The Federal Reserve and Congressional politics threaten to rain on the market party.
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Renewed debt problems in the Eurozone have shaken world markets this week, and if the crisis spreads to other nations, there are two in particular that look most vulnerable.
ValueAct's Jeff Ubben sees a good company at a good price.
By Michael Olsen, CFA
It's 8:15 on a glorious Southern California morning, and I'm waiting to hear Jeff Ubben, managing director and founder of ValueAct, speak.
ValueAct is one of my favorite activist investors. They've built a reputation as gentlemen activists, but their annual returns precede them, 13.5% since inception. Ubben fits the profile: He's well-coiffed and articulate, sprinkles his opening remarks with well-read mentions, and shows a tendency toward polite contrarianism.
He moved from New York to San Francisco to get away from Wall Street. Where value constructionists favor valuation over business quality, he's rigorously focused on good businesses at good prices. He references his friendship with Jonah Lehrer, avid commentator on neuroscience and behavioral economics, and likens ValueAct's vetting process to flight school.
His investment idea, the product of a recent company split, doesn't disappoint.
With shares down double digits this year, the stock is a bust, not a bargain.
By Jon Markman, InvestorPlace.com
Google Inc. (GOOG) is down about 13% since the start of the year, and some investors may be eyeing this as a buying opportunity to get into one of the hottest companies out there, but I don’t think Google stock is hot at all.
GOOG creates a lot of buzz for itself, but as far as making money for shareholders -- which is the job of a company - it has failed recently. What’s worse, it hasn't been investing very well in its future.
Commodities aren't moving based on supply and demand. They're moving on trader and political demand.
Which comes first, the chicken or the dollar? That's what I am trying to figure out about the Goldman Sachs (GS) call this morning that talks about actual commodity demand and not just some sort of dollar-commodity trade.
Goldman's call is that there is innate demand here and commodities should stop going down, that commodities are needed by actual users, not traders.
That's enough to get things going, at least this morning. But it prompts a question: When people see commodities higher, do they then sell the dollar because commodities are supposed to be up only because the dollar's down?
Yeah, it has become that stupid.
It's great if you want to offer Lady Gaga's newest album for 99 cents. Just make sure people can play it.
The downloads aren't coming through, users report. People quickly made the purchase, but then found that all 14 tracks weren't there. Even now, several hours later after my purchase, I'm only able to play one song from the list.
Amazon admitted that it is "experiencing high volume" and that the downloads are delayed. "If you order today, you will get the full @ladygaga album for $.99," the company said on Twitter. "Thanks for your patience."
Well, users are having none of it.
Big events in Italy and Spain adds to investor worries about the euro crisis.
The company has repeatedly tried to light a fire with consumers, but with no real success. Will a new laptop change that?
The company is releasing a $999 laptop this week that looks an awful lot like another attempt to take down the MacBook Air. And with the new device, Dell is hoping one more time that it can finally make inroads with shoppers who have repeatedly rebuffed and ignored it.
Dell has missed the mark in just about every consumer-electronics category: smartphones, tablets, digital music players and sharp-looking laptops. It can't out-Apple Apple, and so now it's trying a different strategy: Going after the "prosumer."
By the way, which is a better buy, Dell or Hewlett-Packard (HPQ)? Jim Cramer makes the call in the following video. Post continues after video:
The hottest IPO in recent history falls more than 7% as investors reconsider the stock. With video.
And Monday, the market seemed to agree that LinkedIn is too expensive. Shares of the social-networking stock fell more than 7% in midday trading to $86.29. That's still way ahead of the stock's $45-a-share IPO price, but it's a steep drop from the $122.69 peak it hit Thursday when investors were at their frothiest.
Now brokers are telling their clients to short LinkedIn, The Wall Street Journal reports. "Even if you think it's a great business model, the feeling is that the valuation is way beyond what even the most bullish guys were hoping for," one brokerage trading expert told the newspaper.
Watch Jim Cramer's take on LinkedIn. Post continues after video:
Investors scramble as economic concerns mount and selling pressure builds.
The correction I've been warning about entered a new, more dangerous phase Monday as reality began to set in among even the most ardent bulls. With just five weeks left in the Fed's $600 billion QE2 initiative, seen by many as a panacea for all the world's ailments, investors are beginning to worry. And they're beginning to sell.
As a result, the sell-off that was relegated to commodities, energy stocks and foreign shares has started to pull the major U.S. averages through major technical support levels and down out of multi-month trading ranges. Even defensive stocks in areas like health care and consumer staples, which have been market leaders recently as savvy traders looked for protection, are plunging along with the overall market.
