Top Stocks

By The ETF Professor 

By Tom Aspray 

Stocks put in another good performance on Tuesday as the market was acting well heading into the widely anticipated Federal Open Market Committee announcement and Fed Chairman Ben Bernanke's press conference. The short-term downtrends in the advance/decline lines have now been broken, suggesting that the correction is over.

Rates were higher on Tuesday making further outflows from bond funds likely as we head into the summer. This is consistent with more gains for stock holders (MoneyShow) and more nervous times for bond holders.

 

Fourth-quarter profits for FedEx (FDX) came in higher than expected and shares rose on the news. Often considered a bellwether for the economy, FedEx is the world's biggest air-freight company. The company's size, along with barriers to entry in the industry, give FedEx the power to raise rates, which it also announced for its "FedEx Freight" service. That said, some investors are concerned that FedEx's decision to cut some routes between the United States and Asia will hamper future growth.  

Updated: 2:31 p.m. ET.

Interest rates will remain low at least through the end of 2014 and probably well into 2015, economists said Wednesday after the Federal Reserve announced no changes in its monetary policies.

The Fed did give one hint on when it might start the process of letting interest rates rise. The downside risks to the economy and job market have "diminished since the fall," the Fed statement said. That may explain why stocks pulled back after the policy announcement.

More clarification came during Chairman Ben Bernanke's news conference. The Fed expects to reduce the pace of buying bonds -- now about $85 billion a month -- toward the end of this year, Bernanke said. If the economy performs as expected, bond buying would end in mid-2014.

The Fed, however, would not start to raise the target on its key federal funds rate until probably 2015. The fed funds rate is what banks pay each other for overnight loans. It's now 0% to 0.25%. 

By Brad Thomas, Intelligent REIT Investor

The recent dividend sell-off has created some good entry points for real estate investment trust investors, but true bargains -- with a wide margin of safety -- are harder to find.

Still there's one blue chip that is becoming noticeably undervalued, and the tailwinds are being driven by more than the whispers of Fed Chairman Ben Bernanke.

Digital Realty (DLR) -- a dominating global data-storage REIT with 123 properties and over 23.1 million square feet -- has been the target of a Highfields Capital Management short squeeze. Since May 8, Digital has been under the microscope, as the hedge fund contends that Digital's shares are worth only around $20, much less than the $59.89 pricing Wednesday.

 

By Richard Suttmeier

The Dow transportation average set its latest all-time high at 6,568.41 on May 20, two days below the Dow industrial average set its latest all time high at 15,542.40. 

On May 8, all eight of the transportation stocks I have been tracking (TheStreet) had "sell" ratings. Today six are rated "sell" and two rated "hold." On May 8, 83.2% of all stocks in this sector were rated "sell," and today 74.9% are rated "sell," still negative enough to rate the sector "avoid-source of funds."

Investors had that second chance to sell as Dow transports set another all-time high on May 20.

 

Information provided by Theflyonthewall.com 

 

By Kiran Moodley

 

In a week that has seen Boeing's (BA) Dreamliner meet its new challenger in the form of the Airbus A350, the U.S. firm maintains that the new European aircraft will not affect its share of the wide body market, claiming: "We've got them boxed and bracketed."

 

Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, was speaking on a day that saw strong orders for Boeing's Dreamliner range, as well as the launch of a newer model of the range, the 787-10, a stretched version of the aircraft.

 

Air Lease Corporation purchased 33 airplanes on Tuesday, ordering three 787-9s and 30 787-10s. GE Capital Aviation Services, International Airlines Group, Singapore Airlines and United Airlines have also all opted for the Dreamliner.

 

Information provided by Theflyonthewall.com

Wednesday's noteworthy upgrades include:

• Adobe (ADBE) upgraded to Buy from Neutral at BofA/Merrill
• Ball Corp. (BLL) upgraded to Outperform from Neutral at RW Baird
• CEMEX (CX) upgraded to Overweight from Equal Weight at Barclays
• Sonic (SONC) upgraded to Equal Weight from Underweight at Morgan Stanley
• LINN Energy (LINE) upgraded to Outperform from Sector Perform at Howard Weil

 

By Chris Ciaccia

 

Adobe Systems (ADBE) posted on Tuesday exceptionally strong second-quarter earnings, led by the strength in its transition to becoming a cloud computing company (TheStreet).

 

Adobe, which now offers its Creative suite of products differently than it previously had, announced that its Creative Cloud subscriptions hit 700,000 customers. The company also announced its Adobe Marketing Cloud bookings grew 25% year over year, resulting in the company beating earnings expectations. Adobe earned 36 cents a share on a non-GAAP basis, and generated $1.01 billion in revenue. Analysts were expecting the company to earn 33 cents a share on $1.01 billion in revenue.

 

Stock Traders Daily has issued a special report on monetary policy, outlining the influence of the recent combined efforts of the U.S. Treasury and the Federal Reserve over both perceived and real domestic liquidity. 

Specifically, we focus on the perceived liquidity on the heels of the popular $85 billion monthly bond buying program the Federal Open Market Committee initiated last year.

Because the velocity of money has not increased proportional to the stimulus programs enacted in recent years, virtually the sole benefit of these programs has been added liquidity to the U.S. economy. However, and often unnoticed by the general public, the efforts of the Federal Reserve are largely offset by the simultaneous bond issuance and other operations of the U.S. Treasury.

 

By Chuck Carlson, DRIP Investor

The search for yield has pushed many investors into a number of investment "alternatives" to stocks. One popular investment alternative that has seen huge investor interest is Master Limited Partnerships (MLPs).

Because of its structure, an MLP does not pay income taxes. Rather, income, depreciation, and expenses are "passed through" to partners (i.e. unit holders) based on their ownership stakes. The unit holders, in turn, are responsible for their own tax reporting.

MLPs distribute the bulk of their cash flows to partners. Thus, yields tend to run well above those of common stocks, which is the major attraction of these investments.

 

How in heck can you tighten or taper when copper's just getting pounded and steel prices can't hold up? How can we think about tapering when Airgas (ARG), which has its fingers in every single pie says non-residential construction is very weak and Terex (TEX) agrees? How do you start tightening when Europe's still in flux and China seems to be going down fast?

 

How do we base the end of QE3 on homebuilding when we didn't get good homebuilding numbers Tuesday?

 

For a company that many had given up for dead after some serious customer service snafus, Netflix (NFLX) sure has rebounded. Its stock has surged more than 145% this year. It could move even higher as investors bet that the streaming video company's investments in original content with DreamWorks (DWA) and others pay off. Or Netflix could buckle under the increasing costs it's paying to content producers.