Canadian Recession Coming Up: Yield Curve Inverts Following Unexpected Rate Cut; Loonie at Six-Year Low

globaleconomicanalysis.blogspot.com / Mike “Mish” Shedlock / January 21, 2015
Currency wars pick up steam today with still more unexpected central bank actions. Please consider Canadian Central Bank Unexpectedly Lowers Interest Rates.

Canada’s dollar sank the most in more than three years after the central bank unexpectedly cut interest rates, saying crude oil’s collapse will slow inflation and weigh on the economy.
The currency reached the weakest level in almost six years after the Bank of Canada reduced economic forecasts and lowered the benchmark rate target to 0.75 percent, from 1 percent, where it’s been since 2010. Government bonds climbed, pushing yields on two-, 10- and 30-year debt to record lows. Crude, Canada’s biggest export, has tumbled more than 50 percent since June amid a global glut.
“They are taking pre-emptive steps,” Thomas Costerg, an economist at Standard Chartered Bank, said in a phone interview from New York. “If oil prices remain under pressure, you could potentially see further cuts. This was not expected, and it’s going to put pressure on the loonie.”

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3 Great Stocks for a Volatile Market: Johnson & Johnson (NYSE: JNJ), Berkshire Hathaway (NYSE: BRK-A ), Phillip Morris International (NYSE: PM )

The stock market has not changed much in 2015, with the Dow Jones Industrial Average down 1.75% since the turn of this year. However, 100-plus point moves have been the rule rather than the exception. In just the past couple of weeks, the Dow has plunged 400 points, gained those points back, and then dropped and rallied again.

What are investors to do in the face of this kind of market volatility? We asked three of our analysts which stocks they prefer when the market becomes erratic, and here is what they had to say. (more)

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Davos Oil Barons Eye $150 Crude as Investment Slump Incubates Future Crunch

Roller coaster move in prices is destructive for the oil industry and is leading to investment cuts that may store up serious trouble for the future
by Ambrose Evans-Pritchard
Telegraph.co.uk
Rampant speculation by hedge funds and a rare confluence of short-term shocks have driven the price of oil far below its natural clearing level, coiling the springs for a fresh spike this year that may catch markets badly off-guard once again.
“The price will rebound and we will go back to normal very soon,” said Abdullah Al-Badri, Opec’s veteran secretary-general. “Yes, there is an over-supply, but fundamentals don’t justify this 50pc fall in price.”
Experts from across the world – from both the West and the petro-powers – said the slump in fresh investment in 2015 is setting the stage for a much tighter balance of supply and demand, and possibly a fresh oil crunch.
Continue Reading at Telegraph.co.uk…

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iRobot Corporation (NASDAQ: IRBT)

iRobot Corporation designs, develops, and markets robots for consumer, defense and security, telemedicine, and video collaboration markets worldwide. The company operates in two segments, Home Robots and Defense and Security Robots. It offers consumer products, including floor vacuuming and washing robots, floor sweeping robots, and pool and gutter cleaning robots. The company also provides defense and security products, such as ground robots comprising 510 PackBot line of small unmanned ground robots; the small unmanned ground vehicle multi-purpose ground robots; the 110 FirstLook small, light, and throwable robot; and the 710 Warrior multi-purpose robot for carrying heavy payloads. It markets its robots to consumers through chain stores and other national retailers, as well as through its on-line store; and to the U.S. military, and other government agencies.
Take a look at the 1-year chart of iRobot (Nasdaq: IRBT) with the added notations:

IRBT has been trending slightly lower over the last 12 months while repeatedly finding support at $30 (green) whenever that level has been approached. Now that the stock is almost there again, traders should be able to expect some sort of bounce. However, if the $30 support were to break, much lower prices should follow.

The Tale of the Tape: IRBT has a key level of support at $30. A trader could enter a long position at $30 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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Andrew Hoffman – Central Banks Cowardly Go Where None Have Gone Before

from Financial Survival Network
WTF Wendsays With Andrew Hoffman. Listen to Andy discuss:

• SNB announcement;
• ECB announcement (leaked an hour ago);
• BOJ announcement (this morning) – lack of credibility;
• BOCananda surprise rate cut this morning;
• FOMC meeting next week;
• gold exploding in all currencies – near record in Yen – others to come;
• plunging U.S./global interest rates – as ECB validates global QE to infinity;
• and of course, today’s comedic “Manipulation Wednesday” action.

Click Here to Listen to the Audio
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Martin Armstrong – Sovereign Debt Collapse Coming Later In 2015

from Financial Survival Network
We connected with Martin Armstrong today. The movie made about him, The Forecaster, is quickly becoming a European blockbuster. He’s hoping that it will become available in the States before too long. With the Swiss ending the Franc-Euro peg and the coming sovereign debt collapse, it’s all starting to move very quickly. The potential for the world to become a very unpleasant place is increasing by the day. The politicians seem to be more concerned about the next election than the long term well-being of the country. Start planning your defensive strategy now. Forget that pension you were promised, it’s probably not going to happen. There’s lots more in this timely interview.
Click Here to Listen to the Audio
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Babcock & Wilcox Co (NYSE: BWC)

The Babcock & Wilcox Company operates as a specialty constructor of nuclear components for customers in the power and other steam-using industries. The company’s Power Generation segment designs, engineers, manufactures, supplies, constructs, and services utility and industrial power generation systems, including boilers used to generate steam in electric power plants, pulp and paper making, chemical and process applications, and other industrial uses. Its Nuclear Operations segment manufactures naval nuclear reactors for the U.S. Department of Energy/National Nuclear Security Administration’s Naval Nuclear Propulsion Program, which in turn supplies them to the U.S. Navy for use in submarines and aircraft carriers. The company’s Technical Services segment provides services to the U.S. Government comprising uranium processing, environmental site restoration services, and management and operating services for various U.S. Government-owned facilities. Its Nuclear Energy segment fabricates pressure vessels, reactors, steam generators, heat exchangers, and other auxiliary equipment.
Take a look at the 1-year chart of Babcock (NYSE: BWC) with the added notations:

BWC has been trading mostly sideways since August of last year. In addition, the stock has found support at $27.50 (red) whenever that level has been approached. Now that the stock appears to be have broken that support, lower prices should follow.

The Tale of the Tape: BWC broke a key level of support at $27.50. A trader could enter a short position on any rallies up to or near $27.50 with a stop placed above the level. If the stock were to break back above the $27.50 level, a long position could be entered instead.
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