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

  • U.S. Economy

  • 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.

  • Oil Prices Set to Soar in the Second-Half of 2010 Oil prices hit a wall this spring. But don't be fooled. The spring retreat simply set the stage for a second-half rally. Despite lingering fears over the global economy, demand for oil isn't slowing down at all. In fact, it's rising... and oil prices will rise right along with it. Read this report to find out why oil is poised to take off in the next six months... and how you can profit. Read More...
  • Bull Market Update: U.S. Stocks Are Hanging By a Thread – But It's a Tough Thread If you ask me, the current bull market in U.S. stocks is hanging by a thread.

    In fact, a decline that takes the Standard & Poor's 500 Index down below the 1,040 level - roughly 7% below where it closed yesterday (Wednesday) - would probably murder the bull-market case for stocks.

    But until that decline actually occurs, don't rule the bulls out for the count.

    That "thread" may be tougher than you think.

    To see what's in store for U.S. stocks, please read on... Read More...
  • The U.S. Economic Recovery is on Cruise Control Assessing the U.S. economic recovery right now is a bit like buying a used car: Although it sure looks good, you can't help but wonder what's really going on under the hood.

    In terms of the U.S. recovery, here's what I see: The U.S. economic recovery looks good. And it is good. But the pace of that recovery is about to slow down - which is part of the reason that the U.S. stock market sold off and why the Dow Jones Industrial Average is down about 7% from where it was in early May (and that's even after the 5% rebound the Dow has seen from the June 7 nadir it established down around 9,800).

    To put this into context, I had a long discussion about this topic with Lakshman Achuthan, managing director of the Economic Cycle Research Institute. Let me share his thoughts.

  • Question of the Week: Readers Respond to Money Morning's Technology Trends Query Apple Inc. (Nasdaq: AAPL) delighted smartphone consumers and enthusiasts of technology trends when it unveiled its new iPhone 4, which will go on sale in the United States on June 24. The fourth-generation iPhone upgrades previous 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 company's momentum going as Motorola's Droid phone, which uses Google's Android system, has edged some market share from Apple.

    Apple's iPhone and iPad have helped supercharge the mobile-communications market. Those products - and others - have helped make sure that consumers and companies alike are inundated with new technologies, new applications, and a slew of new products. All these new options have potential buyers asking such questions as "Can this help me? " or "Do I need one? " or "Should I upgrade? "

  • Defensive Investing: Seven Signs Your Dividend is in Trouble Both the U.S. stock market and the U.S. economy are navigating rough waters right now.

    U.S. employment, which had appeared to be moving into rapid expansion, suffered a setback in May, with the economy creating only 41,000 jobs. Meanwhile, the stock market - even with the recent rebound that brought it back to the 10,000 level - remains more than 15% below its cyclical high.

    That's been the uncomfortable pattern: One economic report points toward a continued U.S. recovery; the next one points toward recession. Sometimes the contradictory research is separated by a single day, other times they are just hours apart. The resultant uncertainty is whipsawing U.S. stock prices - and is leaving investors feeling shaky.

    Fortunately, there is a ready remedy, not to mention a place of refuge, from this kind of grinding uncertainty - high-yielding dividend stocks.

    To discover the seven signs that a dividend isn't secure, please read on...

  • Buy, Sell or Hold: A Copper-Price Rebound Could Mean a 50% Gain For Freeport McMoRan Copper & Gold Inc. (NYSE: FCX) It's time to play "the metal of the economists"- copper. And that brings us to one stock: The publicly traded king of copper - Freeport McMoRan Copper & Gold Inc. (NYSE: FCX).

    Let me explain ...

    Last week, I provided a solid "defensive-investing" pick for readers who wanted to balance their portfolios - and wait for the latest global-financial storm to pass.

    During the past week, we got very strong indications that strong hands see value in the market:

  • Unexpected Drop in Retail Sales a Sign of Trouble For Economic Recovery Sales at U.S. retailers unexpectedly dropped in May for the first time since September, the Commerce Department said Friday, raising worries that the economy is struggling to recover from the worst financial meltdown since the Great Depression.

    Americans slashed spending on everything from cars to clothing to building materials, as retail sales plunged 1.2% last month, following a 0.6% April gain that was larger than previously estimated. It was the largest decline in eight months.

    Retail sales were projected to increase 0.2%, according to the median estimate of 76 economists in a Bloomberg News survey.

  • 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.

  • 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.

  • 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.

  • 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...

  • 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.

  • 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.

  • 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. Read More...