Why trading is done by men

Well, if this study points out that the stock exchange is ruled by men, would you trust your stocks trading to a female trader?

Just asking.

Read on...
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Testosterone an elixir for stock market success

WASHINGTON - The most successful stock traders have higher levels of the male hormone testosterone, providing a dramatic boost to their confidence and drive, according to a British study published Monday.

Researchers at Cambridge University found that testosterone also appears to increase traders' appetite for risk-taking a quality likely to enhance the performance of those who earn a living in the high-stakes world of the stock market.

"Market traders, like some other occupations (such as air traffic controllers), work under extreme pressure and the consequences of the rapid decisions they have to make can have profound consequences for them, and for the market as a whole," said Professor Joe Herbert, Cambridge Center for Brain Repair, one of the researchers on the study, which was to be published Monday in the Annals of the National Academy of Sciences.

The researchers also noted that success fueled by testosterone feeds itself, in part because it leads to the production of even more testosterone.

In male athletes, for example, testosterone levels rise prior to competition, and rise even further in a winning athlete, but decrease in a losing one.

The phenomenon called the "winner effect," can increase confidence and risk-taking and improve chances of winning yet again, in a positive feedback loop.

"Hormones may also be important for determining how well an individual trader performs in the highly stressful and competitive world of the market. We are now exploring this in much more detail," the researchers wrote.

The study followed 17 male traders in the City of London for eight consecutive business days.

To measure the traders' hormones, they took saliva samples twice per day at 11:00 am and 4:00 pm, times that fell before and after the bulk of the days trading. At each sampling time, traders recorded the traders' profits and losses for the day.

They found that daily testosterone levels were significantly higher on days when traders had a higher than customary daily average.

On the down side however elevated testosterone may explain why stock traders sometimes make irrational choices that lead to bubbles and crashes.

Researchers speculated that if testosterone levels continued to rise or became chronically elevated, it could prompt traders to engage in reckless risk-taking and undermine their profitability.

They noted that earlier studies have linked administered testosterone to impulsivity, sensation-seeking and harmful risk-taking.

Dr. John Coates, lead author of the study said: "If testosterone reaches physiological limits, as it might during a market bubble, it can turn risk-taking into a form of addiction."

Coates, himself a former trader, added: "At times like these economics has to consider the physiology of investors, not just their rationality." - AFP/ar


From ChannelNewsAsia.com; source article is below:Testosterone an elixir for stock market success
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Rising oil, commodity prices pull US stocks higher

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06/30/2009 | 07:33 AM

NEW YORK – A jump in oil prices sent investors rushing to put money into the stock market in the final days of the second quarter.

Energy, industrial and materials stocks pulled the market higher in light trading Monday as investors raced to keep up with the gains in oil.

Crude rose $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange after China said it would boost oil reserves and Nigerian militants partly shut down an offshore oil platform.

With the quarter's end coming up on Tuesday, some money managers were making last-minute adjustments to their portfolios just ahead of issuing quarterly reports to their clients. A benchmark against which many funds are compared, the Standard & Poor's 500 index, is up 16.2 percent since the start of the April-June quarter.

Analysts cautioned against seeing the upswing as a sign of conviction among investors that it was time to move into the market ahead of an economic recovery. Stocks seesawed in the early going but jumped after oil gained.

After running the S&P 500 index up 37 percent since March on a litany of "less bad" economic data, investors have become more cautious about the pace of the economy's recovery this month and are looking for more concrete signs of growth.

The Dow Jones industrial average rose 90.99, or 1.1 percent, to 8,529.38. The S&P 500 index rose 8.33, or 0.9 percent, to 927.23, while the Nasdaq composite index rose 5.84, or 0.3 percent, to 1,844.06. Stocks ended last week mixed.

There was little economic news Monday but the week, which is abbreviated by the Independence Day holiday on Friday, brings key data that could give investors a better sense of where the economy is headed.

Of particular importance is the monthly employment report due out Thursday. Though considered a lagging indicator of the country's economic health, the unemployment rate is still one of the most closely watched gauges of the economy. The labor market is intricately tied to many facets of the economy including consumer spending.

Investors also will get reports on consumer confidence and manufacturing this week.

The Dow is up 30.3 percent from a 12-year low on March 9, though it has fallen 3.1 percent from a five-month high on June 12. The blue chips are now down only 2.8 percent in 2009.

