Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing

2011

Article Index

Core Inflation Numbers Will Allow the Fed to Stay the Course – For Now

Even though the cost of living in the United States jumped higher in December, the way the government calculates inflation will give the U.S. Federal Reserve enough cover to maintain its loose money policy.

The consumer price index (CPI) rose 0.5% in December, the largest increase in 18 months, the Labor Department reported Friday. About 80% of the increase was due to an 8.5% rise in the gasoline index, also the sharpest increase in 18 months. Food prices rose by 0.1% in December.

The CPI is the broadest of three monthly price gauges from the Labor Department, because it includes goods and services. Almost 60% of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

Read More…

Housing Crisis Could Peak in 2011 as Foreclosures Rise to Record

The housing crisis could peak in 2011, as the number of homeowners receiving foreclosure notices climbs about 20%, putting a further drag on prices, according to the latest forecast from RealtyTrac Inc.

As high unemployment persists and banks resume seizures after a moratorium to correct paperwork snafus, the market will see a steady increase in volume this year, the tracker of housing data reported.

"We will peak in foreclosures and probably bottom out in pricing, and that's what we need to do in order to begin the recovery," Rick Sharga, RealtyTrac's senior vice president, said in an interview at Bloomberg News headquarters in New York. "But it's probably not going to feel good in the process."

Properties receiving notices of default, auction or repossession rose 2% from a year earlier to a record 2.87 million in 2010, the Irvine, California-based data seller said yesterday (Thursday). Actions against homeowners in default jumped despite a plunge in filings in the latter part of the year - including a 26% drop in December - as banks were forced to review their practices.

Read More…

Mergers & Acquisitions Are Set to Accelerate in 2011 Following Their Best Start in a Decade

So far, 2011 has seen the biggest flurry of mergers and acquisitions (M&A) in a decade, helped by a stock market that's off to a roaring start.

Worldwide deals worth $34 billion were announced on Sunday and Monday, bringing total M&A volume this year to more than $83 billion, up from $67 billion in the same period last year, the Financial Times reported.

The early frenzy of deal making marks the busiest start for M&A activity since 2000, buoying expectations for a rebound in volumes and prices as the economy recovers.

Read More…

2011 Manufacturing Outlook: Slow, but Steady Growth Could Win Profits for Investors

It's often said that a little bit goes a long way, and that will certainly be the case for U.S. manufacturing growth in 2011. Although most projections still call for slower improvement in the sector than in 2010, the estimates have been characterized as "less bad" than originally expected -and that could translate into increased profit prospects for investors.

The market gave evidence of that just last Tuesday (Jan. 4) when the major indexes shrugged off other concerns and moved nicely higher in response to a larger-than-expected 0.7% rise in November factory orders, which had been forecast to fall by 0.1% according to a Thomson-Reuters survey of economists. Orders excluding the volatile transportation sector also posted their biggest gain in eight months.

Analysts characterized the numbers as "pointing to underlying strength in manufacturing." That bodes well for the greater economy, since U.S. manufacturers employ nearly 12 million people, or 9% of America's work force, and add $1.6 trillion annually to the U.S. economy, roughly 11% of gross domestic product (GDP).

Read More…

Stock Market 2011: Fed Policies, Inflation Concerns Make For Bearish Investors

U.S. stocks have been on the march. Last year's market rally drove stocks up to levels not seen for two years - and many prognosticators believe that higher highs are still to come.

The U.S. Standard & Poor's 500 Index posted its best December performance in 19 years, and that bullish sentiment carried into the start of 2011.

The S&P 500 rose more than 1.1% on the New Year's first trading day to close at 1,271.89. It traded as high as 1,276.17, a 52-week high and its high-water mark for the last two years.

"More people have joined the bullish bandwagon for 2011 because individual investors are ready to purchase stocks for the first time in a long time," said Ned Riley, chief investment strategist for Riley Asset Management.

The latest economic reports have further buoyed investor bullishness. U.S. factory goods orders in November unexpectedly rose 0.7%, and U.S. construction spending rose for the third consecutive month in November.

Read More…

U.S. Jobs Market 2011: Are You Worried About Your Job?

The U.S. jobs market finally showed signs of improvement last month after the unemployment rate dropped to 9.4%. That was down from 9.8% in November and represented the first real change in any direction in months, the U.S. Labor Department reported last week.

In fact, that decline pushed the national jobless rate down to its lowest level in 19 months, and created the first sense of optimism in more than a year.

Some analysts think December's numbers represent a sea change in the U.S. jobs market, and will mark the start of sustained improvement. They cite increasing job listings in 2010, rising corporate profits in 2011 and upward revisions of previous unemployment reports as reasons the job market pain could finally be subsiding.

Read More…

Hot Stocks: Vestas Wind Systems A/S (PINK:VWDRY) Could Bounce Back in 2011

Danish wind turbine maker Vestas Wind Systems A/S (PINK ADR: VWDRY) has been racking up an impressive number of new orders lately - especially in the burgeoning Chinese market. Combined with several new manufacturing plants that will increase capacity in the United States, the surge should boost the company's performance in 2011.

Vestas, the world's biggest maker of wind turbines, said last week that its orders from China last year reached a record high.

"In 2010, Vestas has announced almost 1,000 megawatts (MW) worth of orders in China alone, which is a record high order intake for Vestas in this competitive market," the company said in a statement announcing an order from Chongli Construction Investment Huashi Wind Power Company Ltd.

