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There will be winners and losers if financial regulatory reform passes. Giant banks will be stung; smaller ones will win out.
Now we know why Wall Street lobbyists are out in force in the fight against financial regulatory reform.
The New York Times is reporting that new rules with respect to trading of derivative securities would cost banks billions.
Of course this issue boils down to big dollars. For too long Wall Street firms have operated in a shadow environment whereby the rules were fast and loose. As a result of market inefficiency with respect to complex financial derivatives, big bucks were made.
To the extent regulations are passed those profits could evaporate, hurting the biggest banks of the world. But that pain will benefit the smaller banks that I will mention below.
There are three areas to examine to see how global markets could perform in the future.
Remember that trends always run further and longer than investors expect. So what does that mean at the moment?
U.S. outperformance. The U.S. stock market will continue to be the best performing stock market in the world into the summer. The Bureau of Economic Analysis report Friday on first-quarter gross domestic product numbers didn't put a period to that trend.
A whistle-blowing lawyer claims Lehman's chief executive lied to Congress about his salary.
Pass the popcorn! Oh, wait. The case of the salary of former Lehman exec Richard Fuld is just a drop in the bucket. There are countless scandals now involving Wall Street bosses, their ridiculous salaries, the investor money they lost and how it all helped the economy implode.
Will the case of Dick Fuld's missing money get any traction? It all centers around the claim that Fuld, the boss at Lehman as the corporate ship was sinking, lied to lawmakers about the salary he was bringing home.
Warren Buffett's apprehension toward derivative reform is interesting, given his past view of this slice of the market.
By Don Dion, TheStreet
Given Warren Buffett's knack for making money, it's no wonder that the ears of investors around the globe perk up when he opens his mouth -- but what Buffett says doesn't always coincide with what he does.
During recent months, Buffett has diverged from his teachings several times.
At the end of 2009, Buffett expressed his disapproval for Kraft Foods' (KFT) stock-heavy bid for Cadbury.
The launch of instant coffee Via is only the beginning of an ambitious (but vague) product line for retailers.
That green Starbucks (SBUX) mermaid has long been a staple of cityscapes, airports and strip malls -- but if executives at the coffee company have their way, the logo will become just as prevalent on the shelves of your local grocery store.
Starbucks is making a concerted push into the staples retail marketplace -- starting with a new summer strategy that includes new ice cream flavors. (Check out the complete Starbucks summer menu here!)
Though some stores already carry the company’s coffee beans, this is just the beginning of an ambitious line of products across the next year or two that will put the company’s name on a variety of other foods consumers crave.
The recession just ended, but you can't expect companies to begin bringing employees back just yet.
We want badly to relate the end of a recession to hiring, but unfortunately for the millions of people who are unemployed, it doesn't work that way.
That disconnect is particularly problematic in this recession, with a proximate cause of a total shutdown of the credit markets. Many companies, in order to assure that they had access to the credit markets, had to fire people to show they had the cash flow necessary to get loans.
You can't expect companies, even within a year after firing people, to bring them back on. In fact, the only companies I have seen take that action are companies that furloughed people specifically to bring them back when things got better, a policy that was not widespread.
The history of leading economic indicators shows the recovery is well on its way since the market lows.
Plenty of investors still believe the U.S. economy is still just one shock away from another crash. But a hard look at the data shows that point of view simply doesn't hold water.
Look at the latest bullish housing market data for March -- including stronger permits and sales. Or check out the host of stocks raising dividends now that they're cash-rich once more. The list goes on.
If you're still turning up your nose at talk of the recovery, there's probably little that can be done to change your mind. But if anything will convince even the bearish bear that things aren't so bad, it's a set of charts showing strength in nearly all of the major economic indicators. Take a look:
Long-term investors might want to stay with Potash, but the company could face a rough year in 2010.
For the first quarter of 2010, the company reported earnings of $1.47 a share and revenue of $1.71 billion. Both numbers beat Wall Street projections of $1.32 per share for earnings and $1.48 billion for revenue.
