The most likely scenario is that the markets will begin to rise from here -- and that bounce is just beginning to take hold.
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History suggests stocks should blast higher as we enter the third year of the president's term.
With the midterm elections behind us and 2011 looming large, Wall Street strategists are looking forward to the famously profitable third year of the four-year presidential cycle. The logic is easy: Presidents tend to be tough in the first two years, but in the final two with their re-election looming, policy turns toward stimulating the economy and securing a second term.
As a result, Merrill Lynch chief market technician Mary Ann Bartels points out, the third year of presidential terms typically delivers about 15% returns. Jeffrey Hirsh of Stock Trader's Almanac fame notes that there hasn't been a down year in the third year of a presidential term since war-torn 1939, when the Dow fell 2.9%. The only severe loss going back 100 years happened in 1931 during the Depression.
We're in the middle of the sweet spot right now: between the fourth quarter of the midterm year and the first quarter of the pre-election year.
One Morningstar analyst looks at funds that are slightly expensive but poised for growth.
But being new funds, they don't have the attractive expense ratios you'd find at older ones. The hope is to get in on these now, and asset growth would drive costs down.
If you're willing to accept that negative, then here are the nine funds that Kinnel likes:
The upcoming device will offer consumers more wireless capability, according to a report.
By Maggie Overfelt, TheStreet
Another day, another round of speculation about one of Apple's (AAPL) upcoming products.
On Tuesday, DigiTimes reported that Apple is preparing three versions of its upcoming iPad 2, some of which will be Wi-Fi- or CDMA-equipped, offering customers "more" wireless solutions than what's available with the current iPad iteration.
The automaker should benefit from rising industry sales and improving comparisons with Ford, analysts say.
By Ted Reed, TheStreet
Since returning to the public markets on Nov. 18, GM shares have traded in a narrow window between $33 and $36. Shortly after midday Tuesday, they were trading near the high end, up 81 cents to $35.41.
As the year winds down, the outlook for GM appears positive, both because a rising tide of vehicle sales should lift all boats in the auto industry and because analysts are generally optimistic about the company's prospects.
Smart-phone hardware is getting cheaper, and Google's platform is the go-to software for new low-end devices.
That's according to Fortune, which says half a billion smart phones could be sold worldwide next year. "Smart phones will likely blow by traditional computers next year as the way most of the world gains access to the Internet," writes Seth Weintraub.
So far, smart-phone growth has been centered around developed countries. But even in the U.S., smart phones account for only about a third of all phones, Fortune reports.
The retailer sold 158 items per second on its peak shopping day.
The company's holiday press releases are exasperating. Amazon dribbles out some carefully chosen facts but is silent about so many others. As a result, we're left trying to decipher what those few numbers really mean about the retailer's holiday quarter.
In this case, the numbers are pretty impressive. Amazon said it sold 13.7 million items worldwide on its peak day, Nov. 29. That's 158 items every second -- a record for the company.
With a new year just a few trading days away, a few promising sectors stand out.
By Jonas Elmerraji, Stockpickr
This year is almost behind us, and what a year it has been. While the broad market's double-digit run-up has been nothing to scoff at, it has paled in comparison with the massive rallies that have taken place across specific industries and other asset classes.
Defense contractors are up nearly twice as much as the broad market this year. Small caps have rallied even more than that, and precious-metals funds are up more than four times as much as the S&P 500 in 2010.
But focused investing in those plays is easy when you have the benefit of hindsight. Instead, today we'll look at investments to focus on for 2011. With a new year just a few trading days away, a handful of industries stand out as attractive investments for 2011.
For-profit-education stocks have been massacred, leaving an opportunity or two in the aftermath.
Rex Moore, Motley Fool Top Stocks editor
The market has been singing some Pink Floyd lately -- specifically, "We don't need no education!" It's music to my ears.
