Top Stocks

Question: Are you bullish or bearish?

Answer: It depends on what time period we're talking about.

In the very short term -- say, the next four to six weeks -- I'm bullish. I think the market is gradually inching its way higher after breaking through resistance at 1108 on the Standard & Poor's 500.

The summer rally could take us up another 30 or 40 points on the S&P 500 from here.

 

First we have high-end lawn mowers coming into fashion, and now luxury mattresses? Was the recession just a bad dream?

Sealy (ZZ) is making more mattresses for the luxury crowd, and just debuted the black-and-gold Golden Elegance king model for $4,999, The Wall Street Journal reports.

But that's nothing compared to the $44,000 "Sublime" mattress coming out later this year from California-based E.S. Kluft. It will likely become the most expensive American-made mattress, joining the ranks of other mattresses made with cashmere, mohair, silk and crimped wool, writes Anjali Athavaley. 

We've all heard the reasons to be fearful of stocks right now -- potential spillover from the European debt crisis, questions about the housing recovery's sustainability, a burgeoning national debt and budget deficits. All of those (and more) have been highlighted pretty extensively in the media.

 

But there are also plenty of reasons to be optimistic. And in a recent opinion piece for The Wall Street Journal, strategist Bob Doll pointed out some particularly interesting bullish signs. In fact, Doll (portfolio manager and chief equity strategist for fundamental equities for Blackrock) said that despite the formidable challenges the U.S. faces, “overweight positions in U.S. equities are more than warranted” right now.

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One of the most interesting factors Doll addresses involves corporate balance sheets. Unlike many companies in other countries, U.S. firms went into cost-cutting mode and became much more efficient when the financial crisis hit, he writes. As demand rebounds, that has them in very good shape. For nonfinancial companies, cash on the balance sheet is close to 11% of assets -- a 60-year high, he says. And he notes that, according to Citigroup, unit labor costs are falling at the fastest pace in 40 years.

 

 

Now selling seats on a sinking ship: Citigroup (C).

The bank is looking for investors so it can raise $3 billion for its private-equity and hedge funds, Bloomberg reports. But the government is thisclose to banning banks from owning those same funds.

Lawmakers are trying to reconcile the House and Senate financial reform bills, and one of the elements being discussed would limit a bank's ability to trade stocks and bonds for their own accounts, Bloomberg reports. It would also ban them from owning hedge funds or private-equity firms. 

By Robert Holmes, TheStreet

 

Initial public offerings dried up in 2008 amid the global economic crisis, but 2010 is shaping up to be a rebound year in terms of IPO volume in the U.S.

 

According to Renaissance Capital's IPO Home Web site, 57 IPOs have been priced in 2010, a 533% increase from the same time period a year ago. More than $8.5 billion in total proceeds have been raised so far this year; that's over 350% more than in the first six months of 2009.

 

While 2010 has nearly eclipsed the previous year in terms of the number of IPOs (57 already in 2010 to 63 in all of 2009), the average IPO return in 2010 has been -3.6% from the offer price, a statistic that may scare investors away from initial public offerings in the second half of the year. However, some IPOs have rewarded investors with substantial returns. TheStreet examines the highest-returning IPOs in the first half of 2010 and what investors can expect the rest of the year.

 

 

By Jim Cramer, TheStreet

 

All my trading life, I have tried to see order where there appeared to be chaos. I always wanted to know what the market knew, what made it act the way it did when I couldn't understand it for a couple of days.

 

We are in one of those moments. I tried so hard this week to be as bullish as the market was, and to figure out why I would want to buy, knowing what I know. And, more important, why I would want to buy aggressively at some times, when it seemed to make no sense.

 

I scan the headlines. The news in retail is worse than I thought, in part because of the Gulf spill and in part because of a malaise that seems to have set in nationally. OK, that's what I see. What could the market be seeing that I don't? I think the spill is causing some of the malaise. Does the market think the spill's about to end, or that the damage is not as great as I do? I am willing to consider it. But as I have said many times here, I think it is far worse than many people think, and that the plans for stopping it aren't as likely to work as if it just runs its course. One hundred million barrels. That's a lot of course to be run.

 

I’m going to use the current bounce, World-Cup-rally, summer rally, whatever, to sell my position in Impala Platinum (IMPUY). (For more on the possibility that this is the start of the summer rally, see this post).

