RPT-Wall St Week Ahead: Earnings, Bernanke Promise Active

 The frame shows Chairmen Ben Bernanke responding to a question posited by John E. Sweeney Full Committee (Photo credit: Wikipedia)

Investors are looking at an onslaught this week. If it's not corporate earnings, it's Ben Bernanke talking about economic issues before Congress. Recent warnings from a number of companies, including chipmaker Advanced Micro Devices, helped drag the S&P 500 lower for six straight days before a Friday rebound.

The S&P 500 and Dow erased losses for the week, barely finishing higher by 0.2 percent and less than 0.1 percent, respectively. The Nasdaq composite fell 1 percent for the week.

With a slew of companies set to report results this week, the hope among investors is that the bad news has been factored in, but the broader picture remains lackluster. That may limit the market's gains even if companies clear a low bar.

'Expectations have been beaten down a lot,' said Robbert Van Batenburg, head of equity research at Louis Capital in New York. 'The problem is we're dealing with a global slowdown, and I'm sure that's going to be reflected in some of the comments you're going to be hearing.'

Data showing slower growth in Europe, China and the United States has weighed on the stock market, while U.S. companies have warned about overseas weakness and a stronger dollar hurting profits on exports.

The minutes from the Federal Reserve's June meeting suggested it is not ready to inject more monetary stimulus into the economy, but traders will be hanging on Federal Reserve Chairman Bernanke's every word for mention of such a possibility and how he views the slowing economy. ... Continue to read.

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Which Tablet Should You Buy?

Cover via Amazon

As our need for on-demand technology that is portable, light-weight and versatile has increased, our interest in tablets has increased as well. Tablets are lightweight, powerful and have a wide variety of features. The question is, "which tablet should we buy?" There are hundreds from which to choose, all with different features and specifications. For the purposes of this article we will focus on three tablets that currently dominate the market. The Kindle Fire from Amazon, the iPad from the Apple ecosystem and the flagship Nexus 7 Android tablet from Google. This article will compare and contrast the key features.
 Size
The winner of this feature really comes down to personal preference. If you're looking for something more compact, then the Kindle Fire or Nexus 7 is the way to go. They both have seven-inch screens. If you're in need of a larger screen, then the iPad is for you. The iPad has a nine-inch screen. ... Continue to read.

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Retailers win $7.25B in Settlement Over Credit Card Fees

English: First 4 digits of a credit card (Photo credit: Wikipedia)

July 14–Visa, MasterCard and 13 of the country's biggest banks have agreed to pay $7.25 billion to settle accusations by retailers that they engaged in price-fixing on credit card transaction fees. The settlement, on behalf of about 7 million retailers, could be the largest antitrust class-action settlement in U.S. history and is expected to alter the price structure around the plastic cards that are a central feature of U.S. commerce. Retailers alleged that the collusion resulted in a monopoly, with merchants forced for years to fork over ever higher fees to process the credit cards their customers use, driving up costs for consumers. But while the deal promises to put money in the pockets of millions of retailers, it appears the controversy is far from over. Appeals are anticipated, and already one major retailers group has rejected the agreement, called it a “mirage” that doesn’t go far enough. K. Craig Wildfang, an antitrust lawyer in Minneapolis with Robins, Kaplan, Miller & Ciresi and lead counsel for the class plaintiffs, said his group will likely file for preliminary approval in September. It could be 18 to 24 months before money is distributed, he said. The accord, filed Friday in Brooklyn in the U.S. District Court in the Eastern District of New York, comes after weeks of intense negotiations in Manhattan and Brooklyn. ... Contiue to read.

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JPMorgan Fears Traders Obscured Losses in First Quarter

English: Category:JPMorgan Chase (Photo credit: Wikipedia)

JPMorgan Chase & Co. (JPM)’s announcement that an internal inquiry may show “intent” to misprice trades in a unit that lost $5.8 billion may help a U.S. investigation while putting distance between management and any wrongdoers.
“E-mails, voice tapes and other documents, supplemented by interviews” were “suggestive of trader intent not to mark positions where they believed they could execute,” the bank said in apresentation today as it reported net income fell 9 percent to $4.96 billion. “Traders may have been seeking to avoid showing full amount of losses,” the bank said, noting management had concerns about the integrity of the prices used. The bank didn’t provide evidence to support the allegations. The U.S. Department of Justice and the Federal Bureau of Investigation in New York in May began a probe of the bank’s trading losses, a person familiar with the matter said. The Securities and Exchange Commission and the Commodity Futures Trading Commission, which regulates derivatives trading, are also examining New York-based JPMorgan’s trading activities, according to people familiar with those probes. ... Continue to read.

