Why stocks are in for a rough ride this week
Stocks in for a rough ride this week

Longtime market bull Jeremy Siegel says investors could realize the market is behind the curve on interest rates.

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The market constantly misreads earnings from these companies, and you can profit as a result.

By Jim Cramer Jan 24, 2012 2:24PM

By Jim Cramer, TheStreetTheStreet


There's something very humdrum about the predictability and reaction to earnings this time around. But we will still attempt to shoehorn everything through the eyes of the stocks, not the companies.


Here are some time-honored patterns:

 

The 'Dim Sum' market, which is open to Western investors, can provide exposure to China with lower levels of risk.

By Zacks.com Jan 24, 2012 2:15PM

Image: China (© Brand X/SuperStock)By Eric Dutram
   

Although the Chinese economy is apparently slowing down -- to a rate of 'just' 8.9% in the most recent release -- some investors remain relatively bullish.


These investors point to the country's massive reserves and still small consumer economy as two areas which, if unlocked, should help the country avoid a hard landing in the near term.

 

As the fast-food giant looks to expand internationally, its supply chain will become more difficult to manage.

By Trefis Jan 24, 2012 1:29PM
Image: Hamburger (© BananaStock/Jupiterimages) McDonald's (MCD) had a stellar 2011, with its stock gaining more than 30%. We think the company's current price, however, is more reflective of its long-term, intrinsic value.

In fact, the sound fundamentals of the company might have fueled unreal optimism and overheated the stock. Skeptics who thought the company would struggle during a recession were proved wrong as McDonald's and several other restaurant stocks, including Yum! Brands (YUM), Starbucks (SBUX) and Chipotle Mexican Grill (CMG), all significantly outperformed the broader indices.  

Once out of favor, homebuilder stocks have been on a torrid run. But seasonal weakness and extreme bullishness are likely to produce a correction.

By MoneyShow.com Jan 24, 2012 12:58PM

Image: Home under construction (© Corbis)By Tom Aspray, MoneyShow.com


In the first few weeks of 2012, there have been a large number of articles and headlines discussing homebuilding stocks. The positive news on housing so far in 2012 has turned even more analysts and investors bullish on this sector. Does that mean you should be buying now?


Clearly, sector selection was the key in 2011, and it should also be a key factor in your stock choices for 2012. From a technical standpoint, the homebuilders have had an impressive run since their volume surge in mid-October.

 
Tags: KBHLENXHB

It's too little, too early to get worked up about the new offerings from the world's biggest coffee chain.

By InvestorPlace Jan 24, 2012 12:32PM
Image: Beer (© Corbis)By James Brumley

With 18,000 stores tapping out as much coffee as reasonably possible, Starbucks (SBUX) has decided to grow its top line -- at least for some of its stores -- by widening its menu in a major way. Soon, at a couple dozen locations in Atlanta and Southern California, Starbucks will offer coffee, scones -- and brewskis?


Yes, the world's biggest chain of coffeehouses has tiptoed further into the world of beer and wine (the company has already been testing alcohol sales in the Pacific Northwest), looking to get more round-the-clock revenue flowing from its admittedly enviable real estate.

 

Zynga is initiated with 'outperform,' and Deutsche Banks is downgraded to 'neutral.'

By MSN Money Partner Jan 24, 2012 11:58AM
Information provided by Theflyonthewall.com

Tuesday's noteworthy upgrades include:
  • Bed Bath & Beyond (BBBY) upgraded to Buy from Hold at Deutsche Bank
  • KLA-Tencor (KLAC) upgraded to Buy from Neutral at Citigroup
  • Harmony Gold (HMY) upgraded to Buy from Neutral at UBS
  • Western Digital (WDC) upgraded to Buy from Hold at Needham
  • Electronic Arts (EA) upgraded to Buy from Hold at Hudson Square
 

This gold play doesn't undertake any mining operations; instead it holds royalty interests in other miners.

By TheStockAdvisors Jan 24, 2012 11:32AM
Anthony Bradshaw/PhotographerBy Nathan Slaughter, Scarcity & Real Wealth

Royal Gold (RGLD) buys royalty interests in gold mines around the world, paying an upfront fee to secure a fixed percentage of future production or revenues.

Royal Gold gets its hands on buckets of precious metals without having to get its hands dirty. It doesn't assume any of the cost (or risk) of traditional mining -- those burdens fall on the owners of the mines. 
Tags: goldRGLD

The burger chain's solid earnings couldn't allay investor concerns about foreign-currency fluctuations, however.

By Jonathan Berr Jan 24, 2012 11:28AM
McDonald's (MCD) reported better-than-expected fourth-quarter results Tuesday, fueled by strong performance around the world.

