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Stocks

Stock Market Today: Why the Sell-off Will Continue into 2013

By , Money Morning - • Print | Email

The stock market today is trying to end the week positive, but fears concerning the fiscal cliff and what a second term for U.S. President Barack Obama means for the markets continue to grow.

Friday, the third day of trading since President Obama was re-elected, looks to be a volatile ending to a scary post-election market. Since the election, the Dow Jones is down more than 3.5%, the S&P 500 is down 3.7% and much of Wall Street thinks this sell-off will continue.

Analysts and CEOs predict the next year to be a very rough one for stocks and the economy, and there might be nothing the president can do to stop the slide.

"Economic prospects might not have been much different if Mitt Romney had won, especially as Congress remains divided. But the subsequent weakness in equities makes sense too," Julian Jessop, chief global economist at Capital Economics, said in a note to clients. "As we had anticipated, the focus has quickly moved on to the uncertainty over the 'fiscal cliff,' and perhaps back to the unsolved crisis in the euro-zone as well."

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The Dirty Little Secret Behind Wal-Mart's Bluebird Cards

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

Here's something else that's got the potential to undermine our financial future…

It's about those prepaid cards, and the games that are being played with them that you may not know about.

Prepaid cards have lots of benefits, especially for the "unbanked."

These are the people who more or less may live paycheck to paycheck, or don't have jobs but need a "card" because both credit and debit cards are how we pay for most things these days.

A lot of people are rebelling, and rightfully so, against the higher and higher fees that banks are charging on checking accounts (and for all their other "services") and are turning to prepaid cards as an alternative means of paying for goods and services.

Now, American Express (NYSE: AXP) is partnering with Wal-Mart (NYSE: WMT) to offer Bluebird cards. The cards are being pushed through Wal-Mart stores and are ostensibly backed by American Express.

American Express? As if it's a bank. Wait a minute…

It is a bank.

That's because back on November 10, 2008, at the height of the credit crisis, American Express had to become a bank (actually a bank holding company) so it could take money from the Federal Reserve to stay alive.

You forgot that, didn't you?

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Stock Market Today: Why Marc Faber Predicts a 20% Slide

By , Money Morning - • Print | Email

The stock market today (Thursday) is recovering slightly from yesterday's massive sell-off. Less than eight hours after President Obama gave his victory speech the Dow Jones was down 300 points yesterday in its biggest drop in over a year.

Even though the markets started today positive, many financial experts, including Marc Faber and Peter Schiff, are extremely bearish now that the president has been re-elected.

Here's what they have to say on the economy and the fiscal cliff, as well as some stocks that investors should avoid.

  • Marc Faber warns of 20% market plunge- The Swiss investment analyst and entrepreneur spoke with Fox Business Network on what to expect from the markets during a second Obama term and about the impending fiscal cliff. "I think from the peak the market will drop at least 20%. I think we will revisit the lows of June at 1,266 on the S&P." On the markets' reaction to the election he added, "I'm not surprised the market is selling off because technically the market was weak already for a couple of months and we are in a downtrend and Mr. Obama's economic policies are obviously not very good for an economic expansion."

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Here's What President Obama's Win Means For Your Money

By , Chief Investment Strategist, Money Map Report - • Print | Email

Bitter, negative, expensive…I am hard pressed to find any positive adjectives describing this year's presidential campaign.

Evidently, the markets are struggling, too.

As was widely expected leading up to the election, all of the major averages got slammed in early trading on news of President Obama's victory. Just over an hour into yesterday's session, the Dow dropped 262.51, the S&P 500 tumbled 27.58 and the tech- laden Nasdaq fell 59.55. Oil tanked 2.95% and $2.62 per barrel to $86.08 while 10-year bonds saw yields plummet 6.20% to 1.63%.

O-bummer.

There is a bright side, though. Now that all the hoopla is over, investors can get down to business.

Here's what I'm expecting:

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How to Find High-Yield Investments in a ZIRP World

By , Money Morning - • Print | Email

Frankly, thanks to the U.S. Federal Reserve, it's surprising we have not seen a savers revolt in the United States.

We can debate how effective the Fed's Zero Interest Rate Policy (ZIRP) has been, but one thing is unquestionable: Those who rely on income from investments that are cautious and conservative have been brutally punished.

