There are some picks in this sector that have excellent valuations and strong earnings growth.
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But you can dance until the music stops, which will be in the second week of October.
Let's face it. Someone is going to be wrong about the banks or the bonds. This curious decoupling we are seeing, whereby rates continue to go down but banks are breaking out, shouldn't be happening. At least history says it shouldn't. You have to be tempted to short these stocks and bet against the Financial Select Sector SPDR ETF (XLF) breakout if rates aren't going higher, because that means there is even more net interest margin compression ahead, and that's been the be-all and end-all for these stocks.
So what does it mean?
First, you could argue that the bonds are giving one last gasp up before a total breakdown. The interest-rate-sensitive stocks would go along with that. The real estate investment trust ETF, the iShares US Real Estate (IYR), looked like it was on the verge of a rollover most of the day. But I didn't get that read from many of the packaged goods stocks, the so-called bond yield equivalent plays. Some were up and some were down.
Bank of America and Citigroup are setting up beautifully from a technical perspective.
By Anthony Mirhaydari
Big-bank stocks have enjoyed a lift over the last few trading sessions, helping the Financial SPDR (XLF) recover from its early August selloff to push to new all-time highs Monday.
There are a few catalysts in play. For one, with the geopolitical tensions diminishing in Iraq and Ukraine, and with central banks in no hurry to pull back on economic stimulus, the overall market is enjoying a surge of buying interest.
But there sector-specific factors in play as well. Last week, Bank of America (BAC) reached a near $17 billion agreement with the Department of Justice to settle charges of misleading investors during the housing boom -- essentially resolving nearly all the legacy legal overhang related to the acquisition of Countrywide and Merrill Lynch.
Having the best results is less important than having a strategy that is good enough.
Fund shareholders should know what bad investment behaviors look like. To find them, most people simply need to look in their own portfolio.
Whether it's buying funds with above-average expense ratios or chasing performance by rotating toward hot funds -- instead of trying to "buy low" by purchasing whatever the market has put on sale -- hyper-actively managing a portfolio, or going for money managers who haven't proven capable of living up to their fund's promises, there's hardly anyone out there who without one or two classic blunders thrown into their investment history somewhere.
The question is whether that's actually so bad.
That question was raised for me most recently by some new research by the Vanguard Group -- the world's largest fund company -- on the effects of performance-chasing.
Berkshire Hathaway pours more than $1 billion a year into ads for the insurance unit, and the investment is paying off.
Since his debut in 2000, the Geico gecko has helped to sell millions of policies for the Berkshire-owned auto insurer and made it one of the conglomerate's most-consistent profit drivers.
The ubiquitous ads, accounting for almost a quarter of all U.S. insurance companies' advertising spending, cost Berkshire more than $1.2 billion last year.
Mr. Buffett said he intends to keep lavishing Geico with money.
In this wildcatting decade, oil exploration stock investors need to be nimble to get the best returns. Follow the exploration companies and watch where you play.
During the last energy decade, the booming 1970s, investors could simply pick up international oil companies like Exxon (now Exxon-Mobil (XOM)) or Chevron (CVX) (which now owns Texaco), the American partners of what is now Saudi Aramco and walk away with big returns.
It's not that simple these days. Today's boom is not only American, but it belongs to dedicated exploration companies, not the oil majors. Fracking is very expensive, meaning price swings can wipe out profits. You have to pay attention to infrastructure. But the gains can, if anything, be sweeter.
The easiest way to play has been to stick with the oilfield service giants, the "arms merchants" for the fracking revolution. Over the last five years shares of Baker Hughes (BHI) are up 79 percent, Schlumberger (SLB) shares are up more than 105 percent, and Halliburton (HAL) has seen a 175 percent gain.
2 portfolio managers say the market would welcome an increase before the expected time frame of next summer.
As the great interest rate debate rages inside the Federal Reserve, two senior portfolio managers told CNBC on Monday that any accelerated start to normalizing monetary policy would actually be good for stocks.
Perhaps counterintuitively, the market would welcome a rate hike before the expected time frame of next summer.
"When the Fed eventually begins to raise the [federal] funds rate next year, that in our view is not the death knell of this rally," Federated Chief Equity Strategist Phil Orlando said in a "Squawk Box" interview. "The market is going to appreciate the fact that [that] . . . must mean the economy is starting to normalize for the first time in seven or eight years.
"That's good news for equity investors," Orlando added -- a sentiment echoed by Nuveen Asset Management's Bob Doll.
The six-month ordeal has been painful medicine for the company and its investors. But executives are looking ahead.
Are better times coming for General Motors (GM)?
There's a palpable feeling around Detroit headquarters that it has put the worst of the ignition switch recall crisis behind it -- and the company will emerge stronger for it.
Sure, there is a lot of work still to be done cleaning up the damage: getting the affected cars brought in for repairs, making sure that spare parts and qualified service people are available, and paying out hundreds of millions of dollars in damage claims.
But the cascade of notices that have brought about 29 million recalls of GM vehicles since February -- and dominated the news coverage -- seems to be running its course, notwithstanding reports of a federal probe into the behavior of the company's legal division.
Barry Bannister raises his year-end target for the S&P 500 to 2,300 but says getting there won't be easy.
One of Wall Street's biggest bears just did an about-face with his outlook for stocks.
