Press Esc to close

Welcome to Money Morning - Only the News You Can Profit From.

Close

Apple and Google Declare War – Here's the Secret Winner

Resident tech guru Michael Robinson and I are both big science-fiction fans. Michael likes traditional sci-fi stories, like those of Robert Heinlein and Isaac Asimov. My sci-fi interests are more focused on “Golden Age” radio dramas, “pre-code” comics, and old movies and TV shows… like The Twilight Zone and The Outer Limits.

And when Associate Editor Cris Skokna joined our team a few months back, Michael and I were so pleased to discover that he was a sci-fi guy as well that I jokingly dubbed the three of us as “The Trilogy.”

And the other day, Cris told me a story that I absolutely had to share with you…

  • Emerging Markets

  • Emerging Stock Markets Thrive as U.S. Shares Tumble As the U.S. stock markets struggle in the midst of slowing economic growth, emerging stock markets are thriving as their surging economies provide cover for savvy investors.

    Stocks tripped over the past week after a weak jobless claims report and a lukewarm revenue outlook fromCisco SystemsInc. (NASDAQ: CSCO) on Thursday put an exclamation point on worries about a muddled Federal Reserve Bank policy. U.S. markets lost more than 4% in one of their weakest five-day spans of the year, including a 90% Downside Day on Wednesday that featured a rare event: All 30 stocks in the Dow Jones Industrials Average closed lower.

    Small stocks had their throat slit, as the Russell 2000 plummeted below its 50-day and 200-day averages. It was the largest one-week loss for the index since early June when a Hungarian official compared his nation's debt woes to those of Greece. The index is back to early July, wiping out a month of gains. I'm not one to say "I told you so" but let me just note that we have strenuously recommended avoidance of the smalls in an effort to de-risk your portfolios.

    Read on to find which markets are outshining the U.S.... Read More...
  • Buy, Sell or Hold: Peabody Energy Corp.'s (NYSE: BTU) Global Dominance Is Heating Up Profit Growth While advanced economies are still facing high levels of unemployment, more than a billion people in emerging markets are experiencing advancing standards of living.

    As these emerging economies - especially China and India -grow, there is a strong trend toward urbanization. People are leaving the countryside for the cities in droves in order to reap the promise of the global economy. This secular process alone places huge demands on the existing infrastructure.

    This growth is also boosting manufacturing and energy needs. China has surpassed the United States in both car production and energy consumption. And India's Tata Motors Ltd. (NYSE ADR: TTM) launched the cheapest car in the world, the Nano, which costs roughly $2,500. The critically acclaimed vehicle's mass appeal and affordability is creating additional congestion on India's famously overcrowded streets. Adding more fuel to the global-demand fire, most emerging economies implemented a strong dose of infrastructure spending within their budgets as a result of the global financial crisis of 2008.

    The result of all that infrastructure development, urbanization and increased consumer affluence is a myriad of new road, bridge and building construction, additional urban development, and stepped-up production of cars, home appliances and other consumer goods. All of these developments require two key ingredients to become reality: Steel and energy.

    Read More...
  • Money Morning Midyear Forecast: Three Reasons Technology Companies Will Continue to Coast through 2010 Technology companies had a blowout first half marked by strong earnings and successful product rollouts. But the second half of 2010 could be even bigger, because a flurry of merger and acquisition activity, corporate IT splurges, and high consumer demand - particularly in emerging markets - have set the stage for a serious haul.

    "We're going to have much stronger results in the second half [of 2010] than anyone's expecting," Mark Stahlman, a partner at research firm TMT Strategies, told CNBC.

    Business was booming back in 2007, but technology companies froze when businesses and consumers were engulfed by the financial crisis. Global tech spending dropped 4.2% in 2009, but is already bouncing back in 2010. Read More...
  • China's Inflation Higher Than Target Rate, Could Be a Sign It's Time to Tame Rapid Growth China's inflation rate rose 3.1% in May from a year earlier, exceeding the government's 3% target rate for 2010 and stirring speculation on whether or not Beijing will attempt to slow the nation's rapid growth pace.

