UK & Europe Archives - Page 46 of 88

January 17, 2013

Sterling breaks euro support

Pound Sterling broke support at €1.23 on the weekly chart against the euro. Decline of 63-day Twiggs Momentum below zero warns of a primary down-trend. Breach of the rising trendline strengthens the signal.

Pound Sterling

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

January 17, 2013

Stocks: The year ahead

A quick recap of the quarterly chart overview from December 2012:

The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum and a lackluster economy suggest that resistance is unlikely to be broken. Breach of the rising trendline would indicate a test of support at 1100.

S&P 500 Index

Canada’s TSX Composite Index is gaining momentum. Follow-through above 13000 would indicate another test of 15000.

Apple

Germany’s DAX threatens a breakout above 8000. Follow-through above 8200 would confirm a strong primary advance.

DAX Index

The FTSE 100 broke resistance at 6000, suggesting an advance to 7000.

FTSE 100 Index

India’s Sensex is testing resistance at 21000. Rising momentum indicates breakout is likely, heralding a fresh primary advance.

BSE Sensex Index

Singapore’s Straits Times Index lags behind, but breakout above 3300 is likely and would indicate an advance to 3900.

Apple

The Shanghai Composite is headed for a re-test of long-term support at 1800/1750. Rising momentum suggests that a bottom will form at this level. Recovery above 2500 and/or the declining trendline would strengthen the signal.

Shanghai Composite Index

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China or the US may delay this for some time.

ASX 200 Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

January 6, 2013

Why governments need asset bubbles | The Economist [video]

Zanny Minton-Beddoes, economics editor of The Economist, explains why governments need asset bubbles to mask growing inequality between rich and poor.

http://youtu.be/JkybYT_EYNc

Hat tip to Gregor Samsa

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

January 2, 2013

Rogoff: The Unstarvable Beast | Business Insider

Kenneth Rogoff, professor of economics at Harvard University, writes:

As US President in the 1980’s, the conservative icon Ronald Reagan described his approach to fiscal policy as “starve the beast”: cutting taxes will eventually force people to accept less government spending. In many ways, his approach was a great success. But government spending has continued to grow, because voters still want the services that government provides. Today, it is clear that reining in government also means finding ways to shape incentives so that innovation in government keeps pace with innovation in other service sectors….

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 24, 2012

Stocks: Outlook for 2013

Quarterly charts for the last two decades give a good idea of where stocks will be headed in 2013.

The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum indicates that resistance is unlikely to be broken. While this does not mean another fall to 750, it does suggest a strong correction.

S&P 500 Index

Apple Inc. [AAPL] is no longer leading the advance but testing primary support at 500. Failure of support would confirm the primary down-trend indicated by a 63-day Twiggs Momentum peak below zero.

Apple

Germany’s DAX is also headed for a test of its 2000/2007 high, at 8200, but rising momentum indicates that breakout above resistance is likely.

DAX Index

The FTSE 100 is also advancing but is some way off its earlier high of 7000 and breakout appears unlikely.

FTSE 100 Index

India’s Sensex is more bullish and likely to break resistance at 21000.

BSE Sensex Index

The Shanghai Composite is headed in the opposite direction and likely to re-test long-term support at 1800/1750. Rising 63-day Twiggs Momentum (below zero) suggests that a bottom will form at this level.

Shanghai Composite Index

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China and the US may delay this for some time.

ASX 200 Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 23, 2012

How the Welfare State Traps the Poor in Dependency, the British Version « International Liberty

Dan Mitchell describes how withdrawal of welfare benefits as your income rises can create a tax cliff that discourages the unemployed from seeking more work.

A graphic from British newspaper The Spectator gives this example:

John 21, works 25 hours per week at a gross wage of £5.70 per hour.
Of which 63p in tax/National Insurance and £4.18 in benefits (housing and council tax) is withdrawn.
Net income from work: 89p per hour.
84% of wage is lost in tax and benefit withdrawal!

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 19, 2012

Cutting taxes is a largely ineffective strategy for attracting foreign investment | EUROPP

Aidan Regan writes:

The Irish have the second best trade surplus in the eurozone, and productivity per worker is three times higher than Germany….. The truth of this fairy-tale is that US multinational corporations are engaged in transfer pricing. They locate profits in Ireland to take advantage of the low corporate tax regime.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 17, 2012

DAX breakout

DAX follow-through above 7600 would confirm its earlier (7500) breakout signal for a primary advance. One concern: 13-week Twiggs Money Flow is lagging. This may be due to resistance at the 2011 high, but a lower TMO peak would warn of a reversal.

DAX Index

* Target calculation: 7500 + ( 7500 – 7000 ) = 8000

The FTSE 100 is testing long-term resistance at 6000/6100 but 13-week Twiggs Money Flow, again lagging, warns of selling pressure. Respect of resistance would re-test support at 5600, while breakout would offer an initial target of 6400; long-term 6750*.

FTSE 100 Index

* Target calculation: 6000 + ( 6000 – 5250 ) = 6750

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 14, 2012March 22, 2021

Productivity: Ireland leads the way

Ireland now leads the United States in labor productivity as measured by GDP (converted to USD after adjusting for purchasing power parity) to hours worked by the workforce. Mark Cassidy writes on Ireland’s strong productivity growth during the 1990s:

Strong productivity growth during this period was largely driven by substantial foreign direct investment inflows from the United States and sectoral change in industry — i.e. a continuing shift of capital and labour from agriculture and relatively low productivity manufacturing towards high-technology sectors including chemicals and ICT sectors — and was facilitated by macro and micro-economic reforms implemented since the late 1980s, favourable exchange rate and international economic developments, increased European integration and the availability of a young, relatively well-educated workforce.

Two factors stand out:

Ireland joined the euro-zone on its official launch in January 1999;
The Irish government is committed to a 12.5% corporate tax regime, among the lowest in Europe.

Removal of trade barriers and favorable tax rates attracted large investment in high-tech manufacturing, primarily from the United States.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 14, 2012March 22, 2021

Belgium ranked as the 3rd most productive country in the world?

Belgium scores highly on international productivity rankings, which compare GDP (converted to USD after adjusting for purchasing power parity) to hours worked by the workforce. But results can be deceiving. Amcham Belgium writes:

Although Belgium has a high productivity score, it might not be all good news. Firstly, the results could be influenced by the fact that only 34.5% of its employable population aged 55 to 65 are actually working ……… Secondly, Belgian salaries are on average 11% higher than those of neighboring countries (the Netherlands, Germany and France)…..

Belgium may rank high on GDP per hour worked but slips down the rankings when measured on GDP per capita because of its low labor participation rate which imposes a high social cost on the country. That is why it is important not to use just one measure when assessing productivity.
Read more at Belgium ranked as the 3rd most productive country in the world.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.