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Global meltdown?

I saw headlines Thursday morning saying just that. But to me this looks like profit-taking on a huge run up in global markets so far, no more and no less -- even in Japan.

Here’s the background: At its high Wednesday, the Standard & Poor’s 500 was up 10% from its low on April 18; the Nikkei 225 was up 21% from its April 18 low; the NASDAQ Composite was up 12% from its April 18 low.  The phrase, “too far, too fast” comes to mind.

 

 

For a stock market that was supposed to be collapsing, the U.S. market held  its own on Thursday. The market had opened sharply lower, with the Dow Jones industrials ($INDU) off as many as 127 points, in large part because of a shockingly big sell-off in Japan.

But stocks rebounded off those lows because reports on the U.S. economy -- jobless claims and new-home sales -- were better than expected.

Plus, Federal Reserve officials were running around -- trying to assure investors around the world that they weren't about to pare back or stop their big bond-buying program any time soon. Fed Chairman Ben Bernanke had made the point repeatedly in Congressional testimony, but minutes from the Fed's April meeting suggested a change might come starting in June.  

 

By Tom Pizzuti and Kurt Hulse

A wide set of markets currently seem to be at a cusp, and the direction they go from here might require investors to take a radically different approach to protecting their wealth.  

By Jim Lowell, Forbes ETF Advisor

First, SPDR S&P Emerging Asia Pacific (GMF) seeks investment results that correspond to the price and yield performance of the S&P Asia Pacific Emerging BMI Index, which is made up of companies from the emerging Asia-Pacific regions.

It began trading in March 2007, and has a market value of close to $500 million. The top five country representations are China (36%), Taiwan (25.3%), India (15.8%), Indonesia (6.8%), and Malaysia (6.7%). The top three sectors are financials (28.1%), information technology (19.8%), and energy (10.9%).

The top ten holdings are Taiwan Semiconductor (TSM), China Construction Bank, China Mobile (CHL), Industrial & Commercial Bank of China (IDCBY), PetroChina (PTR), Bank of China, Reliance Industries, Hon Hai Precision, CNOOC (CEO), and China Petroleum & Chemical (SNP).

 

By Richard Saintvilus

 

On April 2, when we last discussed (TheStreet) retail giant Wal-Mart (WMT), I made a case for why I thought the stock was undervalued despite (at the time) posting 12% gains.

In that article, while comparing the relative performances of rivals Costco (COST) and Target (TGT), I said:

"For now, from an investment perspective, the stock is still trading at an attractive valuation. When compared to Costco and Target, which are both trading at higher P/E ratios, a case can be made that Wal-Mart is undervalued by at least 10%. With continued operational improvements and a recovering economy, patient investors should expect shares to approach the lower $80s by the second half of the year."

 

By Andrew Sachais

 

Federal Reserve Chairman Ben Bernanke testified on Wednesday in front of Congress explaining that the Fed may or may not rein in quantitative easing in upcoming sessions, based on the future economic situation. That brought a much needed pullback to equity markets, and introduced further uncertainty over the state of the economy for the rest of 2013.

 

Meanwhile, earlier this week, Home Depot (HD) released strong earnings and raised its outlook. The company believes that the housing market, if not the entire economy, is on the rebound.

 

The first chart below is of Home Depot over S&P Equal Weight ETF (RSP). The pair shows the relative strength of Home Depot versus equity markets over a two-year span.

 

Information provided by Theflyonthewall.com 

Now that most of the large-cap stocks have piled up gigantic gains as the market continues to soar to record highs, many investors have started to scout for still undiscovered and underpriced stocks in the small-cap sector that show promising prospects for strong growth.

 

That means a rotation in buying interest is starting to take hold towards lesser-known stocks that so far have not fully participated in the current robust bull run. A sector rotation usually follows the first part of a major bull market which broadens the extent of the advance.

 

One notable small-cap stock that has started to attract increasing attention is Genpact (G), a global company engaged in managing business processes, particularly information technology and financial functions, for major companies worldwide. A positive attribute of Genpact is its history as a former division of General Electric (GE), where Genpact provided essential services in managing its various business processes that improved the giant conglomerate's widely varied operations.

 

While some gold companies may boast attractive valuations at the moment, the atmosphere for mergers and acquisitions in the sector has cooled down considerably in the last year or so, says Jamie Sokalsky, president and chief executive officer of Barrick Gold (ABX).

At the Bloomberg Canada Economic Summit this week, Sokalsky said the general mood is "anti-M&A" in the gold space, particularly at the senior level.

Although valuations are low, Sokalsky noted that such acquisitions might require billions of dollars in additional investment to build a project, while achieving production may take a long period of time. Investors are also hoping for free cash flow, which he said they would perhaps rather see "returned to them in a higher dividend at some point."

 

By James Brumley

If you've been lucky enough to own Internet stocks -- mostly search stocks like Qihoo 360 Technology (QIHU), Yahoo (YHOO), Baidu (BIDU) or Google (GOOG) -- of late, then congratulations ... you've made good money.

Heck, it doesn't even matter which one you owned, as they've all outpaced the market.

Still, veteran investors are understandably asking themselves just how much longer this unusual pocket of strength will hold up. Are the underlying companies truly doing this well, or are traders simply gravitating to Internet stocks because there’s nowhere else to invest, and they know the web’s not going away?

 

By Tom Aspray

Wednesday was one of the widest-ranging days since the middle of April, with a 277-point range in the Dow Jones Industrial Average ($INDU) and 41 points in the S&P 500 ($INX) as traders reacted to mixed messages from the Federal Reserve. The overnight selling in Asia was exacerbated by a drop in preliminary readings on Chinese manufacturing.

The European markets were also down sharply with the German DAX Index down 2.6% in early trading and the Dow opening sharply lower.

Several of the major averages formed what is known as key reversals in Wednesday's trading. This chart shows the NYSE Composite Index ($NYA), which opened Wednesday at 9605, above the prior day's close at 9598. NYA made a significant new high early in the day at 9695, then closed at 9508, which was well below Tuesday's low at 9556.

 

Information provided by Theflyonthewall.com

Thursday's noteworthy upgrades include:

• Diamond Offshore (DO) upgraded to Neutral from Sell at Goldman
• FactSet (FDS) upgraded to Overweight from Neutral at Piper Jaffray
• Hewlett-Packard (HPQ) upgraded to Hold from Underperform at Jefferies
• Pacific Sunwear (PSUN) upgraded to Buy from Hold at Topeka
• Seagate (STX) upgraded to Buy from Hold at Deutsche Bank

 

By Tim Parker

If you were hoping to see the often reported, heavily rumored, and overhyped Apple (AAPL) iWatch this year, the chances of you getting your wish don't look good. KGI Securities analyst Ming-Chi Kuo believes that the device won't arrive until late 2014. This is particularly notable because numerous, otherwise reputable sources, like Bloomberg, have reported that the device will hit the street at the end of 2013.

It's true that this is one more analyst adding to the glut of rumors already published, but he has a stronger track record than most.

He points out that because iOS will require a series of large changes in order to accommodate the device, those changes will take time to implement. With Apple firmly focused on iOS7, it may have worked these changes into the upcoming update but Kuo doesn't see that as likely.