You can still find small-cap superstars
Small-cap superstars still abound

There are some picks in this sector that have excellent valuations and strong earnings growth.


A new paper argues that automation is polarizing the labor market, creating more jobs at both ends of the skills spectrum.

By MSN Money Partner Aug 22, 2014 12:38PM
Credit: © Framck Robichon /EPA/Alamy

Caption: A humanoid robot manufactured by FoxconnBy Jon Hilsenrath, The Wall Street Journal

In an essay in The Wall Street Journal last month, Harvard University economist Lawrence Summers envisioned a world in which computers and machines displace a vast new array of human work, creating an economy that produced few opportunities and sources of income for actual people.

Taxis wouldn't need drivers, nor retailers cashiers or banks financial analysts.


"The challenge for economic policy will increasingly be generating enough work for all who need work for income, purchasing power and dignity," he argued.

David Autor, a Massachusetts Institute of Technology economics professor, argues in a paper to be presented Friday to central bankers at the Kansas City Fed's Jackson Hole symposium that automation is creating a different kind of problem for the economy. 


A tighter tack on monetary policy does not have to be bad for the economy, the president of the St. Louis Fed says.

By MSN Money Partner Aug 22, 2014 12:24PM
Image: Stock investor © CorbisBy Matthew J. Belvedere, CNBC

Don't fear the hawk. That's what St. Louis Fed President James Bullard told CNBC on Friday -- saying a tighter tack on Fed monetary policy does not have to be bad for the economy.

"It means the committee could be more confident that the economy is going to improve in the future and handle the higher [interest] rates which will eventually come," he said on "Squawk Box," ahead of Fed Chair Janet Yellen's Friday morning address at the central bank's monetary symposium at Jackson Hole, Wyoming.

Bullard said he's sticking with his prediction for rate hikes to start late in the first quarter of 2015. He won't be a voting member of the Fed's policy committee again until 2016.

The financial markets have been trading more dovishly than the Fed policy committee's median estimates, he warned -- adding that investors are expecting rates over the long haul to remain lower than the central bank's forecasts.


Putin, not Yellen, will determine what the market does next.

By Jim Cramer Aug 22, 2014 10:57AM

Ukrainian soldiers in the center of Kiev August 20, 2014 © Gleb Garanich/ReutersIt's too bad that the Jackson Hole conference is today and that Fed chief Janet Yellen is speaking, because that will allow people to be deluded into thinking that it isn't Russia-Ukraine that's driving things but the Fed's machinations about rates.

It's Russia, stupid. It has been from the beginning, because while Europe has only 6 percent of the world's population, it accounts for about 30 percent of the GDP. logoThe banks, the employment, the sales -- they are all at risk with Russian trucks moving into Ukraine, which then sends down the European markets, which, even after all of these years, still ding us.

I know the rush into the domestic retailers is, in part, because they are way behind and, in part, because they have nothing to do with overseas. They aren't hurt by the ubiquitous strong dollar.


DineEquity is trying to entice people back into the traditional restaurant setting and sales at its IHOP and Applebee's chains have been improving.

By Staff Aug 22, 2014 10:55AM

An IHOP restaurant in Del Mar, Calif. © Mike Blake/ReutersBy Brian Sozzi, TheStreet

It's as if the entire "on-the-go" nation has grown obsessed with grabbing extra-large burritos from Chipotle (CMG) and oversized iced coffees from Starbucks (SBUX), while sidestepping the experience of sitting in a traditional restaurant for a meal.

DineEquity (DIN), which operates 3,600 IHOP and Applebee's locations in some 19 countries, is doing all it can, however, to entice people back into the traditional restaurant setting. By the looks of the company's financial results, especially compared to those from peers Darden (DRI), which owns Olive Garden, and Brinker International (EAT), the operator of Chili's,, efforts by DineEquity management appear to be paying tasty dividends.

IHOP's system-side same-restaurant sales have increased for five consecutive quarters, rising 3.2 percent in the second quarter, while Applebee's rose a more modest 0.6 percent but halted three quarters of declines. Darden's Olive Garden has posted four quarters straight of same-restaurant sales declines, capped by a 3.5 percent fall in the most recent quarter. Chili's had a 2.5 percent same-restaurant sales increase in the second quarter.

Applebee's has outperformed the same-restaurant sales industry average by 150 basis points in the past five quarters, according to Bloomberg.


New legislation is allowing foreign companies to finally invest in the country's vast oil reserves.

By Aug 21, 2014 4:44PM

Credit: © Omar Torres/AFP/Getty Images

Caption: Aerial view of the Centenario exploration oil rig working for Mexico's state-owned oil company PEMEX, in the Gulf of MexicoBy Swarup Gupta 


Last week, Mexican President Pena Nieto signed legislation which ended state control over the nation's oil sector, giving private players access to the nation's oil reserves for the first time since 1938.

