Thousands of protesters against the government of President Rousseff march en route to the National Congress in Brasilia 2016.
The week began with global equities and markets mostly up, helped by some good corporate earnings, a surge in oil prices and news that Japan was willing to devalue the yen. As the week progressed the markets would then reverse as investors assess various economic indicators.
The American New York Stock Exchange will decline for the third consecutive week.
The big business news was the surge in oil prices that was caused by a huge wildfire in Alberta Canada. The blaze would remove over 1 million barrels from Canadian production on a daily basis. This equates to more than one third of the country’s output.
Satellite imagery of the burn scar left by the Alberta Canada wildfire on May 4, 2016
Also related to oil, Saudi Arabia replaces its long serving oil minister that had been in office since 1995. The country will however, maintain the present policy in place since 2014. This is to keep market share by higher levels of output even as this brings about a downward pressure in the price structure.
In the United States, the markets were in positive territory at the beginning of the week. This was the result of a weaker than expected jobs report. Although 202,000 had been expected, only 160,000 were actually created. Investors calculated that in a weakening jobs market, the United States Federal Reserve (Fed) is less likely to raise interest rates.
In Asia, Japan committed itself to stabilize the valuation of the yen which has appreciated by 12% against the United States Dollar (USD) in 2016 already. The Japanese market is moving up as a result. Investors in Japan have determined that more stimulus is likely on the way.
Graph comparing the 2014 nominal GDPs of major economies
in US$ billions, according to IMF data
In China it was reported that trade statistics showed further shrinkage, despite ongoing stimulus efforts. Exports fell 1.8% from a year ago and imports dropped 10.9%. This does leave a trade surplus of $45.6 billion USD.
Lower domestic and global demand is frustrating Chinese government efforts, to reverse an economic slowdown. Growth is now at a 7 year low of 6.7% in the first quarter of 2016.
Inflation in China at the consumer level is still low despite a jump in food prices. Meanwhile, wholesale prices decline again in April down to -3.4%, it is the 50th consecutive month of a decrease.
Chinese foreign exchange reserves continue to swell. Already the world’s largest, the amount of foreign currency grew an additional $7.09 billion to $3.22 trillion USD. This is a reversal from last year when the central bank was using reserves to defend the valuation of the Chinese yuan, amidst a declining currency and economy.
Rodrigo Duterte
In the Philippines unorthodox candidate Rodrigo Duterte wins the presidential election, following the withdrawal of all his opponents and a record voter turnout at more than 81%.
In Europe, the Greek Parliament approves a bill to reform the tax system and heavily debt laden pension system. The emphasis will be on raising new revenues, ahead of an emergency meeting between financial officials between the European Union and the International Monetary Fund (IMF).
As a result of these actions and the promise of additional debt relief,10 year Greek bond yields fell below 8% for the first time in 6 months.
The IMF warns of negative effects on the domestic economy, if the United Kingdom votes to leave the European Union.
European car sales rose 9% in April at 1.3 million vehicles. This is the highest level since before the financial crisis. Even the troubled German automaker Volkswagen returned to profitability.
In Germany manufacturing orders rebounded in March, helped by surging demand outside the Euro-zone. However, German industrial production declined more than expected the same month by 1.3%. It is the second consecutive drop which could mean the largest economy in Europe is slowing down.
The domestic economy has become more dependent on internal demand as global growth continues to slacken. Yet, German unemployment remains at a record low.
Germany has more than doubled growth, in the first quarter of 2016 at 0.7%. In the fourth quarter of 2015, the economy increased by just 0.3%. Higher consumer and state spending, has given Germany the fastest growing economy in the seven leading industrialized nations.
Rousseff parades in the presidential Rolls Royce beside her daughter Paula during her second term inauguration, January 01,2015.
In Brazil, the Senate votes 55 to 22 to suspend President Dilma Rousseff from office and proceed with an impeachment trial, which could last for up to six months. During the interim, the more conservative Vice President will assume office.
Despite her insistence that a coup has taken place, it is unlikely that Ms. Rousseff will survive impeachment to finish out her term as president of Brazil.
In business news it has been reported unlike 2015 which set an new record for corporate mergers at $4.7 trillion USD, so far this year nearly $400 billion USD of possible deals have failed due to unstable markets and increased regulation.
Crude oil hit a 2016 high this week, even as rising production in the Middle East surpassed cuts in output in the United States. Total output from OPEC (Organization of the Petroleum Exporting Countries) has now risen to 32.64 million barrels a day near a record amount.
Another driver of the price surge is the temporary interruption of Canadian production as aforementioned.
The IEA (International Energy Agency) predicts global oil stocks will fall by 200,000 barrels in the second half of 2016. This will be the result of stronger global demand and lower output from non-OPEC countries.
On Friday morning, American West Texas Intermediate (WTI) oil decreased -1.33% to $46.08 USD, $2.00 above where prices stood last week. International priced Brent is also down by -0.94% at $47.63 USD. This is nearly a $3.00 increase in valuation.
The Investment Newsletter had 6 target fills to report this week, and 1 stock target called early.
