Archives for August 2012

August 2012 - Page 4 of 20 - Money Morning - Only the News You Can Profit From

Gold Prices Going Up Regardless of Jackson Hole Outcome

Investors want to know if this week's Jackson Hole, WY meeting of central bankers will result in further stimulus measures and a rally in gold prices – but they don't have to wait to know gold is headed higher in 2012.

Gold fought back from its Tuesday morning low of $1,659.10 an ounce after a read on consumer confidence showed sentiment dropped in August to its lowest level in nine months. Americans have become increasingly worried about their employment scenarios and the overall outlook on the sluggish U.S. economy.

"Bad news is good news for gold again," Charles Nedoss of Kingsview Financial told CNBC.

Gold for December deliverylost $5.90, or 0.4%, to end at $1,669.70 an ounce on the Comex division of the New York Mercantile Exchange – but the slip won't last.

"Before you know it, gold is going to push for the next level, somewhere above $1,700 an ounce," Michael K. Smith, president of T & K Futures in Florida, told MarketWatch.

Gold glistened last week on news of possible additional monetary intervention from the U.S. Federal Reserve.

Following the release of the Federal Reserve's minutes last Wednesday, gold prices climbed to a 16-week high on hopes the central bank may engage in a fresh round of monetary stimulus to give life to the besieged U.S. economy.

"Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," according to the Federal Open Market Committee (FOMC) meeting minutes from July 31 – Aug 1.

Gold futures for December delivery hit $1,655.90 an ounce Wednesday after the 2 p.m. announcement, marking a then four-month high.

Gold prices continued the rally Thursday, gaining some $32.70 as the metal relished in renewed safe-haven buying. The precious metal was buoyed by an uninspiring manufacturing report from China revealing production fell to a nine-month low in August. The data suggested more action may be needed to boost the Asian nation's lackluster economy.

Now analysts see even more upside potential as the gold-price trend slopes upward. Deutsche Bank AG (NYSE: DB) expects U.S. and Chinese policy measures to support gold's growth over the next quarter or so.

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Can the U.S. Housing Market Continue this Recovery?

The ailing U.S. housing market, the trigger of the Great Recession, is indeed starting to recover – but it'll take years before it's healed.

The Standard & Poor's/Case Shiller Home Price Index released today (Tuesday) revealed that home prices in 20 U.S. cities rose in June from the same period a year ago. It also marked the first such gain since September 2010.

All 20 cities tracked by the index also rose in June from May, the second month in a row in which every city posted month-over-month gains. The most robust one-month gains came from Detroit, Minneapolis, Chicago and Atlanta.

"The combined positive news coming from both monthly and annual rates of change in home prices bode well for the housing market," David Blitzer, chairman of the S&P's index committee said in a statement. "We seem to be witnessing exactly what we need for a sustained recovery: monthly increases coupled with improving annual rates of change."

Helping the housing market rebound are record-low interest rates. Mortgage rates hit historic lows this year, and while they have inched up a tad, they are still at record low levels.

The National Association of Realtors last week reported sales of previously occupied homes climbed 10% in the past year. Builders, seeing an uptick in interest from potential buyers, are growing more confident. The group in June applied for the largest number of building permits in roughly four years.

The news is encouraging, but don't be mistaken: The U.S. housing market is still a far cry from healed or even healthy.

"We seem to have upward momentum and we have confirmatory evidence and like NAHB housing confidence index," said economist and index founder Robert Shiller. "But you know we have lots of clouds on the horizon too."

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Stock Market Today: Two Big Winners in Another Quiet Day

Here are the main headlines in the stock market today.

