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    NYSE Shutdown Shows Cybersecurity Risks - and Opportunities

    Dow Jones Today

    By Dwight Cass, Money Morning - July 9, 2015

    The New York Stock Exchange's meltdown on Wednesday shows how fragile our financial infrastructure is. But it also shows how canny investors can position themselves to profit from that fragility.
    The NYSE, a unit of the Intercontinental Exchange (NYSE: ICE), shut down at 11:32 AM ET, and was offline until after 3:00 PM ET.

    Frankly, it was scary to see the NYSE - the ideal of exchanges for a decade - melt down.

Article Index

  • NYSE Shutdown Shows Cybersecurity Risks - and Opportunities
  • Don’t Be A Wall Street Patsy
  • Buy, Sell or Hold: Exelon Corp. (NYSE: EXC) Can Energize Your Portfolio with a High-Powered Dividend
  • Buy, Sell or Hold: Tata Motors Ltd. (NYSE: TTM) Is Kicking Into High Gear
  • The S&P 500 is Set for a Surge... But It Won't Come Easy
  • What Really Caused the Stock Market 'Flash Crash'
  • Question of the Week: Readers Respond to Money Morning's "Flash Crash" Query
  • We Want to Hear From You: How Has the Market's "Flash Crash" Affected Your Investment Behavior?
  • SEC, Major Exchanges, Working on New 'Circuit-Breaker' Rules to Avoid Another 1,000-Point Plunge in the Dow
  • The Bull Market is Intact and On the Move
  • What's In Store for U.S. Stocks in Light of Greece's Tragedy?
  • Will Stocks Rebound From Last Week's Beating?
  • Last Week's Sell-Off Leaves U.S. Investors in Unfamiliar Territory

NYSE Shutdown Shows Cybersecurity Risks - and Opportunities

By Dwight Cass, Money Morning - July 9, 2015

Dow Jones Today

The New York Stock Exchange's meltdown on Wednesday shows how fragile our financial infrastructure is. But it also shows how canny investors can position themselves to profit from that fragility.
The NYSE, a unit of the Intercontinental Exchange (NYSE: ICE), shut down at 11:32 AM ET, and was offline until after 3:00 PM ET.

Frankly, it was scary to see the NYSE - the ideal of exchanges for a decade - melt down.

Don’t Be A Wall Street Patsy

By Shah Gilani, Chief Investment Strategist, Money Morning • @ShahGilani_TW - January 27, 2012

You want to know the truth? The truth is that Wall Street has stacked the deck against you.

That's why you need to understand how the game is played. Otherwise you'll end up a Wall Street patsy.

So, here's the truth along with some lessons that will help you play the game like a pro.

First, though, we'll need to debunk a few myths...

Let's start with the myth that the Street lowered brokerage charges for the benefit of retail investors. At one time, these fees used to be obscenely high and fixed.

But, on May 1, 1975, fixed commissions were abolished after brash upstarts like Charles Schwab and disgruntled investors decided to attack The Street's price-fixing schemes.

The negotiated commissions regime that followed lowered the cost of access to the stock market, essentially ushering in the era of the "individual investor."

The influx of these individual investors, many of whom didn't have enough money to create diversified portfolios, soon became a boon for mutual funds - which have since grown like weeds in an untended sod farm.

Wall Street Changed the Game

Since the commission business was no longer profitable, Wall Street moved its retail business to an "assets under management" model.

So instead of making money on commissions the game changed to gathering as many assets as you could into a retail investor's account and charging a fee to "manage" them; in other words, just watch them.

That's one of the reasons why Wall Street advocates a "buy and hold" strategy for retail investors. They don't want you to take those assets away from them.

It's the same thing with mutual funds.

And conveniently, if your broker puts you into mutual funds that are losers, it's not your broker's fault.

Now, it's the mutual fund manager's fault. That way the broker can't be blamed if your account loses money.

Instead, your broker can tell you, "Don't fire me, let's fire the mutual fund manager and let's find you a better fund to invest in. But, no matter what happens, we need to buy and hold and not try and time the market."

That's what retail investors are told to do over and over and over again.

But guess what? That's definitely not what Wall Street firms do.

In fact, while you're being told to buy and hold, exchange specialists, market-makers, hedge funds and every trading desk at every Wall Street bank and firm are busy trading.

Some individual investors began to see how Wall Street was really making its money and started trading themselves.

Of course, that only increased the competition for easy trades as more retail investors traded in and out of stocks.

To continue their advantage over the public, Wall Street fought to do away with the uptick rule. The rule was wiped out so traders could short sell any stock at any time.

But it's the big Wall Street players who benefit from the rule change because they can use their huge capital positions and work with each other to drive down stocks they have shorted.

