The most likely scenario is that the markets will begin to rise from here -- and that bounce is just beginning to take hold.
VIDEO ON MSN MONEY
The charts of 3 funds in particular look the strongest, and bullish signs from another potential standout sector are emerging.
By Tom Aspray, MoneyShow.com
The second quarter has been a tough one for the major averages, and the first day of trading in June has many people concerned about how the quarter will end. There have been only a few bright spots among the major market sectors, as four of the nine are currently underperforming the S&P 500.
On April 15, I analyzed the major sectors and used relative performance, or RS analysis, to identify Two New Market-Leading Sectors. Those were health care, as represented by the Select Sector SPDR - Health Care (XLV), and consumer staples, as tracked by the Select Sector SPDR - Consumer Staples (XLP).
Real-estate securities yield as much as 19% at a time when equities are about to lose some of the Fed's support.
By Jake Lynch, TheStreet
Federal Reserve Chairman Ben Bernanke has indicated that the hurdle for QE3 is very high. Other Fed governors have echoed this sentiment and, given the QE2-backlash from politicians and the recent ramp in commodity prices, the Fed wouldn't consider more easing unless deflation emerged and a double-dip recession loomed.
As QE2 ends, there are other significant headwinds facing the economy. In the past two weeks, every single economic report has missed its consensus projection. Consumer confidence posted a disconcerting drop and the S&P Case-Shiller Home Price Index fell to an all-time low.
In many ways, the issues that caused the Great Recession are still prevalent and dogging growth. In this environment, with the government tackling budget cuts and employment stagnating, the Fed funds rate is likely to remain at zero, longer than previously expected.
Users of the deal-a-day site stand to save even more money on heavier discounts. Includes video.
By Miriam Marcus Reimer, TheStreet
Groupon is looking to raise $750 million through its impending IPO, giving the company capital to continue to build its business and providing a windfall for its owners.
Nokia makes an 'Elop flop.' Zuckerberg starts killing his own meat. The safety of mobile phones remains in question after major WHO announcement. Goldman Sachs' Libya dealings come to light.
Here is this week's roundup of the dumbest actions on Wall Street.
5. Nokia takes the Elop flop
Nokia's rough road to recovery got even rockier Tuesday as the phone giant cut its second-quarter sales forecast due to weak demand.
Stocks have been trading in lockstep with the dollar-euro relationship, but this market needs good news out of Europe, not more bad news from the US.
The CurrencyShares Euro Trust (FXE) has been a terrific barometer of the action for several months now. On Thursday it was a good one that just turned bad.
When the dollar plunged on the Moody's warning, of course sending the FXE higher, the Dow shot up to even instantly. There are clearly buy programs that kick in automatically. Did anyone think that, by now, in a world dominated by high-frequency trading, there would be anything different?
But then the market came right back down, a recognition, perhaps, that we don't want the dollar to weaken on a default basis, and that anything short of a real debt deal and a real cut in the budget will actually send rates higher and derail what, until recently, had been considered an anemic recovery to begin with.
The mining equipment maker impresses in its second quarter, and investors push up shares more than 5%.
Revenue climbed 19% from the second quarter of fiscal 2010 to $1.06 billion. That was slightly above the consensus forecast of $1.03 billion.
Another increase in guidance for the full 2011 fiscal year: For fiscal 2011, the company now sees earnings of $5.30-$5.60 a share (former guidance was $5.10-$5.40). Wall Street analysts had been projecting earnings per share of $5.41.
Revenue, the company now projects, will total $4.1 billion-$4.3 billion. That's above former guidance of $4 billion-$4.2 billion. (The Wall Street consensus was $4.17 billion.)
The daily deals site wants to raise $750 million in an IPO, trading under the symbol 'GRPN.'
The site, which offers daily discounts at local shops and restaurants, filed plans today to raise $750 million in an initial public offering, creating a new wave of anticipation among investors who want to cash in on social media.
Groupon had been on this path ever since it rejected a $6 billion offer from Google (GOOG) last December. The company pioneered the daily-deals business, and was rewarded by seeing a rash of competitors and clones. Google, Facebook, LivingSocial and Amazon (AMZN) have all jumped into the pool, offering customers discounts at hair salons, photography studios, restaurants and other stores.
Post continues after this video about Groupon's IPO filing:
At least one major cable company said that the focus should be more on Internet than anything else.
But times have changed. As the economy turned sour, people were open to ditching the digital phone. And some have cut the cable cord, too, relying on Hulu and Netflix (NFLX) instead.
But the one part of that triple play that people absolutely can't live without is their Internet connection. And that's causing cable companies to shift their focus from triple play to selling the single play of broadband Internet.
One investor says the pieces are in place for the market to go sky high.
One reason Altucher is bullish is because the Federal Reserve's second round of quantitative easing hasn't really started yet. Last November, the Fed said it would buy $600 billion in long-term Treasury bonds, hoping to juice the economy by unleashing new money.
Federal stimulus takes six to 18 months before one dollar of it means something to the economy, Altucher writes. He expects that $600 billion to make an impact toward the end of this year.
Altucher's also optimistic because President Barack Obama extended the tax cuts he inherited from his predecessor. Altucher even calls Obama's presidency the "third administration" of George W. Bush.
