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The Big Mac Index suggests a new long-term trend for the yuan while the US dollar tries to bottom. These ETFs could make good alternatives to stocks in this volatile market.

By MoneyShow.com Aug 15, 2011 12:18PM
By Tom Aspray, MoneyShow.com

Since 1986, The Economist has published the “Big Mac Index,” which strives to determine the correct value of the major currencies based on purchasing power parity, or PPP. Its underlying principle is that a dollar should buy the same amount in all countries, and the McDonald’s Big Mac is used to represent a basket of goods.


I have always found the index quite interesting, and the latest results were released late last month. Though I doubt anyone uses the data to trade currencies or currency ETFs, year after year, there are some interesting trends.
 

Professional money managers say almost every stock is worth considering now as the market gyrates with every new economic report and development.

By TheStreet Staff Aug 15, 2011 11:49AM

TheStreet

By Robert Holmes, TheStreet

 

Individual investors have been increasingly fearful as they grapple with wild swings in the stock market. Professional investors, on the other hand, say there are plenty of value stocks for folks who can stomach the risk.

 

The Dow Jones Industrial Average ($INDU) has swung wildly this month, but with many stocks trading at only 11 times earnings in a near-zero-interest-rate environment, professional investors are turning greedy while the masses have become fearful.

 

Brian Frank, the manager of the Frank Value Fund (FRNKX), says the valuation of his portfolio was the cheapest ever heading into second-quarter earnings, and that includes during 2008 and 2009, when share prices plummeted in the heart of the deep recession. "Guess what. Now it's even cheaper," he says. "The fundamentals are still getting stronger, even if there is economic weakness in the future."

 

High hopes for companies like Facebook, Zynga and Twtter have individual investors looking to get in ahead of their public trading debuts.

By TheStreet Staff Aug 15, 2011 11:46AM

the streetBy Joe Mont, TheStreet


Are you upset you didn't get in on the LinkedIn (LNKD) and Pandora (P) IPOs? Not just because you passed on their public offerings but because you didn't have a horse in the race before they went public?

 

For the most part, private investing in pre-IPO companies has been an exclusive and expensive club, limited mostly to financial and venture capital firms or very wealthy individuals. Facebook, for example, announced earlier this year that it was offering up to $1.5 billion of securities to clients of Goldman Sachs (GS), provided they invested at least $2 million and pledged to hold the shares until 2013.

 

Increasingly, however, smaller investors are looking for ways to hop the fence and join the party, especially given the hot prospects of several well-known Web-based and social-media-focused companies.

 

Doing so is easier said than done.

 

The discount giant is losing its reputation as the low-price leader. If it doesn't stand for bargains, what is the company's strategy?

By TheStreet Staff Aug 15, 2011 11:19AM

By Jeanine Poggi, TheStreet

 

Wal-Mart's (WMT) crown as the low-price king has been tarnished.

 

The discount giant, which prides itself on its motto of "Save Money, Live Better," appears to have lost its price perception among consumers. According to a survey conducted by WSL Strategic Retail, 86% of Wal-Mart shoppers no longer believe the retailer has the lowest prices.

 

"Every brick-and-mortar retailer lowered prices and shouted sales throughout the recession, while the Internet became the go-to place for shoppers in search of the lowest prices," the report said.

 

This raises a serious conundrum: If Wal-Mart no longer stands for everyday low prices in the eyes of consumers, what does it stand for?

 

As fear subsides, look for a recovery.

By Jamie Dlugosch Aug 15, 2011 10:05AM

Wow, what a ride. Stocks go down 600 points one day, up 500 the next, only to give it all back the day after. Friday’s calm 125 point increase on the Dow was like a walk in the park.

 

Too bad it left us a bit short of break even for the week. Oh well, I suspect most investors will take the small loss as some sort of victory. They should be cheering all the way to the bank.

 

The intense volatility has created one of the best trading landscapes in recent years. Dare I say day trading is making a come back? Why not when you can make 10, 20 or even 30% on a stock trade in one day?

 

If you can remove the fog of nonsense from the discussion, you will find plenty of reasons to want to own stocks, even for the long term. The ETF I would own this week is the iShares S&P North America Technology and Multimedia Fund (IGN).

 
Tags: etf

The deal could make Android smartphones the standard and knock Apple's iPhone from its perch.

By InvestorPlace Aug 15, 2011 9:31AM

By Jeff Reeves, editor of InvestorPlace.com


Google (GOOG) isn't afraid to go on shopping sprees. With more than 75 acquisitions since 2006 -- including the $3.1 billion buyout of DoubleClick to bolster its online advertising presence, and  the $1.65 billion buyout of YouTube -- the cash-rich tech giant has made these deals a normal part of its growth plans.


