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Stock Market

Why I'm Calling a Market Top

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW - • Print | Email

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

By , Money Morning - • Print | Email

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.

Energy Investing

Two Natural Gas Stocks to Buy Now Before the Transportation Revolution

By , Contributing Writer, Money Morning - • Print | Email

A glut of cheap, abundant natural gas is about to turn the U.S. transportation industry upside down – and it will make two companies at the epicenter of this revolution among the best stocks to buy.

Exploration and drilling for oil in America's newfound shale fields has unleashed a game-changing byproduct – enormous pools of natural gas that could meet the nation's energy needs for the next century.

In fact, the discoveries are so colossal they're set to rattle energy markets around the planet.

"North America has set off a supply shock that is sending ripples throughout the world," the International Energy Agency (IEA) said in its 2013 medium-term report.

But the first place to feel the effects will be right here at home.

You see, the supply surge will spur a massive switch away from smog-belching diesel engines to clean-burning, natural gas-powered vehicles.

Here's why…

Buy, Sell or Hold

Buy, Sell or Hold: Up 3,400%, Is It Time to Tune in to Sirius XM?

By , Money Morning - • Print | Email

From streaming online, to iTunes, to good ole terrestrial radio, there are a lot of ways to listen to music today.

But, believe it or not, there is one area that still has yet to be exploited. It's what you listen to as you tool down the road.

Major players such as Google, Apple and Pandora are making inroads into this area, but the truth is that Sirius XM Radio (NASDAQ: SIRI) has a "built in" head start.

Its equipment is already installed in approximately 52 million vehicles. Better yet, Sirius expects that number to almost double, reaching 100 million vehicles within the next five years.

That doesn't necessarily sound like "dead money" to me – despite the chorus of analysts who had written the company off.

In fact, Sirius has seen its share price rise from $0.10 (that's right, 10 cents) in early 2009 to a five-year high of over $3.50. That's a gain of 3,400%.

The question now is whether it's too late for investors to tune in….

Energy Stocks to Buy Now: Two of the Best "Pick and Shovel" Plays

By , Money Morning - • Print | Email

If you could pick stocks to buy among the companies tied to the California Gold Rush, miners would not have been your best bets. 

The miners were not guaranteed to get rich. While some of them did in spectacular fashion, many went completely broke.

One subset of those who flocked to the region actually did very well for themselves. They were the ones who ventured out not to look for gold but to sell supplies. It may not have been as exciting as digging for gold, but the profits were sure and steady.

Merchants made a fine living and built fortunes selling axes, pans and other items to the masses of gold hunters flocking to the region.

Business was so good that one firm in New York took to the region to sell tents, bedding and denim pants to the miners.

Indeed, young Levi Strauss experienced quite a run of success in this endeavor…

The same profit distribution has been true over the years in the oil and gas industry to some degree. Much like the Gold Rush, there are risks associated with the search for oil and gas exploration and production.

Although they cannot always escape the economic cycle of the industry, the company that sell supplies are not exposed to as much high-cost and risk as the exploration companies are. That's why many of these suppliers have managed to stay in the black, while the exploration and production companies have struggled for profits.

And it's why some of the best energy stocks to buy now are the supporting players in the continued exploration process.

Global Economy

Eurozone Debt Crisis Exposes What EU Leaders Fear Most

By , Associate Editor, Money Morning • @DavidGZeiler - • Print | Email

European Union leaders have seemingly changed their tune lately on how best to deal with the long-running Eurozone debt crisis.

Increasingly, EU politicians have been sounding the theme that economic growth – not Eurozone austerity – is the answer, and that deadlines set for reductions in public spending needed to be loosened.

It started about a month ago, with none other than European Commission President Jose Manuel Barroso.

"While I think this policy [of austerity] is fundamentally right, I think it has reached its limits," Barroso said. "A policy to be successful not only has to be properly designed, it has to have the minimum of political and social support."

Shortly afterward, French Prime Minister Pierre Moscovici chimed in, "We're witnessing the end of the dogma of austerity."

Meanwhile, the European Commission seemed to confirm the policy shift when it recently extended the deadlines for most of the troubled EU nations to fix their budget deficits.

News headlines throughout Europe trumpeted the "end of austerity."

But what the EU leaders have really done is buy themselves more time by stretching out the Eurozone austerity policies – which are mostly still in place – over a longer period of time.

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Investing Tips

How to Invest as America Spends $190 Billion to Fix Our Highway System

By , Money Morning - • Print | Email

The United States' Eisenhower Interstate Highway System was the biggest, most expensive public works project since the Pharaohs had the Pyramids built.

