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Grand City Properties: Oversold dusted jewel? Maybe not yet.Back in Oct 13, 2022 I made this analysis: Compared to Vonovia, Grand City has a double better debt position than its big competitor. Earnings payout are 23% and cash payout 64%. Vonovia's respective figures are 67% and 61%. Debt quity ratio at 57% is highly different from Vonovia's at 117%. Grand City may experiment higher costs of debt refinancing in 2023 but not as much as Vonovia in relative numbers. Grand City is able to breath better within this whole interest rates hike environment than mostly any other REIT. Sometimes, it's better to aim at 1,5B valued companies than 15B valued ones. But then, on March 16th, 2023 GYC presented its FY 2022 results. And my analysis changed to this one: Unfortunately, Grand City decided not to pay 2022 dividend due to macroeconomic uncertainty. The results were somewhat weak even though positive. I see GYC going down to 4.42€ in the next months. Better to avoid January and February 2013 lows were around 4.42€. Current PER is 9.51 and dividend yield has been cut to 0% in 2022. Interest rates keep rising at the moment and before the SVB, FRC, Credit Suisse fall; investors thought they would go up until 5.5-6%. Even though debt is lower than its bigger competitor Vonovia and according to GYC website the company’s debt have a 95% interest hedging ratio, which is expected to reduce to 91% as some interest rate hedging matures throughout 2023; in an environment of increasing interest rates, investors could switch from REITs to bonds. The fact that GYC cut its dividend to 0, may look very disciplined and responsible. But a REIT who does not pay dividend is no longer attractive in my opinion. Whether it will be at 10-15€ in the next 4-5 years, that depends on: inflation stabilisation, interest rates beginning to drop at comfortable levels (1-3%), reduced banking crisis uncertainty and reduced recession fears, among other factors. It's also important to track the FFO and AFFO and compare these two metrics with competitors in order to see if the stock has been oversold or overbought. If Central Banks stop raising interest rates or inflation drops further, then REITs will be one of the first sectors to recover as they may be experiencing overselling. When I analysed GYC back in Oct, I saw good fundamental reasons to invest in it. Macroeconomic uncertainty is now overweighting those fundamental reasons. But when every aspect in the macroeconomic environment seemed to doom the expectations of GYC stock, I analysed the fundamentals of the company: Analysis FY 2022 results: Net Debt/EBITDA = 11.4x. AFFO diminished -1.26%. FFO/per share +3% at 1.14€. P/FFO (Today) = 7/1.14 = 6.14. Guidance FY 2023 FFO/share to decrease -13.16% max to 0.99€/share. P/FFO (2023e) = 7/0.99 = 7.07. Sector P/FFO for Residential REITs in US has been moving steadily between 17 and 25 in 2010-2018 period (S&P Global Market Intelligence, Nareit 2018). GYC is clearly undervalued already. Technical aspect doesn’t show any signs of recovery yet. RSI(14) suggesting completely oversold but selling volume keeps increasing. CONCLUSION We may be set to turnaround very soon on GYC. However, the fact that a REIT does not pay dividends is something clearly penalising the stock value. Therefore, I would still wait and see how the market develops and if GYC reaches 4.40€ level, maybe it could act as a historic support level from January 2013 and bounce back upwards from there.
XETR:GYCShort
by alexinve
FED Interest Rates and it's mechanism BINANCE:BTCUSDT In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets. The effective federal funds rate (EFFR) is calculated as the effective median interest rate of overnight federal funds transactions during the previous business day. It is published daily by the Federal Reserve Bank of New York. The federal funds target range is determined by a meeting of the members of the Federal Open Market Committee (FOMC) which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule. The Federal Reserve uses open market operations to bring the effective rate into the target range. The target range is chosen in part to influence the money supply in the U.S. economy Financial institutions are obligated by law to hold liquid assets that can be used to cover sustained net cash outflows. Among these assets are the deposits that the institutions maintain, directly or indirectly, with a Federal Reserve Bank. An institution that is below its required liquidity can address this temporarily by borrowing from institutions that have Federal Reserve deposits in excess of the requirement. The interest rate that a borrowing bank pays to a lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the effective federal funds rate. The Federal Open Market Committee regularly sets a target range for the federal funds rate according to its policy goals and the economic conditions of the United States. It directs the Federal Reserve Banks to influence the rate toward that range with open market operations or adjustments to their own deposit interest rates. Although this is commonly referred to as "setting interest rates," the effect is not immediate and depends on the banks' response to money market conditions. Separately, the Federal Reserve lends directly to institutions through its discount window, at a rate that is usually higher than the federal funds rate. Future contracts in the federal funds rate trade on the Chicago Board of Trade (CBOT), and the financial press refer to these contracts when estimating the probabilities of upcoming FOMC actions. When the FOMC wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, the price of borrowed funds – the federal funds rate – falls. Conversely, when the Committee wishes to increase the federal funds rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, the interest rate will normally rise. The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee's lowering has recently predated recessions, in order to stimulate the economy and cushion the fall. Reducing the federal funds rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.
