Stocks have rallied 177%, and while calling a top is the easiest thing to do, it might not be the most accurate, Cramer says.
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In a volatile market like this one, you need to own a blend of cyclical, defensive and dividend stocks.
The past couple of days demonstrate the value of being diversified. You want to catch a rally, and with a eurozone fix evidently in place there is more room for this one to run. But you don't want to have too much risk on -- meaning you don't want to have only stocks that go up when the economy is strong. You also want companies that have good dividends and companies that do well in a slowdown.
Why do you want all three? Pretty simple: On down days you lose less money, and on up days you do just fine. In a market with a bias to the downside, you have to be worried about both.
So consider a portfolio that holds a good pastiche of all of them, one that has Procter & Gamble (PG) and Johnson & Johnson (JNJ) on the soft side, Eaton (ETN) and DuPont (DD) on the cyclical side and AT&T (T) and Kinder Morgan Energy Partners (KMP) on the utility side.
Even the company seems to be backing away from claims of a fourth-quarter iPad order cut.
Apple reportedly lowered its fourth-quarter iPad orders by 25%, according to analysts from JPMorgan's electronic manufacturing services team in Hong Kong.
But JPMorgan analysts in the United States were not convinced. In fact, the JPMorgan analyst covering Apple in the U.S. did not lower his estimate of 10.9 million to 12 million iPad shipments in the third and fourth quarters. And Apple isn't commenting.
The service sector looks healthier than many believe -- and is home to a number of intriguing stocks
Over the past several decades, America has shifted consistently and dramatically toward being a service-dominated economy. Fifty years ago, 59% of U.S. private jobs came from the service sector, with 41% from the goods-producing sector; by 1981, the gap had grown to 67.8% for the service sector vs. 32.2% for the goods-producing sector; and today, 83.4% of America's private jobs are service-oriented.
We rely less on people buying our cars and appliances and clothing made in America, and more on people using our cable, phone, and Internet services; shopping at stores that sell goods made elsewhere; using healthcare services like doctors and nursing homes and rehabilitation centers; and needing transportation services to move products imported from other countries.
That means service-type companies, and the service sector as a whole, have become the real bellwethers of U.S. economic activity. And lately, if you listen to the pundits, you'd think that the service sector is in dire straits, with fears of another recession -- or worse -- having dominated the headlines for the past couple months.
But guess what? The real, hard data from the service sector hasn't been that bad.
The company's big announcement Wednesday is widely assumed to be a low-cost Kindle tablet.
But Netflix (NFLX) should also be worried. That's because Amazon has quickly and efficiently lined up a solid library of streaming videos in advance of the launch.
The man who invented the chips has died and will be buried with some of them.
Arch West, a retired marketing executive with Frito-Lay, will be buried with some Doritos. His daughter told The Dallas Morning News that the family planned on "tossing Doritos chips in before they put the dirt over the urn."
A fitting memorial for a man who believed in Doritos even when Frito-Lay wasn't so sure.
West was on vacation near San Diego in 1961 when he found fried tortilla chips at a snack shack, The Associated Press reports. He took the idea back to headquarters and got a lukewarm response. Perhaps in the 1960s the idea of a fried tortilla was considered too unusual for mainstream tastes.
Secular sideways markets are comprised of many cyclical bull and bear markets ...
Secular sideways markets are comprised of many cyclical bull and bear markets [take a look again at the chart below]. Though cyclical bull and bear markets can provide great buying and selling opportunities, our emotions will try to get in the way between us and the right decisions. Markets will constantly try to brainwash us into doing the opposite of what we should be doing. I hope [excerpt from] this chapter provides an antidote to this as it contains two missives. Read the first one [You Are Not as Dumb as You Think] during cyclical bear markets and the second [You Are Not as Smart as You Think, which I did not attach] during the cyclical bull markets. Good luck!
The move reflects the management's view that the stock is undervalued, the company says.
By Shanthi Bharatwaj, TheStreet
The move reflects the management's view that the stock is undervalued, according to a company statement.
You can beat this crazy market by focusing on trading companies set to report operating results.
There is a tremendous amount of noise in the market that can influence stock price. Ultimately, the value of a stock is based on the present value of future profits.
When a company reports earnings results, market participants receive a key piece of information that can be used to determine the price of a stock. For a brief moment in time after a company releases its operating performance, the market will adjust pricing based on how the numbers match up against current expectations.
In many cases stocks of companies reporting results will move significantly higher or lower.
'Never let them see you sweat!' It was a great advertising campaign for a deodorant, and the central bank should have taken that advice.
