May 2011 Archives - 5/9 - Money Morning - Only the News You Can Profit From
Hot Stocks: Netflix Inc. (Nasdaq: NFLX) Is More Than Just Special Effects
Netflix Inc. (Nasdaq: NFLX) shares have surged 764% in just two-and-a-half years.
And yet there are still investors, analysts and businessmen who continue to doubt the company – choosing instead to believe that its meteoric rise is more flash than bang.
If you're part of that mix, you may want to reconsider your stance: Not only has Netflix revolutionized the way people rent movies – driving Blockbuster Inc. (PINK: BLOAQ) into bankruptcy in the process – it's now even revolutionizing the way people watch TV.
Having added 3.3 million subscribers in this year's first quarter, Netflix has some 23.6 million subscribers in North America alone. That's more than Comcast Corp. (Nasdaq: CMCSA, CMCSK), whose cable-subscriber ranks shrank by 39,000 to 22.76 million during the same three-month stretch.
- Can the Bull Keep Running?
- U.S. Dollar Rebound: Inflection Point Turns The Dollar Into A Winner
The Japanese Economy: How Its Post-Earthquake Weakness and Scuffles With China Contribute to a Global-Market Reversal
In our ongoing search for possible "inflection-point" catalysts – financial stimulants that could help turn global markets upside down – the Japanese economy has to be a prime candidate.
In the last part of the 1980s, Japan was the world power – so much so that investors on the U.S. trading floors of New York each day watched the Tokyo markets with a mixture of awe and fear. An oft-cited investing aphorism of the day explained this very clearly by holding that "when Tokyo sneezes, Wall Street catches a cold."
Not long after, the Japanese miracle ended, the stock-and-real-estate markets crashed, and that Asian country fell into a funk known as the "Lost Decade" – a misnomer, since the economic malaise that's lasted virtually ever since is actually more than 20 years long.
Why Inflation in China Could Lead to Another Global Recession
Inflation in China is far more intractable than official headline statistics reveal.
That's potentially bad news for global growth and toppy stock and commodities markets.
If China effectively dampens dangerously high inflationary expectations and real, rapidly rising food, property and fixed-investment assets by hitting the brakes too hard, global growth could skid and potentially stall out.
The resulting sound of breaking glass would likely be clear support levels enjoyed by rising stock and commodity markets as they finally correct, along with theories of China's infinite growth trajectory.
Increasing U.S. Oil Production Won't Stop Rising Gasoline Prices
This year's surge in oil prices and resulting high gasoline prices have many calling for more U.S. oil production as a solution.
Rising oil prices have pushed the U.S. average price per gallon of gasoline to $3.98. Oil prices, despite a recent slip, are up about 11% this year. West Texas Intermediate crude oil hovered around $99 a barrel yesterday (Thursday), and many experts expect it to hit $150 a barrel this year.
Many consumers want an increase in U.S. oil production to lower oil and gasoline prices, as well as reduce U.S. dependence on foreign oil for a national security benefit. Domestic activity has slowed since BP PLC's (NYSE ADR: BP) Gulf oil spill last April. Critics claim that U.S. President Barack Obama hasn't done enough to support a U.S. oil industry that provides needed jobs and revenue and could help keep oil costs from rising much higher.
Safe Haven Investments: Only One Remains
The April 18 announcement by Standard and Poor's that it downgraded its outlook for U.S. debt to "negative" from "stable" was unsurprising.
At the same time, though, it raised questions about safe haven investments.
Principally, if U.S. Treasuries are no longer an investment safe haven, then where can cautious investors safely store their capital?
The market's initial reaction to the S&P announcement was typical of its trader-dominated nature. Stocks dropped and gold rose – but U.S. Treasury bond prices actually rose, as well.
LNG Imports: We Predicted How Japan Would Ease its Energy Crisis
Just days after Money Morning columnist Peter Krauth predicted a global uptick in liquefied natural gas (LNG) demand because of the nuclear-powerplant disaster in Japan, experts predicted the Asian heavyweight would boost LNG imports by 50% to help ease the massive energy shortage the country now faces because of the tragedy.
Krauth is Money Morning's resident natural resources expert, and he also runs the "Global Resource Alert" advisory service. Late last month, in the special report "A Trillion Reasons to Bet Big on LNG," Krauth told Money Morning subscribers to take a close look at liquefied natural gas, predicting that Japan would seize upon LNG as a ready and plentiful partial solution to its increasingly serious energy-shortfall quagmire.
Japan relies on fuel imports for most of its energy needs. After the March 11 earthquake and subsequent powerplant accident ruined 20% of its nuclear power output, Japan has been forced to seek out other sources of electricity.
Toyota Motor Corp. (NYSE: TM) CFO Encourages Global Production Shift as Profits Tumble
Toyota Motor Corp. (NYSE: TM) reported a staggering 77% decline in quarterly profits this month due to production disruption from the Japan earthquake and a strengthening yen. Many now wonder if the automaker can maintain its strong manufacturing presence in Japan without losing too much in profit.
Chief Financial Officer Satoshi Ozawa said at a news conference yesterday (Wednesday) that he will advise Toyota President Akio Toyoda on the need to rebalance the company's domestic and overseas production. Toyota makes 45% of its vehicles in Japan.
Toyota has "reached the limits of our ability to manufacture in Japan," said Ozawa. "We have done as much as we can do as a single company."