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No longer hostage to raw costs and consumer whims, consolidated clothing companies like Phillips-Van Heusen are premier growth vehicles.
The results were spectacular, led by international -- chiefly Calvin Klein and Tommy Hilfiger. Of course, going into the quarter the betting was heavy that we would have another disappointment, like Polo Ralph Lauren (RL) after its quarter, or like VF Corp. (VFC) after a recent conference.
But the bearish reasoning was all backward. We heard that PVH would have a hard time with cotton costs for Calvin Klein. But PVH licenses the Calvin Klein name and doesn't have to eat those cotton costs. We heard that Tommy can't maintain its strength in Europe. But prices are actually rising for Tommy clothes (they already sell for more than double their cost here for pretty much the same product) in Europe and Russia.
The Brazilian government is trying to attract customers to Vale. What does that involvement mean for the company?
It spends more than it brings in, and it's on track to hit its debt limit. Why can't it pull itself out of this mess?
How is it that UPS (UPS) and FedEx (FDX) can run profitable, successful delivery services while the U.S. Postal Service blunders its way into insolvency? That's an easy question to answer after you read the BusinessWeek article.
The USPS brought in $67 billion in revenue last year, not nearly enough to cover its costs. It's nearly $15 billion in debt and will hit its debt limit this year. If this continues, the Postal Service will collapse.
Post continues after this video interview with BusinessWeek's editor about the article:
The stocks have soared over the past year, and they stand to benefit from low interest rates and more conservative investors.
There is no stopping this sector. The top stock in the group? Analysts from UBS say menthol leader Lorillard is the top pick, and they're raising their price target on the stock to $124. Lorillard is trading at about $115 today.
Lorillard has a strong growth trajectory, and is expanding its Newport line to include non-menthol cigarettes such as its recently introduced Newport Red. In the first quarter of this year, Lorillard's sales rose nearly 13%, profit rose 7% and the company raised its dividend 16%.
The chief executive, currently on medical leave, is on board to announce the company's new software offerings. With video.
Normally the company keeps its set list top secret. But on Tuesday, Apple was very clear that the event is all about software, including its new operating system, Lion. Apple will also talk about its next mobile operating system for devices like the iPad and iPhone, and finally its upcoming cloud services product, called iCloud.
And to top it all off, chief executive Steve Jobs will deliver the keynote. That wasn't expected, as Jobs went on medical leave in January. One large Apple shareholder talks about what he sees in the news in the following video.
Post continues after video:
Traders playing the short side must be sure to avoid some common pitfalls. See what they are and discover several heavily shorted stocks that seem poised to move higher.
With low multiples and good products, the stock is compelling.
Dell (DELL) lost its No. 1 place in PC market share to Hewlett-Packard (HPQ)in 2006 and has been unsuccessfully struggling to regain its former glory ever since. Now, after years of looking like a turnaround that wouldn't ever turn, the company's recent earnings report suggests that Dell could be in the early stages of a turnaround. The company's new XPS 15z notebook, announced on May 24, provides more evidence that Dell's stock could be poised to take off.
This time it looks as though Dell got it right. CNET describes the XPS 15z as "much more in line with what people have come to expect from Dell nowadays: some thoughtful style, decent quality, but still very accessible to mainstream consumers."
Will funds in defensive sectors continue to perform well?
By Don Dion, TheStreet
Here are five ETFs to watch this week.
Europe took center stage last week as investors were once again reminded of the debt crises facing vulnerable euro members. During this week, it will be interesting to see if these issues remain on the forefront of investors' minds.
I continue to urge investors to avoid products with heavy exposure to nations like Spain, Italy, Greece and Ireland. Rather, risk-tolerant investors seeking exposure to this corner of the developed world may find nations outside of the euro bloc attractive. Over the most recent 30-day period, funds like the iShares MSCI Sweden Index Fund (EWD) and iShares MSCI Switzerland Index Fund (EWL) have managed to outpace EZU.
Netflix and Dean Foods are among the US benchmark's top gainers this year.
By Jake Lynch, TheStreet
That leaves the benchmark with a 2011 gain of 5.5%, which is on pace to trail the performance of the previous two calendar years.