 

The South African stock looks like it’s in a steady down trend despite its 13.8% gain off the June 4 low. Platinum was bid up heavily by traders who bought it as a speculative precious metals play on market volatility, but the problem with platinum -- unlike, say, gold -- is that it’s both a precious metal and an industrial metal.  

With the European economy slumping and the U.S. economy showing signs of slower growth, the industrial demand for platinum hasn’t lived up to hopes, and traders have been unwinding positions since April. (The company paid a half-yearly dividend on March 15.) 

 

The holiday season seems to start earlier every year, but in June? That's taking it a little far.

Toys R Us has Santa on the brain already, and has started a Christmas Savers Club to help people start saving now, DailyFinance reports.

It's a fine idea to start saving this early -- and Toys R Us even gives you a little reward for doing so -- but the problem with this club is that there's only one retailer who will accept all those accumulated dollars.

Here's how it works:  

By Scott Moritz, TheStreet

 

More reports of Apple's (AAPL) production plans for a CDMA iPhone stirred up the simmering anticipation for a Verizon (VZ) iPhone, sending Apple shares to a new high.

 

According to Digitimes, Apple's contract manufacturers plan to ship a CDMA version of the iPhone in the fourth quarter. This information confirms a report last month from TheStreet that Apple had told its iPhone manufacturing partners to start full-scale production of a CDMA iPhone to be available as a Verizon iPhone, as early as November. Verizon uses the CDMA, or "code division multiple access," technology.

 

The news comes as pre-orders for Apple's redesigned iPhone 4 outpace supply. They have even exceeded the sales volume of the previous iPhone by a factor of 10.

 

A strange press release has been floating around cyberspace today, outlining how Burger King (BKC) is partnering with Microsoft (MSFT) on the launch of the new Xbox 360 motion control system called the Kinect. The strange partnership has been turning more than a few heads, even though its extremely light on the details.

 

The Kinect goes on sale in November, and is getting a lot of buzz because the technology allows gamers to control characters on the screen simply by moving around and not by pushing buttons or swinging a remote controller. But what in the heck does Burger King have to do with video games?

Actually, more than you may think.

 

By Ted Reed, TheStreet

 

Disappointing earnings estimates from FedEx (FDX) on Wednesday triggered a market decline and a 6% drop in the company's shares, but several analysts say Wall Street got it wrong.

 

In reports issued after the company's earnings call, two analysts cited price targets of $100 while a third said $113. Historically, the analysts said, FedEx trades at 18 to 21 times earnings. In trading on Wednesday, FedEx shed $4.94 and closed at $78.07.

 

Before the opening Wednesday, FedEx projected earnings of 85 cents to $1.05 a share in the current quarter and $4.40 to $5 for fiscal year 2011. Analysts surveyed by Thomson Reuters had been estimating $1.03 for the current quarter and $5.05 for fiscal 2011.

 

By Jake Lynch, TheStreet

 

U.S. stocks yesterday weren't able to extend Tuesday's rally after a report showed U.S. housing starts fell 10% in May and FedEx (FDX) issued a 2010 profit outlook that missed analysts' expectations.

 

Dividend-paying shares help investors weather a weak stock market. Here are 5 stocks that offer enormous yields. They also carry greater-than-average risk.

 

By Robert Holmes, TheStreet

 

The Great Recession produced a slew of penny stocks for speculative investors as many stock prices fell below $3 during the throes of the bear market.

 

For some penny stocks, the returns have been massive during the first six months of the year.

 

Here are the top five penny stocks of 2010, ranked by total returns. Here’s what may be in store for investors in those companies for the remainder of the year.

 

 

Goldman Sachs (GS) may do "God's work," but the company has a devil of a problem: bedbugs.

 

Employees at the company's new 42-story office tower in Jersey City, N.J., were ordered out of the building last month as bedbug-sniffing dogs and exterminators came in to spray for the critters, ABC News reported, citing sources at the company.

 

"We're always focused on our facilities and there are no issues," a Goldman Sachs spokeswoman told ABCNews.com in a statement. She did not comment as to whether the building had been treated for a bedbug infestation.

 

By Jim Cramer, TheStreet

 

It's part oil spill. Part stock market's worst May in 40 years. Part "flash crash." Part no increase in hiring. Part hangover from April's strong showing. Part end of the housing tax credit. Part European unraveling.

 

That's what I come up with when I puzzle -- now endlessly -- on how May was such a weak month in this country, and how the market is still struggling to recover in June.

 

The psychology of the economy took a big hit in May, and I think all of those negatives contributed to it and have caused us to distrust this rally and detest its phoniness.