The Insanity Of The US Earnings Season

Over the last 2 weeks the US has been in earnings announcement mode. This mode is absolutely filled with insanity and overreaction, and therefore it is a traders heaven or hell.

Two cases in point. First one everyone will know, the second one, most people will get to know over the next few years.

Amazon (stock code AMZN) reported it had 'stellar' earnings growth, resulting in a 27% increase in the share price. Yes you read that correctly... 27%. Imagine the suprise you would have had if you owned a CFD on Amazon. This was Amazon's largest growth since the tech boom.

The next case in point is a company called Baidu (stock code BIDU). Have you ever heard of them? It's ok... few people outside of China have.

To put it simply Baidu is the leading Chinese search engine. The Google of China you could say. They have 55% of the searchmarket in China, a market Google is struggling to crack.

Baidu announced that they had experienced exceptional earnings growth and this NASDAQ listed company responded with a surge. On Thursday 26 April 2007, Baidu opened at approximately, $105. On Friday morning, Baidu surged to $131. This was a 24% increase.

Do you have an earnings story of horror or success?

The US Dollar Weakening

If you have been hiding under a rock, placed a blind fold over your eyes and taken advantage of some ear plugs... you would have missed the news.

The Aussie dollar is soaring against the greenback... and the American markets are happy about it. Well... really they are happy about the decreasing value of their currency, they don't necessarily care about the Aussie dollar.

Why? Well there are many reasons. The benefits of a weaker US dollar are...

* US Exports tend to increase
* More foreign tourists can afford to visit the U.S. and are likely to spend more whilst on holiday
* The U.S. Stockmarkets become more attractive to foreign investors.

Tourism?

From an Australian perspective, seems like a good time to holiday and do a spot of shopping. Good news for the ladies. Shame aviation fuel is still so expensive.

How much further will the American Dollar weaken and do you have any stories about how you've been affected by currency swings?

Is The Commodities Boom Still On?

Analysts... you have to love them!

Just a few months ago, analysts around the world were sprouting the end of the commodities boom. According to the analysts, it was done, finished and all over! They also made the call that oil was going back down to $40 a barrel.

What went wrong? It is difficult to speculate but demand and instability in oil producing regions are usually to blame.

Now read what the analysts are saying. They are now debating, "Is the commodities boom going to last 10 years or 15 years"? Who knows? Traders who pick the direction of commodities are very skilled traders indeed.

It will be very interesting to follow, especially as two of Australia's most loved companies BHP Billiton and Rio Tinto are in the drivers seat.

Also, there have been extraordinary results with smaller cap Australian mining companies and many happy investors benefiting. It hasn't all been good news. Remember the decline of Bendigo Mining.

What are your thoughts on commodities?

Old business being helped by new business

One of the annoying aspects of emerging technology is all the supposed experts that come out and say, 'with this advancement it means out with the old and in with the new.'

A good example of this was when the computers started to gain traction, people started sprouting, "soon we are going to experience the paperless office."

Not likely! In fact, more and more paper is being used every year.

Another example of where old business is benefiting greatly from new business, is with our old friends, Australia Post.

Everytime you walk past a post office, check how busy they are. So which company has assisted in the return to favour of Australia Post.

Ebay!

With all the buying and selling taking place on Ebay Australia, Australia Post and all the courier companies out there are the ones that are benefiting.

So the question is... what other traditional businesses, are going to enjoy increased revenues from new business models?