GBP/USD Holds Positive Ground Above 1.2550 On Weaker US Retail Sales Data

Economic

Forex

Summary:

GBP/USD posts modest gains around 1.2585 in Monday’s early Asian session. The US Retail Sales dropped 0.9% in January, weaker than expected. Investors brace for the UK labor market data and CPI inflation data, which are due later this week.

The GBP/USD pair trades with mild gains near 1.2585 during the early Asian session on Monday. The major pair edges higher amid the upbeat UK Gross Domestic Product (GDP) report and weaker US Retail Sales data. The US market will be closed on Monday in observance of President's Day.

US Retail Sales posted the biggest drop in nearly two years, dragging the Greenback lower. Retail Sales dropped 0.9% in January after an upwardly revised 0.7% increase in December, the Commerce Department's Census Bureau reported Friday. This figure came in weaker than the estimation of a 0.1% decline. On a yearly basis, Retail Sales increased 4.2% during the same reported period.

The better-than-expected UK GDP provides some support to the Pound Sterling (GBP). The UK economy grew by 0.1% QoQ in the fourth quarter (Q4) of 2024, beating expectations, according to a preliminary estimate from the UK Office for National Statistics (ONS) on Thursday.

Traders will keep an eye on the UK labor market data and Consumer Price Index (CPI) inflation data, which will be published on Tuesday and Wednesday, respectively. These reports could offer some hints as to whether the Bank of England (BoE) will cut its interest rates again in the March meeting.

Source: FXSTREET

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Glendon

Economic

The stock market can seem like a maze to both novice and experienced investors. With the constant fluctuations in stock prices, the biggest question on every investor's mind is: When is the right time to buy or sell? Timing the market is not just about following trends or responding to news headlines. It requires careful analysis, patience, and a solid understanding of both market movements and your own financial goals. In this guide, we’ll explore how to approach stock market timing, common strategies, and tips for making informed decisions without succumbing to fear or greed.

The Myth of Perfect Timing

One of the first things to note is that perfect timing is often a myth. No one can predict the market with absolute certainty. Even professional traders, with all their advanced tools and experience, rarely get it exactly right every time. The key to successful market timing is not to aim for perfection, but to make informed decisions based on evidence and strategy. While trying to time the market might sound appealing, it’s also important to realize the risks of attempting to buy and sell at the perfect moments.

Why Timing Matters

Good market timing can drastically improve your investment returns. A well-timed buy can result in significant gains when a stock’s price rises, while an effective sell can help you lock in profits or avoid losses during a downturn. However, the challenge lies in figuring out when exactly to enter or exit a market that is constantly changing.

Key Strategies for Timing the Market

Technical Analysis

Technical analysis is the study of past market data, primarily price and volume, to forecast future price movements. Traders often use charts, patterns, and indicators to identify buy or sell signals. While technical analysis doesn’t guarantee success, it helps to pinpoint entry and exit points based on historical trends.

Common technical indicators include:

Moving Averages (SMA, EMA): Smooth out price action and help identify trends.

RSI (Relative Strength Index): Indicates whether a stock is overbought or oversold.

MACD (Moving Average Convergence Divergence): A momentum indicator used to spot trend reversals.

Fundamental Analysis

Unlike technical analysis, which focuses on stock price patterns, fundamental analysis involves evaluating a company's financial health and long-term prospects. Investors using fundamental analysis look at metrics such as earnings reports, debt-to-equity ratio, and the company’s competitive position within its industry.

If a company’s fundamentals remain strong but its stock is undervalued, it may be a good opportunity to buy. Similarly, if fundamentals are weakening, it might be time to sell before the stock price drops.

Market Sentiment and News

Market sentiment—how investors feel about the market—can significantly influence stock prices. News events, geopolitical issues, and even social media trends can cause rapid price swings. Investors should keep an eye on global and national events that may affect market psychology and individual stocks.

However, it’s important to be cautious of emotional investing. Fear-driven sell-offs or greed-fueled buying sprees often lead to poor decisions. It’s essential to separate emotions from your strategy and focus on long-term goals.

Dollar-Cost Averaging (DCA)

For those who don’t want to risk trying to time the market perfectly, dollar-cost averaging (DCA) can be a great strategy. DCA involves investing a fixed amount of money at regular intervals, regardless of the stock’s price. This reduces the impact of volatility and ensures that you’re not making decisions based on short-term market movements.

