Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.
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Around the world, central banks are dragging out or canceling interest-rate increases. The effect, however, is unclear.
A few thoughts after a wild few days.
By Morgan Housel
After several days, a stock market plunge and a flurry of finger-pointing, we're still trying to figure out what Standard & Poor's downgrade of U.S. Treasurys really means. Here are four points to keep in mind.
1. It had no impact on Treasurys. The biggest risk of a Treasury downgrade was the possibility that interest rates would rise. That could add trillions to future federal borrowing costs and stifle economic growth.
But interest rates didn't rise at all after the downgrade. In fact, they've plunged. Monday turned out to be the eighth best day for 10-year Treasurys in modern history. The biggest irony of downgrading Treasurys is that it instantly increased global demand for . . . Treasurys. One blogger, mocking the stereotypical investor, quipped: "Treasurys were downgraded? Wow! Sell my entire stock portfolio and get me into Treasurys!"
Sales are suspended for repricing as gold soars.
These are the gold numismatic coins sold to collectors, not the gold bullion coins sold to investors, the Mint told Reuters.
The problem was that the market price for gold bullion was fast approaching the price of gold collector coins. The U.S. Mint has the right to stop collector sales when that happens, but that apparently has never happened, at least as far as anyone can remember.
As stocks flirt with losses of 20% or more, many observers are calling for the end of the March 2009 uptrend. Here's why they're wrong.
It's been a brutal few weeks. Stocks at home and abroad have been pummeled by the combination of fresh recession fears and financial panic. Instead of focusing on solid second-quarter earnings or a slowly improving jobs picture, all eyes were on sovereign debt concerns and the rising potential of two disaster scenarios: a default by the U.S. Treasury and a breakup of the eurozone.
As a result, a number of major stock averages have fallen more than the 20% technical guideline used to define new bear phases. The Russell 2000 Small Cap Index is down more than 22% from its high. The iShares Transportation (IYT) is down nearly 21%. Markets in Brazil, France, Germany, China and India have also crossed the 20% threshold.
Yet mindless terror is now giving way to a more reasoned analysis as stocks whipsaw near their lows. The surge of buying in U.S. Treasury bonds proves America still issues the reserve asset of choice and retains its haven status. And a big drop in Spanish and Italian bond yields shows that European policymakers are serious about ring-fencing their problems.
This is the bottoming process I've been waiting for. And it's a sign that the time to start buying up stocks at deeply discounted prices is nearly here. Here's why.
One enterprising designer is turning the convicted fraudster's old pants into pricey tablet covers.
And now what once covered Madoff's rear end can protect your iPad.
Introducing the Bernie Madoff collection at Frederick James, a designer that makes iPad covers from "rescued" and vintage fabrics. Frederick James won 16 pairs of Madoff's pants at an auction in 2010 and turned them into iPad covers selling for between $250 and $500 each.
For $350, you can get the Ralph Lauren Polo blue khaki pants cover.
Even after sharp recent declines, the chart patterns show that four of the most prominent global bank stocks still have more downside potential.
It's a good time to buy stocks at current depressed levels. Here's a start.
By Jamie Dlugosch, Stockpickr
In September 2008, I wrote that it was not too late to sell stocks. With the market in the middle of a sell-off, that article went against the grain of popular opinion. I was proud of the result. The S&P 500 ($INX) ultimately lost 39% between September 2008 and March 9, 2009, when the market hit its low.
I bring this to your attention as we attempt to deal with the current market environment. Should investors sell? Should investors buy? Should investors buy gold? These are legitimate questions, to which many people are desperately seeking answers.
Despite recent volatility, the Oracle has maintained his faith in the US economy and a long-term investment approach.
By Don Dion, TheStreet
The past week's gut-wrenchingly volatile market action has stoked fears into the hearts of even the most confident investors. One individual who appears solidly set in his bullish ways, however, is Warren Buffett.
On a number of occasions, I have commented on the Oracle of Omaha's unwavering optimistic view of the ongoing global economic recovery. Using a variety of mediums including New York Times op-eds, shareholder letters, and sit-down interviews, the billionaire investor has attempted to ease investor fears, arguing that the world's largest economy still holds promise over the long run.
As investors have clamored and panicked following Standard & Poor's' credit downgrade and renewed concerns over the European debt crisis, Buffett has once again taken to the stage in an effort to quell fears.
Orders miraculously pick up, giving the company and investors a sense that the worst of the tech spending slump might be over.
By Scott Moritz, TheStreet
The unexpected optimism sent Cisco shares up 15% in early trading Thursday, helping to lift the Nasdaq ($COMPX) almost 3% and boosting peers like Juniper (JNPR) and tech giants like Microsoft (MSFT), which were surging 7% and 3%, respectively. (Microsoft owns and publishes MSN Money.)