As the weather warmed up in May, same-store sales cooled off. Here's a look at retailers showing some cracks.
By Jeanine Poggi, TheStreet
As the weather heated up in May, retail same-store sales cooled off.
Of the 23 retailers tracked by TheStreet, 12 missed Wall Street's estimates, with even some of the top-notch performers disappointing.
"Unlike the April same-store sales report, May's batch of numbers contained a singular message," Wall Street Strategies analyst Brian Sozzi wrote in a note. "That message, echoing the commentary on first-quarter earnings conference calls, is one of reality coming home to roost."
Before simply giving in to the widespread selling and panic that has swept the markets this week, take a look at the current technical picture for help in making more calm, well-educated decisions.
By Tom Aspray, MoneyShow.com
After weathering a torrent of worrisome economic and financial news over the past few weeks, stocks hit the tipping point on Wednesday, as the selling was heavy for most of the day.
Today’s Wall Street Journal headline announced “Economic Outlook Darkens.” The combination of a weaker-than-expected ADP employment report, a sharp decline in manufacturing output, and a late-day downgrade of Greece’s debt combined to keep the selling pressure heavy.
One measure of how negative the action was is that only ten S&P 500 stocks were higher on the day. As I have been noting for the past week or so, the sentiment measures for the stock market are more consistent with a market bottom, not a top.
This week’s sentiment reading from the American Association of Individual Investors (AAII) is likely to show a further decline in bullishness, as it will approach last summer’s lows of 20.7% bulls. Newsletter writers, while bullish overall, still have a high percentage who are looking for a correction.
Wednesday’s stock market decline clearly reversed the positives from Tuesday’s strong gains, but is it really the start of a more significant market correction?
I think it is impossible to gauge the true state of the economy or the direction of stock prices from monthly economic numbers that are always subject to revision. Therefore, the most objective approach is to look at the technical outlook to determine the market’s direction.
The overseas markets are sharply lower in early trading on Thursday, as those markets are now reacting to the US market troubles, but is a waterfall decline likely? Take a look at the technical evidence first; then decide.
Patience? Ding. Checklist? Ding. TV news? Bzzzt.
Reuters blogger Felix Salmon posted a video last week arguing against attending meetings like the Ira Sohn conference in New York, an annual gathering in which some of the world's richest hedge fund managers talk about themselves and share an investing idea or two.
These people are just talking up their books, Salmon says. Sales pitches. Infomercials. As he puts it: "If you want to go there and spend your money and eat, like, rubber chicken and rub shoulders with plutocrats, then all power to you. But don't pretend that you're doing this for your investment portfolio."
Joe Weisenthal of Business Insider came back with a thoughtful rebuttal. Chasing stock tips might be futile, he said, but "It's not often that you get to hear the thought process and reasoning employed by these financial professionals."
As the retail giant holds its annual meeting, investors wonder: When will US sales recover?
By Jeanine Poggi, TheStreet
Everyone from Miley Cyrus to "American Idol" Season 9 winner Lee DeWyze has performed at the Bud Walton Arena in Arkansas, the state where Wal-Mart is based. Actor, comedian and singer Jamie Foxx hosted last year's spectacle, which also featured double-dutch jumping unicyclists and belly dancers.
But it will take more than pop icons to overshadow the biggest question concerning Wall Street: When will Wal-Mart's domestic sales recover?
With buzz-worthy debuts from LinkedIn and Yandex, it's been a strong year for initial public offerings. But it seems like there are just as many losers as winners.
Updated: 4:40 p.m. ET
By Debra Borchardt, TheStreet
LinkedIn (LNKD) set the bar pretty high for initial public offerings with its scorching debut last month, and that kind of trading can help the wider IPO market by fueling demand for the next batch of new companies to go public.
Several prominent IPOs followed on the heels of LinkedIn's offering, and today coupon website Groupon joined the fray by filing to go public.
The vast majority of retail investors, of course, don't get to buy in at the offering price. Those allocations are doled out to institutional players and a few lucky retail brokerage clients. Even then, those brokerage clients only get tiny slivers of the sale. That leaves everyone else waiting until the stock's debut to get a piece of the action.
Following LinkedIn and the massive $10 billion offering of Glencore International on the London Stock Exchange, the total value of global IPOs reached $80.3 billion year-to-date as of May 20, according to Thomson Reuters, up 1% from 2010's pace. And that doesn't include Yandex (YNDX) and a host of other debuts that went off with varying success as the month drew to a close.
Despite a blowout quarter from the equipment maker, in this market, it's futile to pick up shares until they fall -- like it or not.
But it's amusing to think of it like this: When you go through the earnings release, there is nothing but net. Raised outlooks; positive items about coal, iron, copper and oil; demand soaring from China and India. All the right touchstones.
All of the things that would ordinarily have sent it up 10% today and then kept it up in subsequent days.
In this market, though, it doesn't matter, because we are staring at sub-3% bond yields on the 10-year Treasury, which confirms that the recession is back -- except this time neither the Fed nor Congress can come to the rescue. That is the mindset of this market, like it or not.
MORE ON MSN MONEY
Copyright © 2014 Microsoft. All rights reserved.
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|