By Terry Savage, Special to MoneyShow.com
Nothing in the global economy changed overnight. But when the Fed announced it was tinkering with the interest-rate structure because it saw "significant downside risks to the economic outlook, including strains in global financial markets," the stage was set for mass fear.
The Fed rarely, if ever, comments on global financial markets. And if the Federal Reserve Bank of the United States admits it is worried, then every other banker, lender and investor on the planet should be worried. The results showed up in all global markets.
As animosity mounts among subscribers, will the addition of animated hits like 'Shrek' and 'Madagascar' make up for the potential loss of Starz content?
By Jeanine Poggi, TheStreet
Netflix (NFLX) reportedly struck a streaming deal with DreamWorks Animation (DWA). But can the studio behind family hits like "Shrek" and "Madagascar" make up for the potential loss of Liberty Starz (LSTZA) content?
The New York Times reported Sunday that DreamWorks completed a deal with Netflix that would replace a previous deal with HBO. Analysts predict that the deal between Netflix and DreamWorks is worth about $30 million per movie over an unspecified period, the newspaper said.
"In the end, DreamWorks was kicked out of HBO, and Netflix is a buyer of last resort," said Janney Capital Markets analyst Tony Wible. "Frankly, paying $30 million per film seems expensive and would make the Starz deal look cheap, as the two studios there put out almost 30 movies a year versus two to three at DreamWorks."
Here are some defensive plays for those seeking shelter in this turbulent market.
By Don Dion, TheStreet
Here are five ETFs to watch this week.
Although the wild market action has been unsettling, adopting a reactionary investment strategy isn't appropriate. Rather than trying to game every market fluctuation, long-term investors should focus on defense with a solid collection of well-balanced, diversified products.
It could have long-lasting implications not just in the currency markets but in stocks and precious metals.
By Tom Aspray, MoneyShow.com
The 14.7% drop in the shares of the SPDR Gold Trust (GLD) certainly got the market’s attention last week. It is the sharpest correction in some time, but veteran precious-metals investors are likely accustomed to the volatility. For example, in October 2008, GLD dropped by more than 28% in just three weeks, falling from a high of $99 to a low of $66.
Gold is lower again in early-Monday trading, and the CME margin hike that will take effect after Monday’s close is adding further downward pressure to both gold and silver prices.
Since the beginning of August, there have been some interesting changes in the relationship between the US dollar to gold and the S&P 500, which could have longer-term significance.
If nothing else, get a little perspective from last week's drop.
By Charles Sizemore, InvestorPlace.com
I know better than to say "I told you so" after warning of a gold bubble recently. The market gods tend to be jealous and vengeful and appear to take great pleasure in humbling the arrogant. So I know better than to tempt them.
Besides, even after last week’s bloodletting, gold still is one of the best-performing assets of 2011. The September sell-off has done little more than erase August's parabolic surge.
Still, it would only be appropriate if last week's action did mark the top. The market gods might indeed have a twisted sense of humor, and Donald Trump's high-profile blustery rant that immediately preceded the crash would have been a good opportunity for divine smite.
Nothing much good or bad is coming out of a gridlocked US. But whether Europe avoids catastrophe will determine the direction of the next 1,000 points on the Dow.
Easy. It's Europe. Here's why:
When Federal Reserve Chairman Ben Bernanke talks about significant downside risk, believe me, he's talking about significant downside risk from a collapse in Europe that might freeze credit. We don't have significant downside risk here in this country. Anyone who listens to any conference call -- whether from Nike (NKE), Oracle (ORCL), General Mills (GIS), Honeywell (HON), Norfolk Southern (NSC) or Federal Express (FDX), all of which we just heard from last week -- knows that the U.S. is pretty good. Not great but not horrible either.
What could make it horrible, though, is a sudden credit crunch in Europe that could reverberate here. I'm sure that Bernanke is also worried about all of the confusion coming out of Washington, D.C., and the inability of Congress and the president to get serious on anything, let alone job creation. But Bernanke knows that Europe is way behind us in fixing its banks and that the sovereign debt crisis is real and alarming.
So, no, we aren't the factor in this world economy.
Bearish sentiment and economic troubles continue to take their toll on the markets, but certain sectors look good and a buying opportunity may be right around the corner.
By Tom Aspray, MoneyShow.com
Even though global stock markets were able to stabilize on Friday, the sharp declines last week added to the overwhelming negative sentiment in the markets.
The technical formations prior to last week suggested that stocks were vulnerable to decline, and the short-term outlook turned more negative Tuesday.
Of course, the magnitude of the decline was a surprise to all, and Thursday's sell-off was similar to the panic selling that occurred in early August. This gave the investment firms and major banks some vindication, as they have been racing each other for weeks to cut their forecasts for the economy and lower their year-end targets for the S&P 500.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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