Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.
- Moody's: RadioShack is running out of cash
The retailer may not have a financial cushion to fund its turnaround plan.
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Several casino owners have upsides, but the value's not there
By Jonathan Berr, InvestorPlace Writer
When it comes to casino stocks, investors have not always had Lady Luck on their side — even in the red-hot gaming market of Macau.
Shares of Wynn Resorts (WYNN) have soared more than 46% this year because its operations in Macau are growing like gangbusters. The Macau magic, however, has not rubbed off on Las Vegas Sands (LVS), which has barely budged this year amid investors’ concerns about lawsuits alleging illegal activities in Macau, which the firm has denied. MGM Resorts (MGM), which recently took control of its Macau joint venture, has been hurt by concerns about its lackluster earnings. Its shares have slumped nearly 30%.
None of these stocks are a compelling value even though Macau gaming revenue was a record $3.1 billion in August, an increase of 57% year-over-year.
No one is disputing that things are bad across the pond, but the desire to take down everything here because of our link to Europe is overblown.
I mean, if they are down 5, don't we have to be down at least 5? Aren't we that dependent on Europe? Wasn't that down 2%-3% Friday off the jobs report just the foreplay for European madness?
That's what all the macros think. They just relate one to another as if we are all related. But are we? Did you see what was still up big last week despite this link with Europe? Stocks like Kimberly-Clark (KMB) and Procter & Gamble (PG) and McDonald's (MCD)? Bristol-Myers (BMY)? Anything with a nice yield?
But the big wins this year are what I am now calling "edge wins," companies on the edge of the decline that don't deserve to be in the decline at all -- and wouldn't be if there were no such thing as futures. Don't laugh. They didn't exist in the early 1980s when I was trading pretty aggressively, unless you think the Value Line futures are part of a vast conspiracy to take all stocks down or up off of "each other."
Even if you miss a major bottom in a stock or market, you can still buy in and enjoy most of the uptrend.
This is going to be a long weekend as we wait for the markets to reopen, but there are some bright spots.
By Tom Aspray, MoneyShow.com
Last week, the hopes that the economy was not really that bad were supported by some of the economic data (such as auto sales) turning out better than expected.
The tone changed Thursday, as stocks opened weak, then rebounded sharply as the ISM Purchasing manager’s report came in stronger than expected.
The rebound was short-lived. New concerns over Bank or America (BAC) and Goldman Sachs (GS) helped stocks to reverse to the downside. The very weak close suggested that the rebound from the August lows was likely over.
Then the dismal monthly jobs report hit stocks hard Friday, as stocks opened sharply lower and the major averages closed near the lows.
The rally was classic in technical terms, as the Spyder Trust (SPY) came very close to retracing 50% of the decline from the July highs. Most of the major averages traced out flag formations, which are normally seen as interruptions in the downward weekly trend. I will share some more specifics below.
The key question is whether the support zones derived from the recent rally will hold. If they do, we could see the formation of a short-term double bottom that would set the stage for a better rally.
A federal lawsuit filed Friday could kill chances of a comprehensive foreclosure fraud settlement.
Forget pricey chairs. Nowadays, the hottest office item does away with the chair altogether.
The latest status symbol for the office doesn't use a chair at all. It's the standing desk, and it's becoming a hot item in Silicon Valley. At Google (GOOG) and Facebook, workers have replaced the traditional setup with higher desks that you can use while standing or perched on a stool, The Wall Street Journal reports.
Even better? The treadmill desk. Facebook has set up some treadmill stations where people can walk while working on the computer.
The Earnings Predictor likes the prospects of Manny, Moe & Jack
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 Pep Boys (PBY) reports earnings for the quarter ending July 31, 2011.
The holiday was created in honor of the American worker. But this year, there isn't much to celebrate.
Does anyone even remember why Labor Day exists? It dates back to 1894, when President Grover Cleveland made nice with the labor movement after unions clashed with railroads in the Pullman Strike.
Workers went on strike to protest low pay and 16-hour workdays, refusing to continue production and throwing the nation's railways into chaos. A military crackdown led to 13 worker deaths. Congress created Labor Day as an olive branch of sorts for union workers.
Why big money is wrong about European banks.
By Tim Hanson
You should know by now that European banks are on shaky ground. Because of their ownership of troubled European sovereign debt -- bonds they are reportedly marking to model rather than market (i.e., they're making up what they think they're worth) -- they are going to need truckloads of new capital as sovereign defaults by the likes of Greece, Spain, Italy, or Portugal start flowing through the system.
And the sector's recent stock market performance reflects this massive risk. Over the past year, the Bank of Ireland (IRE) is down almost 90%, National Bank of Greece (NBG) is down more than 60%, and Spain's BBVA (BBVA) and Banco Santander (STD) are down more than 25%.