Education
by INVESTRONE
3
Looking towards next daily zone 1.08 before Sellers 🏳️Wicks Don't Lie. Momentum Doesn't Lie. Looking for Higher prices. The Reasons Why. 1. Weekly/Daily is Bullish 2. 4hr Closed solid bullish 3. We wait for healthy pullback to a 4hr level 4. 4Hr zones get respected frequently 5. End of Last week Weekly Candle Pulled Back hard and so far this week we have seen a confirmation of that momentum. There is alot of fear and pessimism. It is more important to follow price instead of imposing what we believe will happen onto the market.
Long
by ShrewdCatfx
3
$BTC $170K by Halloween 2023, believe it. If the same technicals of growth, volatility, and previous lows and highs math estimates are correct, then as strange as it may sound, Bitcoin is 23% likely to reach $170,000 by Oct 31st 2023. Not to mention the fertile environment for Bitcoin given; 1. The recent turmoil in the regional banking world and the lack of trust of the banking system being reinforced. 2. The decline of BTC in 2022 was arguably related to the massive interest rate hikes by the Fed, and they (The FED) are now likely to stop raising rates due to #1. 3. The correlation btwn Gold and Bitcoin has re-emerged in recent weeks
BITSTAMP:BTCUSDLong
by jgeno
SP500 vs FedFund vs Unemp vs Yield CurveUS stocks vs the Federal Reserve Funding Rate vs the unemployment rate vs 10yr-2yr treasury yields. When the 10yr vs 2yr yield goes negative it means that a 2yr treasury bond is yielding more interest than a 10yr treasury bond and it is also known as a yield curve inversion. The red vertical lines in the chart are drawn from yield curve inversions which are usually followed by the Federal Reserve lowering interest rates, a rise in unemployment and US recessions. We're currently in a yield curve inversion that has gone more negative than the inversions just prior to the Covid panic, the 2008 financial/housing crisis and the 2000 dot-com bust which were all accompanied by record stock market losses. Maybe this time will be different...
SP:SPX
by PrepForProfit
1
Gold gets a safe-haven bid as banks shake confidenceFinancial markets were sent into a tailspin on the news of Silicon Valley Bank (SVB) imploding. Despite the decisive moves by the Federal Deposit Insurance Corporation (FDIC)1 and the Federal Reserve (Fed)2, market confidence has been shaken and we have witnessed a flight to safety. Demand for government bonds have risen sharply, driving the yields on 10-year US Treasuries down from 4.0% on 9/3/2023 to 3.4% (16/03/2023). In tandem, gold prices have risen 6.6% in the past week (9/3/2023 to 16/03/2023). The speed of gold’s moves indicates that the flight to safety has not been obstructed by any broad-based liquidity issues. Very often in the initial phases of financial market stress, investors sell gold to raise cash to meet margins calls on futures positions in other assets or for other liquidity needs. The current crisis appears different in that there are no visible signs of panic gold selling and that could be indicative that the stress in certain parts of the banking sector are idiosyncratic. Nevertheless, investors have been reminded that unexpected events occur with greater frequency than they hoped and have sought to rebuild defensive positions that will help to hedge against further turbulence. Credit Suisse concerns add to investors desire for defensive hedges The Credit Suisse debacle unfolding quickly on the heels of SVB highlights that when confidence is shaken in one part of the banking sector it can easily spread. All banks, deposit takers, brokers and lending institutions with weak metrics are under the microscope. A liquidity life-line offered by the Swiss National Bank on 16/03/2023 has allayed markets fears for now, but we believe that investors are likely to continue to seek defensive assets in this time of uncertainty. Either tightening or losing monetary policy could be interpreted as a policy mistake. Gold is there as a hedge. The European Central Bank (ECB) raised interest rates by 50 basis points on 16/03/2023, marking a bold move given the fragile state of market confidence. However, blended with dovish commentary, markets are expecting less rate rises in the future and believe the 50 bps hike was delivered only because the ECB felt like it had pre-committed and any smaller hike would signal conditions are worse than what the market has priced in. The Euro appreciated against the dollar and the Dollar basket depreciated, providing further support for gold in Dollar terms. While the jury is out on whether the Federal