Archives for July 2013

July 2013 - Page 8 of 18 - Money Morning - Only the News You Can Profit From

New Glass-Steagall Act Key to Ending Too Big to Fail

Last week, four senators that include Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.) introduced a bill to reinstate the Glass-Steagall Act.

The 21st Century Glass-Steagall Act, as it's called, would bring back many of the provisions of the former law and strengthen language to limit financial speculation by the big banks, reduce risk, and attempt to end "Too Big to Fail" once and for all.

The original legislation, called The Banking Act of 1933 but commonly referred to as Glass-Steagall, was partly repealed by Congress in 1999 and signed into law by President Bill Clinton. But by the time Glass-Steagall was repealed, the law had already been watered down and full of loopholes that left the U.S. economy highly vulnerable to a financial crisis.

Many economists believe that the partial repeal of this law was responsible for the recent financial crisis.

But the reintroduction of a Glass-Steagall law would do one critical thing that should provide comfort to any American.

It would make it impossible for the Big Banks to access FDIC-insured savings and deposits, and then speculate with ordinary Americans' money. In addition, it would aim to end Too Big to Fail and reduce the size of the mega-banks, in essence break them up.

Keith Fitz-Gerald Spots Hot Topics in a G20 Meeting Preview

The Group of Twenty (G20) is the premier forum for international cooperation on the most important issues of the global economic and financial agenda. Its summit is set for September 5-6 in St. Petersburg, Russia.

Money Morning's Chief Investment Strategist Keith Fitz-Gerald appears on CCTV America for a G20 meeting preview.

Keith discusses what he thinks will be the hot topics, including global employment, Abenomics, and the potential for trade wars.

Get ahead of the curve by listening to Keith's full analysis of what will likely unfold in the G20 meeting, in the video below:

G20 Preview

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Microsoft Earnings Call to Focus on Reorg Plan (Nasdaq: MSFT)

The Microsoft earnings call today will demand clarity on CEO Steve Ballmer’s recently released reorganization plan, and what it means for investors.

Microsoft Corp. (Nasdaq: MSFT) reports fourth-quarter earnings Thursday after the close, and expectations are for solid numbers and growth – at a time when a lot of analysts are down on the stock.

Despite a significant slump in the PC market, the Redmond, WA-based company is expected to post a small uptick in earnings and revenue.

Analysts are looking for the tech giant to report earnings of $0.75 per share on revenue of $20.7 billion, up from $0.73 on revenue of $18.06 billion a year ago. Full-year earnings are projected to come in at $2.74 per share on full-year revenue of $78.6 billion.

While modest, those Q4 gains will likely be warmly welcomed by Wall Street.

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Can Google Earnings (Nasdaq: GOOG) Push Stock to $1,000 a Share?

Google earnings for the second quarter come out after the bell today – with most analysts expecting a strong quarter.

Google Inc. (Nasdaq: GOOG) is expected to report Q2 earnings of $10.78 per share on revenue of $14.45 billion. That compares with a $10.12 EPS profit on revenue of $9.61 billion in the same quarter a year ago, according to analysts polled by Reuters.

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A Guide to Pricing and Investing in Tech IPOs

Earlier this week, I shared with Money Morning readers a breakdown on how IPOs are priced.

In this IPO pricing overview, Money Morning Capital Wave Strategist Shah Gilani explained the pitfalls of over- and underpricing an IPO.

An overpriced IPO can be a death sentence for a company, generating bad PR, a stock that bombs, and more. Facebook's (NASDAQ:FB) IPO disaster is a prime example of IPO overpricing.

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Buy, Sell or Hold: Is Sysco Eating Up the Competition?

You call to make reservations at that new and trendy restaurant.  Can you guess who the restaurant called prior to opening its doors?  Chances are the first call it made was to Sysco Corporation (NYSE: SYY).

Sysco's by far and away the leading provider of food to the restaurant industry. The company has an 18% share in a $235 billion dollar industry in the U.S., Canada and Ireland.

Sysco provides the restaurateur everything he needs – from high-quality chef ingredients to Styrofoam cups. It serves more than 400,000 customers and has over 180 distribution centers.

Shareholders have been rewarded by Sysco's fine execution of its business plan as it breaks above new multi-year highs.

However, there is something strange afoot.

How to Succeed in the Low-Yield Inflationary Matrix

In the 1999 sci-fi film, "The Matrix," the mentor Morpheus turns to the protagonist Neo and says, "Do you think that's air you're breathing now?"

The quote has become somewhat of a modern classic movie line, as the words serve to enlighten Neo that all is not what it seems in the world he perceives.

For income investors, there's a new matrix of sorts, and it's a world dominated by the very real toxic cocktail of low yields and rising inflation.

Income investors-most of whom are near or already in retirement-now are forced to breathe the thick air of dwindling income from traditional sources, and the rising costs of all sorts of goods and services.

On the yield front, we've seen the pernicious effects of the Federal Reserve's easy money policies on traditional yield-generating securities such as Treasury bonds.

July Fed Beige Book Round Up

the beige book

Periodically, each Federal Reserve Bank gathers anecdotal information on current economic conditions in its geographic district.

Banks take into consideration the outlook of regional Fed bank directors, interviews with key business contacts, economists, market experts, and other sources.

This information comes out 8 times per year in a compilation report dubbed the "Beige Book" – it's essentially a summary of economic activity in the 12 Fed bank districts as prepared by a designated Federal Reserve Bank on a rotating basis.

Today (Wednesday), the Federal Reserve released its latest.

Therein, manufacturing reportedly expanded in most districts.

Consumer spending, auto sales, transportation, commercial real estate, and banking has improved.

Hiring activity modestly improved, but three districts noted businesses' reluctance to hire permanent workers. We're likely seeing the effects of Obamacare.

Notably, housing demand and construction activity increased at a moderate to strong pace in all districts.

Meanwhile, tourism and agricultural conditions seemed bogged down by bad weather.

In sum, overall economic activity has reportedly continued to increase at a modest pace since the last Beige Book, released on June 5.

Sounds good, but how about some specifics?

Here are some interesting economic tidbits I came across while perusing July's Beige Book, broken down by district:

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Will Yahoo Stock (Nasdaq: YHOO) Keep Climbing?

Yahoo stock has soared nearly 90% in the past year, and CEO Marissa Mayer deserves much of the credit.

Yahoo! Inc. (Nasdaq: YHOO) was seriously ailing when Mayer came on board a year ago. Many analysts placed Yahoo stock on "death watch" and readied to send it to Internet stock graveyard.

Mayer has undeniably made progress as she finishes her first year at the helm.

"She's done a great job," Money Morning Capital Wave Strategist Shah Gilani told FOX's Stuart Varney on Tuesday. "She's done a terrific PR job for the stock."

The question for investors: With shares up more than 70% in Mayer's first year – and another 10.38% today to $29.67 – is there still time to profit from Mayer's success, or did they miss the boat on Yahoo stock?

Yahoo Stock: Still a Buy with Weak Earnings?

Despite Mayer's hard work, Gilani thinks the explosive Yahoo stock gains could be nearing an end.

Yahoo Stocks

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