels, Political Process

Bloomberg News, sent from my iPad.

U.S. Loses AAA Rating at S&P on Concern Spending Cuts Deficient

Aug. 6 (Bloomberg) -- Standard & Poor's downgraded the U.S.'s AAA credit rating for the first time, slamming the nation's political process and criticizing lawmakers for failing to cut spending enough to reduce record budget deficits.

S&P lowered the U.S. one level to AA+ while keeping the outlook at "negative" as it becomes less confident Congress will end Bush-era tax cuts or tackle entitlements. The rating may be cut to AA within two years if spending reductions are lower than agreed to, interest rates rise or "new fiscal pressures" result in higher general government debt, the New York-based firm said yesterday.

Lawmakers agreed on Aug. 2 to raise the nation's $14.3 trillion debt ceiling and put in place a plan to enforce $2.4 trillion in spending reductions over the next 10 years, less than the $4 trillion S&P had said it preferred. Even with the specter of a downgrade, demand for Treasuries surged as investors saw few alternatives amid concern global growth is slowing and Europe's sovereign debt crisis is spreading.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement late yesterday after markets closed.

U.S. Response

The U.S. immediately lashed out at S&P, with a Treasury Department spokesman saying the firm's analysis contains a $2 trillion error. The spokesman, who asked not to be identified by name, didn't elaborate, saying the mistake speaks for itself.

Moody's Investors Service and Fitch Ratings affirmed their AAA credit ratings on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse that pushed the Treasury to the edge of default. Moody's and Fitch also said that downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.

"This move should not be much of a surprise to markets, though the timing is at a point where market sentiment is fragile after the drop in stocks this week," said Ajay Rajadhyaksha, a managing director at Barclays Capital in New York. "What really matters is whether the markets are willing to 'downgrade' the U.S. bond market. As this week's move showed, U.S. Treasuries remain the flight-to-quality asset of choice."

S&P's action may hurt the U.S. economy over time by increasing the cost of mortgages, auto loans and other types of lending tied to the interest rates paid on Treasuries. JPMorgan Chase & Co. estimated that a downgrade would raise the nation's borrowing costs by $100 billion a year. The U.S. spent $414 billion on interest expense in fiscal 2010, or 2.7 percent of gross domestic product, according to Treasury Department data.

'Fiscal House'

"It's a reflection of the fact that we haven't done enough to get our fiscal house in the order," Anthony Valeri, market strategist in San Diego at LPL Financial, which oversees $340 billion, said in an interview before the cut. "Sovereign credit quality is going to remain under pressure for years to come."

The agreement between Republicans and Democrats raised the nation's debt ceiling until 2013 and threatens automatic spending cuts to enforce the $2.4 trillion in spending reductions over the next 10 years.

Even with the accord, S&P said the U.S.'s debt may rise to 74 percent of gross domestic product by year-end, to 79 percent in 2015 and 85 percent by 2021.

S&P also changed its assumption that the 2001 and 2003 tax cuts enacted under President George W. Bush would expire by the end of 2012 "because the majority of Republicans in Congress continue to resist any measure that would raise revenues."

American Policymaking

"More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating," S&P said.

S&P put the U.S. government on notice on April 18 that it risks losing the AAA rating it has had since 1941 unless lawmakers agreed on a plan by 2013 to reduce budget deficits and the national debt. It indicated last month that anything less than $4 trillion in cuts would jeopardize the rating.

"There was still a very narrow cross section of common ground between the parties and we don't think that this agreement really changes that equation," David Beers, a managing director of sovereign credit ratings at S&P said in a Bloomberg Television interview.

Capital Weightings

The treatment of Treasuries and other securities backed by the U.S. in terms of risk-based capital weightings for banks, savings associations, credit unions and bank and savings and loan companies won't change, the Federal Reserve and bank regulators said in a statement following the downgrade.

Obama has said a rating cut may hurt the broader economy by increasing consumer borrowing costs tied to Treasury rates. An increase in Treasury yields of 50 basis points would reduce U.S. economic growth by about 0.4 percentage points, JPMorgan said in a report, citing Fed research and data.

"The minute you start downgrading away from AAA, you take small steps toward credit risk and that is something any country would like to avoid," Mohamed El-Erian, chief executive and co- chief investment officer at Pacific Investment Management Co., said in a Bloomberg Television interview before the announcement.

Ten-year Treasury yields fell to as low as 2.33 percent in New York yesterday, the least since October. Yields for the nine sovereign borrowers that have lost their AAA ratings since 1998 rose an average of two basis points in the following week, according to JPMorgan.

