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The 7 Critical Economic Indicators You Need To Check Every Morning

Everyone has a different opinion on how best to take the measure of the markets and the economy at large.

Hairs standing up on end, a knee that aches with the weather, tea leaves, earnings estimates, the Hindenburg Omen – it seems like all of these are significant in some way at one time or another.

Here at Money Morning, it's no different. We have an editorial meeting each and every morning – rain or shine – where the editors and writers huddle to pitch the stories and reporting we bring you every day. The meeting covers a huge range of financial and policy topics, and ideas of all stripes are kicked around and discussed until a solid story emerges.

A few days ago, we talked about important financial and economic indicators, where each of us turn to get some idea of the health of the markets and economy. Someone asked, "What's the number you look at first ever day?" We all answered in turn, and a really interesting collection of ideas began to emerge – as it always does.

Here are the numbers we think you should be looking at every day – before breakfast, after coffee – if you want to get an idea of the big picture.

To continue reading, please click here…

Technology Stocks

This Tech Sector Slice is 58% Hotter Than the Rest of the Market

Noted tech researcher IDC says that global PC shipments plunged 14% in the first quarter.

That was almost double the 7.7% decline IDC had been expecting, and was also the biggest year-over-year free-fall since the market-intelligence firm started tracking PC shipments 20 years ago.

This wasn't a one-time event, either: It marked the fourth straight quarter that worldwide PC shipments had fallen.

No wonder the pundits are talking about the "Death of the PC."

After reading one of these high-tech eulogies, I'm betting that the last thing you want to do is to invest some of your carefully saved capital into any part of the semiconductor sector.

After all, those complex microchips are the "brains" of a computer: So if the PC sector is getting battered, it stands to reason that the chip sector would be getting thrashed, as well – meaning the best move is to stand clear of both.

Don't make that mistake.

While PC stocks should be relegated to the tech-investor's version of an isolation ward, semiconductor shares have been on a roll since the start of the year and will continue to be one of the best ways to generate big profits for some time to come.

If you buy the right ones, that is.

Trend Watch

Why You Can't Afford to Ignore the Hindenburg Omen

The Hindenburg Omen-a harbinger of stock market crashes-eerily appeared again last week…and the Dow Jones promptly dropped 205 points. But its appearance brought mostly scorn from the mainstream financial media.

Here are just a few of the headlines from the past week:

  • "Hindenburg Omen is Just Hot Air"
  • "Why 'Hindenburg Omen' Is Just a Superstition"

And our personal favorite:

  • "Hindenburg Omen is idiotic, and if you believe in it, you should lose your right to own stocks-or anything"

Several Wall Street analysts reacted as if even being asked about the Hindenburg Omen offended them.

"Let's not mince words on this subject: This is an example of the worst kind of 'technical analysis' – a market signal essentially designated for media sound bites," Adam Grimes, chief investment officer at Waverly Advisors., told The Wall Street Journal. "The markets may well decline from this point, but they will not do so because of some cleverly named signal. The Hindenburg Omen, we have to say, is mostly hot air."

Nonbelievers in the Hindenburg Omen say it correctly predicts a stock market crash only 25% of the time, and point out the last time it appeared, in 2010, the markets just kept on rising.

"In 2010 the accuracy of the 'Hindenburg Omen' indicator went up in flames and the current situation suggests the same result in 2013," huffed Daryl Guppy on the CNBC Web site.

Yet an appearance by the Hindenburg Omen has preceded every stock market crash but one since 1985, and if you look closely at the numbers this indicator's track record is remarkably accurate.

Maybe the doubters don't know as much as they think they do.

"They call it bogus because they don't understand it," said Money Morning Chief Investment Strategist Keith Fitz-Gerald, who called the Hindenburg Omen one of his favorite indicators.

To continue reading, please click here…

Top News

European Central Bank Does Nothing - But Markets React in Big Way

"Maybe next year…" was basically the message sent today (Thursday) from the European Central Bank (ECB).

The European Central Bank left interest rates unchanged despite slightly lowering its outlook for the ailing Eurozone economy for the remainder of 2013. But, it sees a gradual recovery in 2014.

The ECB forecasts Eurozone GDP will contract by 0.6% this year, down from its March projection of 0.5%. However, it modified its 2014 estimates, predicting a return to growth at a rate of 1.1%.

"Euro-area economic activity should stabilize and recover on the course of the year albeit at a subdued pace," ECB President Mario Draghi said at a news conference.

The region has been stuck in recessionary mode for six consecutive quarters. But Draghi cited improving economic data in May as reasons for not taking immediate action.

"But we stand ready to act, and we will continue to monitor closely all incoming data," Draghi said at a news conference. He added the ECB would remain "accommodative" for as long as necessary.

Draghi also staunchly defended the ECB's actions, saying the bank's outright monetary transactions launched last year were "probably the most successfully monetary policy measure undertaken in recent times."

Draghi said the policy had no negative affect on markets.

"The ECB hasn't done anything to increase volatility in the markets," Draghi said. "If you think the ECB has done anything comparable to other central banks, we wouldn't agree."

