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Agenda for this Evening

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Agenda for this Evening

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  1. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.  Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

  2. Agenda for this Evening • Last week’s market action • Euro Debt Issues • Bernanke Defends QE2 • China’s Currency Issue • Market is at a crossroad: Where is it headed? • Economic Data/Holiday Spending • What’s the trade?

  3. Last week’s market action • Short week for the holidays • North Korea worried the markets • Market was concerned Euro debt issues in Ireland and Greece may spread to other countries • Fed minutes revealed officals were split on QE, but the benefits out-weighed the risks • Fed lowered its economic outlook on GDP and employment for 2011 • FBI raided hedge funds out east on insider trading

  4. Last Weeks Performance: S&P 500

  5. Airtime: Fri. Nov. 19 2010 5:00 am ET Bernanke Defends QE

  6. Video Summary • Bernanke defends Fed’s QE • Concerned about long-term high unemployment & deflation • Near term spending is needed to increase growth • Fed committed to price stability-has a 2% inflation target

  7. 6 month chart of S&P 500 Has the Fed and QE2 put a floor in the market?

  8. Bernanke in Germany (video) • http://www.euronews.net/2010/11/19/federal-reserve-chief-hits-out-at-china/

  9. Bernanke on currency/global imbalances Fed aware of dollar’s reserve status Criticized China over exchange rate intervention Global imbalances-2 speed recovery Warns currency intervention could slow global growth Say int’l exchange rate system flawed Fed will make sure it won’t have problems unwinding it’s QE

  10. Global Imbalances • There’s a 2-speed recovery going on • Emerging market economies are growing faster than developed nations • A lot of the global imbalance is due to currency manipulation, China is the biggest manipulator

  11. China’s currency issue • China is an export led economy • Relies on exports for growth, so it needs a weak currency • China has been pegging their currency to the U.S. to artificially make it lower • Solution: China needs to convert to a more consumption led economy like the U.S. and rely less on exports

  12. Airtime: Tues. Nov. 23 2010 | 4:37 PM ET Charting U.S. ISM

  13. U.S. ISM Orders v.s. China’s Economy • China’s growth is driving the world economy • Chinese growth is tied to U.S. new ISM orders • China is the factory of the world • China is concerned about U.S. recovery • Strong U.S. consumer is needed for a strong Chinese economy

  14. Airtime: Tues. Nov. 23 2010 6:25 pm Is the Selling Overdone? 4:20 min to 8:30min

  15. Video Summary • Euro debt/Korea issues overdone? • US economy grew faster than expected in Q3 • Corporate profits very strong rising 11.5 % • Strength of business recovery over shadowed too much by weak US consumer, housing market, and high unemployment • Housing market still a big problem, weak recovery till housing recovery picks up more • Fed will do everything it can to keep recovery from slowing down • Euro has farther to go/shorting dollar is a crowed trade

  16. Airtime: Wed. Nov. 24 2010 | 8:00 AM ET Big Drop in Jobless Claims

  17. Recent Economic Data • Initial Jobless Claims down to 407,000 from 441,000 the week before • Good weekly gage on the employment situation • Personal income & spending up • Durable goods orders down

  18. Datapalooza

  19. This Sunday’sPhrase of the week: “Buy the dips, sell the Rips” • Buy low, sell high • A winning strategy

  20. What’s the Trade? • Oil stocks have been strong • HAL, SLB, WFT, • RIG still cheap • Have banks bottomed? • BAC, AIB, C, FAS

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