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Stock Market Today

Congrats on One Billion Facebook Users... Who Buy Nothing

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

Facebook (Nasdaq: FB) is on the cusp of amassing one billion users, unarguably a milestone.

The last official tally of Facebook users was 955 million. Employees have become giddy in expectation of reaching the one billion mark any day now.

But, they might want to hold off tossing confetti, because the momentous occasion will also shine a bright light on the social network's shortcoming.

No matter how many users Facebook acquires, if it can't sell anything, the landmark number is useless.

As Owen Thomas of Business Insider wrote, "Bottom line: One billion users isn't cool. You know what's cool? Two billion."

Facebook Sales Estimates Slashed

The failure to monetize that many subscribers is a shame because Facebook's massive user base is an advertiser's dream if effective – but there have been no signs of future revenue growth.

That's why market research firm EMarketer Inc. recently slashed its projections for the Menlo Park, CA-based company from $6.1 billion in annual sales to $5.04 billion. Facebook continues to struggle for advertising growth, in particular the fast growing mobile market.

[ppopup id="70925"]That’s why Facebook stock should really be trading for this amount. [/ppopup]
An increasing number of Facebook users are now accessing their accounts via smartphones and other mobile devices, an area where Facebook collects a great deal less in ad revenue than it does on desktop access.

Facebook enjoyed an 88% revenue increase in 2011. EMarketer estimates Facebook revenue will rise only 36% this year and 31% in 2013.

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Stock Market Today: Markets See-Saw on Bernanke Speech

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Here are the major headlines in the stock market today. Bernanke makes case for QE3- In his much awaited speech at Jackson Hole, WY Federal Reserve Chairman Ben Bernanke did not signal any new monetary easing was coming but took the Fed's well-used approach of leaving the door open if conditions worsen. He called the […]

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Stock Market Today: GDP, Home Sales Fail to Lift Market

By , Money Morning - • Print | Email

Here are the major headlines in the stock market today.

  • GDP revised slightly higher in second quarter– Even though U.S. gross domestic product (GDP) was adjusted to 1.7% from 1.5% during the second quarter, the fact remains that it was depressingly low. Since the U.S. officially exited the recession in mid-2009, GDP growth levels have been stagnant and economists do not expect the rest of 2012 to be any different. The U.S. is projected to grow 2.0% in the third quarter and 1.9% in the final three months of the year. The government will issue its third and final estimate of second quarter GDP in several weeks. "It shows slightly better government spending and consumer spending but overall the data suggest the economy stays in slow growth mode and is not likely to change," Peter Cardillo, chief market economist at Rockwell Global Capital in New York told Reuters." This certainly strengthens the hands of the Fed to aid the economy."
  • Gas prices rise 5 cents nationwide- AAA reported that gas prices will be a nickel higher on average when consumers head to the pump Wednesday, sparked by the destruction of Hurricane Isaac. Prices on average are $3.804, the highest level since May. Today's spike is the biggest one-day move since February 2011 when concerns over Libya caused prices to rise. Some states, particularly those in the Midwest who receive most of their oil or gas from the Gulf, saw the largest increases. Ohio had the largest rise with a 13.9 cent increase, followed by a 13.2 cent rise in Indiana and a 12 cent rise in Michigan.

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Stock Market Today: Poor Labor and Manufacturing Data Sends the Markets South

By , Money Morning - • Print | Email

Here's what's making headlines in the stock market today.

  • Jobless claims rise again– A higher number of people filed for their first week of unemployment benefits last week, a sign that the job market is not improving as hoped. For the week ended August 18 372,000 filed for unemployment, up 4,000 from the previous week, the Department of Labor said Thursday. Economists had expected initial claims to be 368,000. As of the July jobs report, 12.8 million people were counted as unemployed and about 5.59 million people received some kind of state or federal benefit in the week ended Aug. 4. "Jobless claims continue to indicate … a sluggish labor market," Peter Cardillo, an economist at Rockwell Global Capital in New York told Reuters. "The numbers also strengthen the hand of the Fed to aid the economy with more stimulus."
  • Global manufacturing slumps- The flash manufacturing Purchasing Managers Index for the U.S. edged slightly higher to a 51.9 reading in August from 51.4 in July, according to Markit. The August reading marked the first monthly increase in five months, but it was the third weakest result since the manufacturing sector stopped shrinking in October 2009. New export orders continue to be below the 50 mark, indicating contraction, but output and new orders rose. Also causing concerns is the HSBC Flash China manufacturing PMI which fell to 47.8 for August, its lowest level since November and well down from July's final figure of 49.3.

