5 reasons the market is seeing red
5 reasons the market is seeing red

Geopolitical crises are taking a toll on stocks as we head into the seasonally weak month of August.

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After a nice climb in recent weeks, the oil giant is about to take another dive as optimism over the Gulf spill wanes.

By InvestorPlace Jul 19, 2010 9:44AM

By Hillary Kramer, Editor of Game Changers


BP (BP) seems to have stabilized. After shares spiked to nearly $40 late Thursday, they have settled back down around $38 -- up over 9% from a week ago and up almost 17% in the past month.


But it’s the end of the line for BP, and investors who made a gamble and jumped in during the worst of the Gulf oil spill should cash out their profits now and put those gains to work elsewhere. The fact is that BP shares are going to get toxic in a hurry.

 

Until all the implications of the new law are fully understood, bank stocks will be sluggish -- but worth holding on to.

By Jim Cramer Jul 19, 2010 8:57AM

jim cramerBy Jim Cramer, TheStreet

 

Should there have been more of a bounce after the financial regulatory reform legislation went through? Why was everything so muted? One answer could be that people didn't care for Bank of America's (BAC) earnings.

 

I get that. There was no growth, and management really hammered shareholders with the most bearish possible assessment of the costs of regulation. They basically presented the negatives of all the costs and lost revenue without any potential growth that could come from higher service fees that we all know are on the way. It was a horribly downbeat conference call.

 

But there was something else at work, too, and it must be pointed out. Financial regulatory reform may be done, but it is rapidly dawning on people that we know nothing about what it will mean when it is implemented.

 

These companies show proof of growth in an uncertain market.

By InvestorPlace Jul 19, 2010 8:30AM

By Robert Hsu, Editor of China Strategy


With widespread investor concerns over the current state of China stocks, there are a lot of fear and frustration over China investments right now. The issue is that all China stocks are not the same. There are different types of China stocks listed in the U.S. -- state-owned enterprises, mid-cap blue chips and small caps, each with specific characteristics. 


Overall, I still believe that we will see 40% upside in many of these stocks by year's end, most of it in fourth quarter, and now is the time to position for the upcoming rally.

 

To help you navigate toward some promising China investments, here are 3 stocks that show potential for growth this earnings season.

 

The downward roller coaster ride continued

By Jim Van Meerten Jul 16, 2010 7:44PM
OK. Time for the reality check. If you had listened to the talking heads at the beginning of the week you night have thought the market was in a full recovery mode but it ran out of gas toward the end of the week. We have been on a roller coaster ride since the beginning of May, but it has been the downward portion of the ride. Remember to use the 3 yard sticks I've developed from the data on Barchart because every sample has some error in it and doesn't tell the whole story. So where are we?

Value Line Index-- Contains 1700 stocks so I think it is a better representation of the market than the S&P 500 or the even narrower Dow 30 -- down 4 days out of 5

  • Although we are up by 5.75% since the beginning of the month we are down 6.54% for the last month
  • 80% Barchart technical sell signal
  • Closed Friday below its 20, 50 and 100 day moving average
  • Barchart Trend Spotter (tm) sell signal

Barchart Market Momentum -- Contains approxi

 

While individual investors remain skittish, several top strategists, including Warren Buffett, are sounding optimistic.

By John Reese Jul 16, 2010 5:50PM

As Friday's market tumble demonstrated, there's still plenty of fear to go around in the current market. Yes, sentiment had improved markedly earlier in the week as the market continued to bounce off its early-July lows, but all it took were a couple iffy earnings reports and some bad consumer sentiment data to send investors heading for the hills.

 

With fears of a double-dip recession or another bear market running high, it's not surprising that many of the stock market gurus I keep an eye on are finding opportunity. As Warren Buffett has said, the time to be greedy is when others are fearful.

One top mind finding bargains amid the fear: Bruce Berkowitz, who was recently named Morningstar's domestic equity fund manager of the decade.

 

Investors are worried about falling revenue streams and loan demand at Citigroup and other banks.

By Jim J. Jubak Jul 16, 2010 4:34PM

Jim JubakThursday's second-quarter earnings report from JPMorgan Chase (JPM) raised concern among investors. 


The bank reported falling revenue -- just 6% -- in its investment banking business. That seemed to confirm concerns that the Wall Street side -- investment banking, trading and the like -- of the big banks is slowing.


But today's earnings reports from Bank of America (BAC) and Citigroup (C) have escalated that concern to at least worry and maybe all the way to fear.

 

The company admits its mistakes and offers free iPhone 4 cases. A little humility never hurt anyone.

By Kim Peterson Jul 16, 2010 3:06PM
Credit:  Apple CEO Steve Jobs holds up iPhone 4 as he talks about the Apple iPhone 4 at Apple headquarters in Cupertino, Calif., Friday, July 16, 2010  (© Paul Sakuma/AP)I don't blame Apple (AAPL) for being arrogant. Heck, any company with a share-price run like that deserves a chip on its shoulder. Anyone who can make such astonishingly elegant and functional devices is allowed a pat on the back.

But when Apple's arrogance begins to inconvenience customers, maybe it's time to take things down a notch. When chief executive Steve Jobs addresses iPhone 4 antenna problems by saying "just avoid holding it in that way," well, something has to change.

And so it was refreshing Friday to hear Jobs (pictured) say things like "we're not perfect," "we're human" and "we make mistakes." Apple is giving free cases to iPhone 4 users to improve the phone's reception. 

Concerns over financial-sector earnings might be overblown.

