Archives for January 2011

January 2011 - Page 5 of 10 - Money Morning - Only the News You Can Profit From

U.S. Unemployment Rate: Readers See Shift to Foreign Job Opportunities

The U.S. jobs market finally showed signs of improvement last month after the unemployment rate dropped to 9.4%. That was down from 9.8% in November and represented the first real change in any direction in months.

In fact, that decline pushed the national jobless rate down to its lowest level in 19 months, and created the first sense of optimism in more than a year.

Some analysts think December's numbers represent a sea change in the U.S. jobs market, and will mark the start of sustained improvement. They cite increasing job listings in 2010, rising corporate profits in 2011 and upward revisions of previous unemployment reports as reasons the job market pain could finally be subsiding.

Read More…

Available CBOE Weeklys

Standard options have long offered a more flexible way to invest. But a relatively new product called Weekly Options, or "Weeklys," gives investors an even more efficient way to use leverage and target profits. As of Jan. 5, there were 40 underlying assets – including stocks, exchange-traded funds, and indexes – available as Weekly Options on the Chicago Board Options Exchange (CBOE).

Read More…

Global Currency War: How to Keep the "Race to the Bottom" From Stealing Our Future

When Brazil Finance Minister Guido Mantega recently warned of a "currency war that is turning into a trade war," he wasn't far off the mark – at least as far as Latin America is concerned.

In that region – in the last two weeks alone – at least three countries have taken steps to prevent their currencies from appreciating against the U.S. dollar.

If you're a U.S. investor with no Brazilian holdings, you probably wouldn't think you'd have to worry a whole lot about what Brazil is doing to keep its currency – the real – from appreciating.

But on that point, you'd be wrong.

In fact, as Mantega warns, the fallout from a currency war could actually be quite severe – and global in reach. The games that governments are currently playing in currency markets could cause countries to set up trade barriers against imports. And that could bring about the end of the truly global economy – a "de-globalization" that would steal our current standard of living and thwart a return to prosperity.

Fortunately, there is a solution.

To understand how we can head off this "currency war," please read on…

Read More…

Hot Stocks: Steve Jobs Health Concerns No Reason to Bail on Apple Inc. (Nasdaq: AAPL)

Apple Inc. (Nasdaq: AAPL) stock is set to plunge today (Tuesday) due to growing concerns about Chief Executive Officer Steve Jobs' health. But rather than retreat from the tech heavyweight, investors might be better served to load up as the stock pulls back.

No doubt, Steve Jobs represents the soul of Apple. He guides the company's general direction – driving its innovation and expanding its global profile. But even without Jobs, Apple is a strong fundamental company with a stockpile of cash, a rock solid product line and mainstream brand.

Jobs, a 55-year old cancer survivor, said yesterday (Monday) that he would take a medical leave of absence to focus on his health.

Read More…

China's Yuan Policy will be the Source of Much Discussion, but Little Change During President Hu's Visit

It's unlikely U.S. President Barack Obama will make much headway in his efforts to influence China's yuan policy when he meets with Chinese President Hu Jintao in Washington this week. President Hu made that abundantly clear on Sunday when he rejected U.S. arguments that allowing the yuan to appreciate against the dollar would help the government in Beijing tame inflation.

In response to written questions from The Wall Street Journal and the Washington Post, Hu said he favors greater cooperation with the United States on economic issues but he called the present U.S. dollar-dominated currency system a "product of the past," the newspapers reported on their Web sites.

The Chinese president said his government is fighting inflation with a package of policies, including interest rate increases, and that rising prices can "hardly be the main factor in determining the exchange rate policy," according to a transcript of the answers.

Read More…

BP PLC (NYSE ADR: BP) Attempts Another Venture Into Russian Oil Industry in $16 Billion Deal

BP PLC (NYSE ADR: BP) on Friday announced it was entering a $16 billion share swap deal with Russian oil industry giant NK Rosneft OAO (PINK: RNFTF). The deal will give BP access to areas of the Russian Arctic that were previously off limits to foreign companies, but it will come at a political cost.

The deal involves BP swapping 5% of its shares, valued at $7.8 billion, for 9.5% of state-controlled Rosneft's shares. The British oil company already owns a 1.3% stake in the Russian business. BP Chief Executive Officer Robert Dudley said the deal is the first cross-shareholding between a Russian state-owned national oil company (NOC) and western oil giant, and called the move "a new template for how business can be done in our industry."

The joint venture will make Rosneft the largest single BP shareholder. Their newly formed joint operating company will be two-thirds owned by Rosneft and one-third owned by BP. It will spend up to $2 billion in an initial phase of testing and well-drilling.

Read More…

Buy Sell Hold: Alcoa Inc. (NYSE: AA) is a Turnaround Play Worthy of Long-Term Investment

While U.S. unemployment is still high and showing no real signs of receding, there are a few indications that the economy is slowly edging back toward a pattern of sustained growth.

That's important because smart investors are always looking for a turnaround play – that is, a situation that has changed the underlying market dynamics surrounding it.

In today's case, we look at a company – Alcoa Inc. (NYSE: AA) – that just last week reported its best quarterly results since the third quarter of 2008.

Alcoa in the last 10 quarters laid-off 20,000 employees as management attacked its cost structure by closing facilities around the world. And today it is a much leaner company and better prepared for the future than it was in the fall of 2008.

Read More…

JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon Issues Warning for Municipal Bond Investors

JPMorgan Chase & Co. (NYSE: JPM) Chief Executive Officer Jamie Dimon said he expected more municipal bankruptcies. In doing so, aligned himself with other critics of the muni-bond market, including analyst Meredith Whitney and Money Morning's own Martin Hutchinson.

"There have been six or seven municipal bankruptcies already," Dimon said Jan. 10 at JPMorgan's annual healthcare conference. "I think unfortunately you will see more."

Cities like Detroit and Harrisburg, PA have recently raised their prospects for bankruptcy. They're troubles reflect the dire situation of state governments that are dealing with about $140 billion in deficits in the next fiscal year, according to a report from the Center on Budget and Policy Priorities.

As states and cities reach their highest debt levels, municipal bond holders are concerned their seemingly safe investments are no longer guaranteed.

The muni-bond market took another hit Thursday when the New Jersey Economic Development Authority failed to generate enough investor interest to refinance it its variable-rate debt. The government agency was forced to reduce its planned $1.8 billion offering to $1.1 billion and pay a higher rate than expected.

Mutual fund company Vanguard Group last week backed away from three new muni bond funds due to the sector's bleak outlook.

Read More…