Archives for April 2013

April 2013 - Money Morning - Only the News You Can Profit From

Is "Dow 16,000" a Reachable Target?

We all saw it.

Barron's April 20 cover showed a cartoon bull on a pogo stock, with the exclamation "Dow 16,000!"

So what's the investor takeaway – are we all in to 16,000, or is it a contrarian signal to watch out for a looming market pullback?

Money Morning Chief Investment Strategist Keith Fitz-Gerald joined FOX Business Network's "Varney & Co." program to answer that question.

Watch the following interview with Fitz-Gerald to find out.

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The Real Reason Government Is Paying Down the National Debt

After six years of non-stop deficit spending that has added $8.2 trillion to the national debt, the U.S. Treasury has announced that it expects to reduce the country's debt by $35 billion this quarter.

Given that national debt growth has rocketed past $16.7 trillion and is on track to exceed $17 trillion at some point in the fall, a $35 billion reduction is laughably tiny. It's just 0.02% of what we as a nation owe.

And in the very same statement, the Treasury admitted that in the following quarter it expects to be back to borrowing as usual – $223 billion worth, more than six times the amount it plans to pay down this quarter.

So why bother?

"I don't believe in coincidences," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "Our leaders in Washington on both sides of the aisle are terribly under pressure from the American public right now, and I think this is a very convenient announcement to say, "Hey, we're doing the right thing, keep us all in office for a little while longer.'"

And apart from any political motivations, Fitz-Gerald wonders whether the plan to pay down $35 billion of the national debt can even be considered legitimate, given the way the government borrows money from itself.

"It's like taking blood from the left arm and putting in in the right arm and calling it a transfusion," Fitz-Gerald said.

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Four Reasons Facebook Stock Could Tumble After Earnings Report

Facebook stock rose nearly 3% Tuesday to come within $11 of its IPO price – but a disappointing earnings report could send shares plunging if the social media giant doesn't show healthy improvement.

One of the biggest things to watch when Facebook Inc. (Nasdaq: FB) reports Q1 earnings after the close Wednesday will be how the company is managing the transition to mobile.

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David Stockman: Thanks to the Fed, We're in "Monetary Fantasyland"

David Stockman, who served as budget director under President Ronald Reagan, is taking aim at a favorite target: the U.S. Federal Reserve.

Stockman minced no words in a Monday interview on FOX Business' "Varney & Co."

Speaking of the Fed, he told host Stuart Varney, "They have violated every rule of sound money that's ever existed. They've got the money market rates at zero. They have managed and rigged the entire yield curve so nothing is real out there. It's all trading against the Fed."

He said speculators will continue to invest as long as the Fed can hold the bond price up and the yield down "and keep shoveling out free overnight money."

"We're in a monetary fantasyland," Stockman said.

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The Sequester Debate and Its 5 Biggest Lies

In a hurricane of contradictions there has been no shortage of whoppers told during the sequester debate.

Since political news is usually strategically written, placed and timed you can chalk it all up to politics as usual. Even seemingly off the cuff, innocent responses seldom are.

With that in mind here are five recent news reports where "the facts" have been spun to a point where they are simply untrue.

To counter, we've given you the "un-spun facts" you're entitled to as a taxpaying citizen.

Just don't expect this nonsense to ever end…it's what they do best.

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Stock Market Today: S&P 500 Reaches Record Before May Sell Off Hits

The stock market today (Tuesday) paused after kicking off the week with strong, across-the-board gains that took the Standard & Poor's 500 Index to an all-time closing high.

The S&P rose 11.37 points Monday, or 0.7%, to close at 1,593.61, a hair above the index's April 11 record of 1,593.37. The Nasdaq tacked on 27.76 points, or 0.8%, to 3307.02, its highest close since 2000. The Dow Jones Industrial Average climbed 106.20 points, or 0.7%, to 14818.75, inching closer to the anticipated 15,000 milestone.

Shortly before noon Tuesday, stocks took a breather. The Dow dipped 32.62 points, or 0.22%, at 14,786.13. The S&P slipped 1.95, or 0.12%, at 1,591.66. The Nasdaq notched a gain of 5.2%, or 0.16%, at 3,312.

As markets march into May, trading is expected to slow. The old "sell in May and go away" adage has many preaching caution. Bespoke Investments reports two of the ten worst months of May in S&P's history have occurred during the current bull market (2010 and 2012).

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BP Tops Earnings Est, Rev Falls Y/Y - Analyst Blog

British energy giant BP plc (BP) reported first-quarter 2013 adjusted earnings of $1.32 per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The results comfortably beat our expectation of $1.05, thanks to improved downstream operation. However, the quarterly figure decreased almost 10.2% from the year-earlier adjusted profit level of $1.47 due to […]

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Are Russia ETFs Signaling More Trouble Ahead? - ETF News And Commentary

Emerging market equities have been a laggard since the start of the year, underperforming domestic equities by a wide margin. Lower demand, Eurozone weakness and an appreciating dollar have been the key culprits in the slowdown in these developing nations. The weakness in the emerging market is quite evident in the performance of broad-based products […]

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These Dividend Stocks Can Deliver a False Sense of Security

You might have caught the recent Barron's cover that read "Dow 16,000!"

It was hard to miss – the cover pictured a wide-grinning bull bouncing on a pogo stick.

The issue outlined why large fund managers were bullish about the next year, with 74% of those polled saying the market was headed higher.

That is the single highest reading ever in the poll, indicating wild enthusiasm among those controlling the largest pots of money.

The major reason driving stock market euphoria is the zero interest rate policy (ZIRP) of the U.S. Federal Reserve.

The Most Dangerous Man in the World

When it comes to spending or saving, it's always a contentious debate.

But the risks are rarely as high as they are now for the U.S. and most major industrial nations. Such fundamental economic decisions will move a country forward (or backward) for decades, not months, and can't be undone quickly.

So let's choose the "winner" and "loser" of this debate carefully.

Yahoo's Daily Ticker host Henry Blodget pronounced last week that Nobel Prize winning economist Dr. Paul Krugman "won" the vicious argument fought between those who want to increase government spending as a means of rebuilding our economy, and those who want to cut spending and reduce deficits as a means of restoring confidence (and rebuilding our economy).