But Google's plan to snatch up Motorola Mobility (MMI) for about $12.5 billion is by far the most dramatic in the history of the company. The partnership, announced Monday, could forever change the makeup of Google and the landscape of the smartphone business, and it might finally create a gadget that can give Apple (AAPL) and its iPhone a run for their money.

 

Just because everyone expects a downturn doesn't mean it's going to happen.

By Jim Cramer Aug 15, 2011 9:10AM

jim cramerthe streetIs it grudging recognition that, despite the political gridlock, despite the European woes, maybe not all is lost?

 

Have we discounted not just a slowdown but also an actual recession, one that might not occur? Could this be a repeat of 1987, when the market's decline presaged nothing other than a momentary loss of consumer confidence?

 

It's hard not to think about that when in the past 36 hours of trading we've had decent employment claims and some really good numbers from retailers Ralph Lauren (RL), Macy's (M) and Nordstrom (JWN), not to mention aggregate retail sales numbers.

 

It's hard not to question the recession thesis when Caterpillar (CAT) comes on national television and says orders are looking good, knowing that CAT is about emerging markets, not the U.S. and not that much about Europe.

 

Traders can make still make money as this 13% winning trade in a down market demonstrates

By Jamie Dlugosch Aug 12, 2011 5:09PM

When I trade stocks that are about to release earnings, I identify my picks over the weekend before the company in question is scheduled to report results. This past weekend was particularly challenging given the horrific state of affairs in the market.

 

Like the majority of those participating in the market a certain degree of fear clouded my vision. For a brief moment I considered cancelling trading this week given the volatility in the market. Given that all of my trading recommendations for my subscribers are long positions, downward velocity for 99% of the market did not bode well for my picks.

 

In the week prior, I made a handful of recommendations. My analysis of these picks was dead on. The companies traded reported strong results with positive guidance for the future. It should have been a big week to make money. While I did make money on two of the four trades, the other two picks were negative with one being down 10%.

 

The two winners did offset the losers making the total loss only a fraction, but the crushing losses of the last two picks combined with the negative environment had me worried. Was now the time to go bottom fishing and buy stocks?

 

Wall Street was given plenty of warning, and now the SEC may be looking into who knew what and when.

By Kim Peterson Aug 12, 2011 2:27PM
Standard & Poor's downgraded the U.S. credit rating late last Friday, and the news wasn't much of a surprise. Wall Street had heard a rumor early on that the downgrade was coming. News sites reported the rumor all day.

Unless it was all a huge coincidence, it's likely that someone in the know leaked the information. The questions are who and whether the leak led to early insider trading.

That's what the Securities and Exchange Commission is reportedly investigating. The SEC has asked Standard & Poor's to disclose who exactly knew about the downgrade before it was announced, the Financial Times reports. It's the start of a preliminary look into potential insider trading. 

Apple and Amazon have held up well despite heavy market volatility. Favorable chart patterns make each a good buy on an upcoming pullback.

By MoneyShow.com Aug 12, 2011 11:39AM
By Tom Aspray, MoneyShow.com

It has been a wild week in the markets, and the ranges in the stock index futures have been incredible. More fireworks are possible on Friday, and while overseas markets are showing nice gains a few hours before the NYSE opening, that does not tell us much about the close.

With two sharp up days and two sharp down days so far, Friday’s close will break the tie. All of the major averages and their respective ETFs closed Thursday well off the week’s worst levels. The Nasdaq 100, as represented by the Powershares QQQ Trust (QQQ), has acted the strongest, and the strength in Cisco Systems (CSCO) helped the market early Thursday.

Since the close on July 22, QQQ is down 8.2% versus a 12.8% drop by the financial-heavy Spyder Trust (SPY), which tracks the S&P 500. The SPDR Diamonds Trust (DIA), which follows the Dow Industrials, is down 12.2% during this time.

Two of the best-known tech bellwethers, Apple, Inc. (AAPL) and Amazon.com (AMZN), have held up even better, but is this important?
 

The yellow metal and companies that mine it remain in a bull market.

By TheStreet Staff Aug 12, 2011 10:31AM

Image: Gold Bars (© Photodisc/SuperStock)By Frank Byrt, TheStreet

 

Standard & Poor's is recommending gold and gold miners as top investment picks only days after downgrading U.S. Treasurys, which sparked a firestorm in financial markets worldwide that boosted the price of the precious metal.

 

S&P's Equity Research Services unit, which made the recommendation, is independent of the firm's Ratings Services division, which lowered its long-term credit rating on the U.S. to AA-plus from triple-A with a long-term negative outlook last week.

