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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China's breakneck growth rate should continue to lift oil prices, leading to a spike in gasoline prices by year's end.
By Andrea Tse, TheStreet
Oil prices should continue to rise and lead to a spike in gasoline prices before the end of the year, thanks to China's breakneck growth rate -- despite a series of interest rate hikes -- according to analysts.
"If China continues to expand this way, I would expect (U.S.) fuel prices to go up 20 to 30 cents a gallon by the end of the year," said A.T. Kearney's head of energy practice Vance Scott. He factored in the U.S. recovery as he discussed oil demand from the world's most voracious energy consumer, as it feeds its rapid economic growth, and the impact of this demand on U.S. gasoline prices.
Demand can, of course, drive up crude oil prices, which then makes gasoline more expensive.
As US debt negotiations go down to the wire, economic growth is stalling and markets are being stressed. Feels like the 2008 panic all over again.
With stocks sliding for the sixth day in a row, word that the economy nearly dipped back into recession in the first quarter and signs of stress already beginning to appear in the funding markets, I can't help but feel like the economy is headed for a repeat of the 2008 panic that deepened the housing bust and made what would have already been a painful recession even worse.
People wonder why, three years into the official recovery, unemployment is still above 9%, housing is stabilizing at best and job growth remains anemic. It's because of the policy errors in those fateful days three years ago. Those wounds -- caused by far-right Republican intransigence against President George Bush's bank bailout proposal and the free-market zealotry that allowed Lehman Bros. to fail -- did serious damage. Inter-bank lending dried up. Businesses couldn't fund normal operations. Purchases were withheld. Hiring was postponed.
We're still paying the price for those crass political acts today. And now, with the U.S. Treasury on the precipice of its first-ever credit default because of an unwillingness among freshmen Tea Party members in the House to compromise with Democrats or even their own party leadership threatens a repeat at a time of extreme economic vulnerability. In fact, forget 2008. There are parallels to the policy errors that prolonged the Great Depression. Here's why.
Treasuries, gold and cash prove popular as investors wait for signs of progress on the debt-ceiling resolution.
By Frank Byrt, TheStreet
Investors are showing increasing concern over Congress's resolve to reach an accord on raising the debt ceiling by Tuesday's deadline and are showing that by selling stocks and building cash or gold positions, while others are waffling on Treasury bonds.
Their concerns stem from the congressional stalemate over raising the government's $14.3 trillion debt ceiling. Complicating matters is that as part of that, Congress and the White House also must agree to a deficit-reduction package to avoid a downgrade in the government's triple-A credit rating.
That sort of uncertainty creates volatility, which translates into larger price fluctuations that strike fear into some investors but create buying opportunities for others.
One surprising metric can help you find promising countries in which to seek stocks.
By Tim Hanson
If you're a global investor, it pays to pay attention to the big picture. Picking where to invest can be just as important as picking what company to invest in.
For example, Specialty Fashion Group is an Australian retailer I respect. It's earning better-than-30% returns on capital, and in better times, it posted steady operating margins and tight cash conversion cycles. Yet the company has not been able to escape Australia's weak consumer environment. The stock has fallen steadily of late, because of slowing sales and contracting margins. (Still, value investors with access to the Australian exchange may want to note that it's now trading for less than three times EBITDA, and paying a 10% dividend yield.)
I highlight SFG here because it's a quirky case. Australia, thanks to rising prices for oil, iron ore, and its other natural resource exports, appears to be doing well, posting 3.3% GDP growth in 2010 atop a surging currency. That strength, however, has come on the back of a mining boom, which has enriched just a tiny percentage of Australia's larger workforce. Strip out mining, and Australia's not doing so hot.
Here are the near- and long-term prospects of a stock market besieged by global tightening and debt crises.
Which is worse: Washington, D.C., versus business confidence or emerging markets' central bankers versus business? What happens if they combine? And what happens if you throw in a European debt crisis?
You get a hard patch. You get a bone-cruncher.
You get this market. Sure, we can get breathers, relief rallies. The kind of action we saw Thursday morning.
Still, we have to face some facts about short-, intermediate- and long-term problems, both temporal and structural.
There are short-term considerations that seem to grow by the hour: Greek default, soft default in America -- no checks sent to certain suppliers but no stoppage in Social Security and interest/principal payments -- and the debt downgrade.
Metal prices are so high that the uncertainties of a US default make a further advance unlikely.
The gold and silver markets Thursday didn't have any better idea than you or I about whether a deal on the debt ceiling or a U.S. default is more likely. But after the run-up in gold prices to a new nominal record, investors are getting edgy. Any rumor of progress is an indication to sell.
As of 1:06 pm ET, gold was flat for the day and silver was down about 1.9% on news reports that the House of Representatives will vote tonight on a Republican plan to raise the debt ceiling by $900 billion as part of a package with $917 billion in budget cuts over the next 10 years.
It looks like enough Republicans are falling in line behind House Speaker John Boehner to give the bill the 218 Republican votes it needs to pass. (It's unlikely that the bill will pick up more than a handful of Democratic votes.)
The organic grocer defies a curdled economic climate.
In a sour economy for consumer-facing companies, grocer Whole Foods Market (WFM) has managed to keep its business fresh.
Third-quarter net income increased 35%, to $88.5 million, or $0.50 per share. Whole Foods' total sales increased 11%, to $2.4 billion. Same-store sales surged 8.4%, an admirable increase in this day and age, and a heartening indicator of growing market share.