Tips for Successful Market Timing

Avoid Chasing the Market: When a stock is rising rapidly, it can be tempting to jump in. But this could be a sign of overvaluation. Be wary of buying stocks when they’ve already had a significant price increase without fundamental backing.

Stay Disciplined: Stick to your strategy and resist the temptation to react to every market move. Developing a solid investment plan and following it through can help avoid the emotional rollercoaster that often leads to buying high and selling low.

Diversify Your Portfolio: Proper diversification can minimize the risk of poor timing. By holding a mix of asset types—stocks, bonds, real estate—you can weather downturns and ride out volatility.

Use Stop-Loss Orders: These orders automatically sell a stock when it drops to a certain price, preventing larger losses if a stock declines sharply. Stop-loss orders are an essential tool for managing risk in volatile markets.

Stay Informed: Read financial news, follow market analysts, and consider using a combination of fundamental and technical indicators to help you make informed decisions.

When to Sell

Knowing when to sell is just as important as knowing when to buy. While many investors focus on the excitement of buying low and selling high, they often overlook the challenge of exiting a position profitably. Here are a few reasons to consider selling:

Reaching Your Financial Goal: If your stock has increased in value and you’ve hit your target, it might be time to lock in profits.

Deteriorating Fundamentals: If the company’s outlook weakens, or if it no longer aligns with your investment goals, selling might be a wise choice.

Rebalancing Your Portfolio: Over time, some stocks might grow disproportionately in your portfolio. Regularly reassessing and adjusting your holdings helps ensure that you’re not overexposed to any one stock.

Conclusion: Patience is Key

Mastering stock market timing is more about consistency and making informed decisions than about chasing every price fluctuation. Successful investors understand that while market timing can yield higher returns, it’s often a game of patience and discipline. Use the strategies above, trust your analysis, and don’t let short-term market movements dictate your long-term strategy.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Cohen

Stocks

Shares of nuclear energy-related companies such as BHEL, L&T, Kirloskar Brothers, KSB, Walchandnagar Industries, and Power Mech Projects fell by up to 6 percent on February 14 after Prime Minister Narendra Modi and US President Donald Trump announced plans to move forward with building American-designed nuclear reactors in India. This development has sparked concerns about the role of Indian companies in the nuclear energy value chain.

The civil nuclear deal, originally signed over 16 years ago, is now being revived with an emphasis on large-scale localisation and potential technology transfer.

However, while the agreement theoretically grants India access to advanced US nuclear technology and materials, enhancing the country’s energy security, the details raise concerns, according to Shlok Srivastav, Co-founder & COO of Appreciate, a SEBI and IFSCA-registered firm.

Catch all the market action on our LIVE blog

Srivastav highlighted that the deal’s focus on US-designed nuclear reactors implies a leading role for American companies. Despite promises of localisation, core technology and design leadership may remain in US hands.

"The key issue is whether core technology and design expertise will genuinely be transferred to Indian companies," he noted.

The renewed talks between Prime Minister Modi and President Trump echo the initial civil nuclear cooperation discussions from July 2005, which stalled due to various reasons, including India’s strict liability laws. At the time, US nuclear reactor manufacturers such as General Electric and Westinghouse had expressed strong interest in establishing nuclear reactors in India.

In addition to concerns over the limited role of Indian companies in the nuclear sector, the sharp decline in stock prices also reflects stretched valuations, according to Deven Choksey, Managing Director of DRChoksey Finserv.

Currently, shares of Power Mech are trading at a 3.2x price-to-book (PB) ratio, higher than its five-year average of 2.6x. BHEL is trading at 2.7x PB, significantly above its five-year average of 1.5x, while L&T is at 5.1x PB, exceeding its five-year average of 3.7x.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Source:Moneycontrot

Risk Warnings and Disclaimers

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Glendon

Economic

When you think about investing, you’ve probably heard terms like “stock market” and “equity market” thrown around interchangeably. However, despite their similarities, these two terms refer to different aspects of the financial world. Understanding the distinctions between the equity market and the stock market is essential for investors who want to navigate the complexities of global finance effectively. In this article, we’ll break down the differences, explain what each market represents, and explore why it’s important to understand these distinctions when making investment decisions.

What is the Stock Market?

