Summary: Daniel Kertcher, Australia’s Top Share Trading Expert, gives us a comprehensive market update for the month of February 2013. He explains some leading market indicators of the US economy and how they’re likely to affect the Australian economy. Hi, my name is Daniel Kertcher, CEO and Founder of Trading Pursuits. Welcome to the monthly market update for February 2013. Now, before we get started, there’s just a couple of key things I need to share with you. Number one, what we explain today is what we call General Advice. It’s not individual, specific advice. Furthermore, we haven’t taken into consideration your personal financial objectives. Number two ,trading involves risk. Should you choose to trade, you must understand your risks and know how to manage your trades. And finally, our company, Trading Pursuits, we hold an Australian financial services license. Okay, now there’s been quite a few things to talk about over the past month or so. One of the big things to notice is that the US New Homes starts has been surging quite rapidly. In fact, this is a very important point because in order for unemployment to improve in America, and therefore for the global economy to surge, as the United States economy starts to surge;- we need to see new home starts being built. That is, in order to provide employment, people have to have some place to work. If new homes are being built, and we’re also seeing new shops, new schools, new offices, etc. and this provides opportunities and areas for people to work. So one of the key factors for unemployment to fall is new home starts. Now, we’ve been watching this for many many years now. And what we can see is specifically in the last six to twelve months new homes starts have surged now to a point where they are back at the all-time lows from the past forty-fifty years. Now, after the 2008 global financial crisis, new homes start to fall, an all-time low in America. And it’s literally taken five years for them just to recover to the lows of all the previous recessions. And that might not sound so exciting but considering the super low that it came off; from 2008, this is a very very bullish sign. We can also see this in US initial jobless claims. This is new claims for people seeking unemployment benefits. And they have fallen to a five-year low as well. Now, we can also identify this in the earnings announcements. Just recently, the top S&P 500 companies in America have made their earnings announcements. In fact, about 400 of the top 500 companies now made those announcements. What we can see here is that companies earnings (that is) their profits are coming in higher than expected. We also see however, that sales are higher than expected. It’s one thing to have more profit, but it’s an important thing to have greater number of sales. Because companiescanincrease their profits without increasing their sales, sure, they can cut costs, but they can only cut back to the bone. In order to see real growth in the market, we need to see or get sales growth as well as profit growth. And that’s certainly what we’ve had in the past three months. In fact, this one has been one of the best earning seasons we’ve seen in the past three years. Certainly showing us a lot of strengths still coming out of the US top 500 companies. In fact, if we look at the chart of the S&P 500, we can see now that the value of S&P 500 has surged all the way back up now to 1,525 points. That’s only 25 points away from the all-time high of around 1,550 points, hit back in 2007. So, it’s quite feasible that within the next few weeks or even a couple of months, we’re going to recover back to the all-time high of the S&P 500. Now once that occurs, I suspect that the media will start to change its tone from being very negative and bearish to saying: “Hey, look! The entire GFC has now been recovered and the S&P 500 a[...]