"The key takeaway is that things have likely stopped getting worse, even if the company is still facing competitive threats," Morgan Stanley analyst Ehud Gelblum wrote in a note Thursday, upgrading Cisco to a buy.
A portfolio of master limited partnerships that yields roughly 6% is there for the asking.
That's the only explanation that I can come up with for the incredible resurgence in master limited partnerships Wednesday. On a day when the Dow ($INDU) tanked more than 500 points, almost all were up, as witnessed by the moves in Enterprise Products Partners (EPD), Markwest Energy (MWE) and Energy Transfer Partners (ETP).
I don't care that I sound like a broken record about yield, but a portfolio of master limited partnerships that yields roughly 6% is there for the asking. These MLPs are amazing in their comebacks, as anyone who bought Linn Energy Limited Liability (LINE) the other day, catching a monster move, knows.
You just caught a four-point move from the $32 level simply focusing on yield, or focusing on insider buying, which is aggressive in LINE.
Buffett and other top investment experts believe in America over the long term -- and you should, too.
By Jeff Reeves, Editor, InvestorPlace.com
Warren Buffett isn't too worried about the recent market mayhem or the big, bad S&P downgrade. And as you watch your own portfolio gyrate wildly, it's worth remembering seven simple words from the Oracle of Omaha: "It's never paid to bet against America."
Yet if you turn on the TV, you will find plenty of fund managers in $5,000 suits who argue the opposite. Buy gold, short Treasury bonds or the dollar, prepare for the worst! So who is right?
The answer lies in your point of view. Many Wall Streeters view the market day to day, minute to minute. And there's a very good chance we will see things stay rocky for a while. But the good news is that things will turn around -- and may do so faster than you think, based on the words of Buffett and other investment experts.
The tech giant ends the trading day as No. 1, beating Exxon Mobil in terms of market value.
Apple was headed for the top spot Tuesday, only to be foiled by Exxon in the afternoon. That changed Wednesday, when Apple finished out the day with a stock price that fell 2.8% to $363.69 -- giving it a market value of $337 billion. Exxon shares tumbled 4.4% to close at $68.03, making its market cap $331 billion.
The opportunity of panic.
By Morgan Housel
After Standard & Poor's downgraded America's credit rating Friday and the stock market lost itself entirely Monday, everyone's emotions are running high. Mine have gone like this. When news of the downgrade hit, I thought, "Eh, no big deal." In April, S&P gave 50-50 odds of a downgrade if last week's debt-ceiling deal didn't cut $4 trillion from future deficits. The deal didn't. So who was surprised? After I read why S&P made the downgrade, I became annoyed. After Monday's 600-point bloodbath, I'm now angry. You should be, too.
Who am I angry with? Washington. By S&P's account, they are the sole reason the nation's credit was downgraded. Few sensible people think the U.S. lacks the economic means to pay its bills. Push comes to shove, and taxes can be raised or money can be printed. These create a litany of other problems, but they invariably solve a debt problem. America can pay its debts.
The real roadblock is the political acid that gets in the way of our debt management.
The company's recent quarter wasn't that bad, but the overall market drop is adding to the stock's woes Wednesday.
Updated: 7:27 p.m. ET
Investors punished Disney (DIS) Wednesday, sending shares down 9.1% on concerns about the economy. The stock ended afternoon trading at $31.54, and was only slightly higher after hours.
Disney was the biggest loser in the S&P 500 today, and that's saying something. The problem for the company was that it reported quarterly earnings Tuesday that didn't seem that bad on the surface. But get a little deeper into the numbers and there were problems galore.
The central bank's promise of further action is only enabling investors.
By Robert Holmes, TheStreet
The Federal Reserve has turned into the ultimate pusher, and quantitative easing is the drug that investors want badly. The question now is whether any good would come of allowing the central bank to continue to enable the markets.
Witness Tuesday's dramatic sell-off following the latest statement on interest rates, which was followed by a dramatic surge into the closing bell and an equally dramatic plunge at the open Wednesday. The Dow Jones Industrial Average ($INDU), which rocketed higher by more than 250 points in the last half hour of trading Tuesday, gave back that gain and more.
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[BRIEFING.COM] The S&P 500 (-0.1%) began the session on a slightly higher note before joining the Dow Jones Industrial Average (-0.3%) in the red. Most notably, the price-weighted Dow has been pressured by Boeing (BA 127.40, -2.34), which trades lower by 1.8% despite beating earnings estimates.
On the upside, the health care sector (+0.8%) trades ahead of the remaining groups thanks to an earnings beat from Biogen Idec (BIIB 339.30, +35.62). The stock sports an advance ... More
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