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Despite low valuations, Bank of America, Citigroup and JPMorgan are sucker's bets.
Strong quarterly results from JPMorgan and Citigroup could help the SPDR KBW Banks ETF. For Google exposure, consider First Trust Dow Jones Internet Fund.
By Don Dion, TheStreet
Here are five exchange-traded funds to watch this week.
Earnings season kicks off this week with aluminum giant Alcoa (AA) scheduled to announce its quarterly performance and outlook after the bell. A number of companies will follow suit, providing investors with insight into the state of the U.S. and global economic recoveries.
Financials will be of particular interest among earnings watchers during the latter half of the week when JPMorgan (JPM) and Citigroup (C) step up to the plate. These two rank as the first- and second-largest KBE components and together account for 15% of its index.
It's hard to pull the trigger on what appears to be a crowded trade, but these energy stocks are poised for ongoing earnings growth and greater gains.
By Jake Lynch, TheStreet
Chevron (CVX) and larger rival Exxon Mobil (XOM) delivered record profits in 2008, following crude's meteoric rise to $147 a barrel. We may be in the midst of another energy bull market as oil has retained a foothold above $90 and is enjoying support amid improving global demand fundamentals.
Chevron is scheduled to report second-quarter results Tuesday. The company's stock has advanced 15% in 2011 and 50% in the past 12 months as the commodities boom widened the company's profit margins, bolstering net income. Chevron's first-quarter pre-tax margin, at nearly 20%, ranked in the 73rd industry percentile. Return on equity, the critical measure of profitability for stockholders, was outstanding, at 20%.
Earnings will need to impress investors to keep stocks moving higher.
A weaker-than-expected jobs report Friday took some of the steam out of the pre-earnings rally, but the market rebounded at the close, limiting the damage. The market finished the week with a small gain.
Earlier in the weak, economic data supported bigger gains as the market waited for corporate profits to roll in. Investors won't have to wait much longer, as earnings season begins in earnest this week with a report from Alcoa (AA) after the close of trading Monday.
After Alcoa (AA), a whole host of companies are set to report results. The big-name report this week comes from Google (GOOG). The technology bellwether will give us a read on the overall health of the economy.
I expect a strong report. ETF buyers should keep the pedal to the metal this week with the iShares S&P North America Technology and Multimedia Fund (IGN).
Italy is the latest dire debt story being used to stir up fear amid what should be a decent earnings season.
Substitute Italy for Greece and replay the whole thing? Is that the plan for folks who need the market lower?
Start pumping up the credit default swaps like last time? And the time before? And the time before that? Get everyone frightened, including the ratings agencies? Make sure everyone knows that Italian bonds are really so overvalued that they have to be restructured and you simply can't own them?
Why not? If it worked before, why not again? You can do this for every country on earth save maybe Germany and France, and definitely not China. It's too lucrative not to do.
Of course, it helps that the current backdrop of stalled employment growth and politicians struggling over debt ceilings allows the negativity to come center stage. A deal to take over Arch Chemicals (ARJ), the only good news here today, certainly can't counteract the gloom. Not to mention China's inflation figures, which are particularly egregious, just when they are supposed to be peaking.
If inflation hits, companies with economic moats should be prepared.
The Federal Reserve's second -- and perhaps final -- round of quantitative easing has ended, and some Congressional leaders continue to talk tough on deficit reduction. But make no mistake: The U.S. is still far from a state of conservative fiscal and monetary policy. Interest rates remain near zero, and, for all of the deficit-reduction talk, many of the cuts being proposed by various politicians only scratch the surface of our $1.4 trillion annual shortfall.
That climate and other factors have many top strategists saying that significant inflation will finally hit the U.S. economy in a big way sometime soon. Just in the past couple of weeks, hedge fund titan Carl Icahn, top-performing mutual fund manager Chuck Akre and insightful strategist Rob Arnott all said they see inflation on the horizon. Icahn says it will come as Asia's growing middle class creates competition -- and rising prices -- for commodities and finished products from that part of the world. Arnott, meanwhile, says that the U.S. will likely try to get out of its debt hole by printing more money, which will lead to an inflation spike.
Friday’s downturn should continue into next week, but technically this should be just a correction that will set up a buying opportunity.
The video service's future lies abroad.
By Anders Bylund
Shares of Netflix (NFLX) skyrocketed this week when the video maven announced an ambitious international expansion plan. By the end of 2011, Netflix plans to sell digital streaming plans in 43 new nations across the Americas and the Caribbean.