Everyone and his alma mater hates for-profit universities. An index of the sector is down 46% from its April highs, as investors seem to be bracing for sweeping reforms and draconian regulations, whether from Congress or the Department of Education.
Will the Santa Claus rally continue?
Santa was very good for investors this year. A very impressive rally that began after Labor Day plowed forward again last week for a solid gain of .9%. That puts gains for 2010 solidly in double digits.
Not bad considering the amount of pessimism surrounding the markets for much of the year. I guess that’s why contrarians have done so well.
I’ll continue to play it safe with my ETF trades this week. My favorite pick is the contrarian play against the so-called January effect that can propel small stocks higher.
It's not an official indicator, but a jump in online employment ads bodes well for 2011.
Major U.S. companies are advertising thousands of job openings, The Wall Street Journal reports. New data from the Indeed website shows that there were 4.7 million job postings online as of Dec. 1 -- up from 2.7 million a year ago.
The number of job postings isn't a very scientific view of the economic recovery. Many openings don't get posted online at all, and official payroll data haven't signaled a hiring rebound, the Journal reports.
Attendance plummeted in 2010, even with deep discounts. Now promoters say admission prices will drop.
Musicians across the spectrum had a tough time selling tickets, as fans decided they had better things to do with their money. Seats that at one time could have sold for $100 or $200 had no takers, and artists like Christina Aguilera, the Eagles, John Mayer and Rihanna had to cancel shows or entire tours.
Not the greatest year for concert promoters like Live Nation (LYV), which merged with Ticketmaster in January and saw its stock price plummet 25% since April. So now the concert business is giving in and dropping ticket prices.
In technology, as in life, sometimes things just don't work out.
By Jonathan Blum, TheStreet
Tech heavyweights such as Google (GOOG), imaging companies such as Hewlett-Packard (HPQ) or Lexmark (LXK), and even Facebook's Mark Zuckerberg -- Time magazine's Person of the Year, no less -- all brought truly bad products and services for small businesses to market.
We are not taking cheap tech shots here, bashing gadgets that merely failed to dazzle. Oh, no. These are the elite mistakes of the year, strategic blunders that indicate significant company dysfunction.
For an annual cost of less than 1%, you can get the market's best vehicle for physical gold.
Gold is a controversial topic, and it's certainly not for everyone. If you do want some exposure to it, however, Fool analyst Andrew Sullivan explains an easy way to get it.
Rex Moore, Motley Fool Top Stocks editor
In my last article, I told you that I'm shifting my Rising Star Portfolio cash hoard into gold to protect my purchasing power because I believe gold still offers a much better risk-reward ratio than cash. Cash loses purchasing power dramatically over time, and with a global currency war and sovereign debt crisis just beginning, this threat is heightened. Thus my reasons for moving into gold, and here's how I'm going to do it.
With US-listed Chinese companies under the SEC's microscope, investors should venture into China-focused funds carefully.
By Don Dion, TheStreet
Here are five exchange-traded funds to watch this week:
TheStreet and other financial media outlets have been buzzing recently about the SEC's probe into U.S.-listed Chinese companies. It's unclear how far the investigation will reach, but for now investors should use a sharp eye when venturing into some China-focused ETFs.
PGJ is more worrisome than other large-cap China ETFs, such as the iShares FTSE/Xinhua China 25 Index Fund (FXI). Whereas FXI tracks a basket of companies traded on China and Hong Kong exchanges, PGJ tracks a collection of U.S.-listed Chinese ADRs. These companies, which have a dual listing on U.S. stock exchanges, are more likely to fall under the SEC's scrutiny.
Whatever the company has planned for its enormous new data center could be enough to break the stock out of its current range.
I think it's going to be for Mac applications. It could be huge, and like everything else with Apple, it might usher in a new era in computing.
Or maybe it is a place where Apple can offer applications in a cloud-like way. Maybe it will be a place for a developer to get virtual shelf space for new Mac applications. They don't have that today.
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
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