In addition, Whole Foods beat analysts' estimates for earnings of $0.47 per share. The organic grocer also increased its earnings expectations for the year to between $1.91 and $1.92 per share, compared to analysts' expectations for $1.90 per share.
Whole Foods' quarter looks particularly fresh in relation to many of its rivals' wilting results.
Banks across the country are sitting on run-down houses no one will buy. What to do with them?
In other cases, the bank is simply giving them away.
The bank is donating 100 foreclosed homes in Cleveland, Bloomberg reports. It will give away as many as 100 in Detroit and 150 in Chicago and plans to add up to nine more cities by the end of the year.
Even if a deal comes through before Tuesday, it's unlikely that the government can cooperate well enough to prevent a downgrade.
By Howard R. Gold, editor-at-large, MoneyShow.com
It’s been a hot summer, and it’s been even hotter in Washington, D.C., where Democrats and Republicans have been burning down the House with a pitched battle over the debt ceiling, the cap that Congress puts on the national debt.
Usually it’s a mundane bit of legislative business barely worthy of C-Span. Congress hikes spending and then authorizes an increase in the debt ceiling to pay for it. It’s happened 78 times since 1960.
The retailer's commercial paper has a lower short-term yield than some T-bills.
A recent report showed that Wal-Mart's commercial paper due Aug. 4 had a 0.04% yield. U.S. T-bills due the same day showed a yield of 0.16%, The Wall Street Journal reports, and a Fannie Mae discount note due Aug. 4 had a 0.06% yield. Wal-Mart's yield was even lower than that of T-bills due Aug. 11, which had a 0.1% yield.
Commercial paper is a short-term security sold by corporations to get some quick money for payroll and other purposes, and a default is extremely rare. Normally, investors like commercial paper because it gives a slightly higher yield than Treasury notes.
Amazon strikes another streaming deal, narrowing the gap between itself and Netflix.
By Jeanine Poggi, TheStreet
This is the second deal in a week Amazon has announced, forming a similar partnership with CBS (CBS) just last week.
This brings Amazon's portfolio of movies and television content to about 9,000, and while this is less than half of Netflix's 20,000 or so titles, it brings Amazon Prime one step closer to competing with the movie rental giant.
Banking executives send a letter urging lawmakers to cut a deal and act responsibly.
Wall Street chief executives have written a letter to President Barack Obama and Congress, telling them to take steps to put the country on "sound fiscal footing." Lawmakers must correct our fiscal course and inspire market confidence by paying our bills on time, the letter said.
Thanks for that bit of "do as I say, not as I do." The sheer arrogance of the letter is breathtaking, given that Wall Street's greed and recklessness helped get us to the point where we are today. Do Goldman Sachs (GS) and the rest of the Fast and the Furious even know what "sound fiscal footing" is?
Even if Congress reaches a budget deal, S&P might still cut the nation's credit rating. Suggestion: Increase your positions in cash and precious metals.
By Robert Holmes, TheStreet
On March 28, after a week that saw the Dow Jones Industrial Average ($INDU) jump 3%, money manager Jeffrey Sica predicted that the borrowing and spending by the U.S. would prompt a downgrade of U.S. debt. Four months later, it appears that gloomy prediction will come true.
Even if a short-term compromise on the debt ceiling is reached, Sica is bracing for a downgrade of U.S. debt by credit ratings agencies by making what some observers have called unpatriotic bets: short positions against U.S. Treasurys and the U.S. dollar, moving to higher levels of cash and buying commodities like oil, silver and gold. Sica is the president and chief investment officer of Sica Wealth Management, a Morristown, N.J., company with about $1 billion in assets under management.
Standard & Poor's warned last month that it would downgrade the triple-A rating of U.S. debt if significant progress were not made in dealing with a ballooning deficit. The credit ratings agency said the U.S. would need to cobble together a plan that would lead to $4 trillion in savings, a task that appears impossible amid the partisanship in Congress.
The maker of Keurig coffee brewers sees shares soar after posting blowout earnings.
Updated: 4:48 p.m. ET
Green Mountain Coffee Roasters (GMCR) surprised nearly everyone this week, blowing past analysts' expectations for sales and profit and wowing them with its fiscal 2012 profit forecast.
The beat was so strong that investors rushed into the stock Thursday, sending shares up 20% in early midday trading. The stock closed at $102.57, up 16.4%. It was the first time the stock had surpassed $100. It was only in November 2008 that this stock was trading for a mere $8.
Analysts continued to shake their heads in disbelief. The stock that no one paid much attention to in the past has more than tripled in the past year, and that momentum will likely continue.
Risk-averse investors might like this fund's size, safety and stability.
By Don Dion, TheStreet
The developed world's debt issues have commanded headlines and weighed heavily on investor sentiment in recent weeks.
As Congress and world leaders continue to seek the best way to solve their respective issues, it may be tempting for some investors to head for the exits.
This, however, should not be a prime course of action. On the contrary, as we have seen throughout the current earnings season, many domestic companies continue to exhibit strength despite the ongoing threat of economic turbulence. Instead of fleeing for the exits, long-term investors should consider doing some portfolio maintenance. By constructing a well-rounded portfolio, you can weather the effects of negative headlines and prepare for when global markets recover.
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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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