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Was last month's economic slowdown just a bump in the road?

By Jim J. Jubak Jun 9, 2011 5:14PM
Jim JubakIt's cold comfort -- but it is comfort nonetheless.

The latest release of the Beige Book, a collection of conversations among the 12 regional Federal Reserve banks and businesses in their regions, argues that last month's slowdown in the U.S. economy may have been caused mostly by temporary factors.

In region after region, the Beige Book reports companies citing disruptions to their business because of shortages of parts or end products, virtually all related to disruptions to the global supply chain caused by the March earthquake and tsunami in Japan.

On Tuesday, June 7, Fed Chairman Ben Bernanke said that the economic recovery, while slow, appears to remain on track. The dip in job creation to just 54,000 in May was temporary, he said.

At the time, many economists and Wall Street analysts wondered what Bernanke knew to prompt that confidence.
 

The long rally in Treasury bonds is set to fizzle as inflation, credit risk and the end of QE2 weigh on prices.

By Anthony Mirhaydari Jun 9, 2011 3:39PM

Over the past few months, U.S. Treasury bonds have defied the naysayers and pushed to levels not seen since last October. This came as a surprise to many people, especially since the government has already hit the debt ceiling and three major credit rating agencies have threatened to downgrade the U.S. credit rating if Washington fails to act as technical default looms in August.

 

The rise was driven by an increase in demand for haven assets as the economy hit another soft patch. Other factors included the European debt crisis, stabilization in the U.S. dollar and a whiff of disinflation as Wall Street marked down growth expectations.

 

But now, the naysayers look ready for their time in the sun as risk appetites rebound and the economy looks ready to re-accelerate and surprise newly pessimistic investors. And that means it's time to bet against the U.S. government by betting against its bonds. Here's why.

 

The retailer likes to be known for its pricier, trendier designs. But that doesn't fly in this economy.

By Kim Peterson Jun 9, 2011 3:37PM
Target (TGT) has for years spelled out exactly what store it wants to be.

You want cheap stuff? Go to Wal-Mart (WMT). But if you want fresher, better-looking, more awesome stuff, go to Target. Oh sure, you'll pay more, but that's the price of being cool.

Target has Zac Posen. Target has seahorse wedge sandals. A $60 wall mural. A $70 pair of earrings. But as the economy continues to sputter, what Target doesn't have is enough sales.

"Has Target lost its cachet?" wonders The Wall Street Journal this week. The company had just a 2% rise in same-store sales for its fiscal first quarter, far below the 3% to 4% analysts were expecting. And sales in May were at the low end of guidance at a 2.8% increase. 

The online auctioneer is getting some analyst love, but the future will be challenging.

By Motley Fool Pick of the Day Jun 9, 2011 3:36PM

By Rick Aristotle Munarriz

 

What do eBay (EBAY) and San Jose, Calif. rockers Smash Mouth have in common? Well, they both had some huge hits in the late 1990s, but we really haven't heard a lot out of either of them lately.

 

I don't know what Smash Mouth is up to these days, but eBay is usually making headlines for all of the wrong reasons.

 

Its namesake marketplace has been meandering in recent years. It sold off two-thirds of Skype two years ago for billions less than what Microsoft (MSFT) was willing to pay earlier this year. PayPal has been the resilient bright spot, though it recently took a hit in China by ending its relationship with Alibaba. eBay has nibbled at mostly smallish acquisitions, but few are likely to move the needle the way that PayPal has done.

 

However, at least one analyst sees eBay differently than I do.

 

The latest chart analysis confirms an important low for natural gas, and several great plays are now being presented, including an ETF that could triple.

By MoneyShow.com Jun 9, 2011 1:31PM
By Tom Aspray, MoneyShow.com

The purchase of XTO Energy in December 2009 by Exxon Mobil (XOM) for $31 billion raised some eyebrows and made it the largest producer of gas in the US. The recent $1.7 billion acquisitions of Phillips Resources and TWP, Inc. gives Exxon Mobil access to 317,000 acres in the Marcellus Shale.

The timing for Exxon looks pretty good, as the natural gas futures appear to have completed a major bottom. In early May, I noted that the on-balance volume (OBV) on the United States Natural Gas Fund (UNG) had formed a five-month bullish divergence. That fund now has the potential to triple from current levels.

