5 reasons the market is seeing red
5 reasons the market is seeing red

Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.

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Emerging markets often bottom ahead of developed ones, and if Japanese investors are right, these Brazil ETFs may present some interesting opportunities.

By MoneyShow.com Sep 7, 2011 12:06PM

By Tom Aspray, MoneyShow.com


Recent data from Lipper Financial indicates that in the past two years, Japanese investors have invested more than $100 billion in mutual funds tied to the Brazilian economy. The past few months have been quite hard on these investments, as the move out of higher-risk assets has hurt emerging markets.


The currency markets have not helped. The carry trade made the Brazilian real attractive to the Japanese, who could borrow at 0.1% in Japan and get 12.5% in Brazil.


The recent sharp rise in the yen, and fall in the Brazilian real, has dampened this enthusiasm. The prevailing wisdom is that the yen would have to get much stronger to cause significant unwinding of this position.


The recent rate cut in Brazil caught the markets by surprise, as inflation has risen sharply for the past 12 months. It is hoped that the cut will help the Brazilian economy stay strong as concerns grow over a global economic slowdown.


Often, emerging markets will bottom out ahead of developed markets, so I am closely watching the technical action of the Brazilian markets.

 

A rising greenback, spurred by currency events in Europe, helps knock the wind out of the precious-metals bubble.

By Anthony Mirhaydari Sep 7, 2011 11:46AM

Just when everyone had left the U.S. dollar for dead, abandoning the world's reserve currency for alternatives like the Swiss franc and gold bullion, it has risen from the dead. Like Lazarus. Only instead of waiting four days for resurrection, it has taken more than 15 months to perk up again.

 

The catalyst, as I discussed in a blog post last week, has been weakness in the euro as currency traders anticipate an end to the European Central Bank's rate-hiking campaign at its next policy announcement Thursday. After two rate hikes this year, the expectation is that the ECB will have no choice but to lighten up as bond yields in Greece, Italy and Spain rise on renewed sovereign debt concerns. Also contributing was a move by the Swiss National Bank to peg the franc to the euro to stem a flood of haven inflows into the currency -- an action that has weakened the euro against the dollar.

 

As a result, dollar-sensitive assets like crude oil, copper and precious metals came under pressure in Tuesday's trading. But while I think crude and copper will rebound along with stock prices as traders discount a re-acceleration of economic growth thanks to soon-to-be-announced stimulus measures, the same can't be said for gold and silver. Here's why.

 

Gold and dividend funds offer some safety when stock markets are rough.

By TheStreet Staff Sep 7, 2011 11:24AM

By Don Dion, TheStreetTheStreet

 

It's common for trading to be volatile during short trading weeks, and this week is no different. After a dismal Monday overseas, U.S. investors returned from the Labor Day weekend to find heavy losses.

 

In recent weeks, I have highlighted a variety of conservative assets investors can turn to for shelter from the economic storms. In the days ahead, many of these securities will offer welcome relief.

 

It's crucial to note that not all market shields are created equal. Before diving into any position, do your homework.

 

Things might get turbulent for Google shareholders in late October when Motorola reports its next earnings.

By TheStreet Staff Sep 7, 2011 10:32AM

the streetBy Eric Jackson, TheStreet

 

This year has been marked by dramatic change forGoogle (GOOG). For the first time since its IPO in 2004, the company changed CEOs.

 

It replaced a trusted hand -- CEO Eric Schmidt, who arguably is still young (56), with years left before he's ready to be put out to pasture -- with a young and unproven co-founder in Larry Page.

 

I warned earlier this year that Google stock shouldn't be owned for the next six months when the company made the announcement in January that Page was taking over for Schmidt. That call was correct, as Google's stock dropped from $626 on Jan. 20 when the succession was announced to $484 on June 20 -- a decline of 23%.

 

It's appropriate now to take a step back and see where Google really is in its own development and as a stock. In late June, Google bottomed out at around $474. After that, the stock jumped on its Q2 earnings and expectations.

 

The bank is in a constant state of patching its holes.

By InvestorPlace Sep 7, 2011 9:46AM
By Jeff Reeves, InvestorPlace.com

August certainly was an interesting month for the stock market. The Dow suffered about a 5% decline and the S&P lost almost 7%, but that's not the whole story. A chart of the major indexes looks like a big W, thanks to white-knuckle volatility, with the Dow Jones Industrial Average having moved in a roughly 1,500-point range. Some traders made a mint on well-timed buys.

