Trade Finance

Robots are moving on to the trading floors of investment banks. Many of the world’s biggest banks have for years been automating manual, repetitive tasks done by support staff to save money. But now they are putting the latest forms of artificial intelligence to work at the heart of operations among their star traders, allocating funds and analysing data to develop strategies.

According to a report by the Financial Times, UBS is about to take robots to trading floors. The company has shown how two AI solutions can assist traders in enhancing their performance.

Nobel Prize winning-economist Robert Shiller says the U.S. equities markets are "quite high" currently but may go even higher in coming months, and that’s why he’s not exiting the market completely.

He was reffering to the valuations measured by the cyclically adjusted price-earnings (or CAPE) ratio he developed with John Campbell. In fact, the only times they have been higher were in 1929 and 2000, the Yale professor said. Both years saw historic market crashes. The metric compares current prices to average earnings over the past 10 years adjusted for inflation.

Apple shares fell more than 2 percent Monday, falling for a second-straight day due to mounting concerns about unsustainably high stock prices. The iPhone maker’s stock has lost nearly 6.2 percent of its value in just two days. Technology stocks have been hit particularly hard, as some investment firms fear that stocks like Facebook, Amazon, Netflix, and Alphabet in particular rose too quickly.

David Stockman’s prophecy over Wall Street seems to announce an Annus Horribilis : "This is one of the most dangerous market environments we’ve ever been in. It’s the calm before a gigantic, horrendous storm that I don’t think is too far down the road," he recently said on "Futures Now."

House Republicans voted Thursday to deliver on their promise to repeal Dodd-Frank – the massive set of Wall Street regulations President Barack Obama signed into law after the 2008 financial crisis.

House Resolution 10, or the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act of 2017, passed by a vote of 233-186 in the lower chamber; eleven representatives did not vote.

After a situation was illuminated in part 1 of the series (TRADERS’ 09/2016), in which the price was outside the Bollinger bands *, the second part (TRADERS’ 11/2016, in the shop under www.traders-media .de), focus on strong price movements without interim corrections. The third part now follows the previous one. You comb through your trading-universe in order to find chart-constellations, which show strong price-declines – this time in combination with price gaps, which increase further the sell-pressure.

The political risk is now behind us in France, it is time to go back to fundamentals. While underlying conditions in the global economy are strengthening, some data may disappoint and trigger a countertrend setback in markets. The economic surprise index has recently weakened (mostly in the US and the UK), the Chinese economy could slowdown later this year and Trump’s promises are being pushed back or diluted. As the equity market is now up 10%, is it time to take profit? The slack in the global inflation figures could persist over the next few weeks, but this should be a temporary move. Indeed, the cyclical macro backdrop remains supportive for equity prices and negative for bonds. Eurozone inflation accelerated to 1.9% YoY in April from 1.5% in March.

In the first part of this series, you have learned how to identify a special reversal formation using the Bollinger bands and a Hammer (-Candlestock). In the second part, strong, partly panic-like price-slides serve to determine promising trade-candidates. The more intense the price decline, the greater the probability of a counter-movement.