 

Gold futures tumbled Thursday after CME Group, the owner of the world's biggest futures market, increased margins on gold contracts by 22%. Gold had soared 8% in the previous three days, bringing a one-year gain to 49%, on U.S. and European debt concerns and a slowdown in global economic growth. Haven investments such as gold, Treasurys and the Swiss Franc have benefited the most.

 

"We believe that gold is in a bull market," S&P analyst Leo Larkin wrote in a research note, because demand will outstrip supply "for the foreseeable future."

 

Spooked by a severe market slump and the first downgrade of US credit, investors are on pace to redeem record amounts.

By TheStreet Staff Aug 12, 2011 9:57AM

the streetBy Frank Byrt, TheStreet

 

U.S. stock mutual funds are forecast to set a record for investor withdrawals in August as Americans recoil from the biggest equity market slump in three years and the first downgrade of Treasurys.

 

The prediction, from analyst Kevin McDevitt at mutual fund tracker Morningstar, comes after July's $22.9 billion in outflows, the most since the peak of the credit crisis in October 2008, when investors pulled $28 billion from U.S. stock funds. "With August off to a very rocky start, this trend is sure to continue, with deeper outflows to come."

 

Investors have withdrawn a net $200 billion from U.S. stock mutual funds over the past five years. Total fund industry assets peaked at $4 trillion in late 2007, but the subsequent stock market crash a year later, the prolonged recession and last year's flash crash have contributed to skittish investor behavior that has resulted in outflows of about $500 billion since the peak, according to Morningstar.

 

That's roughly equivalent to the assets of the seven largest U.S. mutual funds, a list that includes Pimco Total Return (PTTRX), SPDR S&P 500 ETF (SPY) and Fidelity Contrafund (FCNTX).

 

Big upswings are good for 3 things: selling tech, selling banks and selling companies that receive most of their earnings from budget-strapped governments.

By Jim Cramer Aug 12, 2011 9:24AM

the streetthe streetNice action Thursday.

 

Principally because it made us forget how horrible Wednesday was. The last-hour buying that accompanies an up day (courtesy of the rebalancing of double and triple exchange-traded funds -- the machine buying) put whip cream on top of the bullish concoction. 

 

And I hated it.

 

I hated it because it was a day when rumors didn't fly in Europe -- or at least they were temporarily muted by the shorting ban.

 

We need real resolutions to real problems.

 

First, we need to take off the table a possible recession, courtesy of governmental uncertainty here and in Europe and higher interest rates in emerging markets. Second, we have to see a substantive conclusion to the sovereign and bank debt problems in Europe.

 

Around the world, central banks are dragging out or canceling interest-rate increases. The effect, however, is unclear.

By Jim J. Jubak Aug 11, 2011 3:52PM
Jim JubakThe combination of slower economic growth and a global stock market rout are enough to change the strategies of central banks around the world.

Already.

The almost uniform global response from central banks has been to drag out or cancel interest-rate increases that were in the works. In general that will help stock markets -- but how much they help an individual market depends on how convinced investors were that the central bank was serious about hiking rates in the first place.

For example, in the United States, the Federal Reserve has already told the market not to expect higher benchmark interest rates until 2013. Investors who have watched the gradual slowdown of the U.S. economy had already decided that the Fed wouldn’t move in 2011, as had seemed likely earlier in the year.
 

A few thoughts after a wild few days.

By Motley Fool Pick of the Day Aug 11, 2011 2:56PM

By Morgan Housel

 

After several days, a stock market plunge and a flurry of finger-pointing, we're still trying to figure out what Standard & Poor's downgrade of U.S. Treasurys really means. Here are four points to keep in mind.

 

1. It had no impact on Treasurys. The biggest risk of a Treasury downgrade was the possibility that interest rates would rise. That could add trillions to future federal borrowing costs and stifle economic growth.

 

But interest rates didn't rise at all after the downgrade. In fact, they've plunged. Monday turned out to be the eighth best day for 10-year Treasurys in modern history. The biggest irony of downgrading Treasurys is that it instantly increased global demand for . . . Treasurys. One blogger, mocking the stereotypical investor, quipped: "Treasurys were downgraded? Wow! Sell my entire stock portfolio and get me into Treasurys!"

 

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[BRIEFING.COM] Equity indices have taken a couple steps back from their opening highs, with the Nasdaq (+0.3%) slipping behind the S&P 500 (+0.4%).

The benchmark index currently hovers in the middle of its range, but the tech sector, which displayed early strength, has narrowed its gain to 0.3%. Other heavily-weighted groups like financials (+0.1%) and health care (+0.2%) also trail the broader market. The consumer discretionary space (+0.7%), meanwhile, continues trading ahead of ... More


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