  • Home prices show strong improvement- The S&P/Case-Shiller National Home Price Index increased for the fifth month in a row as prices in June on a non-seasonally adjusted basis were up 2.3% from the previous year and ahead of expectations for a 2.2% increase. Home prices rose 6.9% in the three months ended June 30 compared to the first three months of 2012. The index, which measures single-family homes and covers more than 80% of the housing market in the United States, continues to back up the belief that the housing market has finally turned a corner. "We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change," said David Blitzer, a spokesman for Standard & Poor's, in a statement. "The market may have finally turned around."
  • Consumer confidence falls to nine-month low- As worries over the economy escalate and more Americans are unemployed consumer confidence slipped to its lowest level since last November. In August, consumer confidence, measured by the Conference Board's Confidence Index, fell to 60.6 from 65.4. Economists had hoped the index would rise slightly to 66. The board's future expectations sub-index dropped to 70.7 from 78.4, while the present-conditions index was basically unchanged at 45.
  • Mario Draghi to skip Jackson Hole– President of the European Central Bank Mario Draghi was expected to be the keynote speaker Saturday September 1 in the second day of the Jackson Hole, WY Symposium. Draghi will not attend due to his heavy workload regarding the strategy of the ECB's new bond-buying plan. Details regarding the European Stability Mechanism and other measures to improve the Eurozone debt crisis are expected to be announced at the ECB's next meeting Sept. 6.

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CSIQ Sells Solar Power Plant - Analyst Blog

Canadian Solar Inc. (CSIQ) announced that it has sold a utility-scale solar power plant to Stonepeak Infrastructure Partners for approximately $48.4 million.  As the developer responsible for engineering, procurement and construction of the project, Canadian Solar built the solar power plant to provide enough clean, renewable energy to power more than 1,200 homes in eastern […]

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Telefonica to Invest in UK Spectrum - Analyst Blog

Spanish telecom giant Telefonica S.A. (TEF) intends to spend €1.5 billion ($1.86 billion) to acquire spectrum in the forthcoming UK auction, likely to be conducted by the year-end. The auction plans were announced last month by the UK regulator Ofcom. The regulator will put two airwave bands —800 MHz and 2.6 GHz — on sale. […]

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AutoNation, Inc. (AN) - Bull of the Day

AutoNation, Inc. (AN) is the largest automotive retailer in U.S. The company s optimal brand and market mix is pulling new vehicle sales higher as the market revives. In the second quarter of 2012, the company's profits surged 35% to $0.66 per share, beating the Zacks Consensus Estimate by $0.07. Revenues of $3.9 billion were […]

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Ignore the Doom-and-Gloom Crowd When They Talk About $40 Oil

I just returned from a week down South with a few of my energy clients. It's good to get my hands dirty and remind myself firsthand what is going on at the project level of some of the country's top energy companies.

But when I returned home this weekend, I made the mistake of flicking on the television and opening the newspaper.
I can't believe that the pundits are now predicting that oil will fall to $40 a barrel. They also are projecting that the entire natural gas sector is going to collapse.

Here we go again.

Yes, we are wrestling with an energy sector that remains gun shy on elements from market volatility to geopolitical tensions.
And sure, $40 a barrel is possible, but only in an improbable situation where global demand for oil completely collapses, along with the world economy.

But we are in a new reality. And such doom and gloom predictions are highly oversimplified and potentially dangerous to you as an investor.

Here's why.


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Higher Gas Prices Ahead as Hurricane Isaac Takes Aim at Gulf

Hurricane Isaac continues to build strength in the warm waters of the Gulf of Mexico and is now moving west, toward the heart of U.S. oil and gas production.

Hurricane Isaac already has forced several energy giants to shut down major Gulf oil and gas projects until the storm passes. That's going to spell higher gas prices for U.S. consumers.

The emergency response will be the largest challenge to the U.S. energy sector since 2008, when Hurricane Gustav and Ike struck the region. Both hurricanes caused month-long disruptions at off-shore facilities and damaged a number of midstream operations in processing, pipeline, and storage along the coast.

By Monday, the U.S. Bureau of Safety and Environmental Enforcement reported that daily oil production in the Gulf was down 78% and natural gas production down 48%. Energy producers including Royal Dutch Shell Plc (NYSE ADR: RDS.A, RDS.B), Chevron Corp. (NYSE: CVX) and British Petroleum (NYSE ADR: BP) have evacuated more than 346 platforms and 41 rigs.

