Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing
Category

U.S. Economy

Are You Worried About Stocks? The U.S. Housing Market Should Be Your Real Concern

According to the latest reports on the U.S. housing market, the 96,400 homes hit with default notices last month were 7% less than in April and 22% less than in May 2009.

And that's not all. Foreclosure auctions were scheduled for the first time on 132,680 properties last month – 4% fewer than the month before and 16% fewer than in May a year ago, according to the Irvine, California-based RealtyTrac Inc.

In fact, foreclosure filings of all types – default notices, scheduled auctions and bank repossessions – were reported on 322,920 U.S. properties in May, a decline of 3%. All told, this latest report seems to have painted a picture of a gentle and steady recovery for the embattled U.S. housing market.

Unfortunately, these figures are quite deceptive – as is the reassuring portrait they helped create. Despite the apparent improvement in the foreclosure figures, there exist some dangerous undercurrents that threaten to further drag down U.S. housing prices – as well as U.S. investors.

To discover the "real" state of the U.S. housing market, read on…

Read More…

Defensive Investing: Seven Signs Your Dividend is in Trouble

Both the U.S. stock market and the U.S. economy are navigating rough waters right now.

U.S. employment, which had appeared to be moving into rapid expansion, suffered a setback in May, with the economy creating only 41,000 jobs. Meanwhile, the stock market – even with the recent rebound that brought it back to the 10,000 level – remains more than 15% below its cyclical high.

That's been the uncomfortable pattern: One economic report points toward a continued U.S. recovery; the next one points toward recession. Sometimes the contradictory research is separated by a single day, other times they are just hours apart. The resultant uncertainty is whipsawing U.S. stock prices – and is leaving investors feeling shaky.

Fortunately, there is a ready remedy, not to mention a place of refuge, from this kind of grinding uncertainty – high-yielding dividend stocks.

To discover the seven signs that a dividend isn't secure, please read on...

Unexpected Drop in Retail Sales a Sign of Trouble For Economic Recovery

Sales at U.S. retailers unexpectedly dropped in May for the first time since September, the Commerce Department said Friday, raising worries that the economy is struggling to recover from the worst financial meltdown since the Great Depression.

Americans slashed spending on everything from cars to clothing to building materials, as retail sales plunged 1.2% last month, following a 0.6% April gain that was larger than previously estimated.  It was the largest decline in eight months.

Retail sales were projected to increase 0.2%, according to the median estimate of 76 economists in a Bloomberg News survey.

Read More…

Hot Stocks: Wal-Mart Stores Inc. (NYSE WMT) Proves that the Best Defense is an Active Offense

Wal-Mart Stores Inc. (NYSE WMT) has the reputation of being a defensive stock, but lately the company has gone on the offensive. For that reason, it's a good candidate to break out of its recent slump and head higher.

Wal-Mart has been among the stocks to lose ground in the recent market correction. But with more than $400 billion in annual sales, the world's largest retailer is still one of the soundest plays an investor can make – particularly in times of uncertainty.

In the year and a half stretching from January 2008 to June 2009, Wal-Mart stock managed a 3.45% gain despite being interrupted by one of the worst stock market plunges in history.

Read More…

Moribund Sentiment Is Jeopardizing the U.S. Stock Market

The U.S. stock market is really at a critical juncture right now.

I'm all for being optimistic at the prospect of a super-oversold condition amid rampant pessimism. But bulls need to take charge of the controls of this sputtering plane. But now that they failed to yank the stick higher before the February lows, the bottom is really in danger of falling out.  

Most corrosive for the major indexes' value at present are large-cap energy and bank stocks, which have fallen 7% as a group amid a hex from the BP PLC (NYSE ADR: BP) blowout and financial regulation clampdown.  

You would think that a cut in oil supply from the Gulf of Mexico would provide a strong undertow for energy, at least, but investors have been acting like industrial demand will grind to a halt in coming months.