Harry Rady, chief executive of Rady Asset Management, is concerned that although the market's rally has lost steam in the past three weeks traders are still too optimistic about how quickly the economy can recover.

"I see a bit of complacency creeping into the market," he said. "The market has run up and that has the inverse effect of what it should."

Rady sees trouble in the continuing retreat of a gauge of fear in the stock market, and contends that investors are overlooking danger spots in the economy like heavy debt loads and weakness in the dollar.

The Chicago Board Options Exchange Volatility Index, or VIX, is a measure of stock market volatility that has been easing since early March. The VIX is down 37 percent in 2009 and stands below 26. The historical average is 18-20. It hit a record 89.5 in October at the height of the financial crisis.

Three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume came to a light 4 billion shares compared with 5.1 billion traded Friday. Volume was heavy Friday because of the annual reconstitution of the Russell 3000 index forced investors to make changes to their portfolios.

Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.48 percent from 3.53 percent late Friday.

The dollar was mixed against other major currencies. Gold prices fell.

The gains in commodities lifted energy, industrial and materials stocks. Exxon Mobil Corp. rose $1.53, or 2.2 percent, to $70.58, defense contractor General Dynamics Corp. rose $1.54, or 2.8 percent, to $57 and Eastman Chemical Co. rose $1.38, or 3.7 percent, to $38.79.

Shares of Ford Motor Co. rose 17 cents, or 3 percent, to $5.78 after the automaker's top sales analyst said US auto sales might have stopped their month-to-month slide in June and could be down less than 30 percent for the first time since September. Automakers, which are expected to report June sales in the US on Wednesday, have been hit by a 37 percent drop in sales in the first five months of the year.

In other trading, the Russell 2000 index of smaller companies fell 2.61, or 0.5 percent, to 510.61.

Overseas, Britain's FTSE 100 rose 1.3 percent, Germany's DAX index advanced 2.3 percent, and France's CAC-40 rose 2 percent. Japan's Nikkei stock average fell 1 percent. - AP

From GMANews.tv; see the source article here.

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Market panic: Wild gyrations, risks and opportunities in stock markets

BRAIN FOOD

Stephen Vines

Should investors be dumping stocks just because it's a recession?

No, as there are always chances to take advantage of the downturn, says author and successful businessman Stephen Vines.

In Market Panic, Vines, a former journalist whose Hong Kong-based company Pan Britain provides consultancy services to major corporations in East Asia, takes a hard look at current trends and offers simple tips for succeeding in volatile markets.

He challenges some long-held theories about the benefits of investment diversification; offers new ways of understanding the panic cycle and teaches investors how to predict the onset of panics.

"Stock markets show remarkable resilience in the face of crises, scandals and all other forms of extreme behaviour," Vines writes. "If more people understand the opportunities arising from markets at their supposedly weakest moments ... the potential for profit is greater than when fear, irrationality and extreme behaviour dominate stock markets."

Vines provides real-life case studies by interviewing fund managers and traders, who tell how they were caught in market panics and how they countered these challenges head on.

The book is easy to follow and jargon-free, perfect reading material for the budding investor. ZUL OTHMAN

From TODAY, Business – Monday, 01-Jun-2009

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Wall Street rises as bond market tensions ease

Posted: 29 May 2009 0531 hrs

A trader watches the numbers as he works on the floor of the New York Stock Exchange.

NEW YORK - Wall Street stocks rose strongly Thursday, lifted by a late rally as tensions eased on the bond market following news of robust demand for Treasury bonds.

The Dow Jones Industrial Average of 30 blue-chip stocks rallied 103.78 points (1.25 percent) to finish at 8,403.80.

The tech-heavy Nasdaq gained 20.71 points (1.20 percent) to 1,751.79 and the broad-market Standard & Poor's 500 index advanced 13.77 points (1.54 percent) to 906.83.

The major indices had churned in a narrow range as investors digested a mixed batch of US economic data and details of a bankruptcy plan for General Motors.

"The equities market reversed course at midday, fueled by climbing commodities prices and stronger-than-expected results from the latest Treasury bond auction," said Andrea Kramer at Schaeffer's Investment Research.

"By the closing bell, all the stars seemingly aligned for the Dow, which ended the session with a triple-digit gain," she added.