Treasury Yields

Treasury yields average about 0.70 percentage point less than the rest of the world's sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January.

Investors from China to the U.K. are lending money to the U.S. government for a decade at the lowest rates of the year. For many of them, there are few alternatives outside the U.S., no matter what its credit rating.

"Yields are low in the face of a downgrade because there is nowhere else for people to go if they don't buy Treasuries because they want to be in safe dollar assets," Carl Lantz, head of interest-rate strategy at Credit Suisse Group AG, one of 20 primary dealers that trade directly with the Fed, said before the announcement.

Bond Dealers

The committee of bond dealers and investors that advises the U.S. Treasury said the dollar's status as the world's reserve currency "appears to be slipping" in quarterly feedback presented to the government on Aug. 3.

The U.S. currency's portion of global currency reserves dropped to 60.7 percent in the period ended March 31, from a peak of 72.7 percent in 2001, data from the International Monetary Fund in Washington show.

"The idea of a reserve currency is that it is built on strength, not typically that it is 'best among poor choices'," page 35 of the presentation made by one member of the Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pimco. "The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate."

Members of the TBAC, as the committee is known, which met Aug. 2 in Washington, also discussed the implications of a downgrade of the U.S. sovereign credit rating. "None of the members thought that a downgrade was imminent," according to minutes of the meeting released by the Treasury.

Remaining AAAs

S&P gives 18 sovereign entities its top ranking, including Australia, Hong Kong and the Isle of Man, according to a July report. The U.K. which is estimated to have debt to GDP this year of 80 percent, 6 percentage points higher than the U.S., also has the top credit grade. In contrast with the U.S., its net public debt is forecast to decline either before or by 2015, S&P in the statement yesterday.

A U.S. credit-rating cut would likely raise the nation's borrowing costs by increasing Treasury yields by 60 basis points to 70 basis points over the "medium term," JPMorgan's Terry Belton said on a July 26 conference call hosted by the Securities Industry and Financial Markets Association.

"That impact on Treasury rates is significant," Belton, global head of fixed-income strategy at JPMorgan, said during the call. "That $100 billion a year is money being used for higher interest rates and that's money being taken away from other goods and services."

To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/

Best Regards,

Christopher Tahir

Sent from my iPad

PS. Please forgive me for any mis-typing in the e-mail...:)

Thursday, 4 August 2011

(BN) Stocks in U.S. Rise Amid Bets on More Fed Stimulus; Treasuries Pare Gains

Bloomberg News, sent from my iPad.

U.S. Stocks Rise on Bets of More Stimulus; Treasuries Pare Gains

Aug. 3 (Bloomberg) -- U.S. stocks rose, reversing earlier losses and preventing the longest Dow Jones Industrial Average slump since 1978, as investors speculated the Federal Reserve will start another stimulus program. Treasuries 10-year notes erased gains, and the dollar slid.

The Dow halted an eight-day drop, gaining 29.82 points to 11,896.44 at 4 p.m. in New York. The S&P 500 rose 0.5 percent, rebounding after yesterday's plunge drove it to the cheapest price-earnings ratio in more than a year. Ten-year Treasury yields rose one basis point to 2.62 percent. Oil slid to a five- week low following government data showing an increase in stockpiles. The franc fell from a record versus the euro and dollar after Switzerland reduced interest rates.

Speculation the Fed will embark on a third round of asset purchases to stem off a recession grew after the Wall Street Journal said three former central bank officials support the approach. More than $2.3 trillion had been erased from the value of global equities since July 22, and Treasury yields set 2011 lows, amid concern the economic recovery is faltering. Service industries grew in July at the slowest pace since February 2010, the Institute for Supply Management said today.

"Every time we see economic weakness, there will be discussion about more economic stimulus," Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in telephone interview. "That could be the case given the fairly weak economic figures we've had. In addition, the market has given back a lot recently and people started to look at some bargains."

Dow Movers

Coca-Cola Co., General Electric Co. and Walt Disney Co. rose more than 1.2 percent to help lead gains in the Dow, which reversed a loss of as much as 166 points. MasterCard Inc., the second-biggest payments network, advanced 13 percent for the biggest gain in the S&P 500 after profit rose 33 percent as customers' spending increased.

Concern about weakening economic data has overshadowed an earnings season that has seen per-share profits grow 17 percent and sales increase 13 percent at companies in the S&P 500 that reported second-quarter results since July 11. Earnings per share have topped analysts estimates at about three-quarters of the 363 companies that have reported, Bloomberg data shows.

