The $19 billion WhatsApp deal could become the Facebook founder's legacy . . . or his albatross.
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This could be a solution to hedging your risk in the world's fastest-growing and second-largest economy.
By Tim Hanson
It's well-known that there have been Chinese public companies trading in Canada, the United States and Hong Kong that have either been alleged or proved to be misrepresenting themselves to investors in some capacity. Interestingly, little to no fraud has been exposed at Chinese public companies trading in China. This is one of those statistical anomalies that must have some "Freakonomics"-esque explanation.
Is it because China is exporting only its bad companies and keeping the good ones for itself? That seems unlikely when you remember that China very much wants to put on a good face for the world and that the business practices being called into question by foreign investors are widespread across China.
Is it because Chinese investors aren't doing due diligence on Chinese companies? Probably not, as a variety of pensions and mutual funds, as well as 150 million individual investors, are all buying shares of Chinese companies.
Technical indicators suggest recent tech-sector strength can continue. Look for favorable entry points in an ETF and several strong stocks.
A failure to reach an agreement on the debt ceiling by Aug. 2 wouldn't have to result in a default on US bonds. But how would traders react?
By Peter Morici, TheStreet
Be clear, the U.S. doesn't have to default on its bonds. After Aug. 2, it still will collect taxes and other revenue exceeding $180 billion per month, and interest payments on the national debt eat up less than $30 billion.
If the Treasury prioritizes expenditures -- as the state of Minnesota did during its recent shutdown -- it could pay interest on bonds, roll over bonds coming due and pay Social Security recipients and many other obligations. But it would be late to many vendors until the debt ceiling was raised or new sources of cash were found.
The U.S. would not be insolvent but, rather, would be in a political crisis.
Fund managers disagree about the stock's prospects following rate hakes that have agitated customers.
By Robert Holmes, TheStreet
When chit chat over a poker game last week turned to Netflix's (NLFX) decision to raise prices for its DVD-delivery and Internet-streaming services, Darren Chervitz, director of research for Jacob Asset Management, became very nervous.
Everyone at the table planned to change part of their subscription to Netflix's service, Chervitz says. Some planned to drop delivery of DVDs and Blu-Ray discs, while others complained that the quality of the streaming content wasn't worth the increased price. As his firm is an investor in Netflix, it was not what Chervitz wanted to hear.
"Anecdotally, it's got me worried," Chervitz says. "This is a pretty significant change. Are they really going to be able to make this stick? The stock is expensive right now, so a misstep will not be taken lightly by the Street."
Keep an eye on funds tracking gambling, materials, energy and housing.
By Don Dion, TheStreet
Here are five exchange-traded funds to watch this week.
Last week, Wynn Resorts (WYNN) reported earnings, providing investors with insight into its performance over the past quarter and outlook for the gaming industry. The numbers were strong, highlighted by double-digit revenue increases at both its Las Vegas- and Macau-based establishments.
The standout performance seemed to be overshadowed, however, by the bold comments by CEO Steve Wynn in the conference call. When discussion turned to the topic of government, Wynn said, "This administration is the greatest wet blanket to business, progress, and job creation in my lifetime."
Semiconductors, beauty products and newspapers increased payouts last week.
Earnings season is in full swing, with many of the biggest companies reporting results over the past week. Stellar numbers from standout companies such as Apple (AAPL), McDonald’s (MCD) and Verizon (VZ) have grabbed the financial headlines, but on the dividend stock front, there's also been plenty of big news that's made investors smile.
We saw a bevy of big companies increasing payouts to shareholders, and that's a continuation of the trend we saw through the first six months of the year. Here are five noteworthy picks that just boosted their paydays:
It may be rough going early on, thanks to the debt ceiling debate, but earnings are likely to push stocks higher later in the week.
A strong performance by the S&P 500 last week masked underlying difficulties for a majority of stocks. The large index gained more than 2% last week, but other sectors lagged. The biggest gainers were from companies that reported strong earnings reports.
As for sentiment, there is still much fear in the market. Recent moves have been nice, but we are far from a rip-roaring rally even though corporate profit growth is strong.
This week will be marked by the pointed debate in Washington regarding raising the debt ceiling. On Friday after the market closed we learned that the bickering sides were retreating to their respective corners. Stocks are likely to be lower initially, but a debt ceiling rally could be in store later in the week.