There are many catalysts. For one, there is no doubt that the eurozone debt contagion is mutating into something so virulent that it now threatens not only Greece and Ireland but also Spain, Italy and Belgium. Japan, the world's third-largest economy, has plunged back into recession. And here at home, the economy is stalling badly just as rising inflation and unsustainable debt levels force the Federal Reserve and Washington to back off on stimulus measures.
Here's a look at the situation, along with two new trade recommendations discovered with the help of Fidelity's ETF screener.
Conditions are shaping up that could spur a renewed rally in precious metals, and traders should be alert for buying opportunities.
Keep an eye on funds that track health care, Internet companies, retail, Canada's financial sector and cars.
By Don Dion, TheStreet
Here are five ETFs to watch this week.
The most active period for company earnings ended last week following WalMart's (WMT) report on Tuesday. Looking ahead to this week, however, there are still firms scheduled to release quarterly results.
Medtronic (MDT) will report Tuesday. The firm's performance numbers and outlook will weigh heavily on IHI, which lists MDT as its largest holding. MDT shares account for over 11% of its total portfolio.
The old company was bloated with debt and overexpansion. Now it's posting record profits near those of its 2004 boom times.
By Jeff Reeves, Editor, InvestorPlace.com
A few years ago, some folks figured Krispy Kreme (KKD) was destined for the garbage heap. After overly aggressive growth and the bankruptcy of key franchisees, the company was bleeding more red than a freshly bitten jelly doughnut.
But the company has been on a diet for the past few years, cutting costs and restructuring debt. Finally the doughnut shop appears trim and healthy once more, with its stock up almost 18% Monday on record profits. It's the best quarterly performance since fiscal 2004, during its heyday.
You're better off not owning them.
By Alex Dumortier, CFA
This week's highly anticipated initial public offering was heavily oversubscribed. I'm referring to commodities producer/trader Glencore, which listed on the London Stock Exchange yesterday. Meanwhile, on this side of the pond, the shares of social networking website LinkedIn (LNKD), which also began trading yesterday, flew out of the gates, gaining more than 100% over the $45 offer price. In the face of such enthusiasm, I suggest investors remain placid and steer clear of these shares -- particularly LinkedIn.
LinkedIn was smart to cash in first by becoming the first social networking company to go public. The structure of the offering all but guaranteed an overvaluation of the shares. Not only did its first-to-market status create scarcity value, but its offering amounts to a small percentage of the shares outstanding -- fewer than 10%. Scarcity value squared, in sum. A massively oversubscribed IPO may be good for bankers and the companies they take to market, but it is the enemy of value-conscious investors.
Russia's version of Google is slated to make its Nasdaq debut this week.
By Debra Borchardt, TheStreet
If investors missed out on buying Google (GOOG) when it went public at $85 -- it's now trading above $500 -- they have another chance to get in early with Yandex, the Russian version of the Internet search giant.
Yandex is scheduled to go public on Tuesday in a $1.1 billion deal. The company's stock will be listed on the Nasdaq exchange under the ticker symbol "YNKD," and the offering price is expected to be roughly $21 per share. There's a precedent for excitement. China's Baidu.com (BIDU) priced its initial public offering at $27 per share back in 2005, and the stock closed Friday's regular session at $134.69.
Of course, Baidu.com was helped when the Chinese government essentially kicked Google out of the country and gave the company a monopoly. The Russians aren't impeding access to Google.
A long-short approach has beaten the market in recent weeks, and it continues this week.
The market drifted lower last week. With earnings season winding down, investors are left to speculate on the economy. Earnings reports that were released failed to inspire the market.
On Friday, two large clothing retailers, Aeropostale and Gap reported results that disappointed investors. Shares of both companies lost more than 14% of their value. That is a big loss irrespective of the results.
The big move down in those individual names tells us much about where the market may be heading. Certainly the number of bears emerging from the woodwork is on the upswing. In some ways, the contrarian play here is to be bullish as the market often moves opposite the consensus view.
Whatever the direction from here one thing is certain: predicting the exact direction is difficult at best. As such I’m staying conservative with my picks here. On the long side I would consider the SPDR Dow Jones Industrial Average (DIA).
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[BRIEFING.COM] The major averages ended the midweek session on a flat note after spending the day inside narrow ranges. The S&P 500 hovered near the 2,000 mark for the majority of the trading day, but slumped to new lows during the last hour of action. The index then returned to its flat line, where it settled for the day. For the third day in a row, participation left a lot to be desired with just 487 million shares changing hands at the NYSE.
Equity indices opened with slim gains, ... More
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