Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.
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Passing the president's jobs plan would be worse than doing nothing at all.
Does it matter what President Barack Obama does? Other than perhaps to declare a moratorium on changing anything?
We've had some classic examples in this one-two punch of "the jobs plan" and "how to pay for the jobs plan" that show me, increasingly, it doesn't matter.
Here's why. If you look at Obama's plan through a corroded prism, but one that has served you well, it's about giving money to state and local governments to keep paying highly unionized people on their payroll. It is also about keeping people from looking for work who would rather not take lower-paying jobs than they used to have -- remember, corrupted prism.
It is about payroll tax breaks for startup companies that don't even bother to care about this minuscule nonstarter, something that truly doesn't influence behavior of people who create small businesses. Heck, they expect to lose money when they start them, not worry about payroll tax exemptions. It is about giving people who work a couple of percentage points more on their wages, perhaps so they can shop at Target (TGT) and not Dollar General (DG).
If millions of Americans filed for Chapter 11 protection, people would suddenly have more spending money and companies would start hiring again, one columnist writes.
The idea isn't as half-baked as you might think. Tens of millions of homeowners could default on their mortgages and millions more could file for bankruptcy, Arends writes.
Why? Because the real problem with our economy is debt. American households owe $13.3 trillion -- an amount that has doubled in the past 11 years. "We're hocked up to the eyeballs, and then some. We're at the bottom of a lake of debt, lashed to an anchor," Arends writes.
While the overall market remains mired in a two-month trading range, evidence builds for an upside breakout as semiconductor stocks perk up.
If the financial markets are a battle field, then the fog of war down on Wall Street is particularly thick these days.
Stocks and other risky assets are rising and falling based on every rumor, whisper and denial out of Europe. On Monday, it was all about China using its $3.2 trillion stash of currency reserves to support Italy's bond market. Tuesday, it's all about a Dutch finance minister saying that a Greek default is unavoidable -- a statement that was later retracted.
But all the while, just beneath the tumult and turmoil on the surface, Wall Street insiders are stealthily accumulating new stakes in super sensitive sectors like semiconductors and transports. That, along with a number of positive technical signals, suggest that despite the euro zone worries a new medium-term uptrend is being formed. Here's why.
Believe it or not, there are signs the economy is better than many people say. A diversified portfolio should reflect that.
The European banking crisis, sluggish recent U.S. growth, a burgeoning deficit and national debt -- investors have had a lot troubling issues on their minds lately. And they should, as all of those are serious issues that should cause concern. But at the same time, some significant positive signs have been popping up -- and going largely unnoticed.
Retail and food service sales have been rising in recent months. Consumers are saving twice as much as they were heading into the Great Recession, and they are carrying their lightest debt loads since 1994. The service sector expanded at a healthy rate in August, and while manufacturing growth decelerated, it was still positive despite all of the turmoil last month, the Institute for Supply Management recently reported.
Investors are focusing primarily on the negatives, however, which isn't surprising, given that the wounds of the 2008-09 financial crisis and market collapse are still fresh. Having been burned badly, they are going to be skeptical of positive signs and seize on the negatives.
Fans of the store's new Missoni line apparently crashed the site after the collection launched.
Eager fashion fans crashed Target's (TGT) website Tuesday, bringing it down for hours as the company scrambled.
The troubles were apparently caused by Target's launch of a collection developed by Italian luxury line Missoni. By 9 a.m. ET, the site was down. Target was clearly working furiously -- the site would come back to life at times throughout the day -- but by the evening there were still problems.
It was no less chaotic inside Target's stores.
Encouraging trade data from China offer some hope for investors weighed down by European market fears.
By Don Dion, TheStreet
Although the turmoil in Greece, France, Germany and the rest of the euro monetary bloc will steal attention in the days ahead, I encourage investors to avoid being distracted from other, more promising events taking place elsewhere around the globe.
While Europe is under a deluge of dismal market-related news, other closely watched global players have actually enjoyed some promising economic data over the past few days.
Facing a higher tax rate in Obama's jobs bill, hedge fund managers are contributing more to GOP candidates. The move might be their most profitable bet this year.
By Robert Holmes, TheStreet
In a year of disappointing stock returns, it turns out that hedge funds' best investment may be in Republican presidential candidates.
The details of President Barack Obama's $447 billion jobs bill emerged Monday, and it was revealed that investment managers' gains would be taxed at the income tax level. The tax rate on carried interest income -- the profits investment managers are paid as compensation -- is currently 15%, below the income rate of 35%.
Obama's decision to take aim at the carried interest tax break is a direct hit at hedge funds and echoes calls made by billionaire investor Warren Buffett in his New York Times op-ed asking regulators to stop coddling the superrich. In the commentary, Buffett noted that he paid only 17% of his taxable income, a lower rate than even his secretary pays.
Many analysts expect metals to rise on continued stock weakness, but chart and volume patterns indicate they might be due for a decline of their own.
By Tom Aspray, MoneyShow.com
Since the July 7 closing high in the S&P 500 at 1353, weakness in the stock market has correlated to strength in gold prices. The December Comex gold futures contract is up 18.4% during this period, while the S&P is down 14.1%.
Tuesday’s early weakness in the stock market was met with some surprising strength into the close as the September E-mini S&P 500 futures closed 34 points above the day’s lows. This surely gave the bulls some hope and made those who were short quite nervous.