One of the biggest movers in August was Bank of America (BAC). The financial stock shed about 18.5% last month to continue its ugly streak in 2011. However, shares did leap from $6 to $8 in just two trading days, rewarding those savvy few who bought the bottom.


Amid this volatility, the billion-dollar question for B of A investors should be whether the stock has the potential for another big move like that. Unfortunately, the direction of this stock seems to be down, down, down.

 

When the current decline is over, shop from this list of stocks that hit 52-week highs last week.

By Jim Cramer Sep 7, 2011 9:11AM

the streetjim cramerIf you want to know what to buy and when to buy it, I am excerpting here a list from Briefing.com of the stocks that hit 52-week highs last week.

 

Now, you know that I like the higher yielders, but these stocks represent the market’s favorites while Europe was brewing. They are stocks that I think represent the places to go after the decline is over. We are so not there, but I think you need to be prepped.

 

I am editing the list to home in on stocks I like, and I am taking out the gold stocks -- a substantial part of the list -- because I like the SPDR Gold Trust (GLD) and because I accept that the gold stocks will remain "go to" as long as we are in a race to debase currencies. Basically, I like all of the gold stocks, but my favorites remain Randgold Resources (GOLD) and Goldcorp (GG).

 

First are the soft-goods stocks, and there I want to highlight Bristol-Myers Squibb (BMY), Kimberly-Clark (KMB), Coca-Cola (KO), Colgate-Palmolive (CL), Diamond Foods (DMND) and Church & Dwight (CHD). These managed to rally despite all of the negativity, and I believe that they should be front and center on your screen. Please keep in mind that the issue here is recession, and these all work in a recession.

 

At this point, the best hope for the fallen Internet giant in the long term is a buyout deal.

By InvestorPlace Sep 7, 2011 6:05AM

By Jeff Reeves, Editor, InvestorPlace.com


jeff reeves top stocksYahoo Inc. (YHOO) hired Carol Bartz in early 2009 to right the struggling media giant. Hard-charging Bartz moved quickly, upending the Yahoo org chart, imposing a near-secretive culture on the Silicon Valley company and slashing 675 jobs, or 5% of staffers, on top of the 1,600 laid off the previous year.


The result? Yahoo is no better off than when Bartz took over. Yahoo stock traded at $12.10 on Jan. 13, 2009, when Bartz took over. As of Tuesday's close (before Wall Street cheered the CEO's firing and bid up shares), YHOO was at $12.91 for a nearly 6% loss. Revenue has also seen a slow decline year over year from fiscal 2009 to 2010, with another projected slide for this year too.


Not surprisingly, Bartz is out despite a year left on her contract. But now the question on everyone's mind now is whether anyone can save Yahoo.

 

The company may be rethinking its IPO plans, and that's probably a good thing.

By Kim Peterson Sep 6, 2011 5:08PM
Groupon was so hot last year that it turned down a $6 billion acquisition offer from Google (GOOG). Wall Street saw that and eagerly awaited an IPO, figuring that any company that would say no to $6 billion had huge plans in the works.

Unfortunately, it's been downhill for Groupon since then.

This week brings word that Groupon is rethinking its plans for an initial public offering. 

The only thing the Ford Evos Concept won't do is run all-electric.

By Motley Fool Pick of the Day Sep 6, 2011 4:47PM

By Evan Niu

 

What do you get when you mix various popular consumer and technology shifts like cloud computing, social networking, and plug-in hybrids? The Ford (F) Evos Concept, of course!

 

The slick-looking concept vehicle features "gull-wing" doors (think Back to the Future) and is set to be unveiled later this month at the Frankfurt Motor Show. In addition to being a plug-in hybrid, it will be integrated into your personal cloud of information, ranging from your work schedule and music preferences to keeping up with local weather conditions.

 

It will even socially network with your friends to recommend better driving routes. The idea is to allow the car to get to know the driver in a way that personally tailors the driving experience. The company goes as far as to say that the Evos will get "to know you and can act as a personal assistant to handle some of the usual routines of a daily commute."

 

Europe will tackle a number of crucial economic issues this month, and markets may stay unsettled until October.

By Jim J. Jubak Sep 6, 2011 2:44PM
Jim JubakThe news flow from Europe in September is full of deadlines and threats. It’s hard for me to see global financial markets finding their footing until this giant bulge of unsettling news has passed through the anaconda.