During that year, the Mexican government expropriated the resources and facilities of private players. These actions led to the creation of state-owned oil company Petroleos Mexicanos, or Pemex.

Since then, the company has emerged as the world's seventh largest oil producer and dominated the Mexican energy space. The new legislation, which received legislative approval in December, goes a long way in diminishing Pemex's dominance.

On the other hand, it provides an opening to foreign companies which can now invest in Mexico's vast oil reserves. This includes behemoths like ConocoPhillips (COP) and Royal Dutch Shell (RDS.A).


For long-term holdings, there is no better strategy.

By MSN Money Partner Aug 21, 2014 4:12PM
Image: Money © MedioImages/Jupiterimages​By Max Levin, MainStreet

A long-term investment is a position used by investors who are predicting upside in the market down the road. 

This is a technique used by people, from the average Joe to the top hedge fund advisors, who are banking on robust returns down the road. 

But whatever your timeline -- whether you hold a stock for a year or 10 years -- you should be collecting a dividend. 

Why? Well, here are three compelling reasons:

The market is closing in on some other important milestones. Here's what to know about the history-making numbers.

By MSN Money Partner Aug 21, 2014 3:19PM
Credit: © Lucas Jackson/Reuters
Caption: A trader points to a stock chart on the floor of the New York Stock Exchange shortly before the closing bell in New York July 2, 2014By Ian Salisbury,

At the market's open Thursday, a few more zeros turned over on the Dow Jones Industrial Average's ($INDU) odometer, and the index is likely to be bouncing around 17,000 all day. 

Sure, the number itself doesn't matter much -- it's not like you get a bonus added to your retirement every time you hit a round figure. 

But it is a chance to pause and look at just how far the market has come in this bull market, and what that might mean about where it's going. 

It's also a moment to look at some other milestones that may be coming up soon. (Spoiler: Keep your eye on the Nasdaq.

The models are much cheaper than what you would get from Apple. The newest iPhone is expected to be unveiled next month.

By MSN Money Partner Aug 21, 2014 2:55PM
Credit: © Andrew Burton/Getty Images
Caption: The iPhone 5C is seen on display at the Fifth Avenue Apple store in New York CityBy Lisa Eadicicco, Business Insider

Wal-Mart (WMT) is practically giving away iPhones. 

As part of a new promotion, the retail giant is now selling the iPhone 5c (pictured) on a two-year contract for just 97 cents. The iPhone 5s is also getting a significant price cut to $79 down from $99. 

Although the iPhone 5s costs only $20 less than Wal-Mart's previous price, it's still much cheaper than what you would get through the Apple Store. 

Apple (AAPLis still selling the entry-level 16GB iPhone 5s for $199 on a two-year contract. Engadget was the first to spot the promotion on Wal-Mart's website on Wednesday, reporting that the deal was valid for 90 days.

Both home improvement retailers are beating Street estimates, but 1 stands out from the other.

By InvestorPlace Aug 21, 2014 2:44PM

Caption: Home Depot store in Williston, Vt.
Credit: © Toby Talbot/APBy Dan Burrows

Lowe's (LOW) and Home Depot (HD) reported earnings this week, and business did pick up as promised after a cold start to spring.

But that still doesn't make make either stock a slam-dunk buy.

Spring is the most important part of the year for home improvement retailers, so weak first-quarter results -- hurt by unseasonably cold weather -- was not a good way to get the stocks moving in a down year.

Happily for anyone holding Home Depot or Lowe's stock, sales picked up in the second quarter, as did profits . . . but serious headwinds still remain.


Wall Street traders can be shady, Michael Franzese says. Don't let them decide where to put your money.

By MSN Money Partner Aug 21, 2014 2:37PM
Credit: © Jerritt Clark/WireImage/Getty Images

Caption: Michael Franzese former Colombo Family CapoBy Leslie Shaffer, CNBC

Former mob boss Michael Franzese thinks investors should avoid the U.S. stock market. Should you take his investment advice?

"There's a bubble there that's going to burst at some point, and when it does, it's not going to be good," Franzese (pictured), a former mob boss for the Colombo crime family in New York and now an author and motivational speaker, told CNBC.

It's not just the valuations. He's got another reason for advising investors to keep their money off Wall Street.

"I did a lot of things at times with people on Wall Street," said Franzese, who believes there is still a contract out on his life. "A lot of guys are shady and they did shady things with me and I don't trust them. And I don't like other people that I don't know really well taking care of my money. I think that I can do it better."