Barry Bannister, chief macro and portfolio strategist at Stifel Nicolaus, raised his year-end target for the Standard & Poor's 500 Index ($INX) by 20 percent, from 1,800 to 2,300.
"Well, it's definitely a bull market when a flat view is the most bearish view out there," he said Friday on CNBC's "Halftime Report."
Bannister noted that the 7 percent gain for stocks year-to-date is "exactly in the middle in August-to-date changes for the S&P in the last 100 years. It's a pretty ordinary market."
When a company like Roche buys InterMune for $8 billion and calls it a mere bolt-on, you know you're seeing signs of a much bigger trend.
You want to know what's the biggest change that has come over mergers and acquisitions in the past few years? No, it is not inversions. It's the definition of "bolt-on." This morning I sat and listened in amazement to how Roche described the $8.38 billion purchase of InterMune (ITMN) as a bolt-on acquisition that fits right into the company's emphasis on pulmonary care drugs.
Since when is $8.3 billion a bolt-on? That's like saying that a Cartier ring is a bolt-on to your jewelry collection.
In truth, all of the major drug companies are challenged for new products and are scrambling to make acquisitions just like this one, even as it is a 38 percent premium to where the stock went out on Friday and the stock was already up 265 percent for the year. They are scrambling because their own labs simply seem incapable of the kind of greenfield breakthroughs that biotechs are developing.
These companies won't soar like other plays in the sector, but they make for great income sources.
By Jeff Reeves
Finding the best tech stocks to buy can be hard in any market, considering the fast-moving nature of the technology sector.
But it's especially hard for income-oriented investors, given that many of the best tech stocks out there are high-growth companies plowing money into expansion instead of dividends.
If you're looking for good dividend stocks in the technology sector, then it's important to acknowledge that these names are naturally not the same as the sexiest small-cap tech stocks out there. Most of these players are older and more mature technology companies, with the largest part of their growth behind them. That maturity isn't a bad thing, though -- just like the dividend stocks among consumer staples stocks or utility stocks, a mature and stable company is frequently the best source of dividends.
Just don't expect 100 percent earnings growth each quarter.
Investors need to rethink that often-repeated belief, because times have definitely changed.
Do you believe in magic?
Fifty years after the Lovin' Spoonful first posed the question, we have to ask it yet again. And it seems that for a lot of people on Wall Street the answer is emphatically . . . Yes!
They believed in magic in the late 1990s. Maybe it was the influence of Harry Potter. They believed in magic in 2006. Maybe it was due to "Twilight" and all those vampires. And apparently they believe in magic today. Can we credit "The Walking Dead" and the appearance of zombies on our TV screens? Who knows?
Stock market investors still believe in the supernatural, to judge by their enthusiasm for the Standard & Poor's 500 Index ($INX) at current prices.
Magic? Supernatural? What am I talking about?
A new survey asks employees around the country to rank their company's culture and values. Many in the top 10 were, not surprisingly, in tech.
Employees at companies with self-proclaimed great cultures get a lot of perks -- among them freebies like organic meals, dry cleaning, haircuts and child care; unlimited vacation and stipends for personal trips; complimentary massages and yoga classes; dedicated rooms for napping.
But do these things make them happier workers?
Job search site GlassDoor.com revealed the results of its "top companies for culture and values" survey on Friday, in which it asked employees at companies around the country to rank their company's culture and values.
The athletic-wear underdog could be offering a huge contract to the basketball star.
The Baltimore-based company has been scoring a number of key endorsements lately, including golfer Jordan Spieth.
Now, it's going after one of the biggest stars in basketball -- Oklahoma City Thunder forward Kevin Durant (pictured).
Under Armour is reportedly offering Durant -- who has long been loyal to Nike (NKE) -- a package worth as much as $285 million over 10 years.
It would be Under Armour's biggest endorsement deal, representing about 10 percent of its annual marketing budget, according to ESPN.
So far, the chain is only testing the offering in a few locations. It's ramping up its breakfast menu nationwide, however.
Now, at long last, the chain brings the two together in a chicken-and-waffles test that is going on in central Georgia (Macon, Dublin, and Warner Robins); Memphis, Tenn.; Philadelphia; and Inland Empire, Calif.
It's not a sandwich. The chain describes the new item as "a breakfast portion" of boneless, seasoned chicken breast served alongside a maple syrup-flavored waffle, with a side of honey.
Chick-fil-A, which recently launched a new specialty coffee program to draw in more morning customers, is testing other breakfast items, too, including an egg-white chicken grill sandwich, a Greek yogurt parfait, oatmeal, and cinnamon swirl pastries.
Short sellers, expecting a weak fall shopping season, are counting on poor reports from retailers.
While many retailers spin humdrum quarters with shining previews of the back-to-school shopping season, short sellers are placing big bets that parents' wallets will not be so open.
Although short positions have grown slightly throughout the entire retail sector, those companies with "more skin in the back to school game" have seen the brunt of these bets, Markit analyst Simon Colvin wrote in a note identifying the trend.
These companies include teen clothing retailers such as American Eagle (AEO) and Aeropostale (ARO), but also include department stores like Kohl's (KSS) and Macy's (M) that have pegged their near-term outlooks to back-to-school success.
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These hot movers could rise by double digits in coming months.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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