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Stocks: U.S. stock indexes opened higher on Tuesday as better-than-expected earnings from Wal-Mart (N:WMT) and Home Depot (N:HD) allayed fears of a retail slowdown after last week's sharp selloff in the sector.

 

The Dow Jones industrial average (DJI) rose 12.5 points, or 0.07 percent, to 17,495.51, the S&P 500 (SPX) gained 1.34 points, or 0.07 percent, to 2,054.53 and the Nasdaq Composite index (IXIC) added 6.70 points, or 0.13 percent, to 4,991.32.

Commodities: Oil prices fell on Tuesday, erasing gains linked to security fears after the Paris attacks, as investor focused again on the global oversupply in crude and petroleum products that is showing no signs of abating.

Analysts said that despite the deadly Paris attacks and French retaliation against Islamic State (IS) in Syria, prices would remain low for the rest of the year and into 2016 as oil markets stay oversupplied.

Forex: The dollar continued to hover at seven-month highs against the other major currencies on Tuesday, after upbeat U.S. inflation data added to hopes that the Federal Reserve will raise interest rates at its meeting next month.

USD/JPY edged up 0.12% to one-week highs of 123.32.

Economic Indicators:U.S. consumer prices increased in October after two straight months of declines as the cost of gasoline and a range of other goods rose.

The Commerce Department said the consumer price index rose 0.2% last month, in line with economists' forecasts. The modest uptick in inflation could offer more support to expectations that the Federal Reserve will hike interest rates next month.

Economic Indicators: Industrial production in the U.S. fell for the third straight month in October, dampening optimism over the health of the economy, official data showed on Tuesday.

In a report, the Federal Reserve said that industrial production decreased by a seasonally adjusted 0.2% last month, disappointing expectations for a gain of 0.1%. Industrial production fell by 0.2% in September. Meanwhile, manufacturing production rose by a seasonally adjusted 0.4%, beating forecasts for a 0.2% increase and following a decline of 0.1% in September.

 

The report also showed that the capacity utilization rate, a measure of how fully firms are using their resources, dipped to 77.5% in October from 77.7% a month earlier, in line with expectations.

 

 

 

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Finally! Some good news from a retailer getting ready for the holidays. Walmart reported sales and earnings on Tuesday that topped Wall Street's forecasts.

Walmart is fighting the losing trend. Several prominent retailers have already reported poor results recently, including Macy's (M), Gap (GPS) and Nordstrom (JWN).

That has led to concerns that retailers may have to use massive discounts to lure shoppers in their stores this holiday season, promotions that could crush these companies' already wafer-thin profit margins.

Still, it's not as if expectations were all that high for the company. Walmart warned last month that sales would be weak and that wage hikes it announced earlier this year would hurt its profits. The stock is down 33% this year, making it the worst performer in the Dow.

Warren Buffett's Berkshire Hathaway (BRKB) disclosed on Monday that it cut its stake in the retailer in the third quarter, before the earnings warning. Walmart did report its fifth consecutive quarter of same-store sales growth in the U.S. And store traffic rose 1.7%. Those are encouraging signs.

CEO Doug McMillon said in the company's earnings release that the company is "taking the right steps to win with customers." But he conceded that Walmart still has "work to do." Competition from Amazon (AMZN, Tech30) has also hurt Walmart, along with other retailers. Walmart is investing heavily in its own online retailing operations. Growth, however, has been slow.

The company said that e-commerce sales were up only 10% from a year ago. Walmart cited "pressures in key international markets." The strong dollar is a problem for Walmart -- which generates about a quarter of its sales overseas. Nonetheless, Wall Street seemed relieved that the company's results were not worse. Neither was its outlook.

The company said that it expects fourth quarter earnings to be in a range of $1.40 to $1.55 a share. The current consensus estimate of analysts for the quarter is $1.43 a share.

Shares of Walmart (WMT) rose more than 2.5% in premarket trading on the news.

Walmart is the first of several big retailers to report its quarterly sales and outlook this week. Target (TGT) and Best Buy (BBY) are on tap to release their results later this week.

 

 

 

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What is it? Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

When? At 8:30am Eastern Time.

Trading Tip: If the actual number is higher than the forecast, you can expect the USD to rise.

 

 

 

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