By Anthony Mirhaydari Jul 16, 2010 3:06PM

Megabanks JPMorgan (JPM), Citigroup (C) and Bank of America (BAC) have all reported better-than-expected earnings results this week -- only to be knocked to the ground by unimpressed investors. The problem is that the earnings beats are being driven by reduction in loan-loss provisions, which are like accounting piggy banks that are used to protect against defaults.

 

An optimist would say that these reductions are a result of a strengthening economy and improvements in the number of people who can pay their loans on time.

 

But the skeptics are having none of it. Bank stocks have tumbled over the past two days on concerns that bank executives are using creative tactics to dress up their earnings -- prematurely tapping into their credit reserves. So who's right?

 

Google's disappointing quarter and the Goldman Sachs settlement don't offer any clear guidance, except to stay on the sidelines.

By Jim Cramer Jul 16, 2010 8:54AM

jim cramerBy Jim Cramer, TheStreet

 

We get Goldman Sachs (GS) back but we lose Google (GOOG)? Or did we lose Google a while ago and get a whole bunch of financials back? Hard to puzzle through.

 

Last night confirmed what we've been wondering since last quarter: Google is not a monopoly. It is in competition with Facebook and Apple (AAPL), two formidable adversaries. Facebook can spend whatever it wants, as it is private and doesn't have to report to shareholders, and Apple can do whatever it wants and seems to do it right.

 

And to compete, Google, one of the most cash-rich companies on the globe, is raising capital! That's not what we want to hear from a company that missed estimates and is experiencing maturity at a lightning pace. Plus, it has ceded to China! You can never cede to China if you are a growth company. Only local, community banks don't dream of entering that market. I can't think of any other business that doesn't want to operate there or find a way to do so unfettered.

 

JPM beats expectations but only after releasing its loan-loss reserves.

By Jim J. Jubak Jul 15, 2010 5:22PM

Jim JubakSo far, so good for bank stocks.


Thursday, JPMorgan Chase (JPM) reported second-quarter earnings of $1.09 a share. Not only was that a 289% increase from the second quarter of 2009, but it beat Wall Street projections for a 159% jump in earnings and earnings of 73 cents a share.


Some people, including me, had worried that Wall Street’s expectations for bank earnings had gotten way ahead of themselves and that banks would be unlikely to meet those projections. (For more on that worry, see my July 7 post, Watch for a buying opportunity on my watch-list banks if earnings disappoint this quarter.)


You can take that worry off your list.

 

The company will pay $550 million to sweep serious SEC charges under the rug.

By Kim Peterson Jul 15, 2010 5:11PM
Updated July 16, 1 p.m. EST

Who came out the winner after Goldman Sachs (GS) settled charges with the Securities and Exchange Commission?

Let's see. In after-hours trading, Goldman shares jumped by 8%, and that was on top of a 4% increase Thursday as rumors of a settlement raced around the markets.

Investors continued to applaud Friday. Shares were up $3 and change, which means the company is worth $1.5 billion more than it was before the settlement. Not bad for a $550 million investment; no wonder they say Goldman always wins. 

The economic downturn has many older folks returning to work, while youngsters are simply giving up.

By Kim Peterson Jul 15, 2010 4:32PM
working in retirement © Andersen Ross/Getty ImagesOlder people are staying in the workforce longer, and that has helped bring about a new phenomenon: Now, for the first time on record, more seniors than teenagers are in the labor force.

More people over age 65 either have jobs or are looking than ever before, The New York Times reports. But the participation of teens in the job force is down, perhaps because in this economy, more young people are either unemployed or have given up searching for work.

The flip took place around the end of 2008, according to the Bureau of Labor Statistics. 

The famous annual festival in Spain has been hit by the country's economic crisis.

By Kim Peterson Jul 15, 2010 3:55PM
Bull market © Tom Brakefield / Photodisc Green / Getty ImagesMaybe Spain should try the running of the bears instead.

The annual festival celebrating the running of the bulls has been tempered this year, The Wall Street Journal reports. Spain is suffering an economic downturn that threatens to turn into a crippling recession, and people aren't so bullish on the bulls anymore.

Normally, nearby businesses pull in about half their annual sales during the Fiesta de San Fermines in Pamplona. But this year, business has slumped. Tourists are staying away, and the ones that did show tried to keep it on the cheap by buying alcohol in local supermarkets, writes Joe Parkinson. 

Foreign banks got out of the business of these securities, but they're jumping back in now.

By Kim Peterson Jul 15, 2010 2:40PM
house for sale  © Getty Images Mortgage-backed securities are hot again, despite the prominent role they played in the global financial crisis.

Foreign banks in particular pulled out of the business altogether after getting badly burned. But now, they're jumping back in because they have to stay competitive with American rivals, the Financial Times reports.

European and Japanese banks are aggressively hiring Wall Street traders, and setting them up in New York to concentrate on the American market.  And so the cycle begins again. 

Despite a slowdown in the US and Europe, luxury brands are in demand by Asia's fast-growing upper and middle classes.

By TheStreet Staff Jul 15, 2010 1:52PM

finance news from the streetSave on shopping  © Photodisc / Getty ImagesBy Jake Lynch, TheStreet

 

Luxury retailers may seem like the worst investments, given the prevalence of tightwad consumers, but the opposite is true for some companies.

 

Last week's "Best in Class" feature made the bullish case for jewelry seller Tiffany & Co. (TIF). The same for leather-ware seller Coach (COH) follows. The investment theses are comparable: Emerging-market demand, specifically in Asia, will offset developed-nation stagnancy this year.

 

Although America's economic dominance is weakening, its cultural hegemony is squarely intact. American luxury brands have cache in emerging markets, confirmed by Coach's latest commentary.

 

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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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