    The consumer price index climb was the fastest in 19 months and was higher than the 2.8% rate in April. The National Bureau of Statistics also posted increases in industrial production, retail sales, and property prices, which contributed to analysts wondering whether or not China will make moves to tame growth to avoid higher inflation.

    "Officials seem confident that price pressures will ease later this year, attributing much of the recent positive trend to base effects, but there are plenty of reasons to think that inflation can keep moving higher," Royal Bank of Canada (NYSE: RY) economist Brian Jackson told The Wall Street Journal.

    Read More...
  • Buy Sell or Hold: DryShips Inc. (Nasdaq: DRYS) is a Stock that Offers Major Upside on the Global Commodity Recovery High risk translates into high returns when you hit it right. But that same high risk translates into horrible returns when you miss. This week's "Buy, Sell or Hold" stock - DryShips Inc. (Nasdaq: DRYS) - is a perfect case in point.

    If you want to see the dismal picture of what can go wrong on a stock when you miss, consider how DryShips' shares have performed since the company first listed its shares five years ago.

    Read More...
  • Buy, Sell or Hold: Deere and Co. Thrives on Strong Global Trends and Flawless Execution Deere & Co. (NYSE: DE) beat earnings estimates by a mile last week. It reported $1.58 earnings per share, beating most analysts' estimates by 50 cents! In addition, the company raised its earnings outlook.

    In typical fashion, Deere continues to be conservative in guidance. And as I will explain below, the agricultural cycle this year is poised for a large upside surprise, as it is at the very beginning of a prolonged secular pickup.

    The bottom line of Deere's performance last quarter is a prelude of things to come. Agriculture is zooming, and thus machinery in that sector is - and will continue - to command premium pricing. At the same time, global inflation is picking up slightly, but is still very subdued, which will help margins some more.

    Read More...
  • Six Ways to Profit as Brazil's Economy Takes Off Is Brazil one of the best emerging markets? Should it be in your portfolio? Martin Hutchinson breaks down the pros and cons of investing in the Brazilian economy. And, he's not as bullish as you might think. Find out the best ways to play Brazil in this report. Read More...
  • Three Ways to Profit From the World's Luckiest Country – Australia. When the late Donald Horne called Australia the " Lucky Country" in 1964, the professor and well-known social critic meant it as an insult: He believed that while other countries were getting rich by developing special skills and embracing new technology, Australia prospered just because it happened to sit on a pile of valuable natural resources.

    Well, in the global world of 2010, skill and technology are " two-a-penny" ubiquitous in an emerging-markets world in which billions of industrious people are competing against one another. In this new reality in today's world, natural resources are the key to global wealth.

    And Australia is a prime beneficiary of that new reality.

    For three ways to profit from this "new reality," please read on...

    Read More...
  • Despite Talk of a Bubble, Indonesia Is Still a Profit Haven for Investors Several readers who know of my affinity for Indonesian stocks have sent me articles reporting that one of the country's bank officials had expressed discomfort over the Jakarta's rising stock market and raised the specter of new capital controls.

    I have been investing in emerging markets for a long time, and have found that the news services often pick up these kinds of comments from random officials that are then contradicted a day later by some other random official.

    And that was the case this time, too.

    Read More...
  • Buy, Sell or Hold: Is Pfizer Inc. (NYSE: PFE) the Right Prescription for Your Portfolio? In 2008, the journal Health Affairs reported that 25% of China's adult population - about 375 million people - was "overweight" or "obese."

    That number is expected to double by 2028, and obesity is just one health issue in a densely polluted nation that finds itself battling a growing list of ailments.

    So it's no surprise that China's pharmaceutical market has been surging at a compounded annual growth rate (CAGR) of more than 16% -- the fastest pace in the world, according to research by market-intelligence leader IMS Health Inc. (NYSE: RX). IMS Health estimates that by 2020 the Chinese market for pharmaceuticals will be $110 billion, second only to the United States.