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As Prices Rise, Here's How to Play Natural Gas Companies

By , Money Morning - • Print | Email

The price of natural gas hit a 10-year low in April, sinking to $1.91 per MMBtu on April 19. Since then, natural gas prices are on the rise. In fact, prices have surged nearly 50%, to around $2.75 per MMBtu over the past four months.

What changed?

One, the sector came out of a very mild winter that saw very poor demand for natural gas.

Two, the onset of summer – and a particularly hot one, at that – has had the exact opposite effect.

This summer's record-setting heat has wreaked serious havoc on the economy. The price of everything we consume has been to some degree impacted by the heat, and natural gas is no exception. As temperatures have risen, utility companies have had to rely more and more on natural gas to generate electricity.

What's more, due to strengthened environmental regulations, coal-fired power plants are coming off-line, and their capacity is being replaced by natural gas.

On the supply side, prices were also juiced by last week's Energy Information Administration report that supplies increased by 24 billion cubic feet, missing expectations of a rise between 27 million bcf and 31 million bcf.

While prices are up, they're still hovering below $3. Since much of the country is still in the throes one of the hottest summers on record, there's still some money to be made.

What's more, analysts are predicting a colder winter than last year, which should bring some stability to prices when the heat wave subsides.

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Facebook Stock Hits New Low, So What Now for Mark Zuckerberg?

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

Since Facebook's (Nasdaq: FB) hugely hyped and highly anticipated initial public offering on May 18 at $38, shares have been sliced in half, hitting a low of $19.01 in trading today (Friday).

Now, chatter is swirling that CEO Mark Zuckerberg should step down and let a more experienced executive take the helm.

"There is a growing sense that Mark Zuckerberg, talented though he may be, is in over his hoodies as CEO of a multibillion-dollar public company," Sam Hamadeh, head of research firm PrivCo, told the Los Angeles Times. "While in many cases a company founder can, and does, grow into the job, things are happening so quickly that there is precious little time here for Zuckerberg to do that."

Fueling the sentiment is Facebook's steady descent since its calamitous IPO. On Thursday, as the first lockup period ended, which allowed early investors and venture capitalists to unburden their portfolio of battered shares, the stock hit a fresh low.

Facebook's shares closed Thursday at $19.87, a far cry from its debut price and peak of $45 a share.

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How Global Growth Fears Are Playing Out in the Stock Market Today

By , Money Morning - • Print | Email

After a strong start to the week the stock market today is down on fears of a worldwide economic slowdown. Investors are dealing with weak reports from China and more signs that the drought's effect on U.S. crops is not over.

China, the world's second largest economy, has been a leader of global growth, but is showing more and more signs that its economy is slowing.

China reported its exports grew just 1% from last July, well below forecasts and much lower than the 11.3% increase in June. Import growth stalled as well, up only 4.7% compared to a year earlier, well below the June growth of 6.3%.

At home, the U.S. Dept. of Agriculture released a report today projecting an enormous drop in corn production and an ensuing spike in prices.

In its monthly World Agricultural Supply and Demand report, the USDA projected the corn harvest would fall by 2.2 billion bushels, or 22.6 bushels per acre, resulting in a harvest of 123.4 bushels per acre.

Analysts had anticipated a decline of 20 bushels per acre and a harvest of 126 bushels per acre.
The 2012-2013 crop yield is now expected to be the worst since the 1995-1996 season and prices are soaring.

The USDA said it now expects farm prices for corn to reach a record high this season of $7.50 to $8.90 per bushel, sharply higher than its July forecast of $5.40 to $6.40 per bushel.

The food crisis is affecting consumers across the world as the United Nations released a report on Thursday indicating that world food prices rose 6% in July.

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Stock Market Crash 2013: What the "Hindenburg Omen" Tells Us

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

Should you be worried about a stock market crash in 2013… or even sooner?

Certainly, there's plenty of unsettling news to worry about.

You know what I'm talking about…the persistent Eurozone debt crisis, Taxmageddon, the fiscal cliff, high unemployment. The list goes on and on.

But now, there's one more reason to fasten your seat belt.

On the heels of a sharp stock market decline on July 24, a highly accurate technical indicator called the "Hindenburg Omen" started ringing warning bells.

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