The Interstate System, started in 1956, became the envy of the entire world, except perhaps Germany, symbolizing a nation on the march to progress – a four-lane wonder stretching from sea to shining sea.

But now, in the early decades of the 21st century, that once-vaunted highway network is overwhelmed, underfunded, and flat out crumbling in parts.

Interstate 5 is the West Coast's main artery, spanning the distance from Canada to Mexico. Last week, a portion of Interstate 5 fell into the Skagit River north of Seattle.

The Skagit River Bridge was 58 years old, and listed as "functionally obsolete," meaning the bridge was safe but did not meet current standards. No one was killed, but three people were injured as their vehicles plunged, along with the bridge's deck, into the river.

Thirteen people were killed and 145 injured in August 2007 when a bridge carrying Interstate 35W across the Mississippi River at Minneapolis collapsed during rush hour. In that tragedy, the bridge was found to have been over its weight limit, and some non-critical components had been corroded by, of all things, bird droppings.

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Investing Tips

Why Water Stocks Are About to Get $1 Trillion Boost

By , Money Morning - • Print | Email

The American Society of Civil Engineers has just released its annual Report Card for America's Infrastructure, which grades several critical areas: water and environment, transportation, public facilities, and energy.

And that report card is nothing we'd like to take home to Mom and Dad, moving as it has from a D to a D+ over the last four years. In short, there remains a lot of room for improvement.

The Report Card suggests that the United States government will have to spend roughly $3.6 trillion on infrastructure building to get to a passing grade – at least above a "gentleman's C."

Precious Metals

Are Gold Prices Near a Bottom?

By , Contributing Writer, Money Morning - • Print | Email

It's been a tumultuous couple of months for the yellow metal, which has investors asking: Are gold prices near a bottom?

There's hope this price plunge is ending.

Year-to-date, gold is lower by 17%. But after seven trading sessions where gold prices slumped, on Monday June gold futures gained 1.4%, or $19.40, to $1,384.10. Contract prices bounced as much as 2.4% after sliding 2.1%.

Now technical analysis points to a rebound in the yellow metal to $1,500 in June, following the "double bottom" hit Monday.

A double bottom involves three moves: a drop, a rebound, and another drop to the previous low. Chart watchers deem the pattern as bullish. A classic double bottom reversal typically marks an intermediate or long term change in trend.

"This shows that gold is probably ready to climb," Matthew Schilling, a commodity broker at Chicago based R.J. O'Brien told Bloomberg News. "The reversal was proof that we have found a bottom."

In just 10 minutes Monday, in the wake of gold's rally, holdings in exchange-traded products backed by gold soared by $1.7 billion.

Fueling the buying were comments from Moody's that a downgrade of U.S. debt is likely if the government fails to get its finances in order in 2013.

To get more info, we asked Morning Morning Global Resource Specialist Peter Krauth if he thought a gold-price bottom was near.

"I thing gold is somewhat oversold," Krauth said. "Yesterday's price action, when gold shot up by about $40 within four hours seems to reflect the thinking that it's due for a bounce."

Krauth said this year's gold price correction was expected.

"After a 12-year bull market with no true correction like that in 1974-1976 time frame, one more is due. I would not be surprised to see gold eventually correct a bit further before making a final bottom.

"That being said, if it were to turn up and stay above $1,550, then it's likely this correction would be over," he continued.

Read More…

Energy Investing

Unloved Uranium is About to Get Much More Attractive

By , Contributing Writer, Money Morning - • Print | Email

Pity poor uranium — there is perhaps no more unloved segment of the energy market right now.

Not only is it a commodity, but nuclear power has a stigma attached to it, thanks to the March 2011 Fukushima nuclear mishap in Japan.

Uranium has brought both joy and tears to investors over the past decade. After a 20-year bear market, the price of uranium (U308), bottomed in 2001 at $8 per pound. It then skyrocketed to over $100 a pound, only to fall back again.

Most recently, it peaked at $72 a pound in January 2011. The Fukushima earthquake and tsunami disaster a few months later put a pall over the industry and prices, resulting in the current price of $40.70 a pound.

Yet despite some countries slowing down their plans for nuclear power expansion and the negative mood hanging over the sector, uranium looks to be poised for a rebound in the not-too-distant future.

Why? Well, for one thing, the United Nations' nuclear agency – the International Atomic Energy Agency – said "The Fukushima Daiichi accident is expected to slow or delay the growth of nuclear power, but not reverse it."

The IAEA forecast impressive growth of somewhere between 23% and 100% in nuclear power capacity by 2030.