I would view any selling on this issue as an opportunity to buy. The debt ceiling will be raised eventually.
The SPDR S&P 500 (SPY) is the ETF to own this week based on a continuation of the strong earnings results coming from companies that make up the index.
Gold, consumer goods and inflation-adjusted bonds suggest we should brace for rising prices.
By Jeff Reeves, Editor, InvestorPlace.com
There has been a lot of talk about unemployment lately, as a number of recent jobs reports have been disappointing. At the same time, the media remain focused on the looming Aug. 2 deadline to raise the debt ceiling. That has pushed one of the most pressing economic issues to the back seat. That issue is, of course, inflation.
Investors need to keep an eye on inflationary pressures for many reasons. Rising costs cut into margins for many industries, whether it's fuel costs for airlines or food costs for restaurants or materials costs for manufacturers. And, of course, you have to remember that your nest egg grows only if it can top the rate of inflation. A 1.2% high-yield savings account is actually a money-losing investment if the annualized rate of inflation hits 1.3% or higher.
The Federal Reserve and many politicians continue to insist that inflation is insubstantial. Maybe. But there also are signs it's a growing problem -- and five big reasons inflation is on the march:
As deadlock continues over a debt deal, ride out the impasse with good stocks and some gold and cash.
What happened? Did the politicians learn enough from the bad old Bear-Lehman days but not enough to make a difference? Is that where they came up with this oh-so-tense "by the time the Asian markets open" nonsense? Did they jog the cobwebs free from 2008, dust off the game plan and just go out with it, as if this is some sort of a simulated dramatic crisis?
It does seem that stupid, doesn't it? Almost as if they want the market to crash so each side can say, "We had to do it to save your 401k." That way everybody's butt is protected. They can say, "We did it for you, because look what happened when we didn't get it open in time for Asia."
Unfortunately for the "lawmakers," it looks like we didn't get much of a crash after all. It looks like we were as prepared for this one as we were unprepared for Bear. And where the heck is JPMorgan's (JPM) Jamie Dimon when you need him?
Last week's rally will need to last into an early-week deal in Washington on the debt ceiling, or we could see a correction ahead.
Any company with a 45% share -- and growing -- of a Chinese market is worth your attention.
US Bancorp is one U.S. bank that's actually seeing banking business grow.
Credit Suisse gets investigated. Carl Icahn raises his bid for Clorox. Lions Gate hires Charlie Sheen. Rupert Murdoch gets pie on his face.
By Gregg Greenberg, TheStreet
5. Credit Suisse gets clocked
Credit Suisse (CS) admitted late last week that the U.S. Justice Department is digging into its offshore business as part of a larger probe into suspected American tax cheats. Credit Suisse said it will work with the Feds within the parameters set by Swiss banking secrecy laws.
After blasting higher on fears over the US debt ceiling and a second Greek bailout, metals look vulnerable to a big pullback.
With all the chaos and volatility of the past few weeks -- from concerns over the economy, the U.S. debt ceiling, and a new, more dangerous phase in the European debt crisis -- one asset class has prospered. I'm taking about precious metals.
Since July 7, Gold SPDR (GLD) is up nearly 5%, while iShares Silver (SLV) has gained more than 10%. Over the same period, the S&P 500 is down around 1%, junk bonds are essentially unchanged, and iShares 20+ Treasury Bond (TLT) has added about 1.9%. I recommended that my readers and newsletter subscribers take advantage of the move back on July 12 via silver miner Silver Wheaton (SLW) and the leveraged ProShares Ultra Gold (UGL).
Now things are changing as investors regain their confidence and these big political concerns begin to fade. That leaves precious metals vulnerable to nasty short-term pullback. While I am still optimistic about the medium-term prospects for silver and gold, as I outlined in a recent column, now's the time for active traders to sell their positions and for long-term investors to step aside. Here's why.
Expect short-term pullbacks in these precious-metals ETFs to set up good buying opportunities next week.
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The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.
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[BRIEFING.COM] The major averages finished the Tuesday session near their lows with the Russell 2000 (-1.0%) leading the slide. The S&P 500 lost 0.5% with nine sectors ending in the red.
Equities indices started the day with modest gains and spent the first two hours of action in the neighborhood of their flat lines. Although the early trade lacked clear sector leadership, that could have been overlooked due to the strength among heavily-weighted sectors like health care (-0.3%), ... More
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