The Smart Trader

by
Joe Expert

The US Federal Reserve’s first meeting under the leadership of Janet Yellen has proceeded predominantly as expected. Yellen confirmed that the Fed intends to continue the process of ‘tapering’ its bond buying initiative. A further $10 billion will be shaved off monthly Fed bond purchases as forecast on this page (Wall Street simmers..) yesterday evening. This represents the third consecutive tightening of Fed stimulus efforts. Yellen also revealed a Fed decision to discard its original plan to use the unemployment rate as a benchmark for bumping interest rates. Outgoing Fed chair Ben Bernanke had previously stated that overnight borrowing costs would be increased once a 6.5% unemployment rate had been reached.

by
Joe Expert

US stocks performed well on Wall Street Tuesday ahead of Wednesday’s first Federal Reserve policymaking meeting under the stewardship of Janet Yellen. The Dow Jones gained almost 90 points while the S&P 500 climbed 0.72%. Major European and Asian markets also recorded gains amidst investor expectations of bullish Fed policy announcements. It is hoped that Yellen will address three main areas of concern for Wall Street investors:

by
Joe Expert

Chiquita Brands International and Irish tropical fruit company Fyffes announced a $526 million merger in a joint statement today. The all stock deal will establish the world’s largest banana company, creating a new entity called ChiquitaFyffes. The new firm will have 32,000 employees and will take in approximately $4.6 billion in annual revenue. Domiciled in Ireland, ChiquitaFyffes’ shares will be traded on the New York Stock Exchange upon the deal’s official finalization. Chiquita presently account for 22% of the global banana market, while Fyffes make up a further 7%. Thus ChiquitaFyffes’ 29% will see it surpass Dole Foods as global leader in banana distribution.

by
Joe Expert

Global stocks were sent tumbling Monday in reaction to increased uncertainty surrounding the Ukrainian political crisis. London’s FTSE 100, Japan’s Nikkei 225 and Hong Kong’s Hang Seng each shed almost 1.5% for the day, while the DAX in Germany lost 3.44%. Russia’s prominent benchmark index, the MICEX, plunged nearly 13% as $60 billion evaporated from the Moscow stock exchange. Investors appear to perceive the increasingly ominous unrest in Ukraine as detrimental to the global economy. Susan Bao, co-manager of JP Morgan’s US Equity Fund, warns of the ‘obvious risk’ should ‘Western countries impose economic sanctions on Russia’. Russian President Vladimir Putin’s insistence on invading neighbours Ukraine has prompted investors to scramble for safe havens.
 

by
Joe Expert

Warren Buffett’s conglomerate holding company Berkshire Hathaway has confirmed record profits of $19.48 billion for 2013. The Omaha, Nebraska based firm saw full year profits rise an impressive 31%, equating to $11,850 per Class A share. Buffett, the world’s fourth wealthiest man according to Forbes magazine, released his annual report to shareholders on Saturday. Analysts’ profit expectations of $18 billion were emphatically exceeded by Berkshire. The company’s stellar performance is attributable to strong year-on-year growth in large, established American companies.