Archives for February 2010

February 2010 - Page 6 of 8 - Money Morning - Only the News You Can Profit From

Buy, Sell or Hold: Paychex Inc. Offers a Chance to Profit From the Paradigm Shift in Employment

The U.S. labor picture may not be clear, but investors can profit by acquiring shares of Paychex Inc. (Nasdaq: PAYX) to take advantage of the new employment paradigm.

As the former head of credit and analysis for ADP Capital Management, the investment arm of Automatic Data Processing (Nasdaq: ADP), I know the outsourced payroll industry from the inside out.  ADP – a company in which I have kept the stock I received – is the leader in the payroll sector.  It focuses on the larger and more stable companies in the United States.
  
Today, taking into account the latest employment dynamics, and the massive change in the structural characteristics of the U.S. economy, we are going to focus on an ADP competitor – Paychex Inc. 

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U.S. Joins Global Parade of Countries Plagued by Debt Bomb

The most important fundamental development of the week was not any of a slew of economic reports at all but the new federal budget proposal released by the White House. And it was a doozy: The Obama Administration proposed to spend $3.8 trillion, with $1.6 trillion on the equivalent of the national credit card.

Investors did not overtly seem to mind today, but they will. It is almost mind-numbing to think we've gone from the surplus that President Clinton left President Bush to the trillion-dollar hole we're in now. There is nothing good about the scenario of bone-crushing debt, as we have seen repeatedly throughout the world recently in places like Dubai, Greece, the United Kingdom and Japan. The fact that the U.S. dollar has managed to hold its own despite representing a country deeply in hock is only testament to the weakness of every other major developed-world government.

It's ironic in fact that plenty of emerging-market countries are managing their books far better than the United States and Europe. They include Chile, Azerbaijan, Angola, Ukraine and Romania — all with debt at less than 15% of national GDP, while we are knocking on 60%!

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Arctic Chill Frames Divergence in G-7 Economic Policies at Canada Meet

In between bites of seal meat and dogsled races, the financial heads of the Group of Seven (G-7) countries met near the Arctic Circle in Canada last weekend to hammer out differences in how their respective countries will approach monetary policy as the economic recovery takes hold. Windchill temperatures hovered around -40°C in Iqaluit, just […]

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Five Reasons to Put Your Money In China Now

China is the greatest growth zone in economic history. The third largest economy in the world, China is projected to pass Japan in the coming year and to surpass the U.S. economy as soon as 2020. So, when you're deciding how to allocate your investment portfolio, do you want to put your money in the U.S. – a country projected to grow by less than 3% in 2010 – or in a country that is expected to more than triple that? Here's why I'm putting my money in China.

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One Indicator That's Unquestionably Bullish

Many economic indicators are sending mixed signals, but one stalwart is coming through crystal clear.

And it suggests that U.S. stocks are poised for a strong showing in 2010.

The indicator I'm referring to is the oft-overlooked "Super Bowl Indicator," which as has correctly predicted the direction of the Dow Jones Industrial Average in 34 of the past 43 years. That's an enviable 79% success rate. And between 1967 and 1997, the indicator was correct 28 out of 31 times – a stunning 90% success rate.

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Profit From the First Biofuel Winner - Before it Goes Public

Weeds are hardly my favorite flora. My hay fever doesn't like them and neither does my lawn. But a flax called camelina – needing little nitrogen and water – may just be the first big winner in renewable biofuels.

It is going to provide investors with a whole new way to play the renewable energy market. And its impact will be, quite literally, up in the air.

Anybody who flies has been feeling the pinch of exploding ticket prices. Having jetted over a quarter of a million miles in the last 18 months, I can attest to the connection between rising fuel prices and ticket hikes. And without a major change in how we source jet fuel, this problem will simply get worse – especially with ridership slowly returning as the crisis bottoms out.

Jet fuel is already imported in greater volume, and the refineries that can provide it reliably worldwide are limited. That's because refining puts jet fuel (which is really high-level kerosene) among the so-called "middle distillates" – along with diesel and low-sulfur heating oil. But prioritizing the need for high-octane gasoline ("light distillates") has taken up more of the available refinery capacity.

They're producing less diesel and jet fuel than the market requires, pushing up the price.  
And jet biofuel may be an answer.

It's hardly theoretical.

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Price Wars Likely to Spur Smartphone Explosion in 2010

Are you one of those holdouts who hasn't yet jumped into the high-tech world of smartphones? Well get ready, because the mobile-phone makers of the world are about to make you an offer that will be very difficult to refuse.

This may be the year when cheap prices finally drag millions of behind-the-curve consumers into the blossoming smartphone market, unleashing unprecedented strains on broadband networks as handset makers wage a price war in the midst of booming demand.

"The smartphone market will become ultra competitive in 2010," analyst Neil Mawston from Strategy Analytics told Reuters.

More than 1 billion mobile devices will access the Internet in the New Year, research firm International Data Corp. (NYSE: IDC) says. That's catching up to the 1.3 billion users that use a PC to go online, and the rate of growth for mobile users is 2.5 times the growth rate for PC use.

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Unemployment Report Set to Reflect the Bitter Face of a Jobless Recovery

New statistics from the Labor Department today (Friday) will likely confirm that the U.S. economy is in a deeper hole than previously thought.

Economists expect that the national unemployment rate rose to 10.1% in January from 10% in December. More importantly, however, the number of jobs lost from April 2008 to March 2009 will be revised upwards by 824,000 – the largest margin in 18 years, according to Bloomberg News.

Most of those losses came from companies that closed or went out of business, which would undermine the popular birth/death model for joblessness. That model is based on the assumption that hirings at newly formed companies generally offset the job losses associated with company closures.

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Oil Prices Set to Surge to $90 a Barrel by Midyear, Retest Record High in 2011

In its 2010 forecast series, Money Morning predicted the price of oil would reach $100 a barrel by the end of the year. And while crude prices stalled in January, a growing body of evidence suggests that call may not be far off.

Oil prices rose above $80 a barrel for the first time ever on Sept. 13, 2007. From there they jumped 84% to $147 a barrel in July 2008. Then, in 2009, they surged more than 133% from a low of $34.03 a barrel in February to $79.39 a barrel at the end of December.

The price of crude again topped out above the $80 a barrel mark in early January, but has since slid back down to about $75 a barrel. However, some analysts believe that this is just period of temporary cooling before prices reignite and soar to $90 by midyear, and as high as $200 a barrel by 2012.

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As Greece's Woes Demonstrate, the Fuse Has Been Lit on the Global Debt Bomb

The big story in the international markets so far in the New Year has been the increasing shakiness of a number of countries' government bonds, with Greece right now being the most troubled of all.

Since U.S. investors tend to avoid foreign government bonds, many will dismiss this as an irrelevant development.

That's a mistake. The reality is that the international implications of this bond-market problem are serious for the world's stock markets, as well as for the global economy as a whole.

The fuse has been lit on a global debt bomb. And Greece has quickly become a poster child for the explosion that's all but certain to occur.

To find out all about the "Global Debt Bomb," read on...