Reserve will pivot its monetary policy early (note the Federal Open Committee meeting is on 21st and 22nd March), investors are seeking to protect themselves with hard assets. If the Fed doesn’t soften its hawkish stance, it risks transforming a bank liquidity issue into a recession as risk appetite and confidence has been shaken. If the Fed does act either by terminating quantitative tightening or prematurely ending the hike cycle, the central bank’s monetary largess will linger for longer. Either way, gold is likely to benefit. Gold tends to do well in recessions and is seen as the antithesis to central bank created fiat currencies. Gold gains are well supported We therefore expect gold to hold onto the past week’s gains in the is time of turbulence. The key short-term risk for gold at this stage is not market confidence recovering quickly, but a broader market meltdown that could drive gold selling to raise liquidity for meeting other obligations (such as margin calls). In that scenario, gold is likely to recover in time as other investors will buy the metal to shore up their defensive hedges. Sources 1 The FDIC provided more than its usual $250,000 insurance on deposits. 2 The Fed created a new liquidity tool - Bank Term Funding Program (BTFP) - offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.
COMEX:GC1!
by aneekaguptaWTE
How FED / ECB Interest rates set trendsWatch how interest rates decisions set trends in EURUSD and Dollar Index impacting the entire forex market. I marked all the previous interest hike decisions by FED and ECB. 2023 EURUSD bullish reversal was triggerred by ECB starting to raise iterest rates (after EUR hit the alarming 1.00 level). EUR might continue bullish until next tow hikes. From what I read ECB does not plan to hike rates for the rest of the year after May meeting (rates will stay at 4), so it is likely to trigger bearish reversal from May. Likelwise, 2020 EUR bullish ride (and dollar weakness) was triggerred by FED lowering interest rates (in March 2020) after COVID hit. FOR EDUCATIONAL PURPOSES ONLY. Good luck in your trading! God bless!
Education
by ICFX
Possible Crash to 1410? (Alternative Bias)Everyone who has been following us since last year, knows we are bullish on Gold & are still holding buy positions from 1600's. We also have a sell position open from 1953 as a hedge against our buys. However, after seeing price action on Gold recently I believe that there is a possibility for Gold to crash lower towards $1410-$1370 over the next 2-3 years. If you look at the 2 week TF, you can see that Gold reached Wave 3 ($1,920) back in 2011, following a peak of Wave 5 ($2,075) in 2022. If this is correct, we should now see the market crash back as a correction towards the $1400 mark. This also makes sense from a fundamental perspective. If the Federal Reserve keep hiking interest rates over the next year, this'll weaken Gold prices, while strengthening the US Dollar. This analysis is only valid as long as Gold remains below the last high of $2070.
OANDA:XAUUSDShort
by BA_Investments
2
$TNX US02Y are CRATERING, Yields falling hardLast week we mentioned that #yields cratering like they did was not normal. Currently they are all at support with $TNX holding better than short term yields. The 10Yr has BOUNCED a bit off support. In a positive note it does lessens the inverted Yield curve :D We'll see how this scenario holds. What's happening today is more SPECULATION than anything else. The belief is that the #fed will stop raising rates due to the the bank closures that are happening. IMO I don't think it'll stop them but MAY slow them down a bit. The Fed Reserve HAS to pick between #economy & #stocks. While the Fed has been friendly to equities and markets in the past its main concern in the US Economy. They also care about the US #dollar.
TVC:US02Y
by ROYAL_OAK_INC
$DJI has HUGE BUY volume the last few hours$DJI bounce decently off support on daily charts. This may take some time to heal. However, IF #stocks can hold for the next few hours it can be okay. The only reason it's not pumping higher is $GS & $JPM, #banks. On the 4Hr we see a DOJI formed MORE than 4 hours ago & on the CURRENT 4 hr candle it is being ENGULFED WITH VOLUME. We want to see a close above 32k but higher will mean more conviction. The belief is that #rates will take a pause while we have this bank fiasco happening. 32500 is our full exit point. Although we have been loosening positions in this rally for the last couple hours. Would keep re-buying lightly on pullbacks. Bottoms can take some time to form.
