As the market wades through what many people hope is a sixth bull year, some have grown nervous about how long the run can go.
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In the past 3 decades, has there ever been more bullish time?
Mind you, I am not predicting. I am simply pointing out that in 32 years of investing, I cannot recall a more bullish time, a time when as long as you don't own a food, drug or utility stock, you've been making money. No, make that coining money.
Two groups really stand out: semiconductors and oil and gas. I keep harping on these two sectors because, without owning some of them, you can't keep pace and there's no way you are going to beat the benchmarks. If you are overweighting them, you have to be thinking, even in February, that you might have to be defensive simply to protect your lead! Yes, the gains are that pronounced.
The lead rotates in these groups. Last week, thanks to JDS Uniphase (JDSU) and ARM Holdings (ARMH), you had anything broadband and Apple (AAPL)-related roaring, particularly around tablets and smart phones.
Keep an eye on funds tracking consumer-focused companies and Egypt.
By Don Dion, TheStreet
Here are five ETFs to watch this week.
NYSE Euronext (NYX) and IntercontinentalExchange (ICE) are slated to report their earnings this week, providing further insight into the state of the broker-dealers industry. Together accounting for more than 10% of its index, these two companies' performance will influence the action of IAI in the coming days.
In the coming days, investors holding this fund will want to maintain a close watch. IAI is bumping against a level that has been a sufficient point of resistance since late 2009.
The online portal continues to revamp its editorial strategy, charging Arianna Huffington and her team with the daunting task of improving news content.
By Jeff Reeves, Editor, InvestorPlace.com
The move is interesting for a number of reasons. It's the latest move by AOL chief exec Tim Armstrong to right the struggling web-content arm of his company, and it's a deal that has some observers calling the politically active Arianna Huffington a sellout.
But perhaps most interesting is the fact a fledgling website like HuffPo was seen by AOL not just as a buyout target but as a strategic partner that can revitalize a company many times its size.
How? By keeping the feisty Huffington at the helm of content rather than forcing her to bend to the wills of her new corporate bosses.
Time for a little base building now that the market has crossed important thresholds.
Just like clockwork, the fearful trade of last week gave way to solid gains and new milestones. The S&P 500 gained nearly 3%, crossing the all-important threshold of 1,300. Anyone selling based on events in the Middle East missed out on a nice run.
This week we turn our attention to base building.
The moves above Dow 12,000 and S&P 1,300 are significant from a technical and psychological level and come after several months of impressive gains for the market.
Historically, these milestones are followed by sideways trading, and that is what I expect this week. The best way to play a sideways market is with a long/short exchange traded fund.
My choice would be ProShares Credit Suisse 130/30.
After spending months in the wilderness, consumer names are on the move again.
It's no secret that I've become increasingly skeptical about the quality and longevity of the current market rally. My recent columns and blog posts will attest to that. But I won't deny positive signs when I see them. And I see plenty of good things among retail and consumer stocks right now.
Just look at the recent action in the Retail SPDR (XRT), which holds stocks like GameStop (GME) and JC Penney (JCP). The XRT is up 4.6% from its Monday low and looks to be in the midst of initiating a new uptrend. Various technical indicators are moving into positive territory for the first time since December.
Although there are concerns about rising input prices -- especially for cotton -- pressure margins in the sector, fourth-quarter earnings have been solid. And compared to more defensive consumer staples stocks, retailers are moving higher at a pace not seen since last September. Can the momentum continue?
The revenue picture at Ctrip.com International is solid. But expenses are growing, raising questions about margin management.
I dropped Ctrip.com International (CTRP) from the Jubak Picks 50 long-term portfolio on Jan. 18, but this the first time I've had the chance to explain why in detail or to actually remove it from the portfolio. I'll be working on explaining other sells and buys from that group over the next week or so as well.
What worries me about Ctrip.com International in the long-term? Growth.
Oh, not the top-line growth of revenue. That continues to hum along. In the third quarter of 2010, reported on Nov. 2, Ctrip.com, the largest travel agent in China, reported total revenue of $129 million, a 48% increase from the third quarter of 2009.
No, it's the growth in costs that troubles me, because it makes me wonder if Ctrip's operating margins -- which ran at a 38% level for the third quarter -- are sustainable in the long term.
One columnist thinks the iPhone jinxed AT&T shares. But AT&T had a lot to do with that curse all on its own.
That's what SmartMoney's Jack Hough says. AT&T (T) shares have dropped 17% since it started carrying the iPhone, he writes, while Verizon shares rose 9%. Maybe it's time, he says, for investors to sell Verizon and pick up AT&T.
I'm still not sold on an iPhone stock curse, but I'll give Hough a chance. Here are what he describes as the three foundations of the iPhone curse:
1. High investor expectations. The iPhone and hype go hand in hand, no matter who the carrier is. AT&T shares rose 22% between the time Apple (AAPL) announced the iPhone in January 2007 and the device's launch, Hough writes. AT&T shares began sliding in October when reports surfaced that Verizon would soon get the iPhone.
The rate is expected to exceed that of mobile apps over the next 2 years.
By Matt Brownell, MainStreet
Released this week, the report projects big gains for the e-book market: Consumers will purchase 381 million e-books by 2013 -- quadruple the total purchases made in 2010 -- and bring total revenue to $2.7 billion that year, according to the report. Calling it "the next big gold rush," researchers project e-book sales will grow at an even faster rate than that of mobile apps over the same period.
The projected sales explosion likely comes as no surprise to retailers like Amazon (AMZN) and Barnes & Noble (BKS), whose respective Kindle and Nook e-readers lead the field. Both companies have said their e-readers are their best-selling products of all time, and Barnes & Noble announced in December that its e-book sales now exceed those of print books.
