Ten-month average has come to 77.75 this month, and will be around 78.1 next month. Since USD index hit 81.78 in January, it has experienced a four-month retreat.
As OT2 come to an end, Fed has not decided whether to execute QE3. The 10-year inflation expectation is now over 2.2%, more than the threshold of 2%. Crude oil is also around $120. I think USD Index will go up next month, to about 82, and 85 at the end of August. In that situation, Fed may come to the conclusion of QE3.
Two home building companies. After the 2008 financial crisis, it has been four years for real estate to go down. The average home price has decreased over 30% since then. I believe the decrease will end soon. KB home and MDC are two home building companies, and will benefit from the real estate recovery.
Dow industrial index meet strong resistance above 13000, and US economic data tend to slow down in the recent months. I guess Dow industrial index might decrease to 11500 in months, and at the same time the European debt crisis will burn around the world.
But do not worry if things go like this. Fed will put out QE3 then, which will make US economy go steady. If you still have cash then, I think 11500 is a good point to buy US stocks. I can image US economy will have a big process in the next a few years.
USD index trend: bull trend
short term support: 78.50
short term resistance: 81
Yelp close at 24.58 last Friday, over 60% increase compared with IPO price. I had planned to buy yelp at some price a little more than $15, but the market did not give me the chance. The result is that I only had to buy the stock at a price much higher than I planned.
The reason why I want to buy yelp is as follows: Yelp now has achieved annual revenue of 0.1 billion, while the cost is 17 million more. I guess the total annual revenue might increase to 1 billion, in three to five years, since customers will be more and more used to this kind of credit searching APP. At the same time sellers will be more and more used to publishing Ads on such web. At present the total market value of Yelp is about 1.6 billion, and I think this will be a 10 billion or even more business.
Admittedly, yelp is confronting many problems. It has not achieved profits yet, and the loss seems to be increasing. If the loss is for its future good, I would be supporting the company strategy.
TOTAL SA (NYSE:TOT), a France-based integrated international oil and gas company, about 6% annual dividend
France Telecom (NYSE: FTE), about 10% annual dividend
National Grid plc (NYSE: NGG), about 6% annual dividend
Cellcom Israel (NYSE:CEL), about 15% annual dividend
Euro has decreased from 1.41 to 1.27 in the past two months. This year Fed has two more members who may vote for more easing. This is a big problem for people who are shorting Euro. I still think Euro may go to 1 dollar in the next 3-5 years, but not so fast. I think euro may bound to 1.32 or so, or even 1.35 if QE3 is coming.
I think there are four reasons: (1) China had a much better December PMI than expected (2) Fed may increase easing procedure this month (3) China may decrease reserve rate before Chinese New Year (4) U.S. economy is recovering gradually.
But I think it is only a rebound.
Happy Christmas everyone. How is your investment this year? Dow industrial is among the best performed stock markets this year, and USD has been increasing recently. I think they will continue this trend in the next 5 years. Good luck.