The decision by Germany to close its nuclear plants is likely to be followed by similar action from other European countries. This should be an added positive for natural gas, which is the cleanest nuclear alternative.
 
Tags: etf

Is it a UFO or an office building? The company submits plans for its futuristic new digs.

By Kim Peterson Jun 9, 2011 1:22PM
Credit: City of Cupertino
Caption: Proposal slide for a new Apple Campus in Cupertino, Calif.Apple (AAPL) loves to develop futuristic, elegant designs -- even for its office buildings.

The company has asked the city of Cupertino, Calif., for approval to build an office complex that looks like it's ready for outer space. And none other than chief executive Steve Jobs himself went to the City Council this week to ask for the green light.

"We do have a shot at building the best office building in the world," Jobs told the council members, according to TechCrunch. "Architecture students will come here to see this."

The four-story building, at least as planned, does seem like an architectural marvel. It won't use a single piece of straight glass; the design calls for curved glass all the way around. The building will have its own energy center, using mostly natural gas and tapping into the grid only for backup power. 

The latest tech startup to go public boasts Apple and Facebook among its customers. Shares surge more than 20% in their first day of trading. With video.

By TheStreet Staff Jun 9, 2011 1:12PM

By James Rogers, TheStreet

 

Counting many top-line Silicon Valley companies as customers, Fusion-io (FIO), the Salt Lake City maker of products that improve data center efficiency, flew out of the blocks during its first day of trading as a public company Thursday morning.

 

The company's shares reached $23, more than 20% above their opening price, in early afternoon trading. Fusion-io priced its offering at $19, above its projected range of $16 to $18 a share, for a total IPO value of $233.7 million.

 

Even as QE2 ends, this sector is outperforming.

By TheStreet Staff Jun 9, 2011 10:27AM

Image: Oil pump jack, low angle view, dusk (© Seth Joel/Photographer)By Jake Lynch, TheStreet

 

The risk-off trade, which has pummeled the stock market, has led to the outperformance of defensive sectors, including telecom, utility and health care stocks. Still, energy, the most profitable sector so far in 2011, is holding up well.

 

S&P 500 ($INX) oil and gas stocks have delivered a median gain of 9.3% in 2011. Crude oil is hovering around $100 a barrel, a sweet spot for producers -- expensive enough to generate lofty margins but not costly enough to cannibalize demand for energy.

 

On Tuesday, addressing vocal concerns about elevated commodity prices, Federal Reserve Chairman Ben Bernanke reiterated his stance that the recent price rise will be transitory. He also dismissed the notion that speculators are driving up the cost of fossil fuels, noting that emerging-markets demand has long outstripped supply, a trend expected to continue, or perhaps grow, in coming years.

 

With OPEC's surprise decision not to increase oil production, the Senate's vote on debit card fee limits, and Ciena's disastrous earnings, Wednesday's events could cloud the market for a while.

By Jim Cramer Jun 9, 2011 8:52AM

jim cramerthe streetIt's terrific that we regard each day as a new day around here, as in "New day, futures are fine, come on out and play." But we often forget that there was damage done the other day, damage that isn't repaired by the sun going down, the moon coming up and then the sun returning to the horizon.

 

Wednesday the damage was horrific. I don't know a soul who even thought that OPEC would do anything but try to figure out how to make sure alternative energies like solar or oil sands or biofuel would be priced out by $80-$90 oil, long thought to be the price point at which alternatives get dicey.

 

OPEC always seemed to have an economic imperative: How to make the producers richer and keep consumers addicted. It used a drug dealer motif to do so.

 

But Wednesday we saw that some OPEC members don't care about stifling alternatives. They care about stifling "the West." They care about showing the developed nations that they are in charge. They care about hegemony!

 

His advice at a personal finance summit offers simple but powerful lessons.

By InvestorPlace Jun 9, 2011 12:20AM
By Jeff Reeves, Editor of InvestorPlace.com

jeff reeves investorplaceinvestor placeI had the honor and privilege of attending the White House's first Personal Finance Online Summit on Wednesday afternoon. The event gave me and two dozen other financial journalists access to top administration officials, including a brief Q&A with President Barack Obama.


