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With Grocery Prices Soaring, This High-Tech Food Play Belongs on Your Shopping List

Aside from the continued sell-off in U.S. tech stocks, one of yesterday’s top financial news stories was the fact that U.S. inflation is accelerating – and at a pace that’s exceeding forecasts.

And the surge in food prices is one of the big catalysts…

  • Stock Market

  • 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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  • Stock Market Stuck as Investors Demand Risk Premium for Buying Stocks rose worldwide over the past week by 2% to 5%, swelling with sudden courage after positive economic reports from China and shaking off some worsening news in the United States about retail sales and jobs.

    Yet results in the past month are still heavily negative, ranging from -5.5% for U.S. stocks and -8.5% for Europe. China has suddenly become the most buoyant region, up 1.5% in the past month.

    The variation in one-week and one-month results illustrate perfectly how investors are showing that they are hopeful but unconvinced that recent strength in 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. They want a high risk premium, in other words, before buying -- sort of like demanding a 72-month warranty before buying an expensive car.

    Click Here to Find Out How the Risk Premium is Holding Back Stocks...

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  • 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.

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  • 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.

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  • 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. Read More...
  • Question of the Week: Readers Respond to Money Morning's Market Volatility Query The Dow Jones Industrial Average last week dipped below 10,000 for the first time since February as a month of market volatility and price declines continued. Analysts predicted volatility to continue into June as government exit strategies begin and liquidity dwindles.

    The zooming rebound in U.S. stock prices from their March 9, 2009 bottom - the strongest rebound since the Great Depression - has been stymied by concerns over the Eurozone debt contagion, financial reform, the market flash crash and new political sparks in Korea. Figures show that the bulls are still hanging around - on the sidelines - but the bears have been calling the shots during a month that has seen stock prices fall more than 8%.

    "I think it's a question of pick your poison," Dan Alpert, managing partner at Westwood Capital, told MarketWatch. "The market was poised for a very severe correction and whether it's southern Mediterranean countries or worries about German banks, you can pick your catalyst." Read More...
  • Caution Is the Buzzword After Last Week's Stock Market Drop Risk aversion was the story of the week last week amid rising exasperation with Eurozone countries to act in unison to solve their debt afflictions and swelling concerns that financial reform may constrain U.S. financial companies' profits. Economic reports didn't offer much help to the stock market, as industrial manufacturing outlooks showed a surprising amount of slowing.

    Stocks mounted a modest bounce on Friday after a week that saw the major market averages sink another 2% to 4%. All of the positive action in the week came in a single low-volume session on Thursday that didn't ultimately do much to erase the negative tone of the worst May since the Kennedy administration.

    More troublesome was the fact that positive corporate earnings news and mergers failed to bolster the appetite for stocks. Companies as varied as Dell Inc. (Nasdaq: DELL), Chicos FAS Inc. (NYSE: CHS), Brocade Communications Systems Inc. (Nasdaq: BRCD) and Sears Holding Corp. (Nasdaq: SHLD) beat analysts' expectations this month but saw their shares thrashed by up to 20%.

    Most emerging markets fell hard during the week, and there was a broad sense that institutional investors were purging portfolios of high-beta assets that could be vulnerable to a slowdown in earnings growth. This is why bland food makers like Campbell Soup Co. (NYSE: CPB) and General Mills (NYSE: GIS) have survived the month without a crunch, but more economically sensitive companies like Johnson & Johnson (NYSE: JNJ) and Intel Corp. (Nasdaq: INTC) have flailed.

    While the Standard & Poor's 500 Index did not close on Friday above its 200-day average -- the level that separates bull cycles from bear cycles -- the Nasdaq 100, Midcap 400 and Smallcap 600 did. This will be used by bulls as evidence that the May decline was just a modest setback on an upward journey.

    Yet bears are making a good case that this is much more than a mere correction. Breadth has been hellaciously negative except for the 11-1 positive session on Thursday, and less than 100 stocks are making new highs on the three major U.S. exchanges. Plus volume has been much bigger on down days than up days, a sign of distribution.

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  • Sell in May – But Don't Go Away From the U.S. Stock Market If you embrace the old Wall Street adage "Sell in May and Go Away" as an investing strategy, you could end up with a bad case of the U.S. stock market summer blues, a new research study has found.

    That concept is based on the notion that the May-to-November span provides a weak environment for U.S. stock market investors. According to Jon Markman, a best-selling author and contributing writer to Money Morning, that viewpoint started gaining traction in late April. And why not? The major U.S. indexes were already up a lot more than anyone expected, making that a seemingly convenient point to take profits.

    Those who didn't follow that strategy probably now wish that they had.

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  • We Want to Hear From You: How Are You Responding to Market Volatility? The Dow Jones Industrial Average dipped below 10,000 Tuesday for the first time since February as a month of market volatility and price declines continued.

