U.S. Economy

What a Strong U.S. Dollar in 2015 Means

20141013-rising-us-dollar-index

Since 2008 the U.S. dollar has risen against every important currency in the world.

Its steady ascent has been good for a lot of companies, economies, and investors. 

But, if the trend continues, a strong U.S. dollar in 2015 will be bad news for some of those same companies, economies, and investors. Worse, it could trigger a global markets meltdown...

A Measured View of a Difficult Week and the Markets

market volatility

France's 9-11 should remind investors that the world sits atop a precarious geopolitical perch. Madmen with guns have the ability to wreak enormous damage on the fabric of society, which in turn places the stability of markets at risk.

Last week's tragic events in Paris are likely to impose significantly greater security costs on Western societies while leading them to question the open borders that feed immigration and trade, two keys to the future economic growth that will be necessary to dig out of the deepening debt hole they have dug themselves.

Depending on the response, jihadists could win a bigger victory than they imagine if Western governments surrender to their worst fears...

The Scary Wage Growth Story in the December Jobs Report

December jobs report

The December jobs report released today (Friday) by the U.S. Department of Labor highlights what’s missing in the job market’s recovery: wage growth.

According to the report, the United States added 252,000 jobs last month, ahead of consensus estimates of 240,000. That was enough to push the unemployment rate down to 5.6%.

But those impressive numbers were not enough to distract from the bigger story of falling wages…

Facebook Stock (Nasdaq: FB) Gets Boost from Acquisition in Stock Market Today

Stock market today

Stock market today, Friday, Jan. 9: Good morning! Stock market futures Friday morning forecast a 31-point gain from yesterday's close. On Thursday, the Dow Jones rallied 323 points on expectations that the European Central Bank will take more aggressive action to stave off deflation and debt crisis, coupled with swirling optimism for the U.S. economy.

Today will center on jobs, jobs, and more jobs. This morning, the December jobs report indicated that the U.S. economy added 252,000 jobs last month, surpassing consensus expectations of 240,000. As a result, the U.S. unemployment rate slipped to 5.6%.

While that may fuel a short-term surge in the markets, investors remain cautious about the Federal Reserve's desire to raise interest rates this year. In a speech yesterday, Minneapolis Fed President Narayana Kocherlakota said that the central bank should not increase rates in 2015; however, he is not a voting member of the FOMC this year. That sentiment was followed by voting-member Charles Evans. The Chicago Fed President told a CNBC audience this morning that the U.S. job markets have shown strong growth. But, he said, he'd like the central bank to wait until 2016 to raise interest rates.

Here's what else you should know about the stock market today - including your "Money Morning Tip of the Day" - to make it a profitable Friday...

Labor Department Jobs Report: Take a Closer Look at the Numbers

Labor Department jobs report

As usual, a closer look at the U.S. Labor Department jobs report for November shows things aren't as rosy as they first seem...

First, the big news. The jobs report showed employers added 321,000 jobs last month, crushing consensuses estimates of 230,000.

But it's far from "all clear" on the jobs front - here's why...

This Bear Market Indicator Is Off the Mark

bear-wave

Investors are taught that bear markets can't occur unless the Treasury yield curve inverts - that is, unless short-term interest rates are higher than long-term interest rates.

And that can only happen if the Federal Reserve raises the Federal Funds rate, which is the short-term rate that the Fed controls.

But that measure may be off the mark this time, and here's why...

Where September's Job Gains Came From

where September's job gains came from

The unemployment rate dipped below 6% for the first time in six years, as the U.S. Department of Labor reported today (Friday) that employers added 248,000 new jobs in September. The gains took the unemployment rate down to 5.9% from August's 6.1% and beat consensus estimates of 215,000.

Here's where September's job gains came from - plus a look at the trouble still lurking beneath the numbers...

