Longtime market bull Jeremy Siegel says investors could realize the market is behind the curve on interest rates.
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While small- and mid-cap companies typically make for speculative trades, these can offer protection in turbulent times.
By Bryan Ashenberg, TheStreet
With market volatility rising and the health of the global macroeconomic outlook in question, many investors are looking for a haven. Small and mid-caps are typically among the more speculative types of equities, but some have defensive characteristics. Here are three companies worth checking out.
First up is Healthcare Services Group (HCSG). The company is a leading provider of housekeeping, laundry, linen and food services to the long-term-care industry and is a high-quality growth play with impressive defensive traits.
The company boasts 90%-plus customer renewal rates, a robust balance sheet and a healthy 4.3% dividend. In fact, Healthcare Services Group has raised its dividend for an impressive 32 consecutive quarters.
Though Congress has passed a bill to raise the debt ceiling and cut the deficit, S&P may still cut the US credit rating -- or risk losing credibility forever, one fund manager says.
By Robert Holmes, TheStreet
On March 28, after a week that saw the Dow Jones Industrial Average ($INDU) jump 3%, money manager Jeffrey Sica predicted that U.S borrowing and spending would prompt a downgrade of U.S. debt. Four months later, it appears that gloomy prediction will come true.
Sica, who is the president and chief investment officer of Sica Wealth Management, a company in Morristown, N.J., with about $1 billion in assets under management, says Standard & Poor's has to make good on the threat to downgrade U.S. debt or lose credibility forever.
With a debt deal now in place, Sica is bracing for a downgrade of U.S. debt by credit ratings agencies by making what some have called unpatriotic bets: short U.S. Treasurys, short the U.S. dollar, move to higher levels of cash and buy commodities like oil, silver and gold.
The company offers 2 of the most popular footwear brands.
A few years ago my teenage daughter told me she wanted Uggs for Christmas. I spent days going from store to store to find them. Since then I've noticed many teenagers in shorts and even bathing suits wearing the clunky-looking boots.
My Teva sandals are my favorite footwear, and lots of people must agree. Deckers Outdoor (DECK) knows how to design and distribute creative footwear that is worn by people young and old, and its stock deserves your attention, too. Based on its recent price momentum, investors also think so.
Steve Jobs caves in and offers complimentary storage for music and e-books, though extra space will cost you.
By Tom Taulli, InvestorPlace Writer
For Apple (AAPL) CEO Steve Jobs, the word "free" is nonexistent. If a product is good, a customer should buy it, right?
But as for the wild Internet world, the approach is often different. Reliance on advertising revenue means many services cost users zilch, and people have come to expect such freebies.
So in the case of Apple’s widely anticipated iCloud service, Jobs has had little choice but to cave in and use the F word. There will actually be a free version (at icloud.com, the service is still in beta but is expected to launch in September). That is, anyone can get 5 gigabytes of space to store music files, apps, photos and e-books.
But there's a hitch. If you want more storage, it looks like you'll need to pay up.
Crude's usual summer correction is setting up risk-controlled buying opportunities for several strong stocks and an ETF.
Try as I might, I simply can't be as bearish as everyone else is right now.
Maybe it's the large cash position we have on hand in our ActionALertsPlus portfolio. Maybe it's the sigh of relief -- audible for me even as it seems to be inaudible for so many other people -- but I want to do some buying here. I know the hazards:
1. Unknowns in the budget bill
2. Anemic hiring
4. Lack of leadership
5. European woes
But guess what. We've dealt with all of those before, and they didn't kill us. The systemic risk, the crisis risk of the president's invoking the 14th amendment or selling the gold in Fort Knox, is off the table, and that's what matters to me.
A new rumor pushes Apple's launch date to as late as the end of October.
By Jeff Reeves, Editor, InvestorPlace.com
A more likely release date will be in October. Possibly late October, according to reports.
Of course, that's just a rumor, too, but the disturbing trend all these recent rumors share is clear: a later and later launch date for the highly anticipated smartphone.
In a slow economic recovery, the company keeps up pricing pressure. That will mean earnings growth when volume picks up.
In the current slow-growth economic environment, I'm looking for shares of companies that can turn modest top-line growth in unit volume into better-than-expected bottom-line earnings growth.
And that's exactly what DuPont (DD) reported on July 28 for its second quarter of 2011. Earnings of $1.37 a share were two cents a share above consensus, and revenue climbed 19% from the second quarter of 2010 to $10.26 billion, above the Wall Street estimate of $9.9 billion.
But to see what I mean, look at how DuPont got that 19% increase in revenue. Just two percentage points came from higher volumes, while a whopping 11 percentage points came from higher local prices. (Exchange rates and a shift in the company's sales mix toward higher-margin products account for the rest of the revenue gain.)
Although Congress is moving toward an agreement to raise the debt ceiling and trim the budget deficit, we're not out of the woods yet.
As I write this, Congress is moving toward a budget deal that would slash spending by at least $2.1 trillion over 10 years while raising the U.S. Treasury's borrowing limit by $2.4 trillion -- enough to get us past the 2012 presidential election.