    The zooming rebound in U.S. stock prices from their March 9, 2009 bottom - the strongest rebound since the Great Depression - has been stymied by concerns over the Eurozone debt contagion, financial reform, the market flash crash and new political sparks in Korea. Data shows that the bulls are still hanging around - on the sidelines - but the bears have been calling the shots during a month that has seen stock prices fall more than 8%.

    "I think it's a question of pick your poison," Dan Alpert, managing partner at Westwood Capital, told MarketWatch. "The market was poised for a very severe correction and whether it's southern Mediterranean countries or worries about German banks, you can pick your catalyst."

    Read More...
  • Money Morning Mailbag: The Euro and Other Hot Topics Spark Reader Debate The Money Morning Facebook page is gaining more members daily and the Money Morning Mailbag feature is fueling a record number of reader comments and e-mails, giving us a better picture of how readers feel about recurring content like the euro, company profits, and emerging economies. Some articles like the evaluation of Australia's mining super tax have sparked lengthy reader conversation and argument we enjoy observing - and hope readers enjoy being a part of.

    Here is another look at some recent articles generating the most attention and some additional links for further reading.

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  • What Really Caused the Stock Market 'Flash Crash' Just when you thought it was safe to get back into U.S. stocks, you think you see a shark.

    If you are searching - like the regulatory lifeguards and all the political beach bums - to pinpoint and kill the menacing shark that took a huge bite out of investor confidence when the Dow Jones Industrial Average tanked 1,000 points in a just a few minutes late in the day on May 6, don't bother to scan the horizon looking for the dorsal fin of some lurking predator.

    The threat you fear isn't under the water: It is the water.

    We're talking about market liquidity.

    For the full story of the stock-market flash crash - and for some cautionary steps to take - please read on... Read More...
  • Question of the Week: Readers Respond to Money Morning's "Flash Crash" Query The May 6 1000-point drop in the Dow Jones Industrial Average triggered a roar of theories on the cause of the "flash crash." Was it a "fat finger" that entered an incorrect trade, leading automated trading systems to hit a high-frenzied sell mode? Did the initial sell-off fuel panic that escalated sales before manual corrections could be implemented?

    As the New York Stock Exchange slowed trading, orders were routed to electronic exchanges that were not operating under the same safeguards and some companies' stocks were briefly valued at just pennies.

    The exchanges have agreed to revise circuit breakers designed to stop trading during periods of extreme volatility, and to develop standards for handling erroneous trades. Almost all exchanges admitted that the markets' varying policies on halting trading contributed to the roller coaster ride.

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  • Stock Market Strategies for the Post-Financial-Crisis 'New World Order' For many investors, the recent thousand-point plunge by the U.S. stock market was probably the proverbial last straw.

    So let me be perfectly clear about the point that I want to make here: Sitting on the sidelines could be the investment mistake of a lifetime. The post-financial-crisis "new world order" that's emerged from the speculative excesses, recessionary realities and regulatory breakdowns of recent years has created a world of lucrative new profit opportunities - governed by a new set of profit rules.

    Let me explain...

    To discover the next generation of global-stock-market winners, read on...

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  • We Want to Hear From You: How Has the Market's "Flash Crash" Affected Your Investment Behavior? Thursday's Dow Jones Industrial Average 1000-point drop triggered a roar of theories on the cause of the "flash crash." Was it a "fat finger" that entered an incorrect trade, leading automated trading systems to hit a high-frenzied sell mode? Did the initial sell-off fuel panic that escalated sales before manual corrections could be implemented?

    As the New York Stock Exchange slowed trading, orders were routed to electronic exchanges that were not operating under the same safeguards and some companies' stocks were briefly valued at just pennies.

    "I still haven't heard a satisfactory answer as to what happened and what could be done about it," Frank C. Boucher, the head of a Virginia-based financial planning firm, told Bloomberg on Monday - four days after the market's drop.

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  • Dramatic Drops and Short-Covering Rallies Illustrate How Capital Waves Lead to Profits The Greece rescue package is signed and sealed, but is still far from being delivered. It took three tries, but this time global investors believe the EU got it right. Investors celebrated yesterday (Monday) with a relief rally that touched virtually all of the world's key financial markets - and that served as a strident counterpoint to the near-freefall that gripped the U.S. stock market on Thursday.

    So is it finally time to shelve our fears of financial contagion, meaning the financial shocks that start with one nation or market and spark a conflagration that spreads through interdependent entities in plague-like fashion?

    Definitely not. In fact, hang onto your hats: We have just entered the brave new world where a butterfly flapping its wings in China can fan a market fire on the other side of the world. There are more contagions to come. But because of forces known as "capital waves," the same heat that burns some investors can also generate substantial profits for those who understand how to position themselves.

    To understand how capital waves bring profits, please read on...

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