The stock market refers to the collection of exchanges and markets where buying and selling of publicly traded company stocks occur. These stocks represent ownership shares of a company. When a company goes public through an initial public offering (IPO), it issues shares that can be bought and sold by investors. The stock market is primarily focused on the trading of these equity shares.

The stock market can be broken down into various exchanges such as:

The New York Stock Exchange (NYSE)

NASDAQ

London Stock Exchange (LSE)

These exchanges facilitate the buying and selling of shares and provide a platform for price discovery, where buyers and sellers agree on a stock's market value based on demand and supply.

While stocks are a major focus of the stock market, it’s important to note that the market also encompasses other types of assets, such as exchange-traded funds (ETFs), options, and bonds. However, the term “stock market” is commonly associated with the buying and selling of equity stocks—ownership shares in companies.

What is the Equity Market?

The equity market, on the other hand, is a broader term that refers to the market where equity securities (such as stocks) are bought and sold. It represents a category of financial markets in which companies raise capital by issuing shares to the public. In other words, the equity market is part of the stock market, but it extends beyond just the buying and selling of shares.

The equity market also includes the primary market, where companies issue new shares to raise capital (usually via IPOs), and the secondary market, where previously issued shares are traded among investors. The term “equity market” can include all transactions involving equity securities, not just those involving publicly listed companies but also private equity, venture capital, and other forms of equity financing.

In summary, while the stock market is a specific part of the equity market that focuses on publicly traded stocks, the equity market encompasses a broader spectrum of equity-related transactions, including both public and private shares.

Key Differences Between the Equity Market and the Stock Market

Scope of Market

Stock Market: Refers mainly to the buying and selling of stocks of publicly traded companies on stock exchanges such as the NYSE and NASDAQ. It is a subset of the broader financial markets.

Equity Market: A broader term that encompasses the buying and selling of all types of equity securities, including public stocks, private equity, and venture capital.

Public vs. Private

Stock Market: Primarily focuses on publicly traded companies that are listed on exchanges. Stocks can be bought and sold by individual investors, institutional investors, or hedge funds.

Equity Market: Includes both publicly traded stocks (in the secondary market) and private equity transactions. The equity market covers a wider spectrum, including private companies raising capital through equity financing.

Market Participants

Stock Market: Includes retail investors, institutional investors, mutual funds, and traders who are focused on buying and selling shares of publicly listed companies.

Equity Market: Involves a wider range of participants, such as companies raising capital through new stock issuance, private equity firms, venture capitalists, and accredited investors.

Capital Raising vs. Trading

Stock Market: Primarily a trading platform where investors buy and sell shares. It helps in the price discovery of stocks through the secondary market but doesn’t directly facilitate the initial capital raising process for companies.

Equity Market: Facilitates both the

capital raising process

(through IPOs, private equity funding, etc.) and the trading of existing equity securities. It’s involved in the creation and distribution of new shares to investors and also allows for the buying and selling of these shares.

Types of Securities Traded

Stock Market: The focus is almost entirely on the trading of shares (stocks) of companies.

Equity Market: In addition to stocks, the equity market may include other equity-related securities like convertible bonds, preferred shares, or equity warrants.

Market Structure

Stock Market: Structured around exchanges and organized markets where buyers and sellers transact publicly, and stock prices are determined by demand and supply dynamics.

Equity Market: Includes both the formal stock market and private equity deals, venture capital transactions, and other informal transactions that may not be traded on a public exchange.

Why Understanding the Difference Matters

Knowing the distinction between the equity market and the stock market is crucial for several reasons:

Investor Strategy: Understanding the difference helps investors choose where they want to focus their efforts. If you're interested in publicly traded companies, the stock market is your playground. If you're looking into private equity, you may need to venture into the equity market.

Market Conditions: Market conditions in the equity market can affect the stock market and vice versa. For example, when private companies raise capital or experience growth, their IPOs might affect the stock market when they list publicly.

Investment Opportunities: Different markets may offer different types of investment opportunities. For example, the equity market may involve higher-risk opportunities like private equity or venture capital, while the stock market may provide more liquidity and lower barriers to entry for retail investors.

Conclusion

While the stock market and the equity market are related, they are not the same thing. The stock market is a subset of the equity market, primarily focused on publicly traded stocks, while the equity market encompasses all forms of equity securities, both public and private. Understanding these differences is essential for any investor looking to make informed decisions about where to put their money.

