Wall Street
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What to Expect on Wall Street as Nervous Investors Navigate a Slowing Economic Recovery
Wall Street was hit hard last week with gloomy data that has kept buying interest stalled and investors spooked over a slow economic recovery.
Stocks slipped over the past week after investors learned from government reports that jobs are getting scarcer than straw hats in a wind tunnel, and it isn't always sunny in Philadelphia.
The big-cap indexes lost around 1%, while safe haven assets like gold and the U.S. dollar were buoyant. The best investment around for the week was the U.S. long bond, up 2%.
To read what’s in store after last week’s gloomy data, click here.
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Whitacre Resigns, but Is GM Really Ready to Roll On with its IPO?
Whether it's because the company is ready to again stand on its own two feet, or because of undue political pressure, General Motors Co. looks to be preparing an initial public offering (IPO) that would repay billions to taxpayers who own a majority stake in the company.
The company yesterday (Thursday) reported a 44% increase in net profit and announced that Chief Executive Officer Ed Whitacre would step down from his post on Sept. 1.
Whitacre, who was named GM's chairman last year as the company emerged from bankruptcy protection, will be replaced by GM board member Daniel Akerson. Akerson has little experience in the automobile industry, but he boasts a solid track record of leading telecommunications companies.
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Wall Street's Mood Shift Is Signaling a Profit-Making Price Push Ahead
A mood of mild optimism has begun to spread down Wall Street not long after there was nothing but long faces. Fancy that.
More good news out of Europe, better-than-expected new home sales, and the latest of a solid second-quarter earnings season has helped resuscitate the animal spirits that were missing in action since the spring.
Stocks rose past some key milestones in their historic July over the past week, pushing the Dow Jones Industrial Average just barely into positive territory for the year. It was a very professional, low volatility rally this week, a welcome change from the intra-day dramatics that had put everyone on edge lately.
What has really changed from the point of view of government policy or corporate results? Nothing and everything.
To find out what’s changing on Wall Street, click here.
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How to Pick Stocks in the 'New Normal' Economy
In today's potentially ultra-slow-growth "New Normal" economy, old stock market multiples do not apply.
In fact, investors who rely on long-held rules about Price/Earnings (P/E) ratios when they buy and sell stocks are risking a pretty big "haircut:" They may be overvaluing some of their stocks - and the stock market in general - by 17% to 20%.
Let's take a closer look...
To understand how to value stocks in the "New Normal" economy, please read on...
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Stocks Stuck in Trading Range Despite Positive Earnings Reports
Despite positive earnings reports last week from more than a few bellwether companies, stocks remain stuck in a trading range that continues to test investors' patience and skill.
Stocks launched higher last week in another round of the hyper-volatile action that has plagued the equity markets over the last three months. The good news is that some technical resistance was knocked out in the process, potentially setting the stage for a bigger rally in weeks to come.
The not-so-great reality: Stocks remain mired in the same range that has boxed them in for the past three months because, let's face it, despite their strong move they really only ended the week a fraction above where they started the previous week.
Read more about which stocks are leading the pack...
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The Seven Golden Rules That Will Keep You Safe in Today's 'New Normal' Markets
Pundits are talking about the "New Normal," a not-so-subtle hint at the sub-par growth that's expected from the U.S. economy.
Those pundits have picked the right book. But as far as investors are concerned they're reading from the wrong chapter. The "New Normal" isn't just about the economy. It's an epic story about not-so-great expectations - for the financial markets.
And - unlike its Dickensian counterpart - this tale doesn't have an especially happy ending.
For the seven rules that will let you profit in "New Normal" markets, please read on... -
The S&P 500 is Set for a Surge… But It Won't Come Easy
Stocks zipped higher in the past week, capping the first four-day rally since early 2009. Get out the party hats and confetti, right? Bears tried to knock shares lower on Tuesday and early Thursday, but after they failed bids hit the tape in a big way and gave it lift.
Technically, stocks continued to move out of the invalidated head-and-shoulders pattern we've discussed lately. With support below at 1,040, the S&P 500 Index should be good for a run to resistance at the 1,095 to 1,115 area in coming days as long as earnings reports and corporate outlooks are supportive.
But the bulls have their work cut out for them there.
To find out more about where stocks are headed next read on...
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Don't Give Up on U.S. Stocks Just Yet
There's no denying that bearish investors have made their case in recent weeks. They are legitimately afraid that the economies of the United States and Europe will fade so much in the next few months that they will sink back into recessions punctuated by credit blowups and a resumption of a bear market for U.S. stocks.
Still, the simple fact that there are a few economic boogey-men lurking behind each suspect piece of data doesn't mean that investors should run screaming away from stocks.
In fact, if you take the time to listen to the opposite point of view before you make up your mind about the direction the economy is headed, you might be pleasantly surprised.
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Four Factors to Consider Before Determining Your Long-Term View on U.S. Stocks
Stocks rose worldwide over the past week -- ranging from +2% in U.S. big caps to +6% ingold -- as investors swelled with sudden courage in response to positive reports on Chinese economy and glimmers of hope that European governments can get their financial houses in order.
The week's results erased four weeks of losses, including the despairing session that ensued on June 7 after a disappointing report on U.S. employment. Meanwhile, the result of the past 35 trading days, or seven calendar weeks, are still largely negative, ranging from a loss of 5.5% for U.S. stocks and -8.5% for Europe. Only gold stocks have eluded the smoke monster, rising 7% in the span.
The variation in one-week and one-month results illustrate perfectly how investors are showing that they arehopeful but unconvincedthat recent strength in gross domestic product (GDP) growth and corporate income advances are sustainable, and therefore won't buy stocks heavily until prices are so cheap that they discount worst-case scenarios. In other words, they want a high risk premium before buying -- sort of like demanding a 72-month warranty before buying an expensive car.
To read about the four factors you should consider before investing click here.
