Archives for July 2013

July 2013 - Page 4 of 18 - Money Morning - Only the News You Can Profit From

The Fed Is Crushing Corporate Investment

U.S. and global companies may be sitting atop piles of cash as the stock market hovers near all-time highs, but total capital expenditures likely will fall over the next two years.

Reductions in capital expenditure in heavy spending commodity sectors, such as energy and mining, will drive down inflation-adjusted spending by 2 percent in 2013 and 5 percent in 2014, according to Standard and Poor's.

Capital expenditures, the money used by businesses to purchase or upgrade physical assets, are one of four ways that companies typically spend profits.

Despite stocks soaring over the last few months, mixed feelings over the global economic recovery, falling commodity prices, and profit margin pressures are holding back company spending on much-needed project development for future growth, according to the ratings agency.

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Ignore Earnings Noise to Find the Best Tech Stocks to Buy Now

It's been a rocky, uneven earnings season for the tech sector. But if you know where to look amid all the noise and numbers, there are clues that can help you find the best tech stocks to buy now.

Until Apple Inc. (Nasdaq: AAPL) and Facebook Inc. (Nasdaq: FB) reported this week, tech stock investors had almost uniformly glum news from the biggest names in the sector.

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Facebook (Nasdaq: FB) Stock Zooms - But Don't Let Earnings Fool You

Facebook (Nasdaq: FB) stock is up more than 30% today as investors applaud the second-quarter earnings report released yesterday (Wednesday).

Investors were thrilled to see FB earnings improve from previous disastrous quarters, and their exuberance pushed Facebook stock above $30 a share for the first time since January.

But, before you think FB stock is now the hottest investment of 2013,

What Can You Buy For $616 Million? Not Much, If You’re Steven A. Cohen

Steven A. Cohen's SAC Capital Advisors was one of the biggest, most powerful and profitable hedge funds on Wall Street. Cohen himself is a legendary figure, replete with odd, personal eccentricities that are the hallmark of the truly brilliant.

Famous for spending hours as a younger man watching the tape roll by, and for keeping his Stamford, CT, trading floor at a steady 68 degrees, Steve Cohen made billions for his clients – and himself.

Now the sharks are circling, the dominos are falling – nearly any hackneyed metaphor a writer could think of to evoke a doomstruck sentiment applies.

The SEC and Manhattan U.S. Attorney Preet Bharara have pursued Cohen and SAC Capital with a rare, almost indecent zeal. The charge is insider trading, allegations which Cohen vehemently denies, but which the SEC is pursuing.

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Here's How Much Higher Mortgage Rates Will Raise Your Monthly Payments

Where will higher mortgage rates raise monthly mortgage payments most?

These three charts from the real estate site Zillow.com depict how higher mortgage rates will affect monthly mortgage payments in different markets throughout the United States.

The charts are based on the percentage of income homeowners spend on their monthly payments, with a pre-housing bubble baseline of 20% of median household income.

The first chart shows how much more expensive than historical norms monthly payments will become in six of the priciest metropolitan areas when mortgage rates climb to 5%, assuming homes appreciate in line with Zillow projections.

Monthly payments in the San Jose metro area will increase the most (22% over the baseline) followed by Los Angeles (19%), San Diego (14%), San Francisco (11%), Portland, OR (7%) and Denver (1%).

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After Saving My Life, This Technology Will Save Your Retirement

The technology I want to tell you about today is one of my best investment ideas.

And not just because it saved my life.

I'm talking about "location-based services," the technology that allows your smartphone to show where you are … or tell you where you need to go.

It's a technology that has double-your-money profit potential because of all it can do. It can help you find the nearest retail sale, guide you to the seafood house where you have reservations, or get you to a hotel for a good night's sleep.

It can also help you avoid costly navigation errors – and not just in a car.

Two summers ago, while sailing with my crew out on San Francisco Bay, an exceptionally heavy fog rolled in. We grabbed a smartphone, discovered we were off course, and traversed the dangerous Berkeley Reef – which would have ripped our keel right off had we not turned.

And the drama involving location-based-service technology doesn't end there.

You see, this market has finally reached critical mass and is poised to skyrocket.

Buy, Sell or Hold: Is Rackspace's Cloud Being Vaporized?

Rackspace Hosting (NYSE: RAX) is currently the number two provider of cloud computing. The company has been under the microscope lately as its stock has dropped nearly 45% year-to-date.

But the microscope is not just fixated on Rackspace, it's also focused on the entire cloud computing sector.

This sector is growing rapidly with analysts speculating enthusiastically that the overall cloud market could reach anywhere from $40 billion to $70 billion by 2016 or earlier.

But with extreme growth comes extreme competition. This competition is not coming from the under $6 billion market cap companies similar to Rackspace.

The company's competition comes from the largest names in tech – Microsoft and industry leader Amazon.

For those unfamiliar with the term "cloud computing" the business is quite simple to describe.

Real Estate Offerings Hot in the 2013 IPO Market

One of the highlights of the 2013 IPO market so far has been the flood of real estate related offerings.

We have seen a number of real estate investment trusts and homebuilders roll out initial offerings, and more are on the calendar.

They are seeing demand for investment products to fuel investors' desire for yield and ways to bet on a continued housing market recovery. More real estate related offerings are being added to the calendar on a regular basis and most have held up fairly well in the aftermarket.

Good news for investors looking on the IPO market: In the next week we have two real-estate related initial offerings that are worth consideration.

Here's a look.

If A New Glass-Steagall Act Can Protect Us, Why Is There Opposition?

There has been a huge outpouring of support for Senators John McCain and Elizabeth Warren's idea to reinstate some form of the Glass-Steagall Act, which drew a clear separation between investment banking and commercial banking.

The enthusiasm has managed to vault a wall that many thought impossible: broad bipartisan support.

In fact, from McCain and Warren on down to the right and left, strange bedfellows are signing on.

Whether it's the various Tea Party groups, or MoveOn.Org. Whether it's the Huffington Post or Breitbart, or Bill Clinton, there is plenty of common ground between all of these divergent groups.

Even in Congress itself, there is significant bipartisan support for at least the idea behind Glass-Steagall – that big banks should be broken up, and that those who remain should be absolutely prohibited from, frankly, gambling with our money.

It's perfectly clear that, among the people of this country, there is a real desire to bring banks to heel.

Professor William K. Black, veteran warrior of the Savings & Loan Crisis, put it well when he said that "it violates the core principles of conservatism and libertarianism to extend the federal subsidy (to)… commercial banks via deposit insurance to allow that subsidy to extend to non-banking operations," meaning that we, the taxpayers, shouldn't be forced to subsidize a bank's gambling habit.

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Why Gold Prices Are Rising Now

On Monday, gold enjoyed its biggest one day jump in more than a year. It hit a four-week high as the precious metal staged a rebound. Gold finally broke through the $1,300 an ounce technical resistance level and finished above $1,335 an ounce.

Short-covering by technically-oriented traders and the perception that the Fed will continue QE for the foreseeable future are the short-term answers as to why gold had such a strong day. But there are solid fundamental reasons as to why gold should and will recover in price in the months ahead.

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