A sustained rally could have important implications for American and multinational companies, potentially resounding across the stock market.

By MSN Money Partner Aug 21, 2014 2:02PM
Image: Money © MedioImages/JupiterimagesBy William Watts, MarketWatch

After a long, sleepy stretch, the dollar is breaking out to the upside, and it’s not just currency traders who need to pay attention.

The ICE dollar index, which tracks the U.S. currency against a basket of major rivals, quietly pulled off a breakthrough this week, punching to its highest level since September and trading recently at 82.044. 

The currency extended big daily gains Wednesday versus the euro and Japanese yen after the minutes from the Federal Reserve's latest meeting struck a surprisingly hawkish note.

"There's a late-summer feel to the weather and a spring in my step as the dollar has finally slipped its moorings and edged up and out of the doldrums," said Société Générale global macro strategist Kit Juckes, in a note.


The company's funds got a huge boost after a recommendation earlier this year from Warren Buffett.

By MSN Money Partner Aug 21, 2014 12:57PM
Credit: © NetPhotos/Alamy

Caption: Vanguard websiteBy Kirsten Grind, The Wall Street Journal

Investors are pouring money into Vanguard Group, the epitome of the hands-off approach to investing, flocking to funds that track market indexes and aren't run by stock pickers or star managers.

The inflow has pushed the mutual-fund giant to almost $3 trillion in assets under management for the first time.

The surge is part of a sea change in the fund business in which investors are increasingly opting for products that track the market rather than relying on managers to pick winners. Other firms, such as New York behemoth BlackRock (BLK) and Texas-based Dimensional Fund Advisors, are also enjoying an influx of cash.

Vanguard got a huge boost this spring when Warren Buffett gave it a public stamp of approval in March.


The PC market continues to contract, leading some analysts to wonder about the company's long-term prospects.

By MSN Money Partner Aug 21, 2014 12:40PM
A Hewlett-Packard Co. LasetJet CP2025dn printer sits on display at an Office Depot store in Arlington, Virginia (© Andrew Harrer/Bloomberg via Getty Images)By Jennifer Booton, MarketWatch

Despite a plan to axe another 16,000 jobs, analysts aren't all convinced sales of desktops and cost cuts will be enough to carry PC maker Hewlett-Packard (HPQ) forward over the long term.

In a note to clients Thursday morning, analysts at Cantor Fitzgerald said they believe the "long-term trajectory for HP remains in question" despite the massive restructuring.

The brokerage raised its price target on the veteran tech company to $34.50 from $30 previously, but maintained its "hold" rating and expressed concern over the "low-margin profile" of the PC market.

In a conference call on Wednesday, HP CEO Meg Whitman said the PC market continues to contract, even as the company reported 12 percent year-over-year PC revenue growth.

Tags: HPQ

The former head of Wells Fargo says the bank's massive settlement is 'definitely politics' and has nothing to do with justice.

By MSN Money Partner Aug 21, 2014 12:31PM
Credit: © Ron Antonelli/Bloomberg via Getty Images
Caption: Bank of America Corp. signage is displayed at a branch in New YorkBy Matthew J. Belvedere, CNBC

The $16.65 billion settlement by Bank of America (BAC) over financial crisis-era mortgage securities highlights a pattern of the government extorting the banks, said Dick Kovacevich, former Wells Fargo (WFC) chairman and CEO.

"It's definitely politics. It has nothing to do with justice or restitution to the innocent victims. In fact, more of the money is going to the coffers of the states and various departments than the victims," Kovacevich said Thursday on CNBC's "Squawk Box."

The BofA payout -- the largest in a series of soaring penalties against banks for a range of misconduct -- was announced Thursday.


But the fact that the guilty bankers are still free and not even on the run is the real outrage here, a travesty that should never be forgotten.

By Jim Cramer Aug 21, 2014 12:13PM

A Bank of America sign at a branch in Greenville, S.C. © Chris Keane/ReutersHow in heck can a company write a $17 billion check to the government and still have its stock go higher?

That's a legitimate question, given that Bank of America's (BAC) stock is up now that it has paid the Department of Justice its bounty, of which more than $9 billion is cash on the barrelhead -- enough to pretty much wipe out a quarter's worth of earnings along with any reserves.

The answer is simple: We are now able to estimate what Bank of America can earn. We are now able to put a number out there that can be reached. We are in the realm of "normalized earnings power." logoWhat does that mean? As long as this litigation hung over the head of this bank, it was impossible to figure out what it could earn. There were so many lawsuits by so many government entities, so many charges, and so many billions in legal fees, all on top of the $60 billion that had been shelled out, that we were simply guessing about what the company could earn.



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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.

The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More


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