Bonds rebounded from Wednesday's sell-off. The yield on the 10-year US Treasury bond fell to 3.672 percent from 3.695 percent on Wednesday and that on the 30-year bond eased to 4.530 percent from 4.606 percent. Bond yields and prices move in opposite directions.

Charles Schwab & Co. analysts also noted traders' relief that a Treasury auction of seven-year bonds trimmed yields that had hit months-long highs Wednesday on worries about the swelling US government debt that also drove stocks into a rout.

"A good auction in the bond market pressured yields, which have moved to uneasily high levels, providing some relative relief to fears that increasing yields may hamper a recovery in the equity markets, and stocks finished solidly higher," they wrote in a client note.

Energy shares led gains after the US government reported a surprisingly large decline in US crude oil inventories, sparking hopes of a recovery in demand that sent oil prices sharply higher.

"Big oil has been good for the US economy. Big oil does well when the economy is doing well and the increase that we have seen in oil prices is a sign that the economy is recovering," said Phil Flynn of Alaron Trading.

Oil majors lifted after crude oil prices topped 65 dollars a barrel for the first time in more than six months.

ExxonMobil, the Dow's biggest component, gained 1.36 percent to 69.23 dollars and Chevron leapt 1.92 percent to 65.81 dollars.

Among other stocks in focus, reeling General Motors slid 2.61 percent to 1.12 dollars. The largest US automaker was finalizing a pre-packaged bankruptcy that would leave the US government with up to 72.5 percent of the new firm.

Procter & Gamble dropped 1.56 percent to 52.59 dollars after the consumer products manufacturer and Dow component issued disappointing guidance.

Caterpillar, another Dow component, slid 1.31 percent to 34.59 dollars after a downgrade by UBS analysts.

Time Warner added 2.39 percent to 23.55 dollars. The media group announced it would spin off its AOL Internet unit by year-end.

Telcom giant AT&T advanced 2.33 percent to 24.63 dollars after chief executive Randall Stephenson said the company intended to keep its fixed-line business, unlike rival Verizon, whose shares dropped 1.11 percent to 29.27 dollars. - AFP /ls

From ChannelNewsAsia.com; see the source article here.

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A chance to replenish reserves

BUSINESS ANALYSIS

Rosalind Mathieson

THE recent slide in the US dollar against Asian currencies provides central banks in the region with the opportunity to do some quick replenishing of their foreign exchange reserves.

Buying the US dollar now means central banks can put some gas back in the tank for what could be a dollar renewal in the later part of the year — which may require the authorities in Asia to then sell the greenback to protect their local currencies.

And, of course, US dollar buying right now fulfils another aim, namely to keep a lid on emerging market Asian currencies in order to rekindle export demand.

There is the perception that foreign exchange reserves in Asia have been badly run down in the past year or so. Reserves are actually not as low as some people might think, but they have certainly been depleted by the heavy volatility in currency markets and the ongoing presence of a large speculative contingent.

Indeed, HSBC currency strategist Daniel Hui in a recent report estimated that regional reserves, ex-China, have fallen by a fifth in the past year.

Some central banks are already stepping up their US dollar buying, with those in South Korea, Hong Kong and Thailand spotted of late. The Monetary Authority of Singapore is also likely to have been keeping a lid on the Singapore dollar in order to maintain the currency's undisclosed price band.

US dollar weakness may persist in the near term for several reasons. One is that concerns have been brought front-and-centre of late about the US fiscal position, and the heavy amount of debt being taken onto the government's books.

Another is that some of the data from Asia have been showing a bit of resilience — though the emphasis there should be on the "bit" — and this, coupled with a rise in stock markets, has stoked a measure of risk appetite. Inflows have risen to emerging markets, pushing up stocks and currencies alike.

But central banks will want to avoid that going too far. Financial markets and economies alike are still very vulnerable, the recovery indicators are patchy and mild, and for some there is still the sense the worst is it not over for Asia or Europe.

So buying the US dollar now has a dual impact. It prevents Asian currencies from rising too quickly, and it allows central banks to put more ammunition in their arsenals should there be further economic or financial headwinds ahead.

Asian central banks are notoriously paranoid about depleting their reserves, having worked so hard to build them up since the previous financial crisis. They are very keen to make sure the coffers don't get whittled down again. That means "smoothing" operations to buy the greenback are likely to continue, and intervention could pick up in the coming months across Asia as a whole.

