8 reasons the market isn't worse
8 reasons the market isn't worse

Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.

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Despite high expectations, the Fed chief's speech was no repeat of last year's confidence-boosting performance. That's a shame.

By Anthony Mirhaydari Aug 26, 2011 10:58AM

The cliffhanger ended in disappointment. All eyes were on Federal Reserve Chairman Ben Bernanke's speech at the Jackson Hole symposium this morning for clues, hints and winks -- anything that might suggest the central bank was willing and able to support a newly weakened economy.

 

Many investors were hoping for another round of money printing like the $600 billion bond-buying program that was teased at Jackson Hole last year. But as I discussed in my column this week, something less was more likely.

 

Yet I still expected something to sooth raw nerves. Investors, executives and consumers are all feeling like something is not right. And their caution threatens to pull a still-growing economy into outright recession. Instead, we got nothing -- aside from a promise that the Fed will reconsider additional policy options at the end of September. So the question is: Now what?

 

His deal with Bank of America helps us avert bigger catastrophe.

By Jim Cramer Aug 26, 2011 9:12AM

jim cramerthe streetDid Bank of America (BAC) give away the store to Warren Buffett? Does it not matter? Is Doug Kass within the realm when he says, "Say it ain't so, Brian?"

 

Here’s my take. I heard this same sort of criticism when Prince Alaweed took the historic plunge and bought a huge chunk of Citigroup (C) the first time it imploded, in 1990-1991. People thought that the store had been given away. That the dilution was ridiculous.

 

The critics were ridiculous. He saved Citigroup.

 

Now, Bank of America wasn’t in as bad shape as Citigroup back then. But you have to understand that the pressure on this institution’s stock was eventually going to show up on the ratings agencies’ screens. We know that they downgrade when they see stocks plummet endlessly. We saw that time and again. Even when they shouldn’t.

 

Sell aggressive stocks and insurers now -- and jump into Home Depot.

By InvestorPlace Aug 26, 2011 8:48AM

By Jeff Reeves, Editor, InvestorPlace.com


investorplaceHurricane Irene is dominating the headlines this weekend, with the entire East Coast on high alert. The storm will strike North Carolina early Saturday morning and sweep all the way up to Maine if its current path holds, most likely roaring through New York, Boston, D.C. and Philadelphia.


Big storms like this create a big fear factor because residents in affected areas don't know what to expect. Will there be flooding? Lost power? Will it all blow over? It seems prudent to prepare for the worst and hope for the best.

 

Investors hope to see a third round of quantitative easing, but the economy is growing strongly enough without it.

By Jim J. Jubak Aug 25, 2011 4:42PM
Jim JubakThe odds are climbing against any Federal Reserve announcement from Friday's Jackson Hole conference big enough to make global stock markets happy.

Stocks have rallied strongly this week, on hopes that Fed chief Ben Bernanke will announce a third program of quantitative easing and set off another rally in the stock market.

That would echo Bernanke's hints at a second program of quantitative easing at last year's Jackson Hole event. Those hints eventually turned into a 28% rally in stocks that peaked on April 29.

But recent data have turned against those hopes by delivering better-than-expected news. The U.S. economy isn't growing very strongly, the numbers say, but it is growing strongly enough so that dramatic action from the Fed would seem like overkill.
 

Berkshire Hathaway will invest $5 billion in Bank of America, and could become a major stakeholder if all warrants are exercised.

By Kim Peterson Aug 25, 2011 4:20PM
Warren Buffett to the rescue -- again.

Berkshire Hathaway (BRK.A) has agreed to invest $5 billion in Bank of America (BAC), reviving the stock price and giving investors more faith in the financial sector's future. Shares of the bank rose 15% early Thursday, but by the close had settled to a 9% gain at $7.61. 

Another round of mortgage purchases is on the menu of possible stimulus options to be unveiled during Bernanke's Jackson Hole speech.

By Anthony Mirhaydari Aug 25, 2011 2:25PM

Like children waiting impatiently for Christmas morning, Wall Street is being held in suspense. But instead of Santa Claus bearing gifts, it's all about Federal Reserve Chairman Bernanke's speech at the Jackson Hole, Wyo., summit of central bankers Friday.

