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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The newly passed financial reform bill includes plans for the derivatives market that could create huge costs for the banking industry and the economy.
By Lauren Tara LaCapra, TheStreet
Bank investors are freaking out, and with good reason: The companies they own have gotten hammered recently and may see up to 36% in additional losses in the weeks ahead, according to one estimate.
The bad news? Financial reform may slash revenue by at least 25%, profits by as much as 75% and force the industry to raise $200 billion in fresh capital. The good news? Things may not turn out quite as bad as those dire, doomsday predictions. The recovery will offset some of the downside, the capital burden may not be placed on shareholders, and bank stocks have already taken a big hit.
The outcome depends on lawmakers. Let's break it down.
With no country driving global growth and the US reining in banks, stocks and economies worldwide will struggle to gain momentum.
Are we headed for a double-dip recession?
On the "Today Show," Matt Lauer asked me whether it’s going to happen in light of unemployment claims and problems in Europe. Three weeks ago I would have said the odds don't favor it, maybe 25% chance, which is why I thought the Dow ($INDU) could stay north of 10,000.
But now it has to be considered a 35% chance, which is why we could see the Dow at 9,500. As Europe dithers, that odds of a double-dip recession will go up by the week. It’s that important.
Consumers aren't happy with the new look of Starbucks' low-priced brand Seattle's Best Coffee.
Starbucks (SBUX) made a splash recently with news that it would be focusing on its Seattle's Best Coffee brand in the coming months as a way to broaden its appeal to consumers who prefer a milder cup of java -- and a lower price point.
Unfortunately, it appears the coffee giant was too busy crunching numbers and not busy enough working on how to present the Seattle's Best brand. A recently redesigned logo is getting panned by the public, with a whopping 68% of consumers saying Starbucks should try again, a recent survey has found.
Derisive comments from bloggers about the logo include "Seattle's Best Blood Bank," among others.
McDonald's executives have no plans to say goodbye to their long-time mascot.
Ronald McDonald is staying, McDonald's (MCD) executives said Thursday, sending a clear message to critics who say that the red-haired mascot manipulates children into unhealthy eating.
"He is a force for good," chief executive Jim Skinner told shareholders. "He communicates effectively with children and families around balanced, active lifestyles. He does not hawk food."
High-quality stocks are falling to bargain prices in this rocky market -- but owning them might cause you to suffer short-term losses.
"What do I do with gold, Jim?" "What do I do with Citigroup (C), Jim?" "What do I do with tech, Jim?"
OK, here's what you do when you are in a bad market. You make judgments -- judgments about pain. These assets are going down. They are going down for a variety of reasons -- bets from hedge funds going wild, fear from Europe that we will be in deflation mode, and worries about government intervention.
So, you have to ask yourself: Can I take the pain if they go down more?
New iPad owners are complaining about lack of support for Flash in the devices.
All are reasons that Apple has decided not to support Flash on the iPad, iPhone and iPod touch. But a recent survey of iPad users indicates that Jobs may have missed the mark when it comes to his customers and Flash.
Who needs the Midas touch when you have the Oprah effect?
You know how it works. The billionaire talk-show queen invites an aspiring businessperson, author, designer, etc., to be a guest on her show, and suddenly that person's project goes through the roof.
Well, The Wall Street Journal reports she's just hired a top money manager to run her personal fortune, and he's no doubt both hoping the Oprah effect works for him, too.
A personal, dedicated money professional is, of course, one of the privileges of wealth. Most of have to work with mutual funds, busy brokers and planners, or simply try to pick stocks all by ourselves.
The wireless chief at AT&T says customers will stay even if Verizon gets an iPhone.
A Verizon iPhone? Pfft. Bring it on. AT&T will survive, says Ralph de la Vega, the head of wireless at AT&T (T).
AT&T has exclusively offered the iPhone in the U.S. for years. But the rumors are growing that Verizon (VZ) may soon also get approval to sell Apple's (AAPL) popular phone.
AT&T isn't worried about a mass defection to Apple, de la Vega says. That's because 70% of its wireless customers are on family plans, and it can be a pain -- and expensive -- to switch out all family members at once, Electronista reports.
The Treasury Department to sell its last remnant of ownership in Wells Fargo this week.
By Lauren Tara LaCapra, TheStreet
The warrants are related to the government's initial $25 billion TARP investment in Wells Fargo in October 2008. With a minimum bid price of $6.50, the offering will reel in at least $716.7 million in proceeds for taxpayers.
Shares of the hipster retailer drop after it widens its first-quarter loss and receives a delisting warning.
By Jeanine Poggi, TheStreet
The Los Angeles-based company also said it might not be in compliance with a covenant under its credit agreement. Non-compliance may impact the company's ability to carry out its operating plan for 2010, American Apparel said in a statement. The company is working with its second-lien lender to amend a covenant regarding total-debt-to-adjusted-EBITDA by June 30.
The New York Stock Exchange also told American Apparel that it must submit a plan to return to compliance by June 1. The company must be compliant by Aug. 16 or face a delisting of its stock.
It's easy to be a naysayer when it comes to bank stocks, but there are plenty of reasons to be optimistic.
When you say something positive and it doesn't work out immediately, you get an "I told you so."
I have been advocating that when the smoke clears, the pain for the major banks -- Well Fargo (WFC), Bank of America (BAC), JPMorgan Chase (JPM) and Morgan Stanley (MS) -- will not only be bearable but will create buying. I exclude Goldman Sachs (GS) because it’s clear that both the Senate and President Obama are not going to rest until this firm is stripped of much of its greatness.
So what happens? At every turn of every potential pitfall, I get emails from people saying, "I told you so."
Chico's, or how finding new investments can be as easy as keeping your eyes open at the mall
Years ago I remember reading an interview with famed investor Peter Lynch in which he was asked how he kept coming up with new and original investing ideas. He mentioned how when he went shopping in the mall with his wife, he'd sit outside a new store he never heard of and watch not only how many people went in and out but how many of them were carrying bags of new purchases. He would then go back to his office and research that company.
I recently had one of those Peter Lynch moments.
I was visiting my Mom in Fort Lauderdale, and since my daughter was going to get married soon on the beach at Isle of Palms near Charleston I thought it might be nice to buy my Mom a new outfit for the wedding
Resist the urge to buy in China's bear market; the better bet is to use caution.
It's official. China is now in a bear market.
Technically defined as a 20% decline following a rally of at least 20%, the bear surfaced in Chinese stocks last week when the Shanghai Composite index posted losses that took it 21% below November 2009 highs.
While it may be tempting to buy Chinese stocks on such a large retreat for stocks of companies working in an economy with robust 11.9% annual growth, it's wiser to remain cautious with this bear.
Looking to beat the market? Consider the second-tier names.
Investors in the market like to focus on the big corporate battles. Take two giants in an industry and watch them go toe-to-toe in a battle royal.
To the winner go the profits, but how do investors do following the leaders? From my experience investing in giants is similar to owning an index fund. The returns are simply mediocre.
Below the radar in any industry are interesting sub-plots and possible investment opportunities that can outperform the market.
Pay close attention to this biotech play
Written by Douglas Estadt
We like Delcath's management team and the cutting edge life-extending technology of their PHP System. Today we sold DCTH May 15 puts at $.55 and $.60, so when the stock closes Friday, and the options expire, one of two things we view as favorable will happen:
- if it closes above 15, we’re going to pick up $550 to $600 for every 10 contracts we sold
- if the stock pulls back quite a bit before then, we will get the stock "put" to us,
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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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