Here's what Europe can expect over the next month:

Sept. 8:
The hope is that the monthly press conference from the European Central Bank will bring assurances that the bank will continue to buy Italian and Spanish government bonds to support the price of that debt. The bank bought roughly $20 billion in bonds (mostly Italian and Spanish) last week.

However, incoming European Central Bank President Mario Draghi, who takes over on Nov. 1, has warned recently that the buying should not be taken for granted.
 

ETFs that invest in telecom, banks and agriculture will be in the spotlight as investors nervously monitor this week's market action.

By TheStreet Staff Sep 6, 2011 12:57PM

By Don Dion, TheStreetTheStreet

 

Here are five ETFs to watch this week.

 

1. iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ)

 

The telecommunications industry was in the spotlight last week following reports that the Justice Department was suing to block AT&T's (T) proposed multibillion dollar plan to acquire T-Mobile because it would impede competition and hurt consumers.

 

If you're looking to sell shares of large banks after Friday's FHFA lawsuits, it's probably too late. Instead, consider the many solid banks that don't have mortgage targets on their backs.

By TheStreet Staff Sep 6, 2011 12:33PM

By Philip Van Doorn, TheStreetTheStreet

 

If you're thinking of dumping large bank stocks Tuesday in reaction to last week's FHFA lawsuit bombshell, you might want to reconsider.

 

Instead, take a deep breath and mull some other bank stock opportunities, because the automated traders and other market pros will clean your clock if you try to trade based on the lawsuit headlines.

 

It's perfectly understandable for bank stock investors to panic over the long holiday weekend. After all, it was a week of maximum pain for Bank of America (BAC), with the Federal Deposit Insurance Corp., a subsidiary of U.S. Bancorp (USB) and Goldman Sachs (GS) joining the throng of parties objecting to BofA's previous $8.5 billion settlement of Countrywide mortgage putback claims.

 

Sell this cosmetic and fragrence retailer before it releases earnings Thursday

By Jamie Dlugosch Sep 6, 2011 12:14PM

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.

 

Understanding how investors use earnings against Wall Street estimates creates a profitable trading opportunity. Using a few key variables combined with understanding how the market will react to new information can guide you how to trade a stock in advance of the news being reported.

 

Use the Earnings Predictor to help you identify winning trades. On Thursday Ulta Salon (ULTA) reports earnings for the quarter ending July 31, 2011.

 

These Dow stocks are part of a very select group to have gained this year, and all show bullish chart patterns and would be good buys on a further market correction.

By MoneyShow.com Sep 6, 2011 11:07AM
By Tom Aspray, MoneyShow.com

Friday’s sharply lower close likely sets the stage for more selling this week. 

For the year, the Dow Transportation Average and the small-capitalization stocks have been hit the hardest, as both are down close to 13% for the year. Of course, the NYSE Financial Index is even worse, having declined almost 18% this year.

According to The Wall Street Journal, anyone who invested $1000 in each of the Dow’s 30 stocks and reinvested the dividends would have lost 5.7%. 

Still, there are nine stocks in the Dow Industrials that are up for the year (including re-invested dividends).
 

The upcoming iPhone 5 launch will be the first major product release since Steve Jobs resigned, a crucial moment for the company’s new CEO Tim Cook.

By TheStreet Staff Sep 6, 2011 10:45AM

the streetBy James Rogers, TheStreet

 

These are momentous times at Apple (AAPL). Just a couple of weeks after Steve Jobs stepped down, new CEO Tim Cook gets to launch a major product: the iPhone 5.

 

What can investors expect from the new iPhone launch, rumored to be imminent? Initial speculation tagged Sep. 7 as a potential launch date, although this now seems unlikely. Apple, however, typically debuts a major product in the late summer/early fall.

 

With Apple under increasing pressure from a deluge of Google (GOOG) Android devices, the stakes are high for the new iPhone, said Sandeep Aggarwal, an analyst at research firm Digital Route.

 

"Given that Android has become a much stronger competitor since the last iPhone release, Apple must show some killer features/apps to make a bigger dent in the Android ecosystem," he told TheStreet.

 

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[BRIEFING.COM]

  • Coffee futures are up big again on Brazil concerns. I noted yesterday that it was over 5% higher at $1.92/lb. Today, coffee is +6.1% at $2.07/lb.
  • Crude oil remains in the red  and is down significantly in recent sessions. Wednesday's bearish inventory data helped to extend losses this week
  • Since a recent high on June 20, crude oil is down about $8.50/barrel
  • Today, Sept crude oil is -0.7% at $97.46/barrel
  • Natural gas was in the red ... More


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