Who gets hurt? The buy-and-hold retail investors who are told to buy more at lower prices are the ones who get fleeced.

And, who is selling to them?...



To continue reading, please click here...

Buy, Sell or Hold: Exelon Corp. (NYSE: EXC) Can Energize Your Portfolio with a High-Powered Dividend

By , Money Morning - September 13, 2010

With the yield on U.S. Treasury bonds sitting well below 3%, income investors have to get creative. Those seeking dividend-based cash flow must to be willing to look in less traditional places to find a safe yield.  And what could be less traditional than nuclear power?

After the Three Mile Island disaster of 1979, nuclear energy became the forgotten carbon-free source of electricity.  However, a small renaissance in nuclear power is happening as we speak, and Exelon Corp. (NYSE: EXC) gives us a great tool to capture the upside from this renaissance - with some solid income, to boot. 

Exelon is the largest operator of nuclear power plants in the United States, with 10 plants operating a total of 17 individual reactors.  It's the third-largest operator of nuclear plants in the world, and it has a massive barrier to entry around its niche market.
 

Read More…

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

By Horacio R. Marquez, Contributing Editor, Money Morning - August 16, 2010

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…

The S&P 500 is Set for a Surge... But It Won't Come Easy

By Jon D. Markman, Contributing Writer, Money Morning - July 12, 2010

Stocks zipped higher in the past week, capping the first four-day rally since early 2009. Get out the party hats and confetti, right? Bears tried to knock shares lower on Tuesday and early Thursday, but after they failed bids hit the tape in a big way and gave it lift.

Technically, stocks continued to move out of the invalidated head-and-shoulders pattern we've discussed lately. With support below at 1,040, the S&P 500 Index should be good for a run to resistance at the 1,095 to 1,115 area in coming days as long as earnings reports and corporate outlooks are supportive.
But the bulls have their work cut out for them there.



To find out more about where stocks are headed next read on...

What Really Caused the Stock Market 'Flash Crash'

By Shah Gilani, Chief Investment Strategist, Money Morning • @ShahGilani_TW - May 19, 2010

Just when you thought it was safe to get back into U.S. stocks, you think you see a shark.

If you are searching - like the regulatory lifeguards and all the political beach bums - to pinpoint and kill the menacing shark that took a huge bite out of investor confidence when the Dow Jones Industrial Average tanked 1,000 points in a just a few minutes late in the day on May 6, don't bother to scan the horizon looking for the dorsal fin of some lurking predator.

The threat you fear isn't under the water: It is the water.

We're talking about market liquidity.

For the full story of the stock-market flash crash - and for some cautionary steps to take - please read on...

Question of the Week: Readers Respond to Money Morning's "Flash Crash" Query

By Kerri Shannon, Associate Editor, Money Morning - May 19, 2010

The May 6 1000-point drop in the Dow Jones Industrial Average triggered a roar of theories on the cause of the "flash crash." Was it a "fat finger" that entered an incorrect trade, leading automated trading systems to hit a high-frenzied sell mode? Did the initial sell-off fuel panic that escalated sales before manual corrections could be implemented?

As the New York Stock Exchange slowed trading, orders were routed to electronic exchanges that were not operating under the same safeguards and some companies' stocks were briefly valued at just pennies.

The exchanges have agreed to revise circuit breakers designed to stop trading during periods of extreme volatility, and to develop standards for handling erroneous trades. Almost all exchanges admitted that the markets' varying policies on halting trading contributed to the roller coaster ride.

Read More…

We Want to Hear From You: How Has the Market's "Flash Crash" Affected Your Investment Behavior?

By Kerri Shannon, Associate Editor, Money Morning - May 11, 2010

Thursday's Dow Jones Industrial Average 1000-point drop triggered a roar of theories on the cause of the "flash crash." Was it a "fat finger" that entered an incorrect trade, leading automated trading systems to hit a high-frenzied sell mode? Did the initial sell-off fuel panic that escalated sales before manual corrections could be implemented?

As the New York Stock Exchange slowed trading, orders were routed to electronic exchanges that were not operating under the same safeguards and some companies' stocks were briefly valued at just pennies.

"I still haven't heard a satisfactory answer as to what happened and what could be done about it," Frank C. Boucher, the head of a Virginia-based financial planning firm, told Bloomberg on Monday - four days after the market's drop.

Read More…

SEC, Major Exchanges, Working on New 'Circuit-Breaker' Rules to Avoid Another 1,000-Point Plunge in the Dow

By , Money Morning - May 11, 2010

In response to the wild ride U.S. stocks endured Thursday, executives from six U.S. stock exchanges yesterday (Monday) agreed on a framework for "strengthening circuit breakers and handling erroneous trades," the U.S. Securities and Exchange Commission announced.