That should leave traders a little wary about pushing Asian currencies too high in the near term. The gains are momentum-based, not structural. Dow Jones

From TODAYOnline.com, Business – Wednesday, 27-May-2009; see the source article here.

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Surge in US consumer confidence lifts stocks

Posted: 27 May 2009 0544 hrs

Traders work on the floor of the New York Stock Exchange (NYSE)

NEW YORK - Wall Street powered higher Tuesday as a surprisingly strong reading on US consumer confidence buoyed hopes of economic recovery, offsetting jitters over North Korea's nuclear and missile tests.

The blue-chip Dow Jones Industrial Average climbed 196.17 points (2.37 percent) to end at 8,473.49 while the tech-rich Nasdaq rose 58.42 points (3.45 percent) to 1,750.43, its best percentage advance since early April.

The broad-market Standard & Poor's 500 index advanced 23.33 points (2.63 percent) to 910.33, clawing its way back above the psychologically significant 900 level for the first time since May 20.

As traders returned to business following the Memorial Day holiday Monday, stocks came under early pressure amid geopolitical concerns stemming from North Korea's second illegal nuclear test on Monday.

But markets shook off the news after the release of a Conference Board survey showing an unexpected surge in US consumer confidence, a key to ramping up spending and lifting the economy out of its prolonged recession.

The business research group's consumer confidence index spiked to 54.9 in May from 40.8 in April, the highest since last September.

"An unexpectedly large jump in consumer confidence is pushing markets higher, negating early weakness from geopolitical concerns regarding North Korea's nuclear program," analysts at Charles Schwab & Co wrote.

The consumer confidence data "gave participants some anecdotal evidence that economic conditions may be improving, which brought about broad-based gains for the major indices," said analysts at Briefing.com.

Retail stocks responded to the increase in the consumer confidence by advancing "though higher consumer confidence has yet to translate into higher consumer spending," the analysts cautioned.

"The (consumer confidence) report had a positive effect on retailers and technology companies," said Wachovia Securities senior equity market strategist Scott Marcouiller.

Large-cap tech stocks like Apple, which was upgraded by analysts at Morgan Stanley, helped give the Nasdaq a major lift.

Apple closed 6.76 percent higher to 130.78 dollars.

General Motors, widely expected to file for bankruptcy protection ahead of a June 1 deadline imposed by the Obama administration, rose 0.7 percent to 1.44 dollars after recovering from a loss of more than 10 percent.

Reports had said the government will provide more massive financial aid to the country's number one carmaker, which reached a deal with the UAW union on cost-saving concessions that still must be ratified by rank-and-file workers.

The largest increase in the Dow Jones index came from JPMorgan Chase, rising 6.19 percent to 36.54 dollars.

Bonds, which plunged last week amid US credit rating worries, ended lower after an opening bounce.

The yield on the 10-year US Treasury bond rose to 3.493 percent from 3.448 percent on Friday and that on the 30-year bond climbed to 4.446 percent from 4.392 percent.

Bond yields and prices move in opposite directions.

- AFP /ls

From ChannelNewsAsia.com; see the source article here.

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Oil prices bounce above $60 in New York

AFP - Wednesday, May 20

Oil rigs extract petroleum in the Los Angeles area community of Culver City, California. Oil prices jumped to a six-month high above 60 dollars on Tuesday on growing signs of economic recovery amid concerns about unrest in African crude producer Nigeria, traders said.

LONDON (AFP) - - Oil prices jumped to a six-month high above 60 dollars Tuesday on growing signs of economic recovery amid concerns about unrest in African crude producer Nigeria, traders said.

New York's main futures contract, light sweet crude for delivery in June, rallied to 60.48 dollars a barrel -- a level last seen on November 10. The contract later stood at 59.90 dollars, up 87 cents from Monday's close.

Brent North Sea crude for July delivery touched a six-month high of 59.65 dollars a barrel before pulling back to 59.05 dollars, up 58 cents from Monday.

"Gains in the stock market increased optimism that the global economy is recovering," said BetOnMarkets analyst David Evans.

Global equity markets posted fresh gains Tuesday on hopes that the global economy is through the worst of its slump, setting the stage for a pick-up in energy demand, dealers said.