Amid the correction, leadership has shifted to defensive sectors like health care, consumer staples and utility stocks, which were previously bull-market laggards. In the past four weeks, S&P telecommunications stocks have delivered a median return of 6.4% and health-care shares gained 4.2%.
The list of concerns facing investors is piling up. Europe's debt woes, driven by Greece, threaten to stall economic growth in a region that's as large as the U.S. Japan just sank into a recession because of an environmental catastrophe, and China, the engine of global growth, is slowing amid higher interest rates.
Medical marijuana is already massively profitable for a handful of states, so it's no surprise pharmaceutical giants want in on the action.
Though it may not be politically correct to talk about the benefits of legalizing marijuana, the bottom line is that many folks are believers in the power of pot as a medication. And those believers include Big Pharma executives looking to boost their bottom lines.
Consider that medical marijuana sales in the U.S. already will reach $1.7 billion this year, with nearly $250 million coming from Colorado, according to a report released in March. Further, the report predicts that medical marijuana sales will reach $8.9 billion if 20 more states allow its sale for medical use.
If the U.S. government ever legalizes marijuana, sales would probably make the $11 billion Pfizer (PFE) raked in on Lipitor worldwide last year look like chump change.
It's time for investors to transition their portfolios for the proverbial summer rally.
With May selling behind us it is time to drift over to the long side of the market. Selling in May and going away played out well for those short the market or with portfolios properly hedged.
Now that summer is coming, investors can position for the proverbial summer rally. The economy may be showing signs of weakness, but corporate earnings are still strong. It is those profits or the promise thereof that will lift stocks.
June is somewhat of a quiet month as the second quarter winds down. I expect investors to nibble at stocks here in anticipation of good profit numbers to be released in July. I would buy the rumor.
The ETF to buy this week is the iShares S&P North America Technology and Multimedia Fund (IGN).
The nation will get the money it needs only if it cedes control of its finances to the fund. That should help the euro rally and lead to a pretty good day for stocks.
For the last year, Greece has strung out everyone on austerity measures that were supposed to make a difference but haven't. Now, at last, it looks like the IMF has a free hand. That means, basically, that if you want the big IMF money you have to turn over your finances to the IMF, just as the IMF has done whenever it truly takes hold and has to part with big money because the IMF doesn't lose money and it always gets its man.
The euro can rally on that for a while because what it says is the rest of Europe is not going to protect Greece and it is not kicking the issue down the road gently but forcefully which could mean, for some, the end of the "break the euro" faction for the foreseeable future.
Despite bearish headlines, the markets were surprisingly strong...but what does that mean heading into June?
It is important to understand that even a much-followed stock like Cisco will suffer from inefficiency.
To function in everyday life, our brains are used to simplifying complex problems, through pattern recognition. We become accustomed to drawing straight lines when we see two points, and if we get a third or fourth point that fits the line, our confidence about the longevity (continuity) of the line increases exponentially. We become excited, even certain, about prospects of the company we’ve invested in when its stock has gone up for a long period of time, while we often dismiss stocks that have declined or flat-lined, especially if that happened for a considerable period of time.
The bank pared holdings of more than half of its touted stocks, filings show.
By Jake Lynch, TheStreet
A so-called Chinese Wall is supposed to exist between investment banks' research and asset-management divisions, but recent calls, especially coming from subprime-securities proponent Goldman Sachs (GS), warrant further scrutiny.
Goldman helped to catalyze the recent commodity sell-off as its researchers expected little upside when the economy hit a soft patch. Crude oil tumbled beneath $100 on that report. Then, three days ago, with few fundamental changes in the demand outlook, Goldman reversed its stance, advising clients to buy.
This flip-flopping from Wall Street's most closely followed researcher is being perceived by some as client-fleecing since the bank is able to trade in proprietary accounts before it releases research and the markets react, as they often do to Goldman's calls.
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Excitement is growing about the company's new iPhone, expected this fall.
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[BRIEFING.COM] The stock market continued its strong start to the week with a broad-based Tuesday rally that sent the S&P 500 higher by 0.5%. Nine of ten sectors registered gains while the benchmark index extended its week-to-date advance to 1.4%.
Equities received an opening boost from a pair of economic data points that crossed the wires this morning. An in-line CPI report suggested inflationary pressures remain contained, while a better than expected Housing Starts report ... More
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