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It's a Great Time to Buy Tech Stocks… and These Numbers Prove It

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

On Thursday, an important bit of news came out that you may have missed: The U.S. Commerce Department sharply revised upward its second-quarter GDP estimate.

That revised number proves that, despite recent market turbulence, the U.S. economy remains on solid ground.

And that means now is a great time to take advantage of the buying opportunities the chaos has created - especially in tech stocks. Let's take a look...

The Next Subprime Crisis Has Already Started

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

dow futures

Reading about what's going on in the subprime auto lending space is a lot like reading about drive-by shootings.

Unless you're a subprime borrower, or live in a neighborhood where drive-bys are happening, you probably don't know much about either - or think they affect you.

But if you listen closely there's muffled financial "gunfire" already in your neighborhood.

And it's much closer to your doorstep than you think.

Here's what you need to know...

Hot Stocks: Ford Motor Co. (NYSE: F) Takes Pole Position Among Automakers

By , Contributing Writer, Money Morning -

Ford Motor Co. (NYSE: F) yesterday (Tuesday) furthered its lead among U.S. automakers, reporting record-breaking third-quarter profits.

The world's most profitable automaker reported record third-quarter net income of $1.69 billion, up 68% over the same period a year ago. The company also said it is paying down debt faster than planned as new models boost its U.S. market share.

Excluding some items, profit was 48 cents a share, beating the 38-cent average of 12 analysts' estimates compiled by Bloomberg. By comparison, the automaker recorded income of $997 million in last year's third quarter and adjusted per-share profit of 26 cents.

Read More…

Toyota Racks Up Recalls as Automakers Adopt More Proactive Safety Stance

By , Associate Editor, Money Morning -

Toyota Motor Corp. (NYSE ADR: TM) added another set of recalls yesterday (Thursday) to its rocky year.

Toyota announced it needed to repair 1.66 million autos worldwide for brake-fluid leak issues. The newest development brings the total number of Toyota vehicles recalled worldwide in the past year to about 14 million. 

The company said it needed to fix rubber seals on about 740,000 vehicles in the United States and 599,000 in Japan, as well as some models in European markets, including Avalon and Lexus sedans and Highlander sport-utility vehicles. A small amount of brake fluid was able to leak from the master cylinder and gradually reduce braking performance and cause a "spongy" feeling in the brakes, according to a company spokesman. Cars affected have had factory-filled brake fluid replaced with brake fluid that is not "genuine" factory fluid.

Read More…

China Using Government Muscle to Turbo Charge its Auto Industry

By , Managing Editor, Money Morning -

Having already supplanted the United States as the world's largest auto market, China is on the fast track to becoming the global leader in hybrid and electric cars.

General Motors and Chrysler were forced into bankruptcy largely because they failed to pursue more fuel-efficient models. Indeed, GM and Chrysler looked wholly unprepared as gas prices soared over $4.00 a gallon in 2008.

As GM emerges from bankruptcy - having been bailed out by the U.S. government - it will put a renewed focus on alternative energy. Unfortunately, it's too late to make a difference. As U.S. car companies sputtered amid the country's economic collapse, carmakers in China raced ahead. And with billions of dollars in government backing, they are the companies that will set the pace for the global auto market.

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There's Reason to be Pessimistic about the U.S. Economy, but Never Panic

By , Contributing Writer, Money Morning -

Pessimism increased again among investors last week, as a slew of economic data stoked fears of a double-dip recession.

Indeed, housing and unemployment continue to weigh on the U.S. economy. But don't panic. Remember that the prospects for a full economic recovery are much better outside the United States, and that it's often good to be greedy when others are fearful.

To find out more about the precarious state of the U.S. economy read on...

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GM's IPO Filing Reveals Challenges That Could Discourage Investors 

By , Contributing Writer, Money Morning -

When General Motors Co. filed registration papers for an initial public stock offering (IPO) on Wednesday, it also revealed the formidable challenges it faces – some of which may give pause to investors considering taking a stake in the venerable automaker. The 734-page document GM filed with the Securities Exchange Commission (SEC) paints a picture […]

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Buy, Sell or Hold: Tata Motors Ltd. (NYSE: TTM) Is Kicking Into High Gear

By , Contributing Editor, Money Morning -

I am constantly hunting for profitable opportunities for my Money Map VIP Trader, the Money Map Report and this column in Money Morning.  And I realized months ago that India would be the one major emerging market that would notably accelerate in the second half of the year and into 2011. 