In early afternoon stock market trading in Europe, Frankfurt rallied 2.03 percent, Paris gained 0.82 percent and London climbed 0.61 percent.

In Asia, Hong Kong added 3.06 percent, Tokyo put on 2.78 percent, Seoul advanced 2.99 percent, Sydney added 2.19 percent and Taipei gained 1.18 percent.

Oil jumped by around two and a half dollars on Monday as traders tracked prospects of a global economic recovery, rising shares on Wall Street and developments in Nigera.

New York share prices shot higher Monday after better-than-expected earnings from home improvement retailer Lowe's helped reinforce hopes for a recovery in the United States.

A strong US economy is a key growth engine for the world because it is a major export market for many countries -- and is the biggest energy consuming nation on the planet.

Prices were also boosted by rising violence in oil exporter Nigeria, where the country's main armed group said it had ordered a blockade of key shipping channels in a bid to inflict further damage on the energy industry. Nigeria's military has urged oil firms to ignore the threat.

"Fresh violence in Nigeria helped to support prices," said VTB Capital analyst Andrey Kryuchenkov. "Militants there claimed to have sabotaged two pipelines, while threatening more supply disruptions."

Unrest in the oil-producing Niger Delta region has reduced Nigeria's daily output to 1.76 million barrels compared with 2.6 million barrels in January 2006.

From Yahoo! News; see the source article here.

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Corporate woes rise as Asia reels from crisis: IMF

AFP - Wednesday, May 13

Corporate woes rise as Asia reels from crisis: IMF

WASHINGTON (AFP) - - The global financial crisis is taking an increasing toll on Asia's corporate sector with the region's economies now among the world's hardest hit, a senior IMF official warned Tuesday.

"Corporate risks are rising and market indicators are flashing warning signs," IMF deputy managing director Takatoshi Kato said.

"There are signs that even the best Asian corporate 'names' are being rationed out of financial markets and are considering approaching their government for direct assistance," he told the annual meeting of the Pacific Economic Cooperation Council, a regional think tank, in Washington.

Large Asian firms, like their US counterparts, entered the crisis with strong balance sheets and when the demand shock hit, they faced little immediate pressure to scale back their activities or cut costs, he said.

"However, liquidity positions have since dwindled."

Kato said the global economic downturn is hitting Asia more severely than other regions with fourth quarter data showing a decline in output of nearly 15 percent in Asia, excluding China and India.

Many small and medium-sized enterprises, he said, were also suffocating under the weight of the global crisis, which stemmed from a US home mortgage meltdown that triggered financial turmoil and slammed the brakes on growth.

The firms borrowed heavily during the previous decade to expand their activities as suppliers to larger manufacturing groups but with the onset of the crisis, banks immediately started to rein in lending to these firms, Kato said.

Bad corporate loans were also expected to taint bank balance sheets in Asia.

"The feedback loop between the financial and real sectors is expected to play out," Kato said.

"Given the likely prolonged nature of the downturn, non-performing loans are likely to rise. This will feed into bank balance sheets."

Kato said large Asian corporations would need to further cut production if the credit crunch combined with a sharp fall in demand put healthy companies into trouble and scuttled profits.

Predicting that the region could see a wave of consolidation through mergers and acquisitions, he said firms were only now beginning to adjust employment levels.

"In the near-term, the process may prove quite painful, particularly if large job losses are involved," he said.

"Already, unemployment has started to climb across the region and potentially high social costs from this downturn are a looming threat."

Kato said that as financial activity worldwide shrunk, Asia's financial centers "have also been broadsided."

Citing Hong Kong, the special administration region of China, he said its financial system was "contracting," particularly in areas such as asset management and brokerage services.

In Singapore, lending to non-bank customers has been contracting recently in the Asian Dollar Market, he said.

In Japan, stricter lending standards, wider risk spreads, and the significant stock market declines have tightened financial conditions, he said.

Kato also noted that private investment in most Asian countries had slowed significantly and warned about a slowdown in private consumption as well.

"Although private consumption so far has shown relative resilience, falling incomes and tighter financial conditions foreshadow a slowdown ahead."

On the whole, Kato said the current recession in the region promised to be "deeper and more prolonged" compared to previous cycles.

From Yahoo! News; see the source article here.

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