Overnight in Europe, stocks were lower on concerns over the health of European banks, but so far, the futures are holding up well. These banks have looked weak for some time, and the RS analysis on several suggested in August that the global banks could fall further.
So if stocks drop back to the August lows, does it mean that gold is going to rise another $50 or $100? It is always possible, but for the first time since early in the year, the volume analysis is showing signs of weakness, which points to a correction, not a further rally.
Expectations have finally fallen too low for the high-performance chip-maker.
First, the maker of high-performance, high-speed semiconductors for pretty much everything save Apple (AAPL) is on a major roll. It has won contract after contact and is, without a doubt, shining in an era when gaming has simply been one of the great secular growth stories.
Nvidia's chips are the graphics behind the bold, lifelike characters you see at the introduction to all of the football games, the electronics in cars and the lifelike players in games like Call of Duty. Intel's (INTC) chips just aren't fast enough. Only Nvidia can get it done. And when Intel tries to be in fast graphical user interface chips, it licenses them from Nvidia. There's no earnings risk.
The CEO, Jen-Hsun Huang, came out last week at a tech conference and raised numbers and then said that the new estimate is conservative, in part because the Chinese business is so, so strong. (People ask for custom-made PCs there, and because gaming is so strong in China, a preponderance of people want Nvidia's chips in their boxes.)
The US is too deficit-focused to stop the bleeding as China gains ground in alternative energy and other industries.
By Tom Taulli, InvestorPlace.com
About a year ago, President Barack Obama toured Solyndra, a top manufacturer of solar photovoltaic (PV) systems. It was a centerpiece of clean tech and how it would reinvigorate jobs. As a sign of importance of the company, the Department of Energy provided a $535 million loan guarantee.
Unfortunately, it has turned out to be a disaster. This month, Solyndra filed for bankruptcy, shut down its manufacturing facility and terminated about 1,100 employees. There are also concerns about fraud and book-cooking at the company.
Allegations of impropriety aside, Solyndra has a lot to say about the state of the U.S. alternative energy scene. It looks like China has been even more aggressive with its alternative energy investments -- and if America isn't careful, it could force us out of the green energy biz altogether.
The latest attack on banks sounds reasonable but makes no sense.
The housing crisis has defied both expectations and easy solutions, making a mockery of optimistic forecasts for years now. Yet the latest news on the housing front shows how little attention the federal government and big banks are paying to the real problem behind the crisis: depressed home prices that have paralyzed homeowners and lenders alike.
An unnecessary distraction
Last week, the Federal Housing Finance Agency sued 17 banks, alleging that they sold almost $200 billion in high-risk mortgage loans to Fannie Mae and Freddie Mac without full disclosure. With $57.4 billion in bonds at issue, Bank of America (BAC) faces the biggest potential liability, while JPMorgan Chase (JPM) has $33 billion in loans under review.
There's no denying that banks deserve some of the blame for bad loans. Controversies like the robo-signing scandal and other improper documentation for mortgages highlight just how messed up bank procedures were during the housing boom.
Even stocks with good fundamentals are getting hurt as investors turn against the European banking sector.
Companies are choosing to make products for the highest and lowest income levels -- not the gray area in between.
The middle class? History. The housing market bust and the high unemployment rate have taken a huge toll on what was once a steady middle class (families with annual incomes of between $50,000 and $140,000).
Now, companies are changing their focus to cater to the rich and the poor -- but not that crumbling area in between.
Over the past 5 years, these funds have returned 3% annually as the S&P 500 has dipped into the red.
By Stan Luxenberg, TheStreet
Struggling to protect their assets, investors have been turning to world allocation funds. The funds have the flexibility to dodge trouble spots and invest in promising stocks and bonds around the world.
During the past year, investors have poured $24 billion into world allocation funds, according to Morningstar. That was a striking showing at a time when many stock funds suffered big outflows. Steady performance has been attracting the inflows. During the past five years, world allocation funds returned 3% annually, while the S&P 500 ($INX) dipped into the red.
Some of the most popular world allocation funds make sudden tactical moves, emphasizing emerging markets one year and U.S. bonds the next. But many funds in the category shift only slowly. The aim is to deliver steady results and not necessarily call every market move.
Ted Weschler favors consumer-discretionary, financial and telecom companies that generate lots of cash.
By Robert Holmes, TheStreet
Berkshire Hathaway said Monday that Ted Weschler will join the company early in 2012 after he winds down his Peninsula Capital Advisors hedge fund. Weschler and Todd Combs, who was added to Berkshire last year, will each manage a portion of the equity portfolios of Berkshire's insurance subsidiaries.
"With Todd and Ted on board, Berkshire is well-positioned for successor investment management at the time Mr. Buffett is no longer CEO," Berkshire said in a statement Monday.
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4 analysts downgrade the stock the day after a disappointing quarterly report.
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[BRIEFING.COM] The stock market ended the Wednesday session on a mixed note. The tech-heavy Nasdaq displayed relative strength, climbing 0.4%, while the S&P 500 added 0.2% with five sectors settling in the green. For its part, the Dow Jones Industrial Average (-0.2%) spent the entire session below its flat line.
Equities started the midweek affair on a rather unassuming note in the absence of market-moving news or economic releases. With those pieces missing from the equation, ... More
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