The Dow Jones Industrial Average (DJIA) is one of the popular futures trading vehicles and overall bell weather for the US economy. A change in structure takes effect Sept. 24: we have one in and one out.
I’d like to say out with the old, in with the new but there is a joke hidden here regarding the restructuring.
Leaving the DJIA is Kraft Foods Inc. and as its replacement we have UnitedHealth Group Inc.
Kraft have an average volume of 13,085,419 and a market capitalization of $70.92 B in comparison to UnitedHealth with 4,990,008 and $55.83 B respectively.
What’s interesting is what this may indicate about the areas considered most important to the US economy.
Kraft are a food company predominantly known for packaged foods.
UnitedHealth are a health and well-being company (one key component of the company being UnitedHealthcare Medicare & Retirement).
Now the joke at the beginning is that it may be out with the old and in with the new but UnitedHealth are banking on the old. So it is more a case of getting in with the old and the numerous ways a company like UnitedHealth can profit off the back of the unwell (dare I risk saying as a result of over-consumption of the exciting companies products) and the ever aging US population.
Out with the food and in with the old.Continue Reading...
A look at Sugar No 11 (above) shows a downtrend on the daily chart. Sugar recently took out the June lows and has been clearly selling off.
Considering the weekly chart (below) we can see that sugar is currently at levels not seen since January 2011. A further significant breakdown could lead one to eye up prices in the region of 15 to 16 cents a pound last seen in 2010.
The fundamentals behind this price action are an oversupply of sugar with particular focus at the moment on a pick up in cane production forecasts for Brazil, the worlds largest sugar producing country.
Sugar output in India is forecast to be lower than expected as a result of a poor monsoon, however, the market has shouldered this off as a result of the better than expected Brazil forecast hence we don’t see much support for prices will be kept up.
Some analysts suggest reasons for the price to stop its bleeding that revolve around a possible increase in demand from our good friends China who are trying to fiddle a domestic drop in prices through a stockpiling plan.
As well as India’s shoddy harvest the world’s second biggest sugar exporter Thailand could see poor cane production as a result of unusually dry weather.
Another suggestion by Ms Haque from Macquarie is that as a result of the high price of corn the ‘pop1’ producing drink companies in Europe, Asia, the Middle East might make the switch from high fructose corn syrup back to good old fashioned sugar.
Ms Haque thinks that we could see consolidation at the 19 – 21 cents a pound level and even perhaps a reversal at this point.
So traders, will the market price heed these fundamental factors or is it ‘bombs away’ bears still in play?Continue Reading...
With the SP500 at new highs, the answer to the question “Is the market really going up?” is somewhat obvious, but is it really?
Could it be that the market is not going up, but simply repricing itself for devalued currency? (Thanks Ben!)
What if we price the SP500 in gold terms, would the market still show strength then? The answer is in the chart above, representing long SP500 position against gold, NOT USD.
Obviously this chart is NOT at new highs, nor does it show major upward momentum.
Now does that mean that the market will not go higher ? No, not by a long shot, but it does mean that if you have no edge picking those equities that can really outperform the market, in general, you might be better off riding the Gold / Silver commodity train, opposed to the equity train.Continue Reading...
Reading is good for your brain.
Michael is a self-confessed book worm, Victor Sperandeo is known for a voracious reading habit and I try to imitate these two in the reading stakes.
I love reading. I immerse myself in words for both career advancement and also pure unadulterated pleasure.
So it’s no real surprise that science has discovered that reading is good for you.
A bit of a no-brainer really. I hear you saying: “Duh, I knew that”.
What I hope may interest you a little more is what exactly a recent study revealed. The study conducted with supervision by cognition and neurobiology experts at Stanford, is the brainchild of a literary English scholar Natalie Phillips. Natalie was interested in figuring out exactly what the value of studying literature was.
In short, they got people inside an fMRI machine and had them read Jane Austen’s Mansfield Park. Significantly they got the subjects to read it in two different styles. One was to read as if they were reading for pure relaxation or pleasure and the other for critical analysis as if studying to pass an exam.
The researchers found from the fMRI scans that when we read blood flows to regions beyond those used simply for executive functions. It flows to areas associated with close concentration. It should be noted this was in both relaxed reading and critical reading. Although they found that critical reading employs a specific type of complex cognitive function that we don’t usually employ.
“Both styles of reading, the researchers say, initiate kinds of cognitive function that go beyond simple “work” and “play” “.
As we discover more and more about how little we really know about the fascinating brain, I find it rather enticing to read that simply by asking the subjects to change the way they read elicited drastically different neural activity and blood flow in the brain.
So now when you are reading your favourite author you can be sure that you’re genuinely giving your brain a work out. Keep reading.Continue Reading...