Archives for June 2010

June 2010 - Page 8 of 11 - Money Morning - Only the News You Can Profit From

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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From Leader to Laggard: Is it Time to Bet Against the U.S. Dollar?

The U.S. dollar has been one of the world's strongest currencies in the first part of 2010, posting double-digit gains through the end of May.

And little wonder. The Greek debt crisis continues to threaten Europe's overall health, and could unleash an entirely new contagion on the rest of the global economy. Then there's China, – the engine of world growth during much of the financial crisis – which now appears to face the near-term triple threat of slowing growth, accelerating inflation and workplace unrest. Add in concerns about commodity prices and global debt levels and it's easy to see why currency investors have sought the safe haven of the U.S. dollar.

In short, it appears that "everybody" knows the greenback is the best choice for safety, quality and security.

But is that really the case? To me, the dollar is looking more and more like a colossal short that could wind up being one of the biggest moneymakers of the year for traders gutsy enough to take a stand.

To see why the dollar could roll over – and to see how to play it – please read on …

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Money Morning Welcomes Its 2,000th Fan to Its Fast-Growing Facebook Community

Money Morning's Facebook page welcomed its 2,000th fan yesterday (Tuesday), part of our effort to boost visibility and increase communication with our valued readers.

In the two months since we redoubled our social-networking efforts – revamping our Facebook page and expanding our dialogue with readers – our Facebook following has grown by nearly 2,000 fans. As a formal "thank you" to our new "family," the fans who came closest to guessing when the 1,000 and 2,000 numbers would be reached received such prizes as autographed copies of Keith Fitz-Gerald's "Fiscal Hangover: How to Profit From The New Global Economy" and $100 Amazon.com gift cards.

Fans who join Money Morning's Facebook page receive daily updates on news stories, investment research and the latest developing trends. Our daily analysis and commentaries, as well as our "Top News" pieces are all posted. So are investment videos, financial analyst bios, our "Question of the Week" feature, informative graphics and charts and breaking news.

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Spain's Banco Santander Stands Strong Against Debt Crisis with Confident Global Expansion

The Eurozone's largest bank, Banco Santander, S.A. (NYSE ADR: STD) of Spain, showed the European debt crisis has not hurt its prospects by announcing today (Wednesday) it would buy Bank of America Corp.'s (NYSE: BAC) stake in its Mexico unit. The $2.5 billion purchase increases Santander's exposure to the high growth opportunities of Mexico's banking sector.

Despite Eurozone debt concerns and rocky markets, Santander's move to expand into Mexico shows a healthy balance sheet that has stood strong against the debt problems plaguing other European banks. Santander has managed to keep solid footing among Spain's unstable banking sector, where the nation's debt has hurt financing conditions and smaller unlisted savings banks have been suffering losses on property and housing loans.

"Santander is showing that it can still make decisions and go on with its business plan despite the liquidity problems in the markets," Venture Finanzas analyst Ignacio Mendez told Reuters.

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China's Exports Surprise Contradicts the Critics

Chinese exports in May posted a 50% gain over last year, blowing away estimates and suggesting that the risk of a Chinese economic slowdown is overblown, Reuters reported, citing anonymous sources.

China's official export numbers will be reported tomorrow (Thursday) as part of broader trade data, but had been expected to rise 32% year-over-year after recording 30.5% growth in April.

Chinese economic figures are often leaked widely in markets and government circles ahead of their official release, and are sometimes subject to last-minute revisions.

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Question of the Week: Readers Respond to Money Morning's U.S. Housing Market Query

On one hand, housing market reports released last month showed that prices and sales are up from a year ago. The Standard & Poor's Case-Shiller Home Price Index showed a 2.3% year-over-year increase in March prices. And the National Association of Realtors said sales of previously owned homes rose 7.6% from March to April – a five-month high – and were up 22.8% from April 2009.

"A majority of the markets have seen price gains recently," said Lawrence Yun, chief economist at the National Association of Realtors. "A return to old-fashioned responsible lending and buying will help the housing market avoid disruptive and painful bubble-bust cycles."

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Is the Plunge in Commodities a Bear Market Signal for Stocks?

The biggest slump in commodity prices since 2008 is undermining confidence on Wall Street and fueling speculation that a new bear market has been born.

Despite forecasts for accelerating economic growth and higher prices, commodities, with the notable exception of gold, are taking a big hit.

The Journal of Commerce (JOC) Commodity Index that tracks the growth rate of steel, cattle hides, tallow and burlap plunged 57% in May, the most since October 2008 – something that gave analysts a sense of déjà vu.

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These Five Inflation Plays Will Provide Protection and Profits

Inflation hawks have been warning since 2008 that the spurt of U.S. money creation that began at the end of that year would spark a surge in consumer-price inflation.

And yet the consumer price index (CPI) statistics remain quiet – not giving ammunition to the deflationary camp, but making "inflationists" look silly, as well. Now, however, it is becoming obvious that inflation will soon arrive. But this time it is sneaking in through the back door – courtesy of our emerging-market trading partners.

Fortunately, there are some very clear steps that investors can take to protect themselves from this expected inflationary surge.

To learn about five investments that can battle inflation even as they fatten your portfolio, please read on...

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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