By gaining a clear grasp of the roles these markets play, you can better navigate investment choices, whether you’re buying stocks on the open market or exploring opportunities in private equity or venture capital.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Glendon

Economic

Gold has long been revered as a symbol of wealth and a safe haven during times of economic uncertainty. However, its price is far from stable. Understanding why gold prices crash and knowing when to act can help investors make informed decisions and protect their portfolios. This article delves into the factors driving gold price declines, historical examples, and actionable strategies for navigating these turbulent moments.

Why Do Gold Prices Crash?

Stronger U.S. Dollar

Gold is priced in U.S. dollars, making it sensitive to the dollar's strength. When the dollar rises, gold becomes more expensive for foreign investors, reducing demand and causing prices to drop. For instance, during periods of Federal Reserve rate hikes, the dollar often strengthens, leading to downward pressure on gold prices.

Rising Interest Rates

Gold does not yield interest, making it less attractive when interest rates rise. Higher rates increase the opportunity cost of holding gold, prompting investors to shift to yield-bearing assets like bonds. The 2013–2015 gold price collapse, for example, was partly driven by expectations of Fed rate normalization.

Economic Stability and Growth

When economies are strong, investors favor riskier assets like stocks over safe havens like gold. A robust stock market or signs of economic recovery can lead to reduced demand for gold, causing prices to fall. This was evident during the late 1990s tech boom, when gold prices stagnated.

Decreased Inflation or Deflation Fears

Gold is often seen as a hedge against inflation. When inflation fears subside, demand for gold diminishes. For example, the lack of high inflation in the U.S. post-2008 financial crisis contributed to gold's decline from its 2011 peak.

Geopolitical Stability

Gold thrives in times of geopolitical uncertainty. When tensions ease, investors may sell gold, leading to price drops. The post-U.S. election gold price decline in 2024, for instance, was attributed to reduced political uncertainty.

Market Liquidation

During financial crises, investors may sell gold to cover losses in other asset classes, increasing supply and driving prices down. This was observed during the 2008 financial crisis when gold initially fell before rebounding.

Historical Examples of Gold Price Crashes

1980–2002: The Great Gold Collapse

Gold prices fell from 850 per ounce in1980 to 250 by 2002, driven by high real interest rates, economic growth, and reduced inflation fears. The collapse was exacerbated by the success of Reaganomics and the IT boom of the 1990s.

2011–2015: The Post-Financial Crisis Decline

After reaching a peak of 1,920 perouncein 2011,gold prices plummeted to1,050 by 2015. Factors included Fed rate hike expectations, a strong dollar, and the absence of runaway inflation 10.

2024 Post-Election Dip

Following the U.S. presidential election in 2024, gold prices dropped by 8%, reflecting reduced political uncertainty and potential Fed policy shifts under the new administration 46.

When to Act: Strategies for Investors

Buy the Dip

Gold price crashes can present buying opportunities. For long-term investors, purchasing gold during downturns can yield significant returns when prices rebound. For example, gold's recovery after the 2015 low led to new highs in 2020 16.

Diversify Your Portfolio

Gold should be part of a diversified portfolio to mitigate risks. Allocating 5%–10% to gold can provide stability during market volatility 69.

Monitor Economic Indicators

Keep an eye on inflation rates, interest rate trends, and geopolitical developments. These factors can signal potential gold price movements and help you time your investments 811.

Consider Alternative Gold Investments

Beyond physical gold, explore gold ETFs, mining stocks, or futures contracts. These options offer flexibility and liquidity, allowing you to capitalize on price movements without holding physical metal 69.

Stay Informed and Adapt

The gold market is influenced by a complex interplay of factors. Staying informed about global economic trends and central bank policies is crucial for making timely decisions 11.

Conclusion

Gold price crashes are driven by a combination of economic, geopolitical, and market factors. While these declines can be unsettling, they also present opportunities for savvy investors. By understanding the reasons behind gold price drops and adopting a strategic approach, you can navigate market volatility and protect your wealth. Whether you choose to buy the dip, diversify your portfolio, or explore alternative investments, staying informed and adaptable is key to success in the gold market.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Cohen

Economic

New bank loans in China surged more than expected to an all-time high in January as the central bank moved to shore up a patchy economic recovery, reinforcing expectations for more stimulus in the coming months.