Clearly good news. But then the report gets confusing.
Reading between the lines, there are signals that a deal could happen.
That's the conclusion of Bloomberg BusinessWeek, which parses some of Goldman's recent statements and sees the company signaling for a deal.
Case in point: Arthur Levitt, a former SEC chairman who is now an adviser to Goldman. "This is a suit which I think should be settled promptly, not just for Goldman Sachs, not just for the industry, but for the economy as a whole," he told Bloomberg TV.
The carmaker's shares have fallen in recent days as some analysts question Ford's growth potential.
By Andrea Tse, TheStreet
The reaction has hardly surprised Ford equity analysts.
"Ford has had a strong run over past year, so it's not surprising that people have locked in profits," Standard & Poor's analyst Efraim Levy says. "The question is, what will you do for me next?" Craig-Hallum Capital analyst Steve Dyer says "it's natural that people would begin to question how much upside is left."
The Apple chief executive pens a long and public letter about the deficiencies of Adobe's Flash.
That happened Thursday, when Jobs released 1,671 words about the Flash software system from Adobe (ADBE). Adobe shares dropped a couple of percentage points in response but were recovering at midday, while Apple shares were up slightly.
The letter may have been a defensive move in part, since Apple has taken a lot of heat for banning Flash from iPhones and its new iPad tablet. Flash is so pervasive online -- it's been the go-to platform for videos, advertising and games -- that banning it was a pretty shocking step (and, in the short term at least, one that hurts the experience of Apple users).
Friday's GDP report will show the recession is over, but that the recovery is moderate and disappointing.
By Peter Morici, TheStreet
On Friday, the Commerce Department will report its first-quarter gross domestic product estimate. Economists are forecasting a 3.5% increase, further confirming the end of the recession and that the recovery is moderate and disappointing.
Unemployment will hang above 8% or 9% well into 2011, and most workers will continue to face a tough job market and declining living standards.
This recovery is decidedly anti-middle class. Wages won’t keep up with rising prices, health care premiums and taxes. A good deal of the gains, so far, are going to Wall Street and the medical and intellectual property industries.
The coffee giant is looking to keep sales momentum going with a focus on Frappuccinos and even new ice cream flavors.
Seattle coffee icon Starbucks (SBUX) has made a comeback in 2010 after consumers fled during the Great Recession. In order to keep the profits percolating, SBUX is looking to roll out a fresh new menu of Frappuccinos and iced coffee for the hot summer months.
Among the new options are nonfat milk and sugar-free toppings that will keep the calorie count down. Currently a grande Caramel Frappuccino (the flavor that made the cool drink such a success) has 380 calories. The light version will have 160.
But perhaps most interesting of all is Starbucks’ push to offer exotic new flavors, bottled drinks to go and even ice cream as a way to up-size its sales this summer.
The timing and execution of the sale were all wrong.
By Jim Cramer, TheStreet
Here's a stock of a company that just reported a good quarter. It had a lot of momentum, and it was distinguishing itself as an international company with really excellent growth and a reformed management.
Any elementary trader, however, would know that until there is clarity -- no matter what kind of clarity -- in financial regulation, banks were going to be tough to buy. Too much uncertainty. So why sell now, when things are most in limbo? Strike one.
Transocean shares, already meeting resistance, could see more problems after last week's rig disaster.
Transocean (RIG) is the owner of Deepwater Horizon, the drilling rig that caught fire last week and eventually sank in the Gulf of Mexico with the loss of 11 workers. Those workers are still missing but presumed dead. Oil continues to leak from the well 4,500 feet below the surface.
The U.S. Coast Guard is setting some of the huge spill on fire as a way to reduce the danger to the Louisiana coast and the Gulf of Mexico.
I by no means want to say that this human and ecological disaster should be measured only in dollars and cents. But let's face it: The cost of this tragedy is what will drive the price of Transocean shares in the short term.
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The major averages saw little change during morning action, but afternoon buying interest helped lift the indices to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology outperformed. ... More
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