The 8 percent slide in the S&P 500 from a three-year high in April through yesterday brought the index's price- to- earnings ratio to 13.8, the cheapest since July 2010 and near the lowest valuation since the bull market began in 2009.

The retreat is no reason to sell stocks, investors including Laszlo Birinyi and Barton Biggs said. Data from Birinyi's firm, Birinyi Associates Inc., shows the current bull market in stocks may last until 2013 based on the length of past advances.

'Strong Rally'

"We are going to have a strong rally out of this position," Biggs, who helps manage $1.4 billion in assets as managing partner and co-founder of Traxis Partners LP, said in a Bloomberg Television interview before markets opened today. He added that politicians had handled the debt-ceiling debate "poorly" and as a result dollar-denominated assets are "tremendously cheap."

Stocks recovered after the Wall Street Journal reported that former Fed officials Donald Kohn, Vincent Reinhart and Brian Madigan said the central bank should consider a third round of bond purchases to help the economy.

Pacific Investment Management Co. and BlackRock Inc., which together oversee almost $5 trillion, say the U.S. economy is stalling. Bill Gross, who runs the world's biggest bond fund at Pimco, and Peter Fisher, head of fixed income at BlackRock, say the Fed is preparing measures to counter the slowdown.

Quantitative Easing

The Fed may arrange a third round of quantitative easing, known as QE3, Gross said. The central bank purchased bonds to cap borrowing costs in the first two easing efforts. The Fed has also promised to keep the target for overnight bank lending low for an "extended period." The Fed may need to consider signaling an even longer commitment to low interest rates, according to BlackRock's Fisher, who is based in New York.

"I believe the Fed is dusting off contingency plans if the economy does not improve," he said in a report that BlackRock distributed by e-mail today. Fisher worked for 15 years at the Fed Bank of New York, according to BlackRock, which has $3.66 trillion in assets.

The S&P 500 sank 3.9 percent last week, its worst drop in a year, after government data showed U.S. gross domestic product expanded at a 1.3 percent annual rate in the second quarter and a 0.4 percent pace in the prior period, the worst six months since the recovery began in June 2009.

Five Straight Declines

Thirty-year Treasury bond yields decreased for a fifth straight day, losing one basis points to 3.90 percent, the lowest end-of-day level since October. The yield, which sank to as little as 3.79 percent today, reached a record low 2.5 percent on Dec. 18, 2008, amid the worst economy since World War II, credit-market losses exceeding $1 trillion and the biggest drop in the S&P 500 since 1931.

Investors are also awaiting a government employment report in two days, which economists forecast will show the U.S. added a net 85,000 jobs last month including a 115,000 boost to private-sector employment. A private payroll survey by ADP Employer Services today showed U.S. companies added 114,000 workers in July, topping the median forecast of economists surveyed by Bloomberg News for an increase of 100,000.

Almost eight stocks fell for every one that gained in the Stoxx Europe 600 Index. Societe Generale SA slid 9 percent as France's second-largest bank said it may miss its 2012 earnings target after second-quarter profit fell.

Franc Declines

The franc depreciated 1.7 percent to 90.80 euro cents after strengthening to a record yesterday as investors pursued assets considered to be the safest. The franc weakened 0.9 percent from an all-time high versus the dollar.

The Swiss National Bank lowered its target for the three- month Libor to "as close to zero as possible" from 0.25 percent. The Zurich-based central bank said it will also expand banks' sight deposits, or cash which can be withdrawn on demand, to 80 billion Swiss francs ($103 billion) from 30 billion francs and repurchase outstanding SNB Bills, according to a statement today.

Oil fell 2 percent to $91.93 a barrel on the New York Mercantile Exchange. The S&P GSCI index of 24 commodities dropped 1.8 percent, the sixth straight decline and the longest losing streak since May 2010. Gold futures rose 1.3 percent to a record $1,675.90 an ounce.

The MSCI Emerging Markets Index of stocks sank 2.2 percent, set for the lowest close in more than a month. South Korea's Kospi Index slumped 2.6 percent, completing its largest two-day plunge since November 2009

To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/

Best Regards,

Christopher Tahir

Sent from my iPad

PS. Please forgive me for any mis-typing in the e-mail...:)

(BN) RIM Overhauls BlackBerry Devices in Bid to Regain Ground on Apple’s IPhone

Bloomberg News, sent from my iPad.

RIM Overhauls BlackBerry in Bid to Regain Ground on IPhone

Aug. 3 (Bloomberg) -- Research In Motion Ltd. is releasing three new versions of its BlackBerry smartphone simultaneously in the first overhaul of the handsets in a year as the company tries to regain ground against Apple Inc.