 

Will Bernanke manage a repeat performance and unleash another stock market rally by teasing additional policy tools? That's what happened last year as he tipped what eventually became the $600 billion money printing operation that was dubbed QE2 by the press.

 

Unfortunately, and as I discussed in my column this week, lingering inflationary pressures will likely keep a QE3 off the table. Instead, a number of other options are available, with the most probable being an increased focus on pushing down long-term interest rates by lengthening the average maturity of the Fed's bond holdings. What I didn't discuss in my column, and what is generating increased chatter across Manhattan trading desks, is that this strategy could have a pleasant side effect: support for the beleaguered housing market.

 

Irene is already turning into a rare and extraordinary storm that will batter the region all the way to New England.

By Kim Peterson Aug 25, 2011 1:52PM

Updated Friday, 12:30 p.m. ET


The East Coast has begun seeing rains from Hurricane Irene, one of the most extraordinary storms to hit the country in recent history.


The storm's core is expected to hit the North Carolina coast Friday night, and by Sunday morning, it could be within miles of the New York. New York City has already evacuated nursing homes and hospitals in areas likely to be hit with storm surges.

 

But the region caught a small break Friday morning.

 

The soft-spoken, slightly reserved Southerner is ready for the biggest job in Silicon Valley.

By TheStreet Staff Aug 25, 2011 11:59AM

By James Rogers, TheStreet

 

Tim Cook has an unenviable task filling Steve Jobs' New Balance sneakers, although Apple (AAPL) investors have little to fear from the soft-spoken, slightly reserved Southerner who now has the highest-profile job in Silicon Valley.

 

Inevitably, Apple will miss Jobs' genius for innovation and predicting the next big thing in consumer technology, but Cook's talents should not be underestimated.

 

While Jobs is widely regarded as a visionary, Cook has developed impressive skills working behind the scenes at Apple. As an IT operations maven, Cook has expertise that will prove crucial in helping Apple roll out its ambitious cloud strategy.

 

To benefit from the metal's volatility, investors need a clear plan they can stick to.

By TheStreet Staff Aug 25, 2011 11:58AM

By Roger Nusbaum, TheStreetTheStreet

 

Gold (-GC) has been on a wild ride the past couple of weeks. It went up $100 in a few days and then went down $100 in about 24 hours.

 

Early Tuesday, we sold one-third of our clients' position in the SPDR Gold Trust (GLD) based on sentiment indicators like the number of analysts calling for $3,000 as the actual price was approaching $2,000 and the fact that GLD surpassed the SPDR S&P 500 ETF (SPY) as the largest ETF.

 

On a more fundamental level, a partial sale was warranted as our position grew well beyond our target after this most recent move to $1,900. Since then, the price has obviously gone down quickly. But the fear of U.S. dollar debasement still exists, which underpins the fundamental case for gold even if the next $150 is down and not up.

 

The charts flashed a clear warning sign before the metal's recent decline. While the mid- to long-term trend remains positive, it's time to hedge existing long positions.

By MoneyShow.com Aug 25, 2011 11:23AM

By Tom Aspray, MoneyShow.com


Longtime readers know that Starc bands are among my favorite technical tools. Still, last Thursday's column on gold, in which I pointed out that risk on the long side was uncomfortably high, was treated with a fair amount of skepticism, as some were looking for the $2000 or $2500 level to be reached before a correction began.


In that article, I pointed out that as gold was accelerating to the upside, the bearish analysts had disappeared. More importantly, the SPDR Gold Trust (GLD) was trading above both the monthly and weekly Starc+ bands. Historically, this was a very rare occurrence.


As I noted at the time, “When a market reaches a historically high-risk buying area using both the weekly and the monthly analysis, the odds of some consolidation or a more significant pullback are very high. From a money management point of view, this can allow even long-term investors to protect profits by hedging their positions.”


Given the parabolic nature of the recent rally, the correction could last for some time, but it is important to remember that the intermediate and long-term trends are still positive for gold. For those who are not accustomed to gold’s volatility, you may want to take a look at past gold corrections, as detailed in “Are You Ready for Gold’s Volatility?


Gold futures are down another $35 in early trading on Thursday, so GLD could lose another 2.2% on the opening. The key Fibonacci retracement and chart support levels can help identify the key levels investors and traders should be watching.

 

Regardless of the volatility, there are still some great long-term income plays you can get into now.