To take advantage of that trend, I recommended a very pro-cyclical play in my trading service, which you can only see by subscribing. But I also kept up my search and was able to find another good opportunity to recommend here. That opportunity is Tata Motors Ltd. (NYSE ADR: TTM).

About a month ago, my colleague and Money Morning Managing Editor Jason Simpkins articulated a view of the Indian economy that clearly details how that country is looking to accelerate growth.  The major headwind for India has been inflation - more specifically, food prices. 

However, India is experiencing a normal monsoon season and will soon see its production of food increase and food prices drop - the recent spike in wheat prices notwithstanding.  This drop in food prices, coupled with renewed fiscal discipline will help bring inflation down from around 10% to about 6% by year end.

Read More…

Whitacre Resigns, but Is GM Really Ready to Roll On with its IPO?

By , Contributing Writer, Money Morning -

Whether it's because the company is ready to again stand on its own two feet, or because of undue political pressure, General Motors Co. looks to be preparing an initial public offering (IPO) that would repay billions to taxpayers who own a majority stake in the company.

The company yesterday (Thursday) reported a 44% increase in net profit and announced that Chief Executive Officer Ed Whitacre would step down from his post on Sept. 1.

Whitacre, who was named GM's chairman last year as the company emerged from bankruptcy protection, will be replaced by GM board member Daniel Akerson. Akerson has little experience in the automobile industry, but he boasts a solid track record of leading telecommunications companies.

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GM Hopes to Lead Budding U.S. Electric Car Market with Chevrolet Volt

By , Associate Editor, Money Morning -

General Motors Corp. on Tuesday announced the price tag on its hybrid Chevrolet Volt due out this fall, hoping to blaze the trail for an up-and-coming U.S. electric car industry and entice buyers to take a greener route.

The extended-range electric Volt, running on battery power and a small engine, will be priced at $41,000 and will qualify for a $7,500 tax credit. The price is close to analysts' $40,000 estimate, but significantly higher than the $32,780 cost of its competitor, the Nissan Leaf.

GM justifies the price difference with the Volt's significantly better driving-range benefit: The Volt will run for 40 miles on battery power and then a small gasoline engine will kick in as a generator, powering the vehicle for another 300 - 400 miles.

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Money Morning Mailbag: The Euro and Other Hot Topics Spark Reader Debate

By , Associate Editor, Money Morning -

The Money Morning Facebook page is gaining more members daily and the Money Morning Mailbag feature is fueling a record number of reader comments and e-mails, giving us a better picture of how readers feel about recurring content like the euro, company profits, and emerging economies. Some articles like the evaluation of Australia's mining super tax have sparked lengthy reader conversation and argument we enjoy observing - and hope readers enjoy being a part of.  

Here is another look at some recent articles generating the most attention and some additional links for further reading. 

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Taipan Daily: BP Risks Facing Criminal Charges For Oil Spill

By , Money Morning -

Fallout from the BP oil spill is spreading. And far from being "cheap" as some pundits suggest, BP's share price could implode if criminal charges are filed.

It's not looking good for British Petroleum... or the Gulf of Mexico. In fact it's looking like an outright disaster, about as bad as we feared.

And BP's stock - which a number of armchair contrarians quickly dubbed as "cheap" in the aftermath of the Deepwater Horizon spill - is at risk of being massacred.

Don't trust the smart-aleck "buy the dip" viewpoints on this one. Not only would investors be unwise to buy call options on British Petroleum at current levels, they may well be better off buying long-dated put options instead... in anticipation of seeing BP's stock price cut in half. Or worse.

We're talking about $50 billion to $100 billion worth of market cap here... at real risk of being wiped out. (That notion might sound wacky. But a lot of folks thought the concept of a "euro crash" was wacky too, when we started pounding the table for it a number of months ago...)

Read More…