June historically has been the second worst month of the year, after September. But after suffering through the worst May since 1940, and bearish sentiment on overdrive, it's fair to expect opportunistic investors to dive in now and take advantage of bargains.

Read More…

These Five Inflation Plays Will Provide Protection and Profits

Inflation hawks have been warning since 2008 that the spurt of U.S. money creation that began at the end of that year would spark a surge in consumer-price inflation.

And yet the consumer price index (CPI) statistics remain quiet – not giving ammunition to the deflationary camp, but making "inflationists" look silly, as well. Now, however, it is becoming obvious that inflation will soon arrive. But this time it is sneaking in through the back door – courtesy of our emerging-market trading partners.

Fortunately, there are some very clear steps that investors can take to protect themselves from this expected inflationary surge.

To learn about five investments that can battle inflation even as they fatten your portfolio, please read on...

Why U.S. Stocks Will Rise Above Weak Growth in Global Markets

After another lousy week, it's official: Global markets have suffered the worst late-spring setback since 1940 — a May-June period when the Germans invaded the Netherlands, then marched into Paris, and Italy declared war on France and Great Britain. Just like that, seven decades ago, World War II was on, and markets went into freefall.

If stocks are as good at anticipating global calamity this time as they were in that horrible spring 70 years ago, we may be in for a terrible second half.

It's a bitter irony that so many of those old enmities are flaring up again on the Continent at this critical time. The European Union was created two decades ago at behest of the former Allies to prevent the Continent from sliding into armed conflict again, and the euro currency was later launched to cement the new political relationship.

But many centuries of deep-seated distrust are hard to negate with diplomacy and idealistic optimism, and now we see Europeans back at each others' throats in a flurry of recriminations over who is to blame for outrageous deficits, debts and defaults in the Eurozone — and more importantly, who should pay for them.

To read about how Europe's turmoil could affect the U.S. economy, click here.

Two Big Reasons to Believe the U.S. Stock Market Will Bounce Back

There's been a lot of cheerless news coming out of Europe lately, and that's taken a toll on the U.S. stock market. But I want to take this opportunity to offer up some positive points and remind investors that it's still too early to declare the bull-market dead, and even more premature to fret over a new bear market beginning.

There are two key considerations that support a continued rise in U.S. stocks:

To find out why it's too early to give up on stocks, read on…

Read More…

Oil Sector Expert Kent Moors Sees Tough Times, Stricter Regs For BP After Oil Spill

Energy expert Dr. Kent Moors is angry. And the main target for that anger is BP PLC (NYSE ADR: BP).

At its core, the Deepwater Horizon explosion and oil spill is a human tragedy: 11 workers were killed, others were injured and now many Gulf Coast residents will end up losing their homes and livelihoods.

But that's not all that has Dr. Moors seeing red: The accident that resulted from BP's incomprehensible risk-taking has killed an energy bill that could have set the U.S. economy on a course for energy freedom, and is going to summon the heavy hand of government in a way that will cost American consumers dearly while also keeping regular U.S. investors from reaping green.

Read More…

Two Energy Stocks For a Post-Oil-Spill World

With the failure of the BP PLC (NYSE ADR: BP) "top kill" strategy, the Deepwater Horizon oil spill takes on a more serious hue, both for the Gulf of Mexico environment and for BP itself. If it indeed proves impossible to cap the oil flow before August, public anger against BP and against deep-sea drilling in general may put BP out of business and set deep-sea drilling around the United States back for years.

The business fallout from the oil spill could be widespread. As was true of the Three Mile Island nuclear accident of 1979, the Deepwater Horizon oil spill could end up causing massive damage to companies that were in no way involved with the BP tragedy. Risks of different types of operation will be reassessed, new rules will be enacted, and the energy business will change radically.

Smart investors will anticipate these changes.

To discover two stocks poised to thrive in a post-oil-spill world, please read on...