- IMF Warns of Slower Growth As Currency War Rages On
- How to Profit From a Slowing U.S. Economy In the Second Half of 2010
- How to Profit From the Oil-Price Spike of 2010
- The Three Tech Businesses Investors Can't Afford to Ignore in 2010
- How Washington Will Mess with Your Money in 2010
- Buy, Sell or Hold: Government's HeavyHanded Plans Spawn Profits With These Three Top Stocks for 2010
- The Hottest Places to Invest in 2010
- China Will Continue to Drive the Global Economic Recovery in 2010
- Eight Ways to Profit as the U.S. Housing Recovery Gathers Steam
- Can U.S. Bank Stocks Double Again in 2010?
- Why Gold Will Reach a Record $2,000 in 2010
- When Stimulus Spending Winds Down, Will U.S. Businesses Step in For Tapped-Out Consumers?
- U.S. Economy Will Dodge a Double-Dip Downturn, But Won't Escape Unemployment Woes During 2010 Jobless Recovery
The conflict represents a fundamental disagreement about how to sustain the global economic recovery among countries that prefer flexible exchange rates like the United States, and others that are resisting calls to allow its currency to appreciate, like China.
A renewed push for easier monetary policy came as the IMF warned growth in advanced economies is falling short of its forecasts.
At best, the U.S. economy will chug along in low gear - managing only minimal overall growth, while bouncing over economic speed bumps that exist in more than a few key sectors. At worst, the engine of economic recovery will sputter, or stall completely - leaving Americans stranded alongside the fiscal roadside, or to roll backward into a double-dip recession.
Oil prices staged a remarkable rally this year on the back of a weak dollar and a nascent economic recovery. In 2010, it's likely that these same factors will combine with an increase in global energy demand to push oil prices back up over $100 a barrel.
With stockpiles still high and energy demand rebounding sluggishly, most forecasts are calling for the "black gold" to edge up into the low-triple-digit price range. That's 40% higher than where oil is trading right now - but is still well below the record high of nearly $150 a barrel that was established in 2008.
Money Morning Chief Investment Strategist Keith Fitz-Gerald is even more bullish. He believes that a price of $100 a barrel is "easily attainable" and says that some sort of unforeseen market shock could cause crude oil to spike as high as $150 barrel by the end of 2010.
Call 2010 the year of "necessary technology."
While 2009 has seen a dramatic turnaround in the world's stock markets, the rest of the key economic indicators - such as manufacturing, inventories, and jobs - have lagged behind. This has prompted less discretionary spending on technology, and even a postponement of some necessary purchases.
Indeed, investors who are trying to estimate the impact that politics will have on their portfolios in 2010 are likely finding this attempt at analysis to be an exercise in futility.
If that's been the case, read on: Political pundits - even those who claim to be impartial - spend a lot of time trying to score points for their side. But they aren't really that interested in the economic aspects of the endless battle. I certainly don't claim to be any more unbiased than the next person. However, I thought it worth trying to take an educated guess at what will actually happen, and what it will mean for our money.
I know from my years of experience just what to expect each and every time this story plays out. And that's not all.
I also know how to turn this special knowledge into beat-the-market profits.
Here in the United States, the Obama administration and the U.S. Federal Reserve are like two elephants that have been put to work brutishly reshaping the U.S. economy. We're already experiencing the effects of big government involving itself in the private sector. Expect the dollar to fall even more - after year-end profit-taking ends. Also expect a further deployment of government-stimulus money to industries where the United States has a large competitive advantage and can generate domestic jobs.
We'll be only too happy to ride the resulting economic shifts for profit.
In fact, as part of this installment of "Buy, Sell or Hold" - I've identified three of the best profit opportunities for the New Year. The three "must-own" companies - each poised to benefit from these shifts - are: Corning Inc. (NYSE: GLW), The Boeing Co. (NYSE: BA) and Cypress Semiconductor Corp. (NYSE: CY). We offer them to you here as part of a Money Morning "Outlook 2010" Special Report.
[Editor's Note: Money Morning's "Outlook 2010" series delves into the best global profit plays for the new year.]
For global investors, 2010 is shaping up to be a year with two very distinct economic outlooks.
In the first "half," which is actually likely to end in early September, investors can expect a continued escalation in commodity prices, generally bullish stock markets and an ongoing focus on powerful monetary and fiscal "stimulus" initiatives. In the second "half," reality will reassert itself, and investors will find the going tough in many markets.
The real question is: "Which markets will win, and which ones will lose?"
China's gross domestic product (GDP) expanded at an 8.9% annual rate in the third quarter - the fastest pace in a year and up from 7.9% in the second quarter And the median projection of economists surveyed by Bloomberg News is for China's GDP to jump more than 10% in the final three months of 2009, setting the stage for double digit growth in 2010.
China has been the muscle behind the worldwide economic recovery for much of 2009. That role will continue in the New Year as the Red Dragon maintains its catalyst role.
In February 2009, I reviewed the operations of the 12 largest U.S. banks, and concluded most of them were sound.
In fact, I told Money Morning readers that the soundest were at that point excellent investment opportunities.
<br And the records are going to keep on coming.
With the U.S. dollar in a freefall and global gold demand rising, analysts say the precious metal will likely continue its bullish trend through at least the first half of 2010. It could rise as high as $2,000 an ounce, which would represent a 73% gain from current record levels.
It's no secret that government spending has been fueling much of the growth in the $14.2 trillion U.S. economy. And if consumers aren't ready for the handoff when that stimulus spending winds down - and they certainly don't appear to be - it will be up to the U.S. business sector to carry the ball.
And it's not at all clear that Corporate America is ready, willing or able to fulfill that role.