The expansion itself surprised no one, but the grand scale of the rollout -- or, perhaps, its pace -- did raise some eyebrows.
The fast and the furious
Netflix had already signaled plans to go nearly worldwide with its digital services. Recent job postings looking for customer support personnel fluent in Brazilian Portuguese and Latin American Spanish tipped off the pan-American move, but also gave us clues to Netflix's next phase.
The head of Berkshire Hathaway says he has a great plan: Tie lawmakers' political futures to the deficit.
"I could end the deficit in 5 minutes," he told Becky Quick. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."
They don't call him the Oracle for nothin'. Warren also had some rather harsh words for Republicans digging in their heels on the debt issue. We raised the debt ceiling seven times during the administration of President George W. Bush, Buffett said. But now it's become a hostage. You can hear more from Buffett in the following video interview.
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David Einhorn's Greenlight Capital hedge fund has sold its position in the Internet giant at a loss.
By Robert Holmes, TheStreet
David Einhorn's hedge fund Greenlight Capital has sold out of its position in Yahoo (YHOO) at a loss following the Internet search giant's dispute over the ownership transfer of Alibaba's online-payments business Alipay.
In a letter to shareholders Friday, Einhorn said his initial purchase of Yahoo was "based on a sum of the parts analysis," which included putting substantial value on the company's Chinese assets. Following the dispute over Alibaba, Einhorn says the hedge fund "exited with a modest loss," saying that the finger pointing by involved parties "wasn't what we signed up for."
Greenlight's sale of Yahoo comes only two months after the hedge fund took a stake in the Internet search company. Shares are down nearly 15% since setting a 52-week high of $18.84 on May 6 after Einhorn disclosed his position. In Friday's letter, Einhorn acknowledges that Greenlight Capital's fund is down 5% this year, underperforming the market.
With new distribution centers and big tablet orders, the retailer lays the framework for busy fourth quarter.
The retailer has Christmas on the brain these days as it prepares for a huge holiday season. This week, the company announced it will open two new distribution centers in Arizona and Indiana. It's already opened three other centers this year.
The company is on track to open nine new centers this year after opening 13 last year, Business Insider reports. It's a good sign that Amazon is expecting a whopper of a holiday season -- so much so that it's willing to rack up the expenses in preparation.
There's also a big new product in the works: Amazon's own tablet computer.
Hackers continue to have a blast, News Corp. is forced to shut down a paper and Exxon plays dumb after its Montana oil spill in this week's round-up of business-world blunders.
By Gregg Greenberg, TheStreet
5. Summer hackers having a blast
How is your summer break so far? Are you having fun?
Investors who share Warren Buffett's economic optimism might consider this exchange-traded fund.
By Don Dion, TheStreet
Warren Buffett's biggest claim to fame over the span of his illustrious multi-decade career has been his unmatchable investing prowess. However, droves of individuals on Wall Street and Main Street also consistently turn to the Oracle of Omaha in order to gain insight into current events and to hear his outlook for the U.S. and global economy.
The chairman of Berkshire Hathaway (BRK.A) sat down with CNBC's Becky Quick in Sun Valley, Idaho to touch on topics ranging from the U.S. debt ceiling debates to the corporate jet industry. As in the past, the billionaire investor provided viewers with valuable insight blended with a touch of the folksy, down home charm he is known so well for.
During the conversation, Buffett had some choice words for Washington legislators when the topic of the U.S. debt ceiling was brought up. Calling the argument "silly," and likening the debate in Washington to a game of Russian roulette, he warned that major risks could arise in the event that the ceiling is not raised.
These market leaders have rallied sharply recently, and while a pullback is likely, the charts for both stocks show no signs of major tops.
Yes, there's a lot of hype around the iPad and iPhone stock -- but for good reason.
By Jeff Reeves, InvestorPlace.com
I typically have little interest in the hottest stocks on Wall Street. There is much to be said for being fearful when others are greedy.
After all, how much buying pressure can be left to bid up a stock after every guppy on Main Street and every shark in a thousand-dollar suit owns shares?
Recently, I took a good look at Apple Inc. (AAPL), one of Wall Street’s biggest darlings. I was trying to find reasons to avoid the stock like the plague. But as it turns out, Apple is actually very cheap – and a good buy despite all the hype. Here’s why:
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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