RIM is introducing the first touch-screen version of its Bold model, plus an updated Torch slider phone and a new touch- screen-only BlackBerry, all based on RIM's new BlackBerry 7.0 platform, said Patrick Spence, managing director for global sales and regional marketing. The three devices will be available from 225 carriers, with some operators starting next week, in the "biggest launch in the history of BlackBerry," he said in a telephone interview yesterday.

RIM is counting on the phones, the first new models since August 2010, to reverse a revenue slowdown that led to RIM's prediction in June that sales this quarter may drop for the first time in nine years. All the models include pinch-and-zoom browsing and Web-page loading speeds that are 40 percent faster than the old Torch, Spence said.

"We're taking it a step further by enhancing the browsing experience, which is something we know we had to work on," he said. With the addition of what RIM calls liquid graphics that render images faster and make zooming smoother, "it's an industry-leading experience," he said.

RIM rose 13 cents to $24.28 at 10:28 a.m. New York time in Nasdaq Stock Market trading. Before today, the stock had lost 58 percent this year.

New IPhone

While the Waterloo, Ontario-based company continues to gain market share in regions like Africa and the Middle East at the expense of Nokia Oyj, RIM is losing customers in the U.S. to Apple's iPhone and handsets running Google Inc.'s Android software. Those devices appeal to consumers with their Web browsing features and a wider selection of applications.

RIM's share of U.S. smartphone subscribers dropped 4.2 percentage points to 24.7 percent for the three months through May, according to ComScore Inc.

AT&T Inc., the biggest U.S. phone company, said today it will start selling the new Torch slider in August, without being more specific. The new Bold and touch-screen-only Torch will be available this year, the Dallas-based carrier said.

Competing against the new BlackBerrys will be a slew of new rival models. Apple plans to introduce an iPhone version in September that boasts a more powerful chip for processing data and a more advanced camera, two people familiar with the plan said in June. Motorola Mobility Holdings Inc. will release the Droid Bionic, its latest Android phone, the same month.

Narrowing the Gap

That means that RIM has to have an early and successful debut ahead of its rivals in the U.S., which accounted for about 40 percent of RIM revenue last year, said Will Stofega, a technology analyst at Framingham, Massachusetts-based IDC.

"It's critical that they get a jump start now," he said. "They've definitely narrowed the gap with the competition. Display is definitely crisper and had to be, given what we've seen in terms of its competitors."

The new Bold 9900, first shown at RIM's BlackBerry World trade show in May, features a larger keyboard and thinner case. The Torch 9810 with slide-out keyboard looks similar to the first edition of the device. The last of the three new phones, the Torch 9850, is RIM's first touch-screen-only phone since the BlackBerry Storm, which was criticized for software glitches.

Spence declined to say whether that older model was being discontinued, saying only that "we're trying to keep it as clear as possible with a Torch, Bold and Curve family when you look at the BlackBerry portfolio."

Quelling Concerns

The BlackBerry Curve, one of RIM's most popular models in emerging markets, may soon be available with a touch screen, he said.

"We'll be back shortly to talk to you about the Curve," Spence said, declining to say more.

The introduction of the new phones comes at a critical time for RIM. Last week, the company said it will cut 2,000 jobs to rein in costs, leaving it with about 17,000 employees. These phones are set to be the last models that use the BlackBerry operating system as the company shifts to a platform called QNX that run RIM's BlackBerry PlayBook tablet.

With the new BlackBerry 7 phones debuting now, "they've quelled a lot of concerns," said IDC's Stofega. "The sooner they get to QNX devices, the better."

Instant Messaging

In the same week as the job cuts, RIM introduced a new version of its popular BlackBerry Messenger instant-messaging platform that will let consumers use their own applications with BBM, as it's known. BlackBerry 7 is designed to capitalize on the BBM software and offer voice-activated search, Andrew Bocking, vice-president of BlackBerry software, said in the joint interview with Spence.

The Torch slider has a 3.2-inch display, the Torch 9850's screen measures 3.7 inches, and the Bold 9900 has a 2.8-inch display.

The new phones also feature near-field communications, or NFC, capability that is gradually being adopted as a means of scanning information or making payments by tapping your device against a reader.

Individual carriers will make their own announcements about details on pricing and availability, Bocking said.

While new BlackBerrys have typically gone on sale first in the U.S., neither Spence nor Bocking would say which markets will debut the new phones first.

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/

Best Regards,

Christopher Tahir