Recent months have been great for funds tracking US sectors but grisly for many in the developing world.
By Gary Gordon, TheStreet
The media remain hell-bent on describing U.S. economic acceleration, Dow 12,000 and marginal labor market improvements. The analysts seem equally giddy, reiterating quotable notables like "Don't fight the Fed!" or "Don't fight the tape!"
I agree that there are reasons to be hopeful. We've been privy to robust corporate earnings as well as strong corporate balance sheets, share buybacks and a variety of key acquisitions. Yet I don't agree that investors can disregard the impact of world central bank policy. I certainly don't think we can cast aside the tale of the emerging-market tape.
It may seem as though developed-world stocks have decoupled from developing-world equities. The past three months have been dreamy for high-beta U.S. sector ETFs but nightmarish for three-quarters of the BRIC emergers -- Brazil, India and China.
A look at adjusted price-to-earnings data suggests the answer is yes.
A standard way of judging the market's valuation is by looking at historical price-to-earnings data. You can also go a little deeper by using the cyclically adjusted price-to-earnings ratio, or the CAPE. As you'll read below, the Fool's Matt Koppenheffer has CAPE fear.
Rex Moore, Motley Fool Top Stocks editor
For long-term investors, pondering the question "Will the market go up?" is a guilty pleasure, like gorging on In-N-Out double-doubles. And yet we still do it. OK, maybe you don't, but I do (both, actually).
A key component to this question is whether stocks are overvalued, undervalued, or reasonably valued. If the answer is "undervalued," we can feel pretty good about being buyers, while if they're reasonably valued selective stock-picking can usually uncover some bargains.
Google's Bing sting, a spat between tax-prep services, and Kenneth Cole's Twitter blunder are among this week's stupidest business moves.
By TheStreet Staff, TheStreet
Here is this week's roundup of the dumbest actions on Wall Street.
5. Bing's hand caught in the Google jar
One upshot from the so-called Searchgate drama between Google (GOOG) and Microsoft's (MSFT) Bing may be that search quality is only as good as Google makes it.
Google, which controls two-thirds of the total search market, created traps for Bing using phony words assigned phony search results. Using a mishmash like "delhipublicschool40 chdjob" as a search term, Google affixed an Ohio credit union site to the results that came back. Soon after, says Google, Bing's results for that query also turned up the same credit union.
Embarrassing for Microsoft, certainly, and scary for the rest of us since the perceived competition for the best search engine turns out to be little more than No. 2 copying No. 1. (Microsoft publishes MSN Money.)
Nearly half the staff has been laid off. It's time to sell the social-networking also-ran while it still has value.
Back in October, News Corp. (NWS) made what may have been its final bid to make its $580 million purchase of Myspace.com worthwhile -- a redesign that included a streamlined interface and ad system that imitates its top rival, Facebook. The hope was that the measures would finally staunch the MySpace wound, ending the business's streak of losing its parent company about $100 million each year.
So how did that work out? Well, more than 500 MySpace employees were laid off last month -- almost half the staff. Meanwhile, the cost of the redesign and plummeting ad revenue translated to a loss of $275 million in the last three months of 2010, tripling MySpace's annual loss from 2009.
The writing is on the wall: Rupert Murdoch & Co. need to give up on MySpace and sell the operations ASAP. Though News Corp. is allegedly listening to offers, it simply cannot afford to wait. Here are the three biggest reasons:
The tainted mortgage company that Bank of America acquired is keeping its shares from rallying.
What he goes on to say, though, rankles me.
He wants to know why I don't appreciate Countrywide that much, why I'm always negative on it. I tell him that it's tainted, that it has an unfathomable number of home equity loans and a huge number of loans that need to be reworked. I point out that reworking is expensive and is a total drag on earnings.
He talks to me about "reach," and I come back and say: "Reach? Bank of America has all the reach it needs without Countrywide." You know what I should have said? I should have said: "I dislike Countrywide so much, I wish B of A would put all of those loans into some sort of 'bad bank,' some equity stub that's a bet on a comeback of home prices someday. That would remove the taint to the core bank."
With risk aversion rising again, investors are quietly moving back into precious metals.
After spending the past four months sliding, precious metals are attracting investor interest once more. That's a big deal, as between November and January, gold prices formed a "triple-top" pattern after repeatedly being pushed back from resistance near $1,430 an ounce. That, the chartists say, pointed to certain doom for the yellow metal.
But with political unrest spewing forth in Egypt and Tunisia, inflationary pressures rising and renewed concerns about the viability of the U.S. government's tenable fiscal positions and the economic penalty we'll all pay to solve it, precious metals and the stocks of the companies that pull them out of the earth are pushing higher.
Over the past two weeks, gold futures are up more than 3.5%, silver futures are up nearly 9.7%, the Market Vectors Gold Miners ETF (GDX) is up 7.7% and the Global X Silver Miners ETF (SIL) is up 15.8%. Can the gains continue?
ASML Holding is one star in a sector of chip-equipment makers that should see shares rally for another year.
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As the market wades through what many people hope is a sixth bull year, some have grown nervous about how long the run can go.
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
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[BRIEFING.COM] Equity indices strung together a daylong rally on Tuesday, giving the S&P 500 its sixth consecutive advance. Some selling during the final hour of action pressured the indices from their highs, but they still ended with the bulk of their gains. The benchmark index added 0.4% with eight sectors finishing in the green, while the Nasdaq (+1.0%) outperformed throughout the session.
Although the stock market began the day on a flat note, the major averages quickly took the ... More
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