After today's ECB briefing, the Stoxx Europe 600 Index fell 0.4% to 294.04, setting it on pace to close at the lowest level since late April. Banks suffered some of the steepest losses.

European bond yields plunged the most in three months, with Portugal taking the worst hit.

To continue reading, please click here…

Washington

IRS Scandal Exposes a Long History of Outrageous Abuses

The IRS scandal of allegedly targeting conservative groups for extra scrutiny may just be the tip of the iceberg. Unanswered questions abound about the powerful agency's involvement in Obamacare and partisan politics.

Using the IRS as a presidential pit bull is a fine old bipartisan tradition going back to Franklin D. Roosevelt's administration and refined by Richard Nixon.

As we wait for what is sure to be the Summer of Endless Congressional Hearings, to be followed by the Winter of the Independent Special Prosecutor, let's have a look at some of the IRS' most notorious shenanigans – old and new.

Read More…

Wall Street

Too Big To Prosecute: Goldman Skates Again

These investment bankers almost ruin our economy and they're still acting like it's 2007. Have they no shame?

If you missed the latest news that former Goldman Sachs (NYSE: GS) Vice President Neil M. M. Morrison was fined a record $100,000 by the SEC and barred from the securities business for five years for breaking municipal securities rules, don't feel bad.

The news didn't make it into many newspapers.

And sadly, that's because there's nothing newsworthy about greed and corruption on Wall Street.

Here's what Morrison did wrong, besides getting caught. And what his former firm Goldman Sachs said about him after they threw him under the bus, then fired him because he got caught doing what he did.

It's kind of like the intro to "Mission Impossible" episodes and movies when the agent receives the assignment, and the message ends saying, "Of course, if you are caught, we will disavow having any knowledge of you or your mission," then self-destructs.

Neil Morrison, 38 years old, started as a vice president of Goldman Sachs in July 2008. As a municipal finance executive in Goldman's Boston office, Morrison's job was to bring in municipal underwriting business, including the Massachusetts Treasurer's office.

Goldman "trained" Morrison on the ins and outs of gathering municipal underwriting business, the rules, regulations and laws governing municipal financing and underwriting standards, as well as Goldman's own internal policies.

And then….

Dividend Stocks

Why It Pays to Invest in Emerging Market Dividend-Payers

An unexpected change of heart happened in May that you might not have heard about.

After years of resisting any path other than its rigorous course, Germany announced it is backing off from pure austerity and is now planning to spend billions of euros to stimulate the economies of Europe.

Germany, which had been the economic rock of Europe, was facing fissures in its economy as well as an upcoming election season.

With pressure building, Finance Minister Wolfgang Schäuble and Chancellor Angela Merkel are now "willing to abandon ironclad tenets of their current bailout philosophy," says Spiegel Online.

Obamacare

The Scariest Obamacare Facts Yet

There have been fears surrounding the "real" Obamacare facts since the Affordable Healthcare Act was first mentioned.

"An unfolding disaster for the American economy," 2012 Republican presidential frontrunner Mitt Romney said of Obamacare. Fellow candidate Rick Santorum called it "the beginning of the end of freedom in America."

Signed into law on March 23, 2010, Obamacare was peddled to Americans as the answer to the precarious problems plaguing the country's healthcare system.

Among its promises were: uninsured Americans were to gain coverage through an expansion of Medicaid; insurance providers couldn't deny coverage to individuals with pre-existing conditions; employers had to offer health insurance to employees; and costs would come down.

As many Obamacare provisions start to kick-in, the nation is finding out how the sweeping health care overhaul fails to live up to its promises.

At over 20,000 pages long, the legislation is full of stipulations chipping away at what it claimed it would achieve.

Following are some of the most alarming Obamacare facts uncovered to-date.

Stock Market

Why I'm Calling a Market Top

Party like it's 1999.

I'm not talking about celebrating the new millennium all over again. I'm talking about celebrating the markets roaring ahead, like they did in 1999.

Just remember: There will be a price to pay. There was then, and there will be again.

Look what happened on Monday morning. We got some weaker-than-expected economic numbers and the Dow cut its gains in half… for about a minute.

Then it was like, oh, wait a minute, those bad numbers are good numbers for the stock market, because the Federal Reserve won't be tapering any time soon if the economy is tapering. And the Dow roared up by about 65 points… in about a minute.

So go ahead and party like it's 1999. But if you get hammered by the coming crash, you've got no one to blame but yourself. And it is coming.

We've all been here before. This time it just looks different, but it ain't.

Precious Metals

Where Silver is Trading Today - and What's Next

Where silver is trading today represents a 35% decline from six months ago – which has led many investors to bail on the white metal in 2013.

Silver prices hovered around $22.78 in trading today in New York, almost $10 lower than where they started the year.

For more detail on what's next for silver, we asked Money Morning Global Resources Specialist Peter Krauth what investors should make of where silver is trading today.

While Krauth remains bullish on both silver and gold over the long term, he does see prices possibly falling a little more before a reversal.

"I do believe that most sellers have exited silver – but not all," Krauth told us Monday. "Since I'm still bearish on gold for the near term, I expect silver would simply follow gold down on any weakness."

Here are some reasons silver prices could dip into the high teens before bottoming.