Will Alibaba Buy eBay Once PayPal Is Gone?

will Alibaba buy ebay

Ebay Inc.’s (Nasdaq: EBAY) plans to spin off its PayPal unit has left many on Wall Street salivating over the potential of the stand-alone payments business.

And some pundits are speculating that Google Inc. (Nasdaq: GOOG) or Alibaba Group Holding Ltd. (NYSE: BABA) might buy PayPal.

But they should be asking this question: Will Alibaba buy eBay?

Here’s why a deal would make sense for both companies…

Here’s why a deal makes sense for both companies…

Turn the Tables on the Market Manipulators

market manipulators

In theory, we have free markets, where manipulation is illegal and punishable.

We've found that's not often the case in the financial markets.

Unfortunately, this web of "disruptive practices" and "market rigging" is not likely to change any time soon.

Despite a government "crackdown" on illegalities that occasionally makes the headlines.

The problem may be especially manifest in the futures market.

But you don't have to be a victim...

YHOO Stock Now Has to Wrestle with Taxes Post-Alibaba IPO

yhoo stock

Yahoo! Inc. (Nasdaq: YHOO) stock rose 4% today, with Starboard Value LP reportedly buying up a large stake in the company.

The investment management firm’s decision is a positive development for YHOO, which had seen its shares tumble for most of the week on concerns that as it sheds its portfolio of overseas investments, the remaining core business will be valueless.

Here’s one thing YHOO needs to do to reassure shareholders now…

Dow Jones Makes It Clear That Inversion Deals Are Unwanted Trend

dow and inversion deals

Dow Jones Industrial Average officials just made membership requirements for its elite index even more stringent, prompted by a surge in inversion deals made to avoid the high U.S. corporate tax rate.

The committee overseeing the storied blue-chip benchmark just updated the definition for index inclusion. The classification now states that companies that conduct business in the United States, but are incorporated abroad, are not eligible for admission in the 30-stock index.

The Dow tweaked the language used in its process of accepting components into the coveted index to officially read that member companies must be incorporated and headquartered in the United States. Additionally, the United States must be a company’s largest revenue-generating country.

That means the new eligibility requirements clearly exclude companies that have moved overseas via inversion deals.

Keep reading...

Dividend-Paying Stocks: MSFT, MCD, and 22 More New Dividend Boosts

The profusion of dividend-paying stocks that have increased payouts over the last several weeks reflects a robust second-quarter earnings season.

Companies in the S&P 500 turned in 10.3% earnings growth in Q2 - the highest advance since 2011's third quarter.

Last week Microsoft </strong>(Nasdaq: MSFT), McDonald's </strong>(NYSE: MCD), and 22 other dividend stocks raised payouts. Here's the full list of dividend hikes announced during the week ending Sept. 19, 2014.

The Truth Behind the Dangerous "Helicopter Money" Delusion

helicopter money

Seeking out major trends and power shifts in the global economy is a part of my work that I enjoy most.

It's a lot of work, and needless to say, it involves constant research.

That's why a piece I recently read in Foreign Affairs absolutely shocked me...

The piece is a bit revolutionary, as its authors speak to a drastically different way of stimulating an ailing economy than the path we're on today.

Full story...

How the Federal Reserve Is Killing America

Federal Reserve

It's maddening. Our economy is stagnating. The divide between haves and have-nots is widening every day. There are fewer and fewer good jobs and careers to be had. What the heck happened?

The U.S. Federal Reserve System is killing America. It has destroyed the economy. It has undermined savers and retirees. It is even responsible for the corruption in Congress.

We have to kill the Fed before it kills America for good.

August Jobs Report Flop: Smallest Gain This Year with Only 142,000 Jobs Added

August jobs report

The August jobs report was disappointing indeed, missing estimates by a whopping 83,000.

Last month employers added the fewest jobs in eight months, the U.S. Department of Labor reported Friday. Payrolls increased by an uninspiring 142,000 in August, handily missing the median forecast for an increase of 230,000.

But that headline number wasn't even the worst part of the report...

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