There are some picks in this sector that have excellent valuations and strong earnings growth.
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The markets want to know how the economy is growing, and experts are confident of an upward revision.
After a long period of underperformance, REITs are on the move again.
Stocks have had an impressive few months. The major averages are trading at new multi-year highs. And the S&P 500 is up nearly 21% from its late-August low. But not all stocks have participated equally.
Real estate stocks in particular have fared poorly. The iShares Real Estate (IYR) -- which tracks the performance of a collection of high yield REITs -- has lost nearly 10% on a relative basis compared to the S&P 500 over this period.
That's changing now. With bonds selling off, cautious investors are gingerly stepping back into stocks. As a result, real estate stocks have outperformed the broad market over the last three days -- and the sector looks ready for more. Here's why, along with a fast moving recent IPO that looks ready to soar.
These three bond funds employ strategies designed to excel in difficult market conditions.
By Stan Luxenberg, TheStreet
During the past month, the average intermediate-term bond fund lost 1.1%, according to Morningstar. Now many economists worry that bond markets could face more hard times in 2011. Which bond funds will do best in the coming year?
To find promising choices, consider funds that proved resilient during the hostile bond markets of recent weeks. Among the top performers of the past month, my favorites include Pimco Floating Income (PFIAX), Templeton Global Bond (TPINX) and DoubleLine Total Return Bond (DBLTX). These resilient funds employ strategies that are designed to excel in difficult market conditions.
Bond funds have suffered lately as interest rates have risen. Yields on 10-year Treasuries have climbed to 3.33% from 2.6% in early November. Many forecasters predict that rates will continue rising in the next year. When rates climb, bond prices tend to drop as investors flee existing issues in search of new bonds with higher yields.
Banks are paying bigger salaries and cutting back on bonuses. And that can hit employees hard.
Those are the back-office employees and mid-level bankers that will get no annual bonus this year, The New York Times reports. At one time, this would have been unimaginable. But after the financial crisis, many banks cut bonuses and compensated by raising salaries.
So the Zeroes get more in their paychecks, but at the end of the year they see no bonus. "Even though employees will receive roughly the same amount of money, the psychological blow of not getting a bonus is substantial, especially in a Wall Street culture that has long equated success and prestige with bonus size," the Times reports.
The company is finding that a television service with multiple hardware partners is not easy to develop.
Google (GOOG) is now seeing just how tough the TV landscape is. Its much-anticipated Google TV was supposed to get a glitzy launch next month at the Consumer Electronics Show in Las Vegas.
Now Google is delaying the launch to improve the software, which people aren't crazy about, The New York Times reports. The company is telling TV makers to hold off on any introductions.
These funds should capture the strength of the power industry in 2011.
By Don Dion, TheStreet
The global energy industry will likely be an interesting region of the market to watch in the new year. As emerging markets turn to various fuel sources to feed their insatiable thirsts for energy, developed corners of the globe seek resources such as oil, coal and natural gas to prolong their ongoing recovery pictures.
ETF investors can use a number of strategies when it comes to capturing the strength of the energy industry in 2011. Products such as iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) or Market Vectors Coal ETF (KOL) provide ample exposure to a diverse collection of energy-related companies worldwide.
US customers will soon be able to pay for their coffee with their smart phones.
By Brian O'Connell, MainStreet
In a note to customers dated Nov. 1, product manager Chuck Davidson said the Starbucks mobile app is up and running in 300 locations in New York and at select stores in Seattle and Northern California.
Morningstar says NRG Energy and Sprint, among others, may get a big boost if business turns in their favor.
By Jake Lynch, TheStreet
Investors have overlooked the inherent value of the following five companies, which receive five-star ratings from Morningstar. Still, they have many challenges. Morningstar predicts the stocks could more than double as business fundamentals improve. Below they are ordered by potential return, from great to best.
5. GenOn Energy (GEN) is an independent power producer with exposure to volatile commodity markets. It was formed through the all-stock merger of Mirant and RRI. The combined entity boasts a stronger balance sheet and competitive position.
Traders who don't understand the necessity of bargains in retail have missed out on much of the sector's surge. But one discount retail stock is still 'a screaming buy.'
As we go into the final days before Christmas, let me tell you the most overrated word in the stock investing lexicon: discounting. This refers to the idea that the retailers are going to miss the numbers because of all the discounting going on.
One of the most amazing facts out there is that the retailers know they have to offer bargains. They know the consumer is smart. They know people compare prices on the Web. They know that when consumers go to stores, they have prices in mind, regardless of the possible service they will get -- and they care more about price than ever.
Nokia seizes control of the Symbian platform and looks to Apple's business model. But a key delay doesn't help.
Don't even think about shorting it, Reed Hastings writes in response to a fund manager's doubts.
Today, Netflix chief executive Reed Hastings is fighting back. He posted a long response on Seeking Alpha telling Tilson: "Cover your short position. Now." But in a surprising bit of candor, Hastings acknowledged that one could in fact make money shorting Netflix.
Curiously, Netflix's share price did fine last week after Tilson's piece came out, climbing Thursday and briefly topping $184 Friday. But today, after Reed's defense, Netflix shares are down slightly to $178.17.
Not just cheap but also dominant, these companies could ride a stronger-than-expected economy to huge gains next year.
By Jake Lynch, TheStreet
Technology stocks in the S&P 500 ($INX) have generated an average gain of 16% in 2010, the third-worst-performing industry group. But as the recovery ramps up next year, business and consumer spending will accelerate, and tech stocks may lead, analysts say. Value-focused Morningstar covers hundreds of technology stocks but awards its highest five-star rating to only four.
Here is a closer look at those four technology value stocks. They are expected to rise at least 53% and as much as 99%. Below, the stocks are ordered by potential return, from great to colossal.
4. Dow component Cisco Systems (CSCO) makes networking equipment. It holds the dominant position in ethernet switches, with roughly 70% market share, a stable figure. It is also the leader in routers, with Juniper (JNPR) grabbing second place.
US employees could get the same chance that UK staffers have to share in the company's success.
By Jeff Reeves, editor of InvestorPlace.com
After a rough few years during the financial crisis and subsequent recession, Starbucks (SBUX) has been piping hot in 2010. Thanks to an innovative new line of Via instant coffee, a push into retail grocery sales and a number of successful promotions (including Starbucks' free holiday drink offer), the coffee giant is definitely on the upswing.
And it appears Starbucks is willing to share that success with workers in the new year via company stock. Not a bad Christmas present, considering SBUX is up 43% in 2010 -- about three times the broader stock market.
Funds tracking commercial real estate and retail are likely to be active.
By Don Dion, TheStreet
Here are five ETFs to watch this week.
Retail has been an exciting region of the market to watch this holiday season. As we head into the final stretch, malls will likely be packed with shoppers seeking last-minute gifts.
The anticipation of the holidays will make XRT an interesting fund to watch. The fund could also see some earnings-related action. Throughout the middle of the week, index constituents including Carmax (KMX), Finish Line (FINL) and Walgreens (WAG) are scheduled to release their most recent quarterly earnings reports.
With the dollar deflated, major US brands are cheaper than ever -- and forward-thinking foreign companies realize it.
Why is this so important? Because Sara Lee is also Kimberly-Clark (KMB), which is also Clorox (CLX), which is also Heinz (HNZ), which is also Kellogg (K) -- big brands that need better homes than they have. And they can be bought because the dollar is weak and the people who don't think small want these brands as a way to move beyond their home markets.
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These hot movers could rise by double digits in coming months.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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