Weekly Review and OpenBook Roundup

(eToro Blog) The financial markets have been bolstered by several positive developments in the US economy, the Eurozone and various austerity measures proposed by China. News from the Fed indicates that signs for an imminent, and lasting US recovery may well be on the cards. Across the Pacific, China’s Shanghai Composite index was boosted 1.7%, closing at 2168.81. The Hang Seng index in Hong Kong outperformed the Chinese increase, and rose 2.4%, thus closing at 20,136.12. Japanese investors also had reason to celebrate on the back of the Nikkei stock average, which rose 3.9% to finally settle on 8891.44. Similar positive increases were noted across Asia, including India’s BSE Sensex (2.1% + closing at 17,557.74), and South Korea’s Kospi Index (5.3% + closing at 1946.40). The CPI in China rose just 1.8% during the month of July (as compared to 2011). This figure is significantly reduced from 2.2% in June. Reduced inflationary pressures allow for government-induced growth without the fear of diminishing real purchasing power. Chinese trade surplus (differs between imports and exports) is listed at $25.1 billion for the month of July, and there is an urgency to continue efforts to stimulate the economy.

The 163,000 increase in non-farm payrolls in the US economy dramatically eased fears that the US economy would follow Europe into a recession. In Europe and, where economic pressures are being felt most, the European Central Bank, the European Commission and the International Monetary Fund confirmed the Greek compliance with the bailout conditions. The Greek government has been implementing budgetary cuts and austerity measures in order to meet the requirements of the bailout conditions. In China, inflationary fears were put to rest, with news that the rate of inflation was being taken back from figures in June and July. German Chancellor Angela Merkel is fully in support of the ECB’s move of buying bonds. In effect, this means that countries would accept the conditions as determined by the EFSF, following which the central bank would purchase bonds. Overall though, there were some major gainers during the week and the outlook remains positive for the various stimulus measures set to be introduced by the central banks of China, Europe and the United States.

eToro investors are keenly watching the market movements. Traders have been hedging their bets on a wide range of currencies, commodities, indices and stocks. Among the most notable eToro traders is Ascari.  Ascari has enjoyed significant gains over the last 12 months, with an average of 255%. Over the last six months he has been in the region of 300% profitability, in the last three months he claimed  110.4% profitability, over the last month 10.7%, and in the last week 3.7%. These figures certainly point to a trader with his finger on the financial pulse. Ascari’s portfolio is almost exclusively comprised of currency trading with the AUD/USD making up 58.9% of these budgetary allocation, and EUR/USD (40.2%). His overall risk level is medium, with a sizeable chunk of his portfolio based on low-risk trades.

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