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5 Country ETFs To Diversify Your Risk

 (Photo credit: Wikipedia)

Today's economy is becoming more and more intertwined. Greece failure? Better hope you stocked up on that VIX hedge. Egypt flaring up again? Luckily you bought those out-of-the-money SPY puts.

But while major markets can certainly move in unison - a simple principle known as correlation - different countries may have different gains each year. Upset because the S&P only gained 6%, including dividends? Perhaps another country gained 12%.

While many investors love to diversify by buying commodities like natural gas or oil (note: both links take you to articles that I just wrote - they could be helpful for diversification), country ETFs offer a more specific type of exposure.

Below are five country ETFs that are often overlooked, and a few strengths and weaknesses of each. ... Continue to read.

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How Much Money Do You Need To Invest In Real Estate

 (Photo credit: Wikipedia)

With volatility returning to the stock and bond markets over the last few years, many investors have turned to hard assets such as real estate as a way to shield themselves from the market's madness. The temptation to do so is certainly strong. Thanks to the continued mess in the housing market, prices on all types of real estate are getting lower and lower. Those low prices have made it easier for average people to add these assets to their investments.
However, given the number of choices and ways to go about investing in the asset classes, finding out where to begin or how much capital one needs is a daunting task. Luckily for you, Investopedia has taken some of the painful guess work out of figuring out where to start. In this article, we’ll look at some of the choices available and familiarize you with how much capital it takes to get started. First created in the 1960s as a way to allow regular retail investors to participate in the commercial real estate market, REITs are some of the cheapest and easiest options for adding real estate to a portfolio. These securities are traded on the major exchanges like stocks and invest in real estate directly, either through properties or through mortgage investment. Some REITs will invest specifically in one area of real estate or in one geographic location. In exchange for offering investors high-dividend distributions, REITs receive special tax considerations and offer a highly liquid method of investing in real estate. ... Continue to read.

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5 Tech Giants Loved By Hedge Funds

 (Photo credit: smallislander)

By Qineqt:Apple (AAPL), Google (GOOG), Microsoft (MSFT), Qualcomm (QCOM), and Cisco (CSCO) are the most popular tech stocks among hedge funds, according to a recent report by Morgan Stanley's Adam Parker. We have analyzed each of these stocks to find out what makes them favorites among hedge funds. APPLE

TOP FIVE HEDGE FUND HOLDERS: CITADEL, DE SHAW, DISCOVERY CAPITAL, COATUE MANAGEMENT, GREENLIGHT CAPITAL

YTD Performance: 43% ... Continue to read.

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A Few on FOMC Said More Stimulus Probably Will Be Needed

Modern-day meeting of the Federal Open Market Committee at the Eccles Building, Washington, D.C. (Photo credit: Wikipedia)

A few Federal Reserve policy makers said the central bank will probably need to take further action to boost the labor market and meet its inflation target, according to minutes of their June meeting. “A few members expressed the view that further policy stimulus likely would be necessary to promote satisfactory growth in employment and to ensure that the inflation rate would be at the Committee’s goal,” according to the record of the Federal Open Market Committee’s June 19-20 gathering released today in Washington.
Stocks fell as the report disappointed investors looking for a stronger signal that additional stimulus was likely. Fed Chairman Ben S. Bernanke last month said policy makers were prepared to “take additional steps” to boost the economy following their decision to extend the Operation Twist program aimed at lowering long-term interest rates. “The Fed is being cautious,” said Mark Vitner, senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We are not at the threshold yet to justify additional securities purchases and a further increase in the balance sheet. We have to wait for a more of a slowdown before the Fed will act.”
The Standard & Poor’s 500 Index (SPX) fell as much as 0.6 percent after the release before closing 0.02 point lower at 1,341.45 at 4 p.m. in New York, posting a fifth-straight retreat. The yield on the benchmark 10-year Treasury note rose to 1.51 percent from 1.50 percent yesterday. ... Continue to read.