    Read More...
  • How Long Will Emerging Markets Continue to Prosper From U.S. Debt Ills? A surge in purchases of emerging market debt and a dip in buyers' appetite for U.S. Treasury bonds has sparked speculation that developing nations have become the next safe haven for bond investors. But the more likely scenario is a reversal of capital flows that will sustain Treasury debt for a little while longer.

    Emerging market bonds have enjoyed the best first quarter on record as new issuance has surged and interest rate spreads over U.S. Treasuries have narrowed to their lowest since 2008.

    Sovereign bond markets in developing countries have sold a record $157 billion so far this year, a 42% jump over the same period in 2009, which marked the previous record, according to data from Dealogic Holdings plc.

    Read More...
  • Buy, Sell or Hold: BHP Billiton is Poised to Pick Up Big Gains on the Back of a Global Commodities Bull Face it, commodity prices are in a secular rally - and there are three big reasons why.

    • Loose Monetary Policy
    • Growing Demand in Emerging Markets
    • And the Congruent Devaluations of Major CurrenciesWe've already profited from this inflationary trend in the Money Map VIP Trader. And - just like I did with the broadband revolution - today I am presenting you with a stock that stands to benefit from these developments - BHP Billiton Ltd. (NYSE ADR: BHP).
    First, let's talk about policy. Immediately following the 2008 financial crisis, the Group of 20 (G20) countries agreed to stimulate their economies simultaneously. And, while the emerging economies almost unanimously have already returned to strong rates of growth, most advanced economies are just now turning the corner.

    Read More...
  • Why the Bulls Can Stand Strong at Home and Overseas Stocks enjoyed another plus week, closing one of the better Marches of the past 80 years. It seems like ages since volatility has been this low, and there have been many complaints about complacency and listlessness. Yet those concerns may be misplaced if indeed we are enjoying the second leg of a normal bull cycle. Low volatility in a bearish phase does suggest complacency, to be sure, but in a bullish phase it serves more to keep expectations in check.

    Read More...
  • "Capital Waves" Point to High-Tide Profits for Commodities, Tech and Emerging Markets It was November 2008, and a global financial crisis that started in the U.S. credit markets had already leveled such one-time corporate stalwarts as Lehman Brothers Holdings Inc. (OTC: LEHMQ), Fannie Mae (NYSE: FNM) and American International Group Inc. (NYSE: AIG). The U.S. economy was in an apparent freefall, and stock prices wouldn't hit bottom until early the following March.

    In the midst of that chaos, Money Morning's Shah Gilani made five predictions, anticipating five looming "aftershocks" he said were certain to come true.

    He was correct on all five counts - every prediction came true.

    This wasn't the first time Gilani has made such bold predictions - and been proven right. In July 2008, for instance, when crude oil was trading at a record high of $145 a barrel, he predicted that the "black gold" was destined for a major fall - even though many pundits were calling for prices to spike as high as $200, $250, $300 and even $500 a barrel.

    Once again, Gilani was right.

    Gilani, a retired hedge-fund manger, Money Morning columnist and noted expert on the global credit crisis, has been able to do this time and again for one simple reason: He understands the power and profit potential of the global financial market's "capital waves."

    "Capital waves create some of the biggest trading opportunities in the markets today," Gilani said in an interview last week. "Investors who are able to spot capital waves and identify their likely impact have a huge advantage over those who don't."

    And the profit plays that loom are shaping up as the biggest and best, yet.

    For the full transcript of Gilani's detailed question-and-answer session, please read on.

    Read More...
  • Money Morning Mailbag: The Capital Wave That Could Blunt the U.S. Recovery Question: How can banks justify not giving out mortgage money in light of the fact that they can now qualify their applicants to a level not previously seen? I am talking about literally millions of people applying for loans with 800-plus FICO scores and Loan-to-Value (LTV) Ratios that are better than ever before.

    How can banks and lending institutions take our money and then turn around and shut nearly everyone out - which simply prolongs this recession? Can anyone explain why the present administration and regulatory bodies are not forcing the banks to loan monies to qualified applicants?

    At this rate, we will be dead soon. Without borrowing, we will die.

    (Signed) Living in Costa Rica

    Read More...