Outlook 2011

Oil Prices Look to Top $150 by Midsummer On Resilient Demand and MENA Turmoil

Money Morning predicted in its 2011 Outlook series that oil prices would see $100 a barrel by summer. And that's proven to be true – but not entirely for the reasons we discussed.

In addition to the increased demand we talked about in January, violence in the Middle East and North Africa (MENA) has driven oil prices into the stratosphere. The price of light, sweet crude climbed above $112 a barrel last week, up more than 22% from where it started the year.

A recent pullback has driven prices back down to about $107 a barrel, but don't be fooled. Strong demand in emerging markets, a weak dollar, political turmoil in the MENA region, and a strong speculative sentiment will continue to push oil prices higher.

Read More…

Outlook 2011: Fear and Love in Gold Trading

Wall Street has been calling gold a bubble since 2005, when it hit $500. Some media naysayers remained negative even as they wrote the headlines proclaiming record highs and saw gold rise almost 30% in the past 12 months.

Interestingly, despite gold's latest run, it was still a laggard compared to many other commodities. In the commodity world, gold didn't even place in the top half in 2010. Against a basket of 14 commodities that includes everything from aluminum to wheat, gold's 29.52% return places it eighth. Palladium took the top spot with a 96.6% return, followed by silver with an 83.21% return. Natural gas continued its cellar-dwelling ways, dropping 21.28% to become the worst-performing commodity of the basket.

There are two main drivers of gold demand: The Fear Trade and the Love Trade.

Read More…

2011 Manufacturing Outlook: Slow, but Steady Growth Could Win Profits for Investors

It's often said that a little bit goes a long way, and that will certainly be the case for U.S. manufacturing growth in 2011. Although most projections still call for slower improvement in the sector than in 2010, the estimates have been characterized as "less bad" than originally expected -and that could translate into increased profit prospects for investors.

The market gave evidence of that just last Tuesday (Jan. 4) when the major indexes shrugged off other concerns and moved nicely higher in response to a larger-than-expected 0.7% rise in November factory orders, which had been forecast to fall by 0.1% according to a Thomson-Reuters survey of economists. Orders excluding the volatile transportation sector also posted their biggest gain in eight months.

Analysts characterized the numbers as "pointing to underlying strength in manufacturing." That bodes well for the greater economy, since U.S. manufacturers employ nearly 12 million people, or 9% of America's work force, and add $1.6 trillion annually to the U.S. economy, roughly 11% of gross domestic product (GDP).

Read More…

Municipal Bond Forecast: Deadbeat States Emerge as Biggest Threat to Muni-Bond Investors

The U.S. municipal bond market could be cruising for a bruising.

The same thing goes for muni-bond investors.

The danger is right out in the open for everyone to see. But investors aren't heeding the warnings.

The bottom line: Avoid the sector, except the very-highest-rated issues; and even then, given the low yields available, there are clearly lower-risk/higher-profit opportunities for your money.

To understand the spiralling dangers muni-bond investors face, please read on...

2011 China Outlook: The Red Dragon Takes Its Next Step Forward

If the United States has a growth problem, China has just the opposite. The world's second-largest economy is set to grow 9-10% this year, building on its strong rebound from the global financial crisis.

Furthermore, Beijing is determined to accelerate China's transition toward a more domestically based economy, while stabilizing prices and cutting government waste.

So in addition to strong growth numbers, investors can expect more disciplined and responsible economic development.

Read More…

Tech Stocks Set To Soar in 2011 as a New Era of Personal Computing Dawns

Technology companies, and tech stocks, started a revival in 2010 and are heading toward an even more profitable 2011. That's because a new age of computing – one that prioritizes mobility and efficiency – has dawned in the computing world.

Indeed, we've entered what researching firm International Data Corporation (IDC) calls a "new era" of computer usage.

Roughly half of all regular Internet users in 2011 will use non-PC devices, according to IDC, which says a trend becomes mainstream when it constitutes more than 15% of the market.

Just as the smaller PCs of the 1980s supplanted the lumbering terminals of the 1960s, PCs are being replaced by a variety of hand-held devices – like Apple Inc.'s (Nasdaq: AAPL) iPhone and iPad and Research in Motion Ltd.'s (Nasdaq: RIMM) Blackberry.

"The PC-centric era is over," IDC said in its annual report, released in November.

The firm predicts 330 million smartphones will be sold worldwide next year along with 42 million media tablets.

Read More…

Biotech Stocks Will be Fueled by Takeovers in 2011

While a number of companies are on the verge of hitting the market with exciting new drug products or medical treatments, the biggest 2011 profits for investors in the biotech stocks are more likely to come from mergers and acquisitions (M&A) than research and development (R&D).

That's because mergers and buyouts in the industry have far outpaced the sector's overall growth rate, which in recent years has been sluggish. Indeed, IMS Health, a leading research and analytical firm serving the pharmaceutical and medical industries, projects only a slight increase in worldwide growth in 2011 – 5% to 7% versus a pace of 4% to 5% this year – with a similarly restrained outlook stretching out to 2015.

By contrast, virtually every major player in pharmaceuticals worked at least one M&A deal in 2010. That trend is expected to continue, if not accelerate, in the years ahead as drug companies look to broaden product lines, replace revenues lost to patent expiration and expand into emerging markets, where the industry growth rate is much higher in than in the developed nations.

To see the biotech stocks worth considering in 2011, read on...

U.S. Stock Market Forecast: Tech, Energy, Commodities and Gold Are Top Plays For 2011

The outlook for the U.S. stock market in the New Year figures to be an exasperating mixture of promise and peril. Positive momentum is building going into 2011, but so are dangerous bubbles.

The high-tech, energy, materials and commodities sectors will be hot in the New Year. And the U.S. stock market will get an added boost from the fact that U.S. Treasuries, municipal bonds (munis) and euro-based investments will not.

Here's what's in store for the U.S. stock market in 2011.

For the most complete stock-market strategy you'll find anywhere, please read on...

Bush Tax Cuts: How to Profit From the Compromise Tax Deal In 2011

With a compromise agreement that extends the Bush tax cuts for two more years, the Obama administration has given investors what they wanted – but not what they needed.

The compromise tax deal was signed into law by U.S. President Barack Obama on Friday, and continues to draw fire from critics on both sides of the political aisle. The $858 billion tax package isn't paid for. In fact, it actually costs more than the controversial Obama stimulus plan that has been criticized for having little measurable impact – even as it caused the budget deficit and the U.S. debt burden to explode.

And yet, investors have been cheered by the deal.

Near term, that's an acceptable perception. But in the long run, some very real problems loom. Investors who ignore those problems will take a real beating – and it will be self-inflicted. But investors who prepare for the inevitable will actually improve their positions: They'll not only protect themselves, they will profit.

Here's how investors need to position themselves for the fallout from the Bush-tax-cuts deal...

Alternative Energy Forecast: Why Investors Will Finally Start to Profit in 2011

For a long while now, we've heard a lot of talk about the potential for alternative-energy technology.

Investors take note: In 2011, that potential will start to be realized. And those who want to benefit from this emerging sector's projected long-term growth would do well to climb aboard.

Read More…