Stocks have rallied 177%, and while calling a top is the easiest thing to do, it might not be the most accurate, Cramer says.
VIDEO ON MSN MONEY
Investment managers offer their best stock ideas in response to Standard & Poor's decision to lower its rating outlook for US debt to 'negative.'
By Robert Holmes, TheStreet
Standard & Poor's decision to lower its outlook on the long-term rating of US sovereign debt to "negative" may have caught investors by surprise, but Michael Pento, senior economist with Euro Pacific Capital, has been making this case for years.
"It's not a surprise to me," Pento says of Standard & Poor's revision. "It's clearly late. But at least S&P is now waking up to the fact that the American sovereign debt picture is unsustainable and eventually we have to default on our debt in some form."
Just how late is S&P's revision to its outlook of U.S. debt? "I heard that the ratings agencies just downgraded the Titanic's chances of crossing the Atlantic," Pento jokes.
Investors have plowed more than $1 trillion into exchange-traded funds, which are getting increasingly complex.
ETFs are mutual funds that track an index, but unlike most mutual funds, they can be traded like stocks throughout the day. They're cheaper to trade than mutual funds, and they get traded a lot, creating a volatility that some experts are uncomfortable with.
ETFs started out simply, with the first one, SPDR S&P 500 (SPY), launching in 1993 to track the S&P 500-stock index, the Journal reports. But they've become increasingly complicated as Wall Street creates more complex schemes to make a buck. Some of the crazier ETFs can implode in an up-and-down market. In last May's Flash Crash, 70% of the securities that fell the most were ETFs, the Journal reports.
It's hard to ignore these funds, given their popularity. Investors have loaded more than $1 trillion into ETFs. But how can you control these potentially wild horses?
Post continues after this video about whether ETFs have gone too far:
Though the bank's stock is stuck below $5 and its first-quarter earnings fell, investors have been piling into the company. With video analysis on Citigroup's financial results.
By Frank Byrt, TheStreet
If you're an individual investor looking for a rifle-shot buy, Citigroup (C) may not be it, given the compelling alternatives in energy, metals and industrial stocks. But if you follow the wizened heads who run some of the biggest U.S. mutual funds, pay attention.
Mutual fund managers are piling into financial services, which badly lagged other sectors last year after rebounding strongly in 2009.
That's because Citigroup has been beaten down and may be at a generational low that's worth a look, since it's the world's largest and most diverse financial-services company. Big institutional investors are starting to load up on the stock.
Improving prospects for the industry, attractive yields and a positive technical picture make these plays worthy of consideration.
Management plots an uncertain future
By Rick Aristotle Munarriz
The meandering consumer electronics giant is looking to scale back its big-box presence in the coming years, realizing that consumers have moved on. Back-to-back quarters of cascading revenue, comps and earnings can be as sobering as a cup of coffee rimmed with smelling salts.
In an effort to regain relevance before it becomes the second coming -- and going -- of Circuit City, Best Buy is spelling out four paths for growth.
Funds tracking industrials, financials and techs should see an active week as key holdings report first-quarter earnings. With video.
By Don Dion, TheStreet
Here are five ETFs to watch this week.
XLI will be in the spotlight as six of the fund's top 15 holdings release their earnings performance reports over the course of the next week. Companies scheduled include General Electric (GE), Honeywell (HON), United Technologies (UTX), Union Pacific (UNP), Danaher (DHR) and CSX.
Although XLI witnessed an impressive run during the opening months of 2011, the fund has seen some choppy action in March and April. It will be interesting to see if earnings numbers from top holdings will be able to push the fund higher in the near term.
The German carmaker's ambitious goal to triple domestic sales relies on the stylish new Bug, a redesigned Passat and a new Tennesee auto plant. Includes video.
By Jeff Reeves, editor of InvestorPlace.com
With more than 21 million cars manufactured under the Beetle nameplate in the past 60-plus years, it's a bit shocking to consider the iconic Volkswagen car has seen only two major design schemes. Such big numbers on so few changes are proof of the compact car's resonance with motorists worldwide.
But with only 300,000 vehicles sold in the U.S. last year -- a mere 2.5% of the 11.6 million automobiles Americans purchased in 2010 -- Volkswagen has a long way to go before it is a serious player in the domestic auto market.
Stocks could rally as earnings season goes full swing during this holiday-shortened week.
Earnings season began last week with a thud as Alcoa started things off with an earnings report that was less than stellar. Investors sold shares hard and took the market down with Alcoa.
Only a late-week rally minimized the damage. Given that there were only a few data points offered during the week investors will have to wait for this week’s numbers before coming to any conclusions about the health of U.S. corporations.
