Stocks should be crushed by global turmoil, Jim Cramer says. Instead, they're doing fine.
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More falling would not be surprising next week, but we're unlikely to see a repeat of August's panic selling.
By Tom Aspray, MoneyShow.com
After a seesaw week, stocks were punished on again Friday. The action was even worse than what we saw before Labor Day weekend.
This time the financial media reported that stocks were lower because of Obama’s job plan, the surprise resignation of Germany’s top representative on the ECB’s executive board, and worries over a default by Greece.
From a technical standpoint, last week’s action just completed the rebound from the August lows. The sharp drop after the Labor Day weekend caused further deterioration in the technical outlook.
The mid-week rebound—in reaction to a sharp rally in the German Dax index—created another good selling opportunity. The German market was boosted when their constitutional court rejected lawsuits filed to block Germany’s participation in the Eurozone rescue funds. Thursday’s lower close set the stage for Friday’s drop.
If the key support levels are violated early this coming week, it is likely to trigger another wave of selling—but I doubt it will have the panic qualities of what occurred in August.
The country's official inflation rate may have peaked, but the markets may need more time to be convinced.
Be cautious owning Best Buy in advance of its earnings report on Tuesday
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 Tuesday Best Buy (BBY) reports earnings for the quarter ending August 31, 2011.
On the 10th anniversary of 9/11, here are five stocks that play a critical role in our national security.
By Jamie Duglosch, Stockpickr
In a few days, we will commemorate 10 years since the tragic events of 9/11. Having been in New York then, I will certainly never forget. That day changed the world forever.
In the aftermath, an entire category of stocks dedicated to homeland security emerged from within the defense industry. Investors now can select specific stocks of companies that play a critical role in our national security. Osama bin Laden may be dead, but the threat still exists. As long as it does, there is money to be made from the efforts to keep us safe.
It's a good thing, too. With a national debt that is out of control and an economy teetering on the brink of a double-dip recession, stock-picking is exceedingly difficult. Where can investors go and know that growth and profits are likely to follow?
Consider homeland security stocks. In the greater story of military and defense stocks, investors need to brace for cuts. That is less the case with homeland security. Nobody wants to be accused of cutting spending there if and when another terror event occurs.
Early warning signs of weakening demand cast an ominous cloud over cellphone makers ahead of the holiday shopping season.
By Scott Moritz, TheStreet
An early chill has come to the mobile phone sector.
The biggest season for phone sales is just around the corner, and a heaping buffet of beefy Google (GOOG) Androids and an enticing Apple (AAPL) iPhone or two await. But the bountiful supply might not go with what appears to be a shrinking appetite among consumers.
Here are a few recent warning signs.
Alibaba Group should make a bid.
By Tim Hanson
Four months ago, I said Yahoo (YHOO) was a buy below $17. The stock is since down 20%. But now underperforming CEO Carol Bartz is fired and the value of closely held Alibaba Group -- Yahoo's best asset -- is reportedly going up.
Combine those seeming improvements in the business with a falling stock, and this looks like a better buy than ever before. But is it? A few potential futures await Yahoo! shareholders, with some being better than others.
Possible future No. 1: The founder returns and soldiers on
Incredibly, Yahoo's board fired Bartz without any substantive succession plan in place and has yet to hire any counsel to aid in the search for a new chief executive officer. Meanwhile, CFO Tim Morse serves in interim purgatory. For a company already losing ground in U.S. search and online advertising, this is the worst possible scenario presuming the board intends for Yahoo! to remain an independent company.
Why did shares go up after the CEO resigned? Because investors got some much-needed certainty.
Apple shares closed at $376.18 that day. Over the next week, shares would top $390 for three straight days.
Why? Jobs' absence will certainly be a huge blow to the company (though he's now serving as chairman of the board). How could investors be happy with his departure?
The government has spent incredible amounts of money on homeland security over the past decade, essentially creating a new industry.
The spending that resulted was, predictably, out of control. Fighting terrorism became a huge money drain for the government and created a profitable industry for thousands of companies that sprang up around that effort.
Now there are federal 51 groups that track the flow of money to and from terrorist networks, according to the authors of the book "Top Secret America: The Rise of the New American Security State."
Stocks and crude oil have rebounded nicely from the early Tuesday lows, but the daily charts suggest that Friday’s action may be critical. Here are key levels to watch.
By Tom Aspray, MoneyShow.com
Many of the major averages show similar formations, as the rebounds from the August lows have just reached strong areas of retracement resistance.
Though the stock-market averages and the ETFs that track them have not moved above last week’s high, crude oil did make new rally highs on Wednesday. As I discussed last week, crude oil and the Spyder Trust (SPY) often trace out similar chart formations.
Therefore, watching the key support and resistance levels on both, as well as some of the other key market averages, can often give you advance warning of a breakout in the other markets. If any of the key support levels are violated today it is likely to set the tone for next week’s action.