NYSE Euronext (NYSE: NYX), Nasdaq OMX Group Inc. (Nasdaq: NDAQ), Bats Global Markets, Direct Edge Holdings, International Securities Exchange Holdings Inc. and CBOE Holdings Inc. (Nasdaq: CME) met with SEC Chairwoman Mary L. Schapiro on Monday morning.

The SEC's Schapiro, Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler and officials from the various exchanges were also to meet later yesterday with U.S. Treasury Secretary Timothy Geithner. Officials from the CME Group Inc. (Nasdaq: CME), the largest U.S. futures exchange, also were to attend that meeting - after having met earlier in the day with CFTC leaders, The Wall Street Journal reported.

Read More…

The Bull Market is Intact and On the Move

By Jon D. Markman, Contributing Writer, Money Morning - March 29, 2010

Bears have been scratching for a vulnerable spot in the bulls' narrative in the past few weeks, but have been coming up empty, as they logged a blistering March.

Sellers tried to sink the market back in February as the long-simmering Greek debt fiasco roared into the headlines, but that didn't work out so hot for them. And early last week they tried again by both highlighting new reports of discord between the European Monetary Union authorities and Greece, and by flogging the news of a Fitch Ratings Inc. downgrade of Portuguese debt.

At some point, portfolio managers outside of Europe may decide that they care about these matters but for now there has been what you might call a Gallic shrug. Tant pis, as the French say.

Read More…

What's In Store for U.S. Stocks in Light of Greece's Tragedy?

By Jon D. Markman, Contributing Writer, Money Morning - March 11, 2010

The recent month of February was quite interesting for U.S. stocks, because while the Dow Jones Industrial Average rose 2.6%, it didn't exactly take a direct route to those gains: There were eight separate triple-digit moves in the Dow, both up and down.

At the root of that volatility were political and economic developments that challenged the rationale for the huge rally out of the March 2009 low. Bulls were basically rethinking their beliefs that the home-price plunge had abated, employment was on the verge of a big turnaround, governments could cut taxes and boost spending without end, and that interest rates would remain at zero for years.

I had prepared subscribers for much of this turmoil. Back in early November, I highlighted signs of trouble in the market for government debt well before the troubles in Dubai and Greece came to a head. In December, we started a dialogue on what to expect as the U.S. Federal Reserve withdrew liquidity from the economy and lifted interest rates. The upshot was a series of letters detailing why you should expect the first nine months of the year to trade flattish with a lot of volatility.

Read More…

Will Stocks Rebound From Last Week's Beating?

By Jon D. Markman, Contributing Writer, Money Morning - January 25, 2010

Stocks slipped sharply in the past three days as the underlying market weakness we've been highlighting for the past two weeks finally mattered. A number of better-than-expected earnings reports were ignored. Even the successful election of a Republican to one of Massachusetts' two Senate seats, which helped health-care stocks push the market up on Tuesday, wasn't enough.

Look at it this way: The sellers won a round, after being absolutely bludgeoned since last March.

One of the key catalysts has been word that Chinese authorities are ordering some banks to curb lending -- another sign that China is tightening monetary policy in an effort to forestall a runaway credit bubble. Or maybe it was the Chinese government's decision to pull James Cameron's fanciful and rebellious "Avatar" movie out of its theatres.  It's easy to get caught up in the Chinese growth story and forget how oppressive the communist regime running the show there is; these people crushed students to death with tanks.

Read More…

Last Week's Sell-Off Leaves U.S. Investors in Unfamiliar Territory

By William Patalon III, Executive Editor, Money Morning - January 24, 2010

Friday's sharp sell-off in U.S. stocks capped a week of heavy losses that has the market in the red for 2010. And that has investors wondering where U.S. stock prices are headed next.

On Friday, accelerating concerns about U.S. corporate earnings combined with newly emergent worries about China's health hit stock prices hard. A 6% drop in the shares of Aloca Inc. (NYSE: AA) helped send the Dow Jones Industrial Average into a 216.90-point nosedive, a 2.1% decline that had it end the week at 10,172.98. The blue-chip average fell 4.1% for the week, its worst weekly performance since February of 2009.

The Standard & Poor's 500 Index lost 24.72 points, or 2.2%, on Friday. It closed at 1,091.76 after losing 3.9% for the week. A slew of analyst downgrades on technology stocks on Friday sent the Nasdaq Composite Index down 60.41 points, or 2.7%, on Friday. It closed at 2,205.29, after losing 3.6% for the week.

Read More…

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