I’m still expecting strong numbers for this earnings season and I would trade long accordingly. This week we get a larger volume of reports. How the market reacts to the news will go a long way to telling us if stocks have more room to run or will pull back from current levels.
My ETF to trade given my expectations for the market is the iShares Russell 2,000 Index (IWM).
The central bank has a tall order in the wake of the financial crisis, and its track record is far from perfect.
By Jeff Reeves, editor of InvestorPlace.com
Washington’s biggest problem right now isn’t the barely civil debate over the deficit or the looming deadline over the nation’s debt ceiling. Spending issues are surely a headache, but they probably don’t even make the top three behind the interrelated economic issues of the day – inflation, unemployment and general distrust of the Fed.
Many believe the Federal Reserve has failed in its dual responsibilities of controlling inflation and maximizing employment, and the institution is starting to feel the heat. And if the conversation in Washington doesn’t change back to economic issues like inflating gas prices and a stubbornly high unemployment rate, both Barack Obama and Ben Bernanke will be in deep trouble.
But is it fair to blame the Fed chairman for the mess we’re in, or the president for appointing Bernanke to a second term?
Even though the major averages closed lower for the week, they were also well off their lows. This should set the stage for a resumption of the rally next week.
Bank of America missed estimates for first quarter earnings partly due to mortgage settlements and lower mortgage income.
By Maria Woehr, TheStreet
The bank reported first quarter earnings of $2 billion, or 17 cents a share, missing Thompson Reuters analysts estimates of 27 cents a share.
Results were weighed down by a $38.5 billion settlement the bank reached with monoline insurer Assured Guaranty (AGO) that resolves its outstanding and potential repurchase claims against BofA. The agreement includes a cash payment of $1.1 billion to Assured Guaranty, and a loss-sharing reinsurance arrangement that has an expected value of approximately $470 million.
A better-than-expected report from Spanish retail bank Banesto reaffirms optimism in Banco Santander.
The chemicals giant builds on momentum from several quarters of strong earnings and hikes its dividend by 67%.
The company is raising its second-quarter dividend to 25 cents a share from 15 cents -- and the stock is responding with a rise of more than 2% Friday to $37.88.
The move was welcomed by investors who watched Dow cut its dividend for the first time in its history in early 2009. Dow slashed its dividend from 42 cents to 15 cents -- a move that helped the company pay for its $15.7 billion purchase of Rohm & Haas.
But Dow has surged on several quarters of strong earnings, building on other smart financial moves. The company has been serious about paying down its debt and growing earnings -- it repaid $2.5 billion, yes, billion, in the first quarter -- and analysts said it has gained more financial confidence.
As apple juice grows in popularity, one exchange thinks companies will trade futures as a hedge against volatility.
Apple juice is so hot, in fact, that commodities traders may soon be able to place bets on it. The Minneapolis Grain Exchange is preparing to list apple-juice futures, The Wall Street Journal reports.
Prices for raw materials are rising across the board, and companies want to be able to hedge against volatility, according to the Journal. Apple juice futures are one way of doing that. The idea might sound ludicrous, but it's being championed by PepsiCo (PEP), which sells apple juice in its Tropicana and Ocean Spray lines.
The move also comes as people have lost enthusiasm for orange juice, which has become more expensive over the years, the Journal reports. There are fewer orange crops now as orchards get bulldozed for housing developments -- and that has pushed prices up.
Post continues after this interview with Dole Food (DOLE) about orange juice:
Thursday's debacle was a huge black eye for Google. The new CEO's lack of leadership raises more doubts about his competence. Includes video.
By Eric Jackson, Forbes
Google's (GOOG) shares were lower in this morning's premarket than they were even in last night's after-hours when they showed a 5% drop on a 46% rise in operating expenses in the quarter. Despite a 29% increase in net revenues, the rise in expenses clearly spooked Wall Street.
Citi's (C) Mark Mahaney is out this morning with a cut target of $650 from $750. His language is coded to complain about Larry Page, Google's new CEO: "With limited management disclosure suggests lack of discipline in a growth/competitive environment that simply isn't as open-ended as it was for GOOG prior to the recession."
Translation: "A 38-year old's now in charge, and we're concerned with him running up wacky expenses like driverless cars and a new Google space program."
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Like many companies this winter, the fast-food giant blamed a drop in same-store sales on the weather. But could its problems be bigger than a snowbank?
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[BRIEFING.COM] The major averages began the new trading week on a slightly lower note with small caps leading the weakness. The Russell 2000 shed 0.3% while the S&P 500 slipped less than a point with six sectors ending in the red.
Equity indices began the day in negative territory with only the Nasdaq (-0.04%) making a very brief appearance in the green. After sliding through the first hour of action, the major averages reversed and spent the remainder of the session climbing off ... More
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