Chinese banks extended 5.13 trillion yuan (US$706.40 billion or RM3.1 trillion) in new yuan loans in January, more than quadrupling the December figure, data from the People's Bank of China showed on Friday, beating analysts' forecasts

Analysts polled by Reuters had predicted new yuan loans would rise to 4.5 trillion yuan last month, up sharply from 990 billion yuan in December and compared with 4.92 trillion yuan a year earlier — the previous record.

Chinese banks usually rush to lend at the beginning of the year as they compete for higher-quality customers and win market share, but lingering economic uncertainty continues to weigh on credit demand.

New bank lending totalled 18.09 trillion yuan last year, down from a record 22.75 trillion yuan in 2023 and hitting the lowest level since 2019, as businesses and consumers remained cautious about taking on more debt amid an uncertain economic outlook.

The economy grew 5%in 2024, meeting the government's official target, but the post-pandemic recovery has been patchy, with exports and manufacturing making up for weak domestic consumption.

Beijing is expected to maintain a growth target of around 5% this year, but analysts are uncertain over how quickly policymakers can revive sluggish domestic demand, even as US President Donald Trump's aggressive trade measures pile more uncertainty on Chinese exporters.

To sustain growth and counter rising external pressures, Beijing has pledged higher fiscal spending, increased debt issuance and further monetary easing.

The central bank said on Thursday it would adjust its monetary policy at the appropriate time and use policy tools such as interest rates and bank reserve requirement ratio to support the economy, amid rising external headwinds.

China is now facing a renewed trade war with the United States after President Donald Trump slapped sweeping 10% tariffs on all Chinese imports.

In response, Beijing announced tariffs up to 15% on some US imports starting February 10.

Still, the measures were more modest than markets had feared, raising hopes there was room for negotiating.

Since September, Beijing has stepped up efforts to get the economy back on track, including interest rate cuts, a 10 trillion yuan debt relief package for local government, and tax incentives to spur demand in the crisis-hit property market.

Broad M2 money supply grew 7.0% from a year earlier, the central bank data showed, below analysts' 7.2% forecast in a Reuters poll. In December, M2 expanded 7.3%.

Outstanding yuan loans rose 7.5% in January from a year earlier, down from the 7.6% pace in December. Analysts had expected 7.3% growth.

Source: Theedgemarkets

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Owen Li

Economic

Responding to US President Donald Trump’s reciprocal tariffs plan on Friday, the European Commission noted that “Trump's reciprocal tariffs are a step in the wrong direction.”

Additional takeaways

The European Union (EU) remains committed to an open and predictable global trading system that benefits everyone.

EU will react firmly and immediately against unjustified barriers to free and fair trade.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

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GBP/USD Holds Positive Ground Above 1.2550 On Weaker US Retail Sales Data

Source: FXSTREET

Buy or Sell? Mastering Stock Market Timing

The Myth of Perfect Timing

Why Timing Matters

Key Strategies for Timing the Market

Technical Analysis

Fundamental Analysis

Market Sentiment and News

Dollar-Cost Averaging (DCA)

Tips for Successful Market Timing

When to Sell

Conclusion: Patience is Key

Nuclear Energy stocks slide up to 6% on US-India deal

Source:Moneycontrot

Equity Market vs. Stock Market: Key Differences

What is the Stock Market?

What is the Equity Market?

Key Differences Between the Equity Market and the Stock Market

Scope of Market

Public vs. Private

Market Participants

Capital Raising vs. Trading

capital raising process

Types of Securities Traded

Market Structure

Why Understanding the Difference Matters

Conclusion

Why Gold Prices Crash and When to Act

Why Do Gold Prices Crash?

Stronger U.S. Dollar

Rising Interest Rates

Economic Stability and Growth

Decreased Inflation or Deflation Fears

Geopolitical Stability

Market Liquidation

Historical Examples of Gold Price Crashes

1980–2002: The Great Gold Collapse

2011–2015: The Post-Financial Crisis Decline

2024 Post-Election Dip

When to Act: Strategies for Investors

Buy the Dip

Diversify Your Portfolio

Monitor Economic Indicators

Consider Alternative Gold Investments

Stay Informed and Adapt

Conclusion

China January Bank Lending Hits Record High On Policy Stimulus

Source: Theedgemarkets

US President Trump’s Reciprocal Tariffs are a Step in the Wrong Direction

Source: FXSTREET

Risk Disclosure