Just as soup kitchens drew the unemployed during the Great Depression, so cafes have become popular gathering and networking spots during the current downturn.
The weight of last week's jobs report was simply crushing. We learned that exactly zero jobs were created in August, and fears of another recession are fast becoming a reality.
First, the big picture: The United States is experiencing a very traumatic economic event, characterized by persistently high unemployment and persistently high uncertainty. What began in 2008 with the collapse of the housing market and financial crisis has yet to reach its full course.
This is not the Great Depression, mind you. There are no shortages of food or Hoovervilles prompted by a homelessness epidemic. But the pain of losing jobs, homes and pay is very real in its own way.
The retail giant says its Vudu video service isn't looking to compete with the movie-rental company, but ultimately the two may go head to head.
By Jeanine Poggi, TheStreet
Wal-Mart and Netflix are quintessential frenemies. In the past, they have seemingly worked side by side as long as neither encroached on the other's turf.
But with Vudu's clout growing at the same time as Netflix is making a few missteps, how much longer can they remain cozy?
The billionaire's emphasis on buying into solid companies with clear business models is a good long-term fund strategy.
By Don Dion, TheStreet
Although Warren Buffett has never sat down to pen an official autobiography, droves of the Nebraska native's fans and followers already know and take the investor's pearls of wisdom to heart in their own investing endeavors. Buffett's success has largely resulted from his skills as a stock investor, but ETF investors can still use his lessons to their advantage.
When it comes to planning an investing strategy, Buffett is famous for his interest in "boring" industries. Rather than diving into the latest fast-moving tech company or trying his luck with other risky companies and financial products, the Berkshire Hathaway (BRK.A) chairman invests in those that boast easy-to-understand business plans.
This strategy proved particularly beneficial when, at the start of the new millennium, the investor was able to avoid getting caught up in a frenzy that ultimately led to the bursting of the dot-com bubble.
Honchos at these 3 companies have presided over tremendous growth. One stock would have turned your $1,000 into $20 million in less than 20 years.
Bigwigs in corner offices have been on the move in recent weeks.
In the "tearful goodbye" category, Apple (AAPL) announced that iconic founder Steve Jobs is stepping down from his CEO role. In the "don't let the door hit you on the way out" category, Yahoo (YHOO) canned CEO Carol Bartz (via telephone, no less) with a year left on her contract. Even Regis Philbin said recently he will be retiring.
Where have all the great leaders gone? Allow me to offer these:
A promising CPI number in China is being tossed aside by bad data out of Greece.
Good news: The most important consumer price index in the world, the Chinese CPI, went down, which makes it possible that the most important swing factor in world economics might be going from bearish to neutral.
Bad news: It doesn't matter, because it comes on a "world is ending" day in Europe, and the "world is ending" crowd has all the cards when it wants to play them.
We are not in an uncertain backdrop, despite what you hear. We are in a certain backdrop, as in "The euro will not hold, and some if not many European banks are going to fail."
It's odd to think about it, but the European chaos gets the better of us at all times, and it's a learning lesson that the important Chinese CPI number doesn't come near the importance of bad Greek data, because bad Greek data portend "the end of the world."
End of the world is the rock to the Chinese scissors.
The president's closely watched jobs plan represents a desperately needed push for growth.
The wait is over. After weeks of teasing and political bickering, President Obama finally delivered his speech to Congress proposing the kind of fiscal support the economy desperately needs to avoid falling back into recession.
Known as the American Jobs Act, and worth $450 billion, it's exactly the kind of economic support I discussed in a recent column urging Obama to spend more to keep the economy out of the ditch -- and to keep the deficit from getting even worse through flagging growth.
Highlights include an expansion of existing payroll tax cuts for middle class workers and the creation of tax cuts for businesses hiring new workers. Also included were plans to increase infrastructure spending on roads and schools. With the cost to be offset by reforms to the tax code and entitlement spending, Obama pushed hard for the plan -- which contains measures which have historically enjoyed bipartisan support -- to be quickly passed.
Indeed, without the much maligned 2009 stimulus package the Congressional Budget Office believes the economy would already be contracting right now. With the economy stagnating near its stall speed, encumbered by negative pressures like the European debt crisis and the political circus that was the debt-ceiling fight, the stimulus plan is exactly the kind of thing we need to break the cycle of lowered confidence, reduced spending and investments, and ongoing job market weakness. Here's why, starting with a breakdown of the plan.
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[BRIEFING.COM] The stock market maintained a narrow trading range on Thursday before ending the session essentially where it began. The S&P 500 added less than a point, while the small-cap Russell 2000 (-0.2%) underperformed.
Equity indices displayed early strength thanks in part to an overnight boost from better than expected economic data in China and Europe. Specifically, China's HSBC Manufacturing PMI surged to an 18-month high (52.0 from 50.7), while Eurozone Manufacturing PMI ... More
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