U.S. Economy
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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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We Want to Hear From You: How Have New Technology Trends Affected You?
Apple Inc. (Nasdaq: AAPL) delighted smartphone consumers and technology enthusiasts Monday when it unveiled its new iPhone 4, which will go on sale in the United States June 24. The phone upgrades previous iPhone versions with a front-facing video camera for video calls, a higher resolution screen, slimmer body, and an operating system that accommodates multitasking ability.
Chief Executive Officer Steve Jobs referred to the phone as the "biggest leap we have taken since the original iPhone."
It's aimed at keeping the Apple momentum going as Motorola's Droid phone using Google's Android system nabs some market share from Apple.
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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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A Broad-Based U.S. Recovery is Strengthening the Global Economy Against Europe's Turmoil
Stocks scattered across the capital markets last week like the unwanted children of a terrible divorce, as a blunted rally following a global margin call put a hex on every sector and most commodities - but a U.S. recovery marched on.
So far in the ten sessions of May, the Dow Jones Industrial Averageis down 3.6%, theNasdaq100is -4.7%, the S&P SmallCap600is -3.1% and overseas large-caps are down 8.6%.
That's a whole lot of falling, and for what reason? The headlines tell us that investors freaked out over Greek debt, fear of a contagion effect on Spain, speculation that U.S. earnings have peaked, and worry that the great global capital machine will soon seize up for lack of customers and credit.
But headlines don't always tell the whole story.
To take a closer look at why the markets are down, click here.
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Buy, Sell or Hold: Citigroup Inc. (NYSE: C) Is a Turnaround Play that Investors Can't Afford to Miss
Citigroup Inc. (NYSE: C) is truly a global bank. With operations in more than 100 countries, it leads in consumer banking, credit cards, corporate lending, investment banking and brokerage. But its forays into the U.S. mortgage market, and its huge exposure to the U.S. retail and corporate banking markets, created huge losses from which the company is still recovering.
Citi, guided by a prudent and savvy investment banker, Vikram Pandit, has embarked in one of the most ambitious and difficult transformations ever attempted by a financial institution. It is shedding bad assets, cutting costs, raising capital and has segregated the impaired assets and businesses that Citi would like to dispose into a so-called "bad bank," a subsidiary by the name of Citi Holdings. The success of the restructuring will depend on both Citigroup's execution and on the underlying strength of the U.S. and global economies.
But therein lies the huge upside. As I have written before, there are few investment opportunities more profitable than the restructuring and turnaround of a business. And given the huge size of Citi's balance sheet and the fact that banks are pro-cyclical to the economies in which they operate, the potential gains are extremely large.
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How to Play Gold – So it Doesn't Play You
The Greek bailout has turned gold into a "must have" investment. But the new gold rally will be different from gold rallies of the past. This time around, gold isn't serving as protection from inflation... it's become more speculative. Read this report to find out exactly how to play gold now.
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Slower Productivity Growth May Force Businesses to Increase Hiring
U.S. productivity rose faster than expected in the first three months of the year, as employers continued to squeeze existing workers to boost output before hiring new ones, Labor Department figures showed today (Thursday). But the rate of growth slowed, which may force businesses to increase hiring in the coming months.
Separately, fewer Americans filed claims for unemployment benefits for the third consecutive week, in a sign the labor market is slowly recovering from the worst recession since the 1930s.
Productivity rose at a 3.6% annual rate in the first quarter, exceeding the 2.6% median forecast of economists surveyed by Bloomberg News but down sharply from 6.3% in the previous three months.
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The Bull Market Will Pick Up Pace When Retail Investors Finally Climb Aboard
Data shows that retail investors have not yet bought into the bull market. But when they eventually do regain their confidence, the market will soar to new heights.
Consider this: Trim Tabs Investment Research, a boutique data analysis firm in the San Francisco Bay area that's popular with hedge fund managers, last week declared that it had turned fully bullish from cautiously bullish on U.S. stocks. The firm thus boosted its recommended equity exposure to 100% long from 50% long.
The reason for Trim Tabs' change of posture: Its unique blend of macroeconomic data shows the U.S. economy making a gradual recovery, corporate buybacks are picking up during earnings season, and demand indicators are increasingly bullish.
Let's spend some time understanding their point of view, as the firm is influential among large institutions.
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China-U.S. Trade Relations Plagued by Protectionism
China yesterday (Wednesday) slapped the U.S. chicken industry with the second set of tariffs in less than three months, further escalating tensions with its all-important Western trade partner.
China's commerce ministry said the new tariffs, which will impose charges of as much as 31.4% on imports of U.S. chicken, were a response to what it said were subsidies that created an unfair advantage for U.S. chicken producers.
China in February imposed a 105.4% duty on imports of U.S. poultry after a government investigation found that such products were being sold by the United States at less than the fair value. The new tariffs could altogether close off the market to U.S. poultry producers.
China and the United States have a long history of trade disputes, but these conflicts in recent years have escalated in both frequency and intensity as the two nations vie for global influence.
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Should Investors Sell in May and Go Away, or Ride the Bull Awhile Longer?
I'm sure you have heard the old saw that it's a smart idea to "sell in May and go away."
That concept is based on the notion that the May-to-November span provides a weak environment for investors. I have already heard the cry go up recently because the major indexes are already up a lot more than anyone expected, and this would seem to be a convenient time to take profits.
Yet like most old market adages, there's not much substance to the concept if you take a good look at history.