Thus, I found it curious that all of those bank stocks were up sharply, with NBG up more than 30%, on the news that Greece's second- and third-largest banks, Alpha Bank and Eurobank, planned to merge and get new capital from the Qatar Investment Authority, that Middle East state's sovereign wealth
A dismal employment report highlights the obvious: Without more help, a new recession looms.
It was inevitable. After all the gut checks and body blows we've seen this year -- energy price spikes, natural disasters, political brinkmanship -- it was only a matter of time before the job market would be hit. And that's exactly what happened Friday.
The government reported nonfarm payrolls were unchanged in August -- the first time that's happened since the 1940s. Yes, there were some nuances to the report. The private sector added 17,000. And the Verizon strike, which is now over, depressed the result. And the household survey held up OK.
But the haunting takeaway is that the economy, which has been chugging along at "stall speed" all year, is beginning to nosedive. Unless, as I've argued in my last two columns, the U.S. Treasury and the Federal Reserve dish out another dose of stimulus. Here's why.
Politicians and economists had plenty to say after hearing that no new jobs were created in August.
Republicans jumped at the chance to criticize President Barack Obama's economic policies. Presidential candidate Mitt Romney called the news unacceptable. "Americans need a conservative businessman to get this economy moving again, not career politicians," he said in a statement.
A move in crude or stocks can often telegraph a move in the other a few days early, giving investors an invaluable head start.
By Tom Aspray, MoneyShow.com
Many stock investors or traders do not watch the crude oil market as closely as they should. For many years, I’ve compared the chart patterns of the crude oil futures with those of the S&P 500 or the Spyder Trust (SPY).
I have found many instances where crude oil tops or bottoms ahead of the S&P 500. Often, the two markets will show similar chart formations, but one of them will be completed ahead of the other.
Currently, the action in crude oil, as well as the United States Oil Fund (USO), suggests that the short-term rallies are ending. This may create an opportunity in the ProShares UltraShort Oil & Gas ETF (DUG) and also suggests that the stock market is once again ready to turn lower.
This is consistent with the short-term action of the McClellan Oscillator, one of my favorite A/D indicators. The oscillator peaked at +263—an overbought level—on Wednesday, and has now turned lower.
Even if the AT&T deal falls through because of the Justice Department's lawsuit, someone will come for T-Mobile.
By Jeff Reeves, Editor, InvestorPlace.com
We learned this week that Uncle Sam is less than pleased with the AT&T (T) plan to purchase T-Mobile. This changes little for AT&T and Verizon (VZ), of course, since the mobile market already is rapidly becoming a two-horse race. Sprint Nextel (S) hasn’t turned a quarterly profit since early 2007, and T-Mobile has lost some 150,000 subscribers so far in 2011.
In fact, the Justice Department’s move to step in will do little to “save” T-Mobile. In reality, the only thing it will do is ensure someone other than Verizon or AT&T will wind up purchasing the $39 billion wireless carrier.
So who else is in the market to buy T-Mobile? I have a few suitors in mind -- though most would take some accounting acrobatics or gutsy (perhaps crazy) strategic shifts:
Some indicators suggest that maybe, just maybe, the greenback is about to strengthen.
Although stocks haven't really gone anywhere the last few days, big changes are afoot if you know where to look. It's still early, but technical indicators suggest the dollar is poised for a big rebound in the days to come. That'll have big ramifications for a variety of assets including stocks, gold, and commodities.
Why should the greenback rally now? There have been a number of important developments in the eurozone this week, all of which suggest the euro could be headed for a bout of weakness. That, in turn, should boost the dollar.
The first is that European Central Bank President Jean-Claude Trichet indicated in a speech to the European Union Parliament that his recent rate-hiking campaign is about to end. He did not use the keyword "vigilant," which signals an imminent interest-rate increase. And he noted that the risks to the medium-term inflation outlook are under study.
Political risk in China is heating up.
By Tim Hanson
Imagine you own a business in China. Now imagine that the Chinese government starts running high-profile stories in their media about how you're defrauding your customers, enabling the sale of potentially dangerous pharmaceuticals, and slandering respected academics. Would you be concerned?
I'm guessing you would be, and rightfully so. Companies that attract the wrath of the government in China don't tend to do so well, whether we're talking about Google (GOOG) refusing to play ball on Internet censorship, or Sanlu Group putting melamine in its milk. Google has left the market and given up significant market share, while Sanlu went effectively bankrupt -- and there are many more examples.
This is the worst-case scenario facing Baidu (BIDU) owners today. Following the aforementioned barrage of criticism on China's government-run CCTV last week, Baidu ultimately took to the airwaves itself and, effectively admitting guilt, apologized.
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[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.
To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More
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