Vestas got an order for 58 turbines with total capacity of 49.3 megawatts from Chongli China and logged multiple orders from Germany in the past week.

Read More…

2011 China Outlook: The Red Dragon Takes Its Next Step Forward

If the United States has a growth problem, China has just the opposite. The world's second-largest economy is set to grow 9-10% this year, building on its strong rebound from the global financial crisis.

Furthermore, Beijing is determined to accelerate China's transition toward a more domestically based economy, while stabilizing prices and cutting government waste.

So in addition to strong growth numbers, investors can expect more disciplined and responsible economic development.

Read More…

2011 Investing Strategies: Readers Turn to Silver, Avoid U.S. Dollar in the New Year

After a year of rocky economic recovery and a mixed bag of U.S. data, market strategists are waxing optimistic about the profit prospects in 2011.

"There is still an awful lot of pain out there for sure, but if you get this creeping confidence to accelerate a little bit, it's surprising how fast things can turn," Sandy Lincoln, chief investment strategist at M&I Investment Management, told MarketWatch.

A year plagued by Europe's debt contagion, the May 6 market "flash crash" and constant fears of a double-dip recession caused many investors to keep money parked on the sidelines.

Read More…

We Want To Hear From You: Are You Bullish or Bearish About U.S. Stocks in 2011?

U.S. stocks have been on the march. Last year's market rally drove stocks up to levels not seen for two years – and many prognosticators believe that higher highs are still to come.

The U.S. Standard & Poor's 500 Index posted its best December performance in 19 years, and that bullish sentiment carried into the first trading day of 2011.

On Monday – the first trading day of the New Year – the S&P 500 rose more than 1.1% to close at 1,271.89. It traded as high as 1,276.17, a 52-week high and its high-water mark for the last two years.

The Dow Jones Industrial Average advanced 93.24 points, or 0.81%, to close at 11,670.75. It traded as high as 11,711.47 - the blue-chip index's highest close since August 2008 and its biggest jump since early December.

Read More…

Your 2011 Stock Market Leaders

Stocks drifted quietly in the past week, seemingly satisfied with the status quo and in no hurry to get to their next destination. The Dow Jones Industrial Average, Standard & Poor's 500 Index and Nasdaq Composite Index all clocked in tandem for a loss or gain of +0.1% to -0.1%.

Overseas stocks were the only major winners, with developed markets outside the United States up 1.4% and emerging markets up 2.2%.

Looking back at all of 2010, here are a few stats that stick out:



To find out which stocks will lead the market higher in 2011, read on...

Profiting in 2011: What Are Your 2011 Investing Strategies?

After a year of rocky economic recovery and a mixed bag of U.S. data, market strategists are waxing optimistic about the profit prospects in 2011.

"There is still an awful lot of pain out there for sure, but if you get this creeping confidence to accelerate a little bit, it's surprising how fast things can turn," Sandy Lincoln, chief investment strategist at M&I Investment Management, told MarketWatch.

A year plagued with Europe's debt contagion, the May 6 market "flash crash" and constant fears of a double-dip recession caused many investors to keep money parked on the sidelines.

But the Standard & Poor's 500 Index gained 12% this year, the Dow Jones Industrial Average rose 10% and Nasdaq Composite Index climbed 17%. Those who stayed in the game - and made the right plays - netted considerable profits.

Read More…

U.S. Stocks Reach a Pivotal Point as Goldman Sachs Predicts a 2011 Rally

Stocks clicked around the flat line much of the past week until the tumblers of the lock finally fell into place and prices were freed to go higher on Thursday and Friday.

The Standard & Poor's 500 Index quietly gained 1.2% over the week to close at a new two-year high, while the Nasdaq Composite Index rose 1.7% to a three-year high and the Russell 2000 small-caps rose 2.7%.

To find out what direction stocks are headed, read on...

Asia's Surging Economic Growth Pushes Global IPO Market to Record High That Will Continue in 2011

Despite market volatility and a shaky economic recovery, the global initial public offering (IPO) market for 2010 is on track to hit a record high – and 2011 is poised to continue the hot streak.

A study by accounting group Ernst & Young yesterday (Wednesday) showed that funds raised through global IPOs are expected to surpass $300 billion in 2010, topping the 2007 record of $295 billion. IPOs in the first 11 months of the year collected $255.3 billion in 1,199 deals.

"New IPO filings continue to increase around the world and a large backlog has built up as companies await greater macroeconomic stability," said Gregory Ericksen, Ernst & Young's global vice chair for strategic growth markets. "We expect the current IPO momentum to continue its upward trend in 2011."

Read More…

Energy Forecast: Oil Prices Poised to Again Test Record Levels in 2011

After starting the year at slightly more than $80 a barrel, oil prices yesterday (Tuesday) rose to their highest level in two years, with West Texas Intermediate (WTI) crude surging as high as $90.76 a barrel on the New York Mercantile Exchange (NYMEX).

But that 13% advance is just the beginning.

Crude oil prices are poised to again break the psychologically important $100 a barrel mark in a bid to move higher throughout 2011 and 2012, and some forecasters are calling for prices to zoom by as much as 65% from here.

If that happens, crude oil would approach - or possibly even eclipse - the all-time high of $147 a barrel, a price not seen since the summertime speculative frenzy of 2008.

Read More…