Net income rose 11% to $1.38 billion, or $1.33 per share, versus $1.24 billion, or $1.16 billion, a year earlier. Revenue rose 10% to $6.82 billion. Analysts surveyed by FactSet had expected earnings of $1.30 on revenue of $6.8 billion. 
Tags: MCD

Dollar stores' stocks rival their wares for great value.

By InvestorPlace Jan 24, 2012 10:40AM
ballyscanlon/Digital Vision/Getty ImagesBy Lawrence Meyers

Fifteen years ago, I walked into a 99 Cents Only store. Being an unemployed graduate student, I was eager to save as much money as I could while buying the things one needs to live one’s life. I discovered that you get what you pay for. After loading up on dish soap, paper towels and other staples, I found the quality to be absolute garbage. I vowed never to waste my time or money again.


But a few years ago, I sauntered into a Dollar Tree (DLTR) because the stock had been doing well and I couldn't fathom why that was the case. How could there be tens of thousands of these dollar stores when all they sold was junk? As it turns out, they didn't sell junk anymore. They sold brand-name merchandise. I became a fan.

 

The geophysical equipment seller is a small cap growth story that stands to benefit from higher demand in the field.

By Zacks.com Jan 24, 2012 10:24AM

CorbisBy: Jared Levy

 

Much of the world's surface has been mapped. You can even capture an image of someone's house via satellite on the other side of the world. What we don't know much about is what lies beneath the soil, socks and water. Below the earth's surface is a plethora of resources that have yet to be tapped.


Mitcham Industries (MIND) leases and sells all types of geophysical equipment that are used to perform seismic and other studies for all sorts of industries around the globe.

 

One analyst group says the company may have seen 350,000 textbooks downloaded over the weekend.

By Benzinga Jan 23, 2012 5:41PM

Image: High school students with arms raised in classroom (© Image Source/Getty Images)By Louis Bedigian, Benzinga Staff Writer


Apple (AAPL) broke yet another record over the weekend, selling what some analysts think is more than $5 million worth of a hot new item.


Textbooks.


That's according to Global Equities Research, which reports that the Mac maker has sold more than 350,000 of the high-school textbooks currently offered from the iBooks Store. The research group estimates that Apple's free authoring tool released last week, iBook Author, has been downloaded more than 90,000 times.

 

Investors are discouraged by the business-as-usual message from the company's new CEO.

By Jonathan Berr Jan 23, 2012 5:01PM
Image: CEO (© Photodisc/Getty Images)For the few investors who might miss former Research In Motion (RIMM) co-CEOs Mike Lazaridis andJim Balsillie,whose mismanagement of the BlackBerry maker has been roundly criticized by shareholders, don't worry. They aren't going anywhere.

Lazaridis, who founded the Canadian technology company in 1984, is becoming a vice chair of RIM's board and will provide "strategic counsel" to new CEO Thorsten Heins. The company also named Lazardis the chair of something called the Innovation Committee, which seems ironic given the notable absence of that quality at RIM for years. Balsillie remains on the board. 
Tags: RIMMYHOO

That's great news for the ETF business, but it may be a warning for investors that it's time to get out.

By MSN Money Partner Jan 23, 2012 4:51PM

Image: Arrow Up Green (© Image Source/SuperStock)By Thomas Kee, guest columnist

 

The flagship exchange-traded fund for the S&P 500, SPDR 500 (SPY), has just made headlines by surpassing the $100 billion market cap mark. The move was hailed as yet another sign that the ETF industry has come of age.

 

But like a Time Magazine cover story, this headline may be a contrarian indicator for the market. 

 
Tags: SDSSPYSSO

With no real news to justify a rally, you have to wonder if we're seeing 'the mother of all short squeezes.'

By Kim Peterson Jan 23, 2012 4:34PM
Updated 4:50 p.m. ET

Image: Arrow Up (© Photodisc/SuperStock)Sears Holdings
(SHLD) has been an oddball stock for a long time, but this January it's just gone bonkers.

Look at what's happened in the last trading day. Shares shot up more than 10% Monday in morning trading, and finally fell back to a 3.3% loss to close at $47.39. Why? No one knows. But this action is just a normal trading day with Sears. Shares are up more than 50% so far this year.

The thing is, there's nothing going on with the company itself to justify such a rally. 
Tags: GSSHLD

It's unreasonable to expect the company to meet the current demands.

By Jim J. Jubak Jan 23, 2012 3:01PM
A great earnings report from F5 Networks (FFIV) after the close on Jan. 18 has taken the stock within hailing distance of my June target price of $124.

The stock was trading at $120.30 at midday Monday.

I'm selling F5 Networks out of my Jubak’s Picks portfolio. Not because of anything wrong with the earnings report -- it was great -- but on rising expectations among investors. I think F5 Networks has hit the point that many momentum plays hit where investors start hoping for more -- and pricing in more -- than it's reasonable to expect the company to deliver.
 
Tags: FFIV

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[BRIEFING.COM] The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.

Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the ... More


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