Time for market to start worrying about September?yikes! \

http://www.cnbc.com/id/100984921

Friday - S'pore's finance minister. Mr Tharman Shanmugaratnam  said. A wind down of the US Federal Reserve's stimulus programme will " not be a bad thing" for Asean,  that saw a huge sell-off in emerging markets.

He  said  - Fed must manage the move carefully, citing the week's volatility that has seen the Indian rupee plunge to record lows and other currencies also founder. " Tapering of (the Fed's bond-buying scheme) and tightening of US monetary policy, when it occurs, will not be a bad thing for the region's economies."

" It is not in anyone's interest, for very low global interest rates to continue indefinitely," including the emerging economies, " Low or -ve interest rates have inevitably led to a search for higher  yield and a build-up of financial imbalances in Asia."

QE unwinding would take place together with a recovery in the US economy " is not in itself a negative for ASEAN countries" . Said Shanmugaratnam, who's one of S'pore's two deputy prime ministers.

Fed is warned about tightening too soon as Jackson Hole conference opens

\The biggest risk facing the US economy is a premature policy tightening by the Federal Reserve, officials were warned on Friday in the opening paper at the prestigious Jackson Hole symposium.

The annual conference, hosted by the Kansas City Federal Reserve Bank in the mountains of Grand Teton National Park, gathers central bankers from around the world and provides an update on the latest thinking among top monetary economists.

Stanford University economist Robert Hall, in a paper titled " The Routes Into and Out of the Zero Lower Bound," concluded that US economic growth and hiring were slowly heading back to normal, but that the Fed must maintain an ultra-easy policy to keep the recovery on track.

" The central danger in the next two years is that the Fed will yield to intensifying pressure to raise interest rates and contract its portfolio well before the economy is back to normal," he wrote in the 31-page paper.

3 Things You Should Spot On STI Chart

Chart On Straits Times Index

1)      Lower High, Lower Low
A bull trend is usually identified by having a series of rallies where each rally exits at the highest point of the previous rally (higher high). The drop between the rallies ends above the lowest point of previous fall (higher low).  We have seen this on the Straits Times Index (STI) chart since beginning of 2012 where the STI consistently formed higher highs and higher lows. However, a bear trend started when the chart started to form lower high and lower low. We saw the STI formed a high and lower high between June and August, and yesterday we just saw STI broke below the previous low of 3,066.

2)      Death Cross
One of the most popular ways technical analysts use to determine market direction is to use the classic ?Death Cross?. A death cross forms when the 50-day moving average goes below the 200-day moving average. The terrifying drop for the past two weeks by the STI has led to the formation of the death cross seen on the STI chart. To many technical traders, this is a sign on an end of a long-term bull trend.

3)      Uptrend Channel Broken
Since October 2011, the STI started its rally from a low of 2,521 to a high of 3,464 and all this while, the STI was trending up in a big fat channel. Every time when there is a correction, we will see that the STI is supported by the long-term trend line. However, the fall of the STI in June 2013 hinted us on the bear trend, and now we probably need to be more cautious of the market as the ?uptrend? is now obviously broken.

  Posted by Andy Yew

US dealers expected US$15b reduction in QE3 in September: survey

Primary dealers surveyed before the Federal Reserve's July policy meeting said they expected the US central bank to trim its asset purchases by US$15 billion starting in September.

According to the survey conducted by the New York Fed, the median of responses showed that the dealers expected the US central bank to keep buying US$85 billion in bonds per month until a meeting scheduled for Sept. 17-18.

At that meeting, they expected policymakers to trim Treasury buys by US$10 billion and mortgage-bond buys by US$5 billion.

The dealers predicted that by December, the Fed would reduce its quantitative easing program, known as QE3, by an additional US$15 billion, bringing the total size of the program to US$55 billion per month.

Dow shakes off 6-day losing streak, climbs on positive data

18 minutes ago

Stocks rose strongly on Thursday, lifted by some encouraging manufacturing data out of the U.S., China and euro zone. But uncertainty persists as to when the Federal Reserve may begin to reduce its monthly bond purchases.


The Dow Jones Industrial Average posted a solid gain, its first in seven sessions, and was 66 points higher in early afternoon trading, led by Microsoft and Alcoa. Hewlett-Packard was a drag, down sharply after its earnings report on Wednesday. Despite today's fall, HPQ is still the best Dow stock this year, with a gain of 55 percent

The S& P 500 and the Nasdaq were surging after recent weakness. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 16.

Among S& P sectors, energy and financials were higher while telecoms weakened.

The latest jobless claims report showed a rise in initial claims to 336,000, a bit higher than the 330,000 economists were looking for. July leading indicators rose 0.6 percent, a bit better than the 0.5 percent increase expected.


Meanwhile, financial data firm Markit said its " flash" U.S. manufacturing purchasing managers index rose to 53.9, its best showing since March.

" I do think the economy is in better shape than most people think, and that's why i think this setback over the last few days is a buying opportunity," Jim McCaughan of Principal Global Investors said.

In global economic data, HSBC's preliminary reading of Chinese PMI for August crossed the key 50-level for the first time in four months thanks to a rebound in new orders. The data was the latest sign of stabilization in China, and boosted sentiment after July's reading of 47.1, which marked an eleven-month low.

" China's manufacturing growth has started to stabilize on the back of modest improvements in new business and output. This is mainly driven by the initial filtering through of recent fine-tuning measures and companies' restocking activities," said Qu Hongbin, the co-head of Asian economic research at HSBC.

European markets closed higher after Germany's PMI for August climbed to 53.4, up from 52.1 in July. Broader euro zone PMI data also beat expectations.

" They're certainly good numbers, and we've been seeing this for the last four or five months in Europe," Richard Jerram, chief economist at the Bank of Singapore, told CNBC. " It does seem that as the headwinds from fiscal tightening fade, then the economies are starting to lift."

(Read more: Euro zone flash PMI at highest level since June 2011)

There remains uncertainty as to when the Fed will start slowing its massive stimulus program, however. Minutes from the central bank's last policy meeting, released on Wednesday, showed the Fed is preparing to start tapering, but provided little indication as to when it might do so.

UBS economist Maury Harris told CNBC, " The Fed is just apparently unable to send any kind of consistent message about what they're up to." Harris expects tapering to start in the fourth quarter, but it could be a " tiny taper" and " hardly enough to make any kind of difference."

The annual Fed symposium was starting in Jackson Hole, Wyoming, on Thursday evening. Fed Chairman Ben Bernanke broke with tradition and will not attend this year,and there will be plenty of speculation at the meeting as to who will replace him in January.

Source: http://www.nbcnews.com/business/dow-shakes-6-day-losing-streak-climbs-positive-data-6C10975694