DJ:DJI
by ROYAL_OAK_INC
Side-step a potential storm!Just when we thought the hawkish narrative was pretty much priced in, SVB’s fallout basically threw a spanner into the hiking cycle. You’ve probably read quite a lot about the whole SVB debacle since Thursday’s trading session so we won’t harp on that. We instead want to turn your attention to two other markets that moved significantly since the SVB episode. Interest Rates & Gold. A sharp repricing has occurred in the expected rate path as markets digest the onslaught of SVB-related events. As a result, we saw the probability of a 50bps point hike jump from 30% to 80% and then back down to 20% as of today. Additionally, further rate hikes have also been priced out indicating market’s expectations of a more cautious Fed. Most importantly, the implied aggressive rate cuts starting from the end of 2023 caught our eyes here. As a reminder, the last time the fed paused and then cut rates, Gold responded with a 60% rally. As the potentially lower terminal rate and faster pace of rate cuts narrative begin to pick up momentum, we think Gold deserves more attention now than ever. The next FOMC meeting is only 10 days away. From there, we will get a sense of what the Fed thinks of the current situation. If they start to show signs of retreat from their hawkish stance, we believe it will be a catalyst for this trade. Another point of worry is economic data still coming in hot, at least for now. For those not keeping count, Non-Farm Payrolls numbers have beaten estimates to the upside for the past 11 months as the economy remains unusually strong. With the next set of CPI numbers coming out this Tuesday, a hot print could drive inflation worries further. If the Fed shows signs of easing on the hawkish narrative while Inflation numbers continue to be hotter than expected, higher Inflation expectations could once again drive investors into inflation-protecting assets like Gold. Key volatility gauges have pointed higher over the past few days and major indexes have edged closer to key price and technical levels. Given these, volatility is likely to compound from here as Commodity Trading Advisors (CTAs) potentially flip sides and funds rotate out of the banking sector. In such uncertain times Gold’s status as a safe haven asset could attract flows as investors sidestep the market turbulence. Looking at the price action, Gold still trades well clear of the 500 Day EMA mark which has marked the support for the price action and well clear of the 1800 physiological level. RSI is still middle of the road indicating that there is still room for Gold to run higher. Gold’s relationship with interest rates and position as an inflation-hedge/safe haven asset could very well position it for further upside from here. For now, we think it provides enough upside to sidestep the potentially volatile times ahead. We set our stops near the previous level of support and the 0.618 Fib level, 1755, and our take profit levels at 2065. Each 0.1-point increment in COMEX Gold future is equal to 10 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
COMEX:GC1!Long
by inspirante
1
EURUSD Struggling 1.05860. Previous Key level. We can observe that price is pulling back after fed speech caused us to fall off a cliff. This was expected. A Bullish Argument would be buy Daily Support as we reject 1.05428 and NFP data tomorrow will catapult us back up to 1.0646. My bias remains bearish because of the weekly timeframe. Price has corrected 40% of the move on Tuesday. If that is a deep enough retracement or not idk. What matters for me as a trader is good RR Ideas and operating off key levels.
Short
by ShrewdCatfx
1
USDCAD Outlook 9th March 2023Overnight, the Bank of Canada (BoC) released its decision to hold interest rates at the 4.50% level. This was in line with the overall market forecast. However, the decision to hold rates saw the Canadian Dollar weaken (while the DXY remained on its bullish uptrend), resulting in the USDCAD claiming new highs, testing the 1.38 resistance area. If the DXY gains further strength and breaks out to the upside, the USDCAD could first retrace briefly to test the upward trendline, before continuing to climb higher, with the next key resistance level at 1.39. Alternatively, if the price action develops to signal a rejection of the 1.38 resistance level, the price could retrace down to the intermediate support level of 1.3740.
Long
by JinDao_Tai
DXY Outlook 9th March 2023On Wednesday, Fed Chair Powell indicated that the Federal Reserve was ready to speed up interest rate increases, if warranted by incoming data. This was a reversal to what the market had expected, with most speculations regarding a possible pivot on the current monetary policy to slow down on future rate hikes. This headline news saw the DXY strengthen significantly from the 104.60 price area, breaking beyond 105, to reach a near-term high of 105.88. While Chair Powell's overnight testimony saw the DXY retrace briefly to retest the 105.36 support level, this move was unsustained and the price rebounded from the support. Currently trading at the 105.65 price level, and with no major news for the US today, the DXY will likely consolidate along this range for the short term, between the 105.36 and 105.88 price levels.
TVC:DXY
by JinDao_Tai