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Market Update

How One State’s Light Bulb Legislation Could Impact All U.S. Manufacturing

South Carolina is close to pulling off a dramatic end-run around the federal government.

If that state succeeds, the end result could have a serious impact on every U.S. manufacturing industry from cars to toilets.

It could even help balance state budgets.

Dueling Light-Bulb Laws

I'm talking about South Carolina's Incandescent Light Bulb Freedom Act – a trivial-sounding piece of state legislation that could open a significant loophole for states that are desperate to create jobs and drum up revenue.

The Energy Independence and Security Act of 2007 – a predating piece of federal legislation – decreed that all incandescent bulbs be phased out by 2012, and permanently replaced by their fluorescent and halogen counterparts.

That's where the loophole comes in. You see, South Carolina's light bulb legislation would let the state continue to manufacture and sell incandescent bulbs – so long as they were made and sold exclusively in South Carolina.

While South Carolina's attempt to nullify a federal law smacks of an antebellum crisis, the move may well work. That's because, according to the Supreme Court's 1935 decision in the case of Schechter Poultry vs. United States, the federal government does not have the power to regulate commerce that is entirely conducted within a state.

So if South Carolina attempted to buy incandescent light bulbs from one of the country's leading manufacturers, it would be in trouble – since none of the major light bulb manufacturers are South Carolina companies.

But if South Carolina makes the bulbs itself, and offers them for sale only within the state, the Schechter decision would seem to apply – though subsequent Supreme Court decisions in the opposite direction make the question a close one.

Chocolate Eggs, Toilets and '59 Caddies

Still, if successful, this would be a major coup for many U.S. manufacturers, as it would set a significant precedent. Soon, any unpopular federal product regulations could potentially be nullified by a state that's seeking popular support.

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The Death of bin Laden: What it Means for Pakistan, the Dow and Your Financial Security

The finding and killing of Osama bin Laden after 10 years of searching is clearly being heralded as an enormous U.S. victory.

But once you look past the news itself, the death of bin Laden brings to light some highly worrisome revelations about Pakistan. And those revelations have some potentially serious long-term implications for the Dow Jones Industrial Average – and for your money and future financial security.

So let's look at the longer-term implications of the death of bin Laden, the troubling new insights that we've gained about the "real" Pakistan, and how this development actually injects even more geopolitical uncertainty into an already uncertain world.

To understand the true implications of this development - and the moves you must make now - please read on...

It Pays to Prepare for a Stock-Market Reversal – Even With New Bull-Market Highs

In a stunning display of determination (or simple greed), U.S. stock prices are once again at new highs – despite problems in the Middle East, out-of-control government deficits throughout the world, an increasingly inflated China and the looming end to the U.S. Federal Reserve's free-money boondoggle, otherwise known as "QE2."

Should you be worried about a stock-market reversal?

I know that I am.

But here's the thing: While there's no question that a stock-market breakdown could derail the best of investing intentions, it doesn't have to derail your financial future. More to the point, if you understand when stock-market "turning points" are likely to occur, you can establish positions or trades ahead of time that will yield profits when those expected transitions actually come to pass.

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Second Quarter Forecast: Three Predictions, Three Ways to Profit

With the first quarter of 2011 behind us, there's a lot to take away and learn from – especially when it comes to the direction of oil prices, interest rates and stocks.

Granted, we're right now navigating one of the most uncertain periods in modern global history. But if you're a trader or an investor, knowing how markets have been reacting to recent news and events provides you with some valuable insights that you can use going forward.

And after we address each of these three topics – oil prices, interest rates and stocks – we'll be able to recommend some specific moves that investors should consider.

So let's look at each topic more closely.

For three ways to profit from these trends, please read on…

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Fast Casual Restaurants Slice Off Bigger Portion of Dining Dollar

Led by the rapidly growing fast casual segment, the restaurant industry should see significant sales increases in 2011 after getting rocked by the recession.

Consumers who were worried about the economy cut back on dining out in 2008 and 2009. But with modest gains in 2010 pointing to better days ahead, industry analysts believe this year could be the best for restaurants since 2007.

"Consumers are finding some retail therapy in things like eating out," John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC inBoston told Bloomberg. "They may not be ready for that two-week vacation inEuropeyet, but they'll go to a restaurant once every couple of weeks. It's an affordable luxury."

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The U.S. Bull Market: At Two Years and Counting, Here's How to Invest

The current bull market in U.S. stocks celebrated its second birthday on March 9.

With human beings, a 2-year-old is a lusty toddler with a lot more growing to do. For a bull-market-run in stocks, however – particularly a bull market as vigorous as this one has been – the two-year mark is a good time to start searching for some serious signs of aging.

Don't get me wrong: The U.S. bull market could continue – indeed, it probably will continue for some time to come.

But we are almost certainly much closer to its end than we are to its March 9, 2009 day of birth.

And that reality means that we need to invest in a certain way.

To see Hutchinson's full strategy, please read on…

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Japan Nuclear Crisis: New Power Plant Construction Renaissance in Peril

Concerns revived by the nuclear crisis in Japan could well reverse a renaissance in new power plant construction in many countries, while design upgrades to prevent similar reactor failures will make those that are built more expensive.

The 9.0 earthquake and resulting tsunami that struck northeastern Japan on Friday have caused a series of catastrophic failures in several nuclear reactors at the Fukushima Daiichi plant. Attempts to cool overheating fuel rods have led to four explosions, giving rise to fear over how much nuclear radiation may have escaped.

As the crisis has deepened, so has its potential to inflict lasting damage on the nuclear industry.

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Hot Stocks: Motorola Mobility Inc. (NYSE: MMI) Sending a Clear Signal That It's Ready to Bounce Back

A string of cutting edge products such as the Xoom tablet and the Atrix 4G smartphone, both of which use Google Inc.'s (Nasdaq: GOOG) Android operating system, have reversed Motorola Mobility Holding Inc.'s (NYSE: MMI) downward spiral.

The success of its new hardware, combined with strategic acquisitions that show Motorola's desire to offer its customers cloud-based services, has breathed new life into a company that was on life support just a couple of years ago.

Motorola's Droid line of smartphones helped turn a $1.6 billion operating loss in 2009 into a $76 million operating profit in 2010. The recently-launched Xoom has earned rave reviews and has given MMI a critical foothold in the tablet market.

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Hidden Inflation: Rising Prices Are Hitting Consumers Harder Than the Fed Will Admit

Any U.S. consumer that goes to the grocery store or the gas station on a regular basis knows that prices are rising.

Unfortunately, those rising prices are set to soar even higher – and their effects on consumers will continue to be ignored by the U.S. Federal Reserve.

The United States has had a break from inflation the past couple years, while it exported higher prices to emerging market economies. The Fed's easy money policies created excess money that flowed overseas, and now those countries are seeing prices rise to threatening levels.

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2011 Earnings Off to a Strong Start, but Will it Last?

Earnings season is well underway and the trend so far has been mostly positive. But as 2011 progresses, companies will be less and less likely to meet – much less surpass – Wall Street's lofty expectations.

That's because high unemployment, tight credit, an inability to further reduce cost structure and less favorable comparisons to 2010 will conspire to trip up the less nimble corporations.

Indeed, any sustained improvement in spending will depend largely on a significant reduction in the unemployment rate. And even the U.S. Federal Reserve doesn't believe the jobless rate will fall below 8% within the next two years.

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