Archives for April 2013

April 2013 - Page 15 of 21 - Money Morning - Only the News You Can Profit From

FOMC Meeting Minutes Signal These Investment Moves to Make Now

It's clear from the leaked Federal Open Market Committee (FOMC) meeting minutes that the Fed isn't taking away the punchbowl quite yet – but investors can take steps now to be prepared for an eventual sign that quantitative easing will end.

The FOMC meeting minutes show the central bank remains divided on when to end QE and raise interest rates.

The Fed's current policy of buying $45 billion in Treasuries and $40 billion in mortgage-backed securities monthly will remain in place at least through midyear. Near-zero interest rates also look safe until 2015.

The Fed has held short-term rates at historic lows since 2008, with a goal of juicing the anemic U.S. economy. The Fed minutes reiterated that Bernanke and company will keep rates super low until the unemployment rate dips below 6.5% or inflation rises above 2.5% a year.

The monthly March jobs report, released after the March 19-20 Fed meeting, showed a significant slowdown in job creation. While the unemployment rate ticked down to 7.6% from 7.7%, the rate decreased largely because a huge number of people stopped looking for work.

The glum employment data could even extend the Fed's 2015 date to raise interest rates.

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A Major Breakthrough in U.S. Oil Exports May Be Coming

As the crude market continues to show considerable volatility, price gyrations are prompting another round of concerns over supply and production.

There isn't a shortage to worry about right now.

But whenever we have some issues on the demand side, attention shifts to the supply currently available on the market. And it's in this repetitive exercise that one of the major errors by analysts always occurs.

I have noted this shortcoming on several occasions.

Best Investments: The One Stock to Buy in the Red-Hot Biotech Sector

For the best investments to add a little high-potential punch to your portfolio, nothing's better than biotech.

The iShares Nasdaq Biotechnology Exchange Traded Fund (ETF) (Nasdaq: IBB) rose 30.2% in the last 12 months and is already up a healthy 16.5% year to date.

In fact, the biotech sector has been a consistent performer for investors. The Nasdaq Biotechnology Index has notched 16.1% annualized returns for the last five years.

Big gains from just three stocks — Amgen Inc. (Nasdaq: AMGN), BiogenIdec Inc. (Nasdaq: BIIB) and Gilead Sciences Inc. (Nasdaq: GILD) — created a whopping $60 billion in combined shareholder gains in 2012.

And analysts expect the trend to continue.

My Two Favorite Gold Mining Stocks

With the world's central bankers printing money like mad, you would think investing in gold mining stocks would be a no-brainer.

Yet despite these misguided policies, the Market Vectors Gold Mines Index (NYSE: GDX) is down 40% from its peak last September. Even worse, it's off 48% from its all-time highs in 2011.

Not even last Thursday's announcement that the Bank of Japan would buy $1.4 trillion in Japanese government bonds in 2013 and 2014 helped much-even though on a relative basis Japan's "stimulus" is more than double what Ben Bernanke has in mind.

So why all of the pain?…

And better yet, which gold mining stocks have fallen so far they are screaming buys right now?

Here's the answer to both questions….

Could Gold and Silver Coins Become Legal Tender in Your State?

Confidence in the U.S. dollar is so low that 13 states are poised to recognize gold and silver coins as legal tender.

Arizona is the latest state set to make the move.

Monday, the Republican sponsored Arizona measure sailed through the House of Representatives 36-2. The bill moves on for another vote in the Senate, where it got its first nod Feb. 28 in a 17-11 vote.

Should it land on Gov. Jan Brewer's desk, it's good as gold.

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Why Oil Prices Are Moving Higher, Even with a Surplus

Oil prices are up for a second day after a three-day slide. And the Energy Information Administration (EIA) just boosted its 2013 U.S. oil price forecast. But with high oil supply, does this mean a price decline is on the way? Money Morning Global Energy Strategist Dr. Kent Moors explained to FOX News today the […]

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Beware These Three Dividend Stocks Ready to Slash Their Payout

Investors are in love with dividend stocks this year – and there are even more juicy yields to choose from than before.

But one thing you need to be careful to avoid is a dividend stock that boasts a huge yield, but can't sustain it.

For example, look at CenturyLink Inc. (NYSE: CTL). CTL has been a favorite dividend stock for years, but slashed its dividend by 26% in February. The move caught investors off guard. Shares plunged 23% in one day – the biggest one-day decline since at least 1980 – wiping out about $6 billion in market value. 

The stock still yields nearly 6%, but confidence in the company to maintain its payout has been damaged. 

Positive dividend actions have far outweighed negative announcements over the past few years. In 2013's first quarter, 732 companies boosted their payouts compared with 552 in the year-earlier period.

But in March, 73 U.S. companies pruned their payouts – not far off the record of 93 in December 2012.

Usually companies frame dividend cuts as necessary evils – necessary as in the cut was needed to conserve cash. Read those tea leaves and it's easy to realize that if a company needs to cut its dividend to conserve capital, it probably is not worth investing in in the first place.

The good news is investors can skirt stocks that are vulnerable to dividend reductions. We rounded up a few names that deliver tempting yields, but look like they could be on the way to cutting their payouts.

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Why JPMorgan Wants to See More Americans on Food Stamps

Every time an American signs up for food stamps in one of 23 states, JPMorgan Chase & Co. (NYSE: JPM) adds to its revenue stream.

That because JPMorgan Chase contracts to operate as the processor of the Electronic Benefits Transfer (EBT) cards in those states. JPMorgan earns a fee for each recipient, ranging from 31 cents to $2.30, depending on the state, every month for the term of the contract.

JPMorgan's seven-year Supplemental Nutrition Assistance Program (SNAP, the official name for the federal food stamp program) contract with New York state, for example, brought in more than $126 million of revenue to the big bank.

Florida has paid JPMorgan more than $90 million since 2007. Pennsylvania's seven-year contract exceeded $112 million.

It brings a whole new meaning to "corporate welfare."

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