More shutdowns are expected on Monday and Tuesday as the storm gains strength.

"There's panic right now that this could stage a direct hit on New Orleans or the Chevron refinery in Pascagoula [Mississippi]," Tom Kloza, chief oil analyst for the Oil Price Information Service, told ABC 15 News in Arizona. "The refineries, once they're within 24 hours of either tropical storm or hurricane force winds, they have to start a shutdown.

British Petroleum shut down four oil and gas platforms in the Gulf of Mexico on Sunday and evacuated all of its workers. The shutdown includes the evacuation of Thunder Horse, the world's largest production semi-submersible with a production capacity of 250,000 barrels of oil a day and 200 million cubic feet a day of natural gas.

The company is still under obvious scrutiny of its offshore projects given the Deepwater Horizon spill in 2010 which killed 11 workers and gushed millions of gallons of oil into the Gulf.

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The Apple-Samsung Patent Case: Here Are the Real Winners and Losers

Apple Inc.'s (Nasdaq: AAPL) huge patent-trial victory over Samsung Electronics Co. (PINK: SSNLF) has radically shifted the balance of power among the world's mobile computing combatants.

The implications of Apple's victory extend well beyond the two tech giants. As another black mark against Google Inc.'s (Nasdaq: GOOG) Android, the decision could spark a move away from the free operating system toward alternatives.

A nine-member jury found that all 21Samsung products in the suit had infringed on Apple patents and awarded the Cupertino, CA, company $1.05 billion in damages.

The jury dismissed Samsung's counterclaims, awarding it zero in damages.

"This is the best-case scenario Apple could have hoped for," Brian Love, a Santa Clara law school professor, told Reuters.

The markets agreed, sending Samsung stock down as much as 8% on the South Korean stock exchange. AAPL, meanwhile, was up nearly 3% in early trading to a new high of $682.07, though it slipped back later in the day.

Samsung said it would appeal the ruling, but few analysts give the company much of a chance at overturning the verdict.

In fact, it's more likely things will get worse for Samsung. U.S. District Judge Lucy Koh could double or even triple the damages based on the jury's finding that Samsung "willfully" infringed on Apple's patents.

And Apple said it planned to file for an injunction to halt the sales of Samsung's infringing products in the United States, which would be a far bigger blow than the unusually large monetary damages. A hearing on that is expected Sept. 20.

While Apple and Samsung have filed dozens of lawsuits against each other around the world, the case decided Friday was considered the most important because it concerned the U.S. market.

That the Apple-Samsung patent case decision heavily favored Apple surprised many analysts, most of whom expected a more balanced outcome.

Let's take a closer look at what the Apple-Samsung verdict means to the major players in the $219 billion mobile computing market.

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Republicans Support Return to Gold Standard

Five years of liberal monetary policy have made the rarely considered notion of a return to the gold standard a genuine issue on the Republican platform.

The Republican Party is set to announce a "gold commission" to its official policy platform in Tampa Bay this week. The move will mark the first time in three decades that the gold standard has returned to mainstream U.S. politics.

A committee spokeswoman confirmed to CNNMoney that the new proposal to support "gold as money" will be officially decided upon at the RNC Convention.

"Now, three decades later, as we face the task of cleaning up the wreckage of the current Administration's policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar," reads the proposal.

Republicans' Gold Standard Proposal: A Nod to Ron Paul?

The draft calls for an audit of Federal Reserve monetary policy and a commission to explore restoring the connection between the U.S. dollar and gold.

Many credit the eyebrow-raising move to Texas Rep. Ron Paul, a longshot GOP presidential hopeful who has been a staunch advocate of returning to the gold standard. Paul, the token underdog in the race, does have a stream of loyal supporters who would support such a move.

But Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the committee, shrugs off any connection to Paul and his coveted delegates.

"These were adopted because they are things that Republicans agree on. The House recently passed a bill on this, and this is something that we think needs to be done," Blackburn told the Financial Times.

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