By MoneyShow.com Aug 25, 2011 10:32AM
By Neil George
Special to MoneyShow.com

It’s important for income investors to have a small and select collection of companies like the ones below, that are in differing industries but have substantial real assets behind them that generate the cash to pay bigger dividends.


Otelco (OTT) 
The telecom has a very sticky customer base for its broadband high-speed Internet data services, wireless communications networks, cable, and other data-fed television and on-demand entertainment, along with its traditional land lines.


Revenues keep coming. And while peers around the nation have faced plenty of pain from lost customers, Otelco focuses on making the most of its customer base by focusing on their wants and needs.


Moreover, it also knows that its capital is a crucial part of the business—so management has continued to keep a firm eye on attracting and keeping individual shareholders. To do so, it continues to pay its rock-steady dividend—currently over 10%—while also watching the revenues and the balance-sheet risk so that it can keep paying up.

 

One look at the company's numbers tells us the Steve Jobs news was largely baked into the stock price.

By Jim Cramer Aug 25, 2011 9:07AM

the streetthe streetSometimes math helps. Let's do some Apple (AAPL) math now that Steve Jobs has officially resigned as CEO.

 

Right now people are using $6.80 as their earnings-per-share (EPS) estimate for Apple's coming quarter, which is the fourth quarter of the company's fiscal year. I think that's low. Way low. To me, $9 is more like it. People are chattering about $27 for fiscal 2012. Me? I am thinking $40 if everything goes right.

 

If you look at the way cash is accumulating, it is reasonable to think that Apple could have $110 per share in the bank.

 

Now, armed with those numbers, let's say Apple is at $350. Big hit, right?

 

There are enough uncertainties in this mixed-up market without questioning the impact of Apple's retiring CEO. With video analysis of the transition at Apple.

By InvestorPlace Aug 25, 2011 5:53AM

By Charles Lewis Sizemore, InvestorPlace.com


Steve Jobs announced his retirement on Wednesday, as his declining health has made it impossible for him to continue as Apple's CEO.   We certainly wish the best for Jobs and his family and hope he makes a full recovery. Still, Jobs' departure raises a very uncomfortable question for Apple (AAPL).


How does a company that owes so much of its success to the vision of one man cope with his absence?


Apple's stock was down 5% in midday trading Thursday, indicating traders are wondering the same thing.

 

The chief executive of Apple steps down, leaving investors and the tech world reeling.

By Kim Peterson Aug 24, 2011 7:04PM
Credit: © David Paul Morris/Bloomberg/Getty Images
Caption: Steve Jobs Introduces iCloud Storage System At Apple's Worldwide Developers ConferenceThat collective gasp just heard around the world? Steve Jobs has announced his resignation from Apple (AAPL).

The news was not unexpected, given Jobs' longstanding health issues, but it's still a shock.

The Apple chief sent an email to the world Wednesday afternoon saying he "can no longer meet his duties and expectations" as head of the world's largest company. He plans to serve as chairman, as long as the board gives its all but guaranteed approval.

Jobs didn't mention his health problems, but many people assume them to be the reason behind the resignation. 

Toy store's pre-IPO expansion strategy is puzzling

By InvestorPlace Aug 24, 2011 6:25PM

By Tom Taulli, InvestorPlace.com

 

Since its start in 1948, Toys “R” Us has always found ways to evolve and grow. But its luck might be running out as the retail landscape is undergoing cosmic shifts. In other words, can an operator like Toys “R” Us survive the onslaught from rivals like Wal-Mart (NYSE:WMT) and Amazon (NASDAQ:AMZN)? And will the stagnant U.S. economy make things even worse?

 

OK, it’s unlikely that Toys “R” Us will become obsolete. This seems a bit extreme. But it’s likely the problems will grow and grow.

 

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[BRIEFING.COM] Recent action saw the S&P 500 (+0.2%) climb to a new session high. The move also helped the Nasdaq (+0.2%) return into the green, but some portions of the tech-heavy index continue showing relative weakness.

The high-beta biotech group lags with the iShares Nasdaq Biotechnology ETF (IBB 256.65, -2.69) trading lower by 1.0% after spiking 2.2% yesterday. Similarly, chipmakers are also on the defensive with the PHLX Semiconductor Index lower by 0.6%. Qualcomm ... More


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