Traditional safe income havens like Federally Insured Certificates of Deposit and Treasury bills offer a minuscule return. It is not possible to retire and live off the interest earned on your savings unless you have several millions stashed away. Even then the return from conservative savings options will not provide a very luxurious retirement.

And according to Fed Chairman Ben Bernanke this condition will exist until at least 2015.

That's why in a ZIRP environment, savers must become investors.

To earn a decent return you have had to consider investments like stocks, bonds and real estate that require a deeper knowledge and risk tolerance than savings-oriented accounts. People with little or no investment experience or knowledge have turned to the stock market to earn the return necessary to fund their lifestyle and living expenses.

That idea might be frightening to life-long savers, but it doesn't have to be. Here's a strategy for finding high-yield investments in the Fed's ZIRP world.

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Can Google's (Nasdaq: GOOG) Nexus Dethrone the Apple iPad?

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

When Google Inc. (Nasdaq: GOOG) launched its new line of Nexus tablets a couple weeks ago, it was a shot across the bow of Apple Inc.'s (Nasdaq: AAPL) dominant iPad.

Even though Hurricane Sandy forced Google to cancelan event planned to show off the new gadgets, it went ahead and launched its new products anyway.

The timing was no coincidence.

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How an Obama Win Affects Investments

By , Money Morning - • Print | Email

Now that U.S. President Barack Obama has secured a second term, how will his win affect your investments?

In terms of monetary policy, U.S. Federal Reserve Chairman Ben Bernanke's "grand experiment" with quantitative easing will continue at least until Bernanke's second term expires in 2014. We can expect the Fed to continue to expand its balance sheet through asset purchases-primarily mortgage backed bonds- and to keep overnight interest rates near zero.

The Fed currently expects GDP growth of 3% in 2013. Unemployment is expected to continue to decline through 2013 but the unemployment rate may move in fits and starts as more discouraged workers move back into the labor force as conditions improve.

Unless there is an unexpected improvement in the employment situation and housing prices, investors can expect quantitative easing and zero interest rates to remain in place through 2013.

Here are the other ways a President Obama win will affect your investments.

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There's More than Election 2012 Moving the Stock Market Today

By , Money Morning - • Print | Email

The stock market today is trading higher as investors await the results of Election 2012. By the end of tonight, barring legal battles that could delay a winner, the uncertainty surrounding the election will be over.

But there's more than the election that's affecting markets today.

As voters head to the polls, it's only fitting that the one economic report released today is on jobs.

  • Job openings continue sluggish trend- How Americans view the job market and what they expect it to be like under each candidate will be one of the deciding factors in this election. The Labor Department reported on Tuesday that job openings in the U.S. hit a five-month low in September, indicating that the recent drop in unemployment is not an accurate portrayal of the labor market. The number of available jobs fell by 100,000 to 3.56 million and it wasn't because more positions were filled – during September fewer people were hired, as well as fired. If you go back to December 2007, the start of the recession, there were about 1.8 people vying for each position and now that number has almost doubled to 3.4 people. "Hiring is the most costly expense for a business," Kurt Rankin, an economist at PNC Financial Services Group Inc. in Pittsburgh, told Bloomberg News. "Until a framework for policy can be determined, which will come with the election and the resolution of the fiscal cliff, businesses are not likely to ramp up hiring."

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Execs Keep Selling Their Facebook Stock - Time to Worry?

By , Money Morning - • Print | Email

The market has been buzzing about the fact that three top executives of Facebook have taken their first opportunity to sell some of their stock in the social networking company.

The sales were part of 230 million shares awarded to top executives and employees prior to the IPO that were subject to lockup until last week.

According to Forbes, another 777 million shares awarded to Facebook employees will come off of lockup next week. It is expected that Facebook employees will continue to sell shares for the rest of the year.

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Stock Market Today: Strong Earnings Fuel These Huge Gains

By , Money Morning - • Print | Email

The stock market today is down slightly, but two companies are soaring on great earnings and upgraded forecasts. Along with those two stocks, check out another company that has returned to profitability – but one leading energy company that's sending warning sings. Starbucks Corp. (Nasdaq: SBUX) surges on confidence- The Seattle, WA-based company posted a […]

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