Archives for February 2013

February 2013 - Page 10 of 17 - Money Morning - Only the News You Can Profit From

Why Veteran Trader Says Inflation in 2013 Is Imminent

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Is a spike in the monetary base – currency in circulation plus bank reserves at the Fed – the first sign of imminent inflation?

Art Cashin, the well-respected director of floor operations at the New York Stock Exchange for UBS, recently told King World News the increase in the monetary base may well be a sign of impending inflation.

Monetary base, sometimes called high-powered money, is the basis for the bank lending that drives our economy. When interest rates are normal, banks use their reserves for lending.

Unfortunately, these are not normal times. The U.S. Federal Reserve and other central banks around the world continue to hold interest rates at zero.

Zero interest rates mean zero returns. Investors don't get paid for investing. Banks don't get paid enough interest to compensate for the risk of lending money into the economy. Looking at it another way, there is no penalty for doing nothing with your money.

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Stocks to Buy: 5 Picks Buffett and Insiders Love Right Now

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Investors often look to Warren Buffett's purchases when trying to pick the best stocks to buy.

And with good reason: Buffett's conglomerate, Berkshire Hathaway (NYSE: BRK.A, BRK.B),
has an impressive track record and got off to a stellar start this year. Berkshire Hathaway gained 8.7% in January, beating the Standard & Poor's 500 Index's 6% rise and the Dow Jones Industrial Average's 7% increase.

It's also a good sign when Buffett's picks include companies with heavy insider buying, given insiders buy because they expect shares to rise.

That's why MarketWatch and Insider Monkey just took a look at Buffett's 38 holdings and compared his purchases to stocks that have had sustainable insider buying in the past 90 days.

And who knows better than insiders? These folks are privy to the most current information on their companies' prospects, and research shows stock prices rise more after insiders' net purchases than after net sales.

MarketWatch and Insider Monkey came up with the following five stocks to buy now, based on Buffett's holdings and insider buying.

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Stock Market Today: Wall Street Reacts to State of the Union Speech

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The stock market today (Wednesday) shrugged off U.S. President Barack Obama's State of the Union speech in which he urged Congress to take steps to strengthen the economy.

In early afternoon trading, the Dow Jones Industrial Average was off 38 points, the Standard & Poor's 500 Index was up 1 and the Nasdaq rose 7.

The tepid reaction to the president's speech is not unusual. Historically, most presidential addresses move markets by less than 1% the day after a speech, with the average move just 0.15%, according LPL Financial's Jeff Kleintop.

Whatever the Dow does Wednesday, expect the benchmark to soon hit an all-time high. The index is just 1% off the record 14,165, set in 2007. Since 2009, stocks have soared some 127%, with pullbacks within each month. So it looks like it may be March before we reach a record high, but it's coming.

A lackluster retail sales report from the Commerce Department didn't provide any stimulus to the stock market today. U.S. retail sales rose a paltry 0.1% in January as an increase in payroll taxes left consumers with less disposable income.

"The payroll tax increase is having some impact on spending here. It looks like maybe momentum is not necessarily carrying forward into the first quarter," Jefferies economist Thomas Simons told Bloomberg News.

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Are Japanese Stocks a "Buy" with the Nikkei on the Rise?

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Anyone invested in Japanese stocks took notice when the country's minister of state for economic and fiscal policy, Akira Amari, said at a Yokohama meeting that he hopes the government takes steps to push shares of the Nikkei 225 up about 17% to 13,000.

"I would like the government to take successive steps to push share prices higher,"Amari said Saturday. "Higher share prices work to improve corporate earnings. It is important for the government to show that it will work hard to aim at having the [Nikkei 225] index hit 13,000 by the end of the fiscal year in March."

Amari also noted the Nikkei was up more than 2,000 points since former Prime Minister Yoshihiko Noda announced the dissolution of the Diet in November. In fact, the Nikkei 225 Stock Averagelast week closed at its highest since September 2008 after a 12-week advance that was the longest such streak since 1959, according to Nikkei Inc.

Articles in the English-language press misidentified Amari as minister of finance – a position held by former Prime Minister Taro Aso – making the comments seem more like official government policy.

Of course, no one in the government of Prime Minister Shinzo Abe will be upset if Amari turns out to be correct. Higher share prices are good for the economy and for achieving the government's aim of ending the deflationary spiral in Japan – and good for anyone who owns Japanese stocks.

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Will Encana Miss? - Analyst Blog

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Natural gas exploration and production (E&P) company Encana Corporation (ECA) is scheduled to report its fourth-quarter and full-year 2012 results on Thursday, Feb 14, 2013. In the third quarter, the company delivered a negative 128.00% earnings surprise, due to a depressing natural gas environment and higher operating expenses. Moreover, Encana delivered negative earnings surprises in […]

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The Great American Rebound Has Just Begun

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The U.S. manufacturing renaissance is not just a fantasy – it is actually happening. Jobs that had been outsourced to China and elsewhere really are returning to the United States.