Much of the talk focused on the debt ceiling, the housing crisis and the job market. But during the give-and-take, there were a few nuggets of wisdom from the commander in chief that apply to everyday household budgets and regular folks planning their retirement.


Here are three tips from the president:

 

Two prominent research firms recently lowered their forecasts for PC growth this year.

By Kim Peterson Jun 8, 2011 4:10PM
The personal computer industry is still growing, but not as quickly as people had thought.

The research firm Gartner just lowered its forecast for the industry to 9.3% global growth, down from its prior projection of 10.5%, Dow Jones reports. Another research firm, IDC, also dropped its growth forecast this week to 4.2% growth from 7.1%.

There are two main reasons for the cuts. In this economy, consumers aren't about to blow a hole in their budgets with a new computer purchase. And those who do want to spend money will be looking more closely at cheaper tablets like the iPad.  

Investors are upset as Ben Bernanke pours cold water on the idea of another round of quantitative easing. They shouldn't be.

By Anthony Mirhaydari Jun 8, 2011 3:56PM

Stocks suffered Tuesday and again Wednesday after Federal Reserve Chairman Ben Bernanke made a closely followed speech in Atlanta. The speech wasn't notable for what it contained -- a review of the current situation and the Fed's belief that inflationary pressure will be "transitory" as gas prices ease.

 

Instead, it was notable for what it didn't contain -- namely, any mention of a third round of quantitative easing to take the reins from the current $600 billion program set to expire in a few weeks. Bernanke stressed that although growth is slowing, more easy money isn't the solution.

 

Wall Street, acting like a child who was just refused another cookie, wasn't pleased with the dose of honesty. Traders viewed this as Bernanke acknowledging the current slowdown without a way out. But this misses a number of important points.

 

The SEC steps in, squashes a plan to raise $300 million in pledge commitments to buy Pabst Brewing Co.

By Kim Peterson Jun 8, 2011 3:08PM
A fundraising drive to collect $300 million to buy the Pabst Brewing Co. has lost its buzz.

Two advertising executives tried to raise the money by appealing to potential investors on Facebook and Twitter. Pledge some money to the effort, and if enough is raised you'll get part ownership in the company. You'll also get your pledge amount worth of Pabst beer.

Sounds like a frat house stunt, but Michael Migliozzi II and Brian William Flatow received more than $200 million in pledge commitments from 5 million people. That was enough to take the idea from a joke to something real, and the partners began looking for a firm to help with the purchase. 

With nearly 70% of trades being done by machines, do individual investors stand a chance?

By Kim Peterson Jun 8, 2011 1:47PM
Think the market is rigged? Watch the "60 Minutes" segment airing Sunday about high-speed trading and you'll wonder about the point of trading stocks at all.

Supercomputers control nearly 70% of the trades on Wall Street these days, Steve Kroft reports. They monitor all the data they can about the market and get in and out of a stock within seconds.

The computers don't care about companies or their quarterly earnings. They don't care what analysts say or how strong the dollar or the economy might be. They're completely focused on one thing: buying low and selling high.

Computers can see the buy and sell orders coming into the exchanges before anyone else. And they respond based on what those orders tell them: Jump in before a stock starts to rally. Sell before a stock heads into a decline. The fastest computers get the best results. 

This fund's 4 largest holders support the metal's price by buying the physical commodity when prices fall.

By TheStreet Staff Jun 8, 2011 12:56PM

Image: Silver Bars (© Corbis)By Dan Dicker, TheStreet

 

Silver and BlackRock's silver ETF, iShares Silver Trust ETF (SLV), have been the target of some wild rumors in the past several months.

 

The crazy stories have run the gamut around the financial blogosphere. One has JPMorgan (JPM) as a puppet of the Federal Reserve, establishing a huge proprietary bet against silver designed to pressure the dollar and reduce costs of monetary easing. Others have BlackRock (BLK) unable to satisfy its share demand with real silver stockpiles. Many observers claim that legitimate storage for the metal doesn't come anywhere near the almost 11,400 tons of physical silver that the trust reported holding at its extremes in late April of this year.

 

I don't need to go anywhere near those rumors. The facts about SLV alone are enough to make a great case for the manipulating effects of the ETF on the price of silver and the strong positives those manipulations can deliver to an investor who doesn't mind being part of a grand plan -- as long as it's a profitable one.

 

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