Wednesday 9 September 2015

Top Tweets Today: 09/09/2015

 One of the casualties of the oil downturn is Africa's largest economy, Nigeria. The country relies heavily on the price of oil to siphon dollars into their trade account to fund vital imports needed to build its growing economy. But today JPMorgan said it was going to struck Nigerian government bonds from it's Government Bond Index by the end of October. The investment bank had warned the oil rich state months ago about the implications of pegging their currency, the Naira, but to no avail.

The situation that has unrivalled is turning into a devilish outcome for Africa's newly poised economy. The Naira came under severe pressure late last year which prompted the government to defend it which in turn has depleted foreign currency reserves at the central bank. The economy has been reeling since then. Given JPMorgan's exclusion of these bonds from the index will force funds who hold them to sell them off causing a tailwind for further currency depreciation with no foreign currency reserve to insulate it this time.



 A company who's been part of the Nigerian story for a while is MTN who hasn't seen a healthy share performance since the debacle started. Ludwig Kruger of PSG has highlighted a long term uptrend that's been in place for a while now with the price now resting on that support. However given the sentiment we've seen coming out of Nigeria one does remain weary about the fate of this stock.

The Nigerian government has yet to respond to the news and hasn't given any indication to how they intend to deal with the outflows. One should keep in mind that this economy is still in the process of forming a strong financial system so in all probabilities the road ahead could be a bumpy one.

Some exciting news for Apple followers, the technology company has a major announcement out later today and hopefully it has the right ingredients to get the stock moving again. Below is a some great analysis from StockTwits breaking down the performance related activity before and after the announcement was made for the last 9 occasions. Interesting to see that the most recent share performance leading up to the announcement is the first negative return since January 2007.

Also intriguing is the average performance 1 month after which comes in -1.5%. Could this mean we are going to see more negative sentiment hanging around Apple ? We'll have to wait and see.




Two of my favourite contributors on Twitter Steve Burns and Ryan Detrick tag teaming to crunch down some informative stats about the S&P 500. In the last 13 sessions the index has seen moves of 2% and higher on 7 occasions whereas the previous 167 sessions it only happened once.

What this illustrates is a higher level of volatility gripping the market at present and one should throw caution to the wind when trading only doing so when they are absolutely sure of a signal to go in and ensuring a stop loss is in place.
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