By all indications, the bill will pass. The House approved it Monday evening, and the Senate -- which was expected to OK it as well -- scheduled a vote for Tuesday morning.
And as I outlined on Friday, this couldn't come soon enough. Economic growth is waning and investor confidence fading. As the once unthinkable -- a default by the United States government -- suddenly became a very real threat, it took the wind out of the sails of the recovery just as it was building some momentum after a spring slowdown.
But with GDP growth slowing to a crawl and factory activity essentially unchanged in July, is it too late? Has too much damage already been done? Maybe. But the bigger problem is that the deal doesn't go far enough. And that risks America's losing its vaunted AAA credit rating at a time of economic vulnerability. Here's why.
The end of 'unlimited' as we know it.
Things are going full throttle at AT&T (T), and I don't mean that as a compliment.
The telco giant announced Friday that it will begin to slow down the heaviest data drinkers on its unlimited wireless data plans. The move may shake out money-losing wireless customers, but it will also inevitably sink the carrier's already sullied reputation even deeper.
Come October, AT&T will flag 5% of its biggest consumers of data. Multiple notices will go out. An initial grace period for first-time bingers will be extended. In the end, the largest pigs at the data trough will be slapped with slower access until the next billing cycle begins.
In short, this buffet is about to begin discriminating against heavy eaters.
As Chinese labor costs skyrocket, one manufacturer thinks a robot army will be more affordable.
Foxconn Technology Group (FXCNY), known best for building Apple's (AAPL) products, wants to put 1 million robots to work in the next three years, Reuters reports. That's almost the same number of human workers that Foxconn currently employs.
The biggest reason for this change is, of course, money. Chinese labor is no longer as cheap; some experts say that wages in key manufacturing regions have risen by a third in the last year. In the first quarter, 13 provinces in China raised the minimum wage by an average of 21%. "Workers' wages are increasing so quickly that some companies can't take it longer," one fund manager told Reuters.
Another reason for the change is, to put it candidly, that robots don't commit suicide.
The resolution of the budget debate doesn't mean its hangover will go away soon.
By Joe Mont, TheStreet
It isn't over yet.
What does it all mean for average consumers abd investors, and what moves should they make, or avoid, given continued uncertainty?
People looking to take advantage of the drop in housing prices may do best to ride out the debt crisis for a bit longer.
Even with a resolution, the nation's debt crisis could lead to a downgrade in its creditworthiness that could make getting a loan more expensive in the weeks ahead.
Investors are starting to notice S&P 600 stocks that are projected to have double-digit increases in sales and earnings.
A stock that has received recent notice on Wall Street is Zoll Medical (Zoll) which designs, manufactures and markets an integrated line of proprietary, noninvasive cardiac resuscitation devices, external pacemaker/defibrillators, disposable electrodes, mobile ECG Systems and EMS data management solutions. The recent price momentum has been a result of upgrades in the projections for sales and earnings.
Barchart technical indicators of recent price momentum:
- 100% Barchart technical buy signals
- Trend Spotter buy signals
- Above it's 20, 50 and 100 day moving averages
- 4 new highs and up 20.06% in the last month
- Relative Strength Index is 74.72% and rising
- Trades around 69.00 which is above its 50 day moving average of 57.45
- Barchart calculates a 61.99 support level
Time Warner Cable sees a drop in video-on-demand revenue, with adult films seeing the biggest decline.
That's a question Time Warner Cable (TWC) and other on-demand video providers are struggling with. The cable provider said recently that its video-on-demand segment, which includes its adult film collection, saw a revenue drop of 13.5%, or $14 million, in the second quarter.
"The biggest piece of the year-over-year decline was, in fact, in the adult category," TWC president Robert Marcus said on a conference call with analysts, according to The New York Post.
The company didn't explain why the business has gone soft, but there's a pretty obvious candidate: the Internet and its plethora of free adult videos.
As Americans focus on budget negotiations in Congress, the US may be headed toward another recession.
By Frank Byrt, TheStreet
While Americans focus on debt and budget negotiations in Congress, the nation's already fragile economy may be heading toward another recession.
As an example of how bad things are, the Institute for Supply Management said Monday that its index of manufacturing activity dropped to a reading of 50.9 in July from 55.3 in June. Economists had expected the gauge to remain unchanged.
The Commerce Department also said last week that gross domestic product (GDP) growth -- a measure of all goods and services produced in the U.S. -- rose at a meager 1.3% annual rate in the second quarter, well below economists' projected 1.8% growth. A year ago, the economy expanded by 3.8%.
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Fed keeps important 'considerable time' language in reference to short-term interest rates, but dissents and dots leave doubts.
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[BRIEFING.COM] S&P futures vs fair value: +7.40. Nasdaq futures vs fair value: +14.50. U.S. equity futures trade modestly higher amid upbeat action overseas. The S&P 500 futures hover seven points above fair value after climbing to highs after the start of the European session. That is somewhat fitting considering Europe, and specifically Scotland, will be in focus this evening with the referendum on independence taking place at this time. Referendum results are not expected until ... More
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