Eleven Biotherapeutics (EBIO) was recommended short on 05/09/16 for $0.94, with a buy fill on 05/10/16.There was a Short Term Target Fill at $0.85 on 05/10/16. The $0.09 decline in the share price, provides a 10.59% return for investors.
Medtronic (MED) was recommended long on 12/10/14 for $74.72. There was a Short Term Target Fill at $81.26 on 05/11/16. The $6.54 increase in the price of the stock provides a 8.75% return for investors.
Valeant Pharmaceuticals (VRX) was recommended short on 04/06/16 for $28.99. There was a Short Term Target Fill at $26.35 on 05/12/16. The $2.64 decline in the share price, providing a 10.02% return for investors.
Hellenic Telecom Organization (HLTOY) was recommended long on 06/24/15 for $4.60. There was a Short Term Target Fill at $5.06 on 05/12/16. The $0.46 increase in the share price, providing a 10.00% return for investors.
Valeant Pharmaceuticals (VRX) was recommended short on 04/06/16 for $28.99. There was a Medium Term Target Fill at $25.20 on 05/12/16. The $3.79 decline in the share price, providing a 15.04% return for investors.
Valeant Pharmaceuticals (VRX) was recommended short on 04/06/16 for $28.99. There was a Long Term Target Fill at $24.15 on 05/12/16. The $4.84 decline in the share price, providing a 20.04% return for investors.
Medtronic (MDT) was recommended long on 12/10/14 for $74.72 USD. It is now suggested that investors sell this stock before reaching the Medium/Long Term Target. At $81.26 USD, the increase of $6.54 will provide investors a return of 8.75%.
It is recognized that the sale price upon reading the post for early stock calls, may be somewhat different from when the recommendation to sell was actually made. It is up to the investor to determine the ideal time, to close the position.
Stock Fills For The Previous Weeks
May 06, 2016———-5 Target Fills
April 29, 2016 ——–5 Target Fills
April 22, 2016 ——–5 Target Fills
April 15, 2016 ——–0 Target Fills & 3 Early Stock Calls
April 08, 2016 ——- 5 Target Fills
April 01, 2016 ——- 0 Target Fills
Mar 25, 2016 ——– 2 Target Fills
Mar 18, 2016 ———0 Target Fills & 2 Early Stock Calls
Mar 11, 2016 ——– 2 Target Fills & 3 Early Stock Calls
Mar 04, 2016 ———1 Target Fill & 2 Early Stock Calls
Feb 26, 2016———- 2 Target Fills
Feb 19, 2016———- 0 Target Fills & 2 Early Stock Calls
Feb 12, 2016 ———05 Target Fills
Feb 05, 2016 ———05 Target Fills & 4 Early Stock Calls
Jan 29, 2016 ———01 Target Fills & 2 Early Stock Calls
Jan 22, 2016——— 08 Target Fills
Jan 15, 2016 ———09 Target Fills
Jan 07, 2016 ——– 10 Target Fills
Dec 31, 2015 ——–1 Target Fill
Dec 24, 2015 ——–0 Target Fills
Dec 18, 2015 ——–4 Target Fills
Dec 11, 2015 ——–2 Target Fills
Dec 04, 2015 ——–4 Target Fills
Nov 27, 2015 ——- 1 Target Fill
Nov 20, 2015 ——- 6 Target Fills
Nov 13, 2015 ——–6 Target Fills
Nov 06, 2015———5 Target Fills
Oct 30, 2015——— 2 Target Fills
Oct 23, 2015 ——– 2 Target Fills
Oct 16, 2015 ——– 2 Target Fills
Oct 09, 2015 ——- 1 Target Fill
Oct 02, 2015 ——–5 Target Fills
Sept 25, 2015 ——-1 Target Fill
Sept 18, 2015 —— 2 Target Fills
Sept 11, 2015 —— 1 Target Fill
Sept 04, 2015—— 2 Target Fills
August 28, 2015 6 Target Fills
August 21, 2015 – 2 Target Fills
August 14, 2015 –-1 Target Fill
August 07,2015 —2 Target Fills
July 31, 2015 ——1 Target Fill
July 24, 2015 ——1 Target Fill
July 17, 2015——-3 Target Fills
July 10, 2015—— 1 Target Fill
July 03, 2015—— 0 Target Fills
June 26, 2015—– 3 Target Fills
June 19, 2015 —- 2 Target Fills
June 12, 2015—–2 Target Fills
June 05, 2015—–4 Target Fills
May 29, 2015 —- 5 Target Fills
May 22, 2015—– 2 Target Fills
May 15, 2015 —–2 Target Fills
May 08, 2015 —–1 Target Fill
May 01, 2015 —- 3 Target Fills
April 24, 2015—- 2 Target Fills
April 17, 2015 —-5 Target Fills
April 10, 2015 —-3 Target Fills
@ 2014 The Day Trading Academy. All rights reserved. This work is based on SEC filings, interviews, corporate press releases, and extensive research done across investment articles, current events, and investment expertise. It may contain errors, and you shouldn’t make any financial decision based solely on what you read here. It’s your money and your responsibility. As with any investment, there is no guarantee against potential loss. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. This publication’s sole intended purpose is to provide investment-related information as well as education and opinions to subscribers and the recommendations and analysis presented to members is for the exclusive use of members.