Believe it or not, this "reshoring" already has reversed the long, steady decline of manufacturing jobs in the U.S.

In fact, since 2010 America has added roughly 500,000 manufacturing jobs, an increase of 4.3%.

The economic and investment implications of this reversal are considerable to say the least.

The Best Way to Invest in the "Golden Age of Materials Science"

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How often has your smartphone died during a conference call with your biggest client, or while you're enjoying the highlight replays of your favorite team's latest win?

A new substance that you've probably never heard of could end that worry – and a few others, as well.

Just created at the University of Buffalo, this advanced substance is billed as a portable hydrogen fuel cell. Just add water, and the chemical reaction will yield an instant way to charge your cellphone's dead battery.

Not surprisingly, the research team that invented it believes this new form of silicon could also be a big hit with the military … once the substance is ready for sale, that is.

On its face, this sounds like another bit of technological wizardry … the kind of invention each of us probably reads about several times a week. But if you take a step back, and look at the big picture as I have, you'll see that there's something much more powerful – and dynamic – taking place here.

You see, we've now entered what I refer to as the "Golden Age of Materials Science." I've been watching this sector for more than 25 years and I've never seen so much innovation occurring at one time.

And that means the profit potential in this overlooked sector is big – and getting bigger with each new discovery.

Industry insiders refer to the product of these research programs as "exotic materials." And that's actually a most appropriate term.

I began following these exotic discoveries during my time as a journalist – as part of my coverage of President Ronald Reagan's "Star Wars" program. So I know how these compounds span the entire field of technology, in defense and military applications, in telecommunications, and even in biosensors that warn you about an anthrax attack.

That background has proved invaluable in recent years. It's why I was able to recommend rare-earth investments to my trading-service subscribers in the summer of 2010 – a full year ahead of my rivals. Readers who acted on my recommendations scored triple-digit gains in just over a year's time.

So you can see why I'm always on the hunt for the Next Big Thing in polymers, specialty coatings, composites and biomedical gels. They'll all help drive the pace of innovation in the Era of Radical Change. And they will bring us plenty of profit opportunities.

And there's no shortage of breakthroughs to act on. Just take a look…

After Nexen's Buyout, How Should You Play Canadian Oil Sands Stocks?

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The purchase of Calgary-based energy company Nexen Inc. (NYSE: NXY) for $15.1 billion by China's CNOOC Ltd. (NYSE ADR: CEO) is the largest overseas purchase ever by the world's second-biggest economic power.

But it will likely be the last time China, or any other country, takes a big chunk out of Canada's oil sands – the world's third-largest proven reserves of crude oil.

That's because after Canadian Prime Minister Stephen Harper approved the Nexen deal in December, he banned further foreign firms' investment in Canada's oil sands and will allow them only under "exceptional" circumstances.

"The government's concern and discomfort for some time has been that very quickly, a series of large-scale controlling transactions by foreign state-owned companies could rapidly transform this [oil sands] industry from one that is essentially a free market to one that is effectively under control of a foreign government," Harper said in December.

"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada," he added.

But foreign government control isn't the real problem facing Canadian oil sands companies.

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U.S. Economy: "Recovery" Doesn't Fool Struggling Americans

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The government's numbers – primarily the monthly data on unemployment and inflation – tell the story of a slow but gradual recovery by the U.S. economy.

But the experience of millions of Americans tells a far different story.

According to a new national survey conducted by the John J. Heldrich Center for Workforce Development at Rutgers University, many Americans continue to suffer from the impact of the Great Recession.

What's more, more than half of those surveyed believe the U.S. economy will not fully recover for another six years, and nearly one-third said the U.S. economy will never fully recover.

"Millions of households were affected to some extent by the layoffs that occurred four years ago," Mark Szeltner, the lead researcher for the Rutgers survey, told The Daily Ticker.

The Rutgers survey backs up what some other surveys have said.

Last August, in a Pew Research survey of middle-class Americans, 42% said they were worse off than they were in 2008.

A Rasmussen survey taken earlier this month showed that only 39% believed the U.S. economy would be stronger in five years – the first time, Rasmussen said, that figure had ever dipped below 40%.

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Why Russia is Investing in Gold More Than Anyone

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Now we know what Russia has been doing all these years with all its oil mega-profits: investing in gold.

A Bloomberg News article Monday reported that Russia's central bank added 570 metric tons of gold in the past decade, making the country the world's biggest gold buyer. That amount is a quarter more than the world's second-biggest buyer, China.

The amount of gold Russia added to its stockpile is almost triple the weight of the Statue of Liberty, according to Bloomberg.

It certainly makes sense for Russia to add to its official gold reserves. Gold prices have gained about 400% over the past decade.

"The more gold a country has, the more sovereignty it will have if there's a cataclysm with the dollar, the euro, the pound or any other reserve currency," Evgeny Fedorov, a lawmaker for Putin's United Russia party in the lower house of parliament, told Bloomberg in a telephone interview in Moscow.

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