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Investors Can Have it All

DSC_0065 (Photo credit: Bruce A Stockwell)

One of the first equations that investors learn is the risk/reward ratio.  An asset that entails a higher risk will offer a higher reward: junk bonds have higher interest rates than United States Treasury bonds, as an example.  But that has been proven not to be true for all stocks according to the article “How to Pick Stocks without Getting Burned,” by Carolyn Bigda and Susie Poppick, in the June 2012 issue of Moneymagazine.  The piece reported on research from Dr. Robert Haugen of Haugen Financial Systems that “…found that between 1990 and 2011, the steadiest U.S. shares produced the highest returns while the most volatile domestic shares lost value.”

This only makes sense.  Dividend paying stocks that perform well such as Waste Management (NYSE: WM), SAIC, INC (NYSE: SAI) and Altria Group (NYSE: MO) will be less volatile for the simple reason there is little reason for an investor, whether an individual or an institution, to sell the shares.  The dividend incomes alone should keep investors holding the stocks for long term gains, particularly in today’s low interest rate environment combined with weak total returns.

The average stock on the Standard & Poor’s 500 Index pays a dividend of around 2%. Altria Group, which manufactures and sells cigarettes and wine, provides its shareholders with a dividend income at the rate of 4.69%.  The beta of Altria Group is very low at just 0.40, less than half of the 1 for the stock market as a whole.  Contributing to the low beta is the high level of institutional ownership at almost 60%.  Institutional investors such as mutual funds and pension groups generally buy for the long term, which reduces the volatility of their holdings.  It is a bullish indicator when an institutional investor buys as these firms have deep research resources and are highly sought after by publicly traded companies and other entities.  ... Continue to read.

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Traders Hope for Signals From Fed as Earnings Woes Mount

The wonderful modern and beautiful Marriott Hotel London-Heathrow International Airport - Business hotel and vacation dream at this Landmark Airport! 2008! Beauty in hospitality by Bill Marriott! (Photo credit: || UggBoy♥UggGirl || PHOTO || WORLD || TRAVEL ||)

Even the slightest prospect of more Fed easing has provided some of the underpinnings for a stock market that has become increasingly uneasy about the second-quarter earnings period. After Friday's disappointing June jobs report, expectations for more action from the Fed has increased.

“People will look for that, but they are likely to be disappointed,” said Zane Brown, fixed income strategist at Lord Abbett. “With 1.5 percent on the 10-year, what else are they going to do?” he said. “Are they really going to be able to buy mortgages or add to their Treasury holdings to lower rates even more than they already are?” Brown said the flight-to-quality trade has pushed the market in the Fed’s direction already and further asset purchases, or quantitative easing  , would probably not do much.

“Even the most liberal members of the Fed have said that they’re going to wait until there’s more signs of a slowdown,” he said. Besides the Fed minutes, released at 2 p.m. ET, there is international trade data Wednesday at 8:30 a.m. and wholesale trade at 10 a.m. There is also a $21 billion 10-year auction at 1 p.m., and Brown said he expects it to be well bid. The USDA also releases its latest global crop report and U.S. livestock report at 8:30 a.m. ET.

There are a few earnings reports, including Marriott [MAR  38.17    -0.79  (-2.03%)  ] ahead of the bell, and Texas Industries [TXI  39.47    -1.75  (-4.25%)   ], after the close. Chevron [CVX  103.88    -0.58  (-0.56%)   ] reports interim results after the bell. ... Continue to read.

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Are Coal Stocks Lit Up?

The Bucyrus Erie 3850-B Power Shovel named "Big Brother" went to work next door to Paradise Fossil Plant for Peabody Coal Company's Sinclair Surface Mine in 1962. When it started work it was received with grand fanfare and was the Largest Shovel in The World with a bucket size of 115 cubic yards. After it finished work in the mid 1980's, it was buried in a pit on the mine's property. It remains there still today. (Photo credit: Wikipedia)

Even though coal usage is falling in the United States and stagnant globally, coal stocks are soaring in recent market action.  Peabody Energy (NYSE: BTU), the world’s largest private sector coal company in the country, is up 17.33% for the last week and 10.44% for the last month of trading.  Year to date, Peabody Energy is off by 20.67%.  James River (NASDAQ: JRCC), a small cap coal producer with a short float of 34.62%, has soared by 34.94% for the last week and 55.13% for the last month.  For 2012,  James River has fallen by 47.54%.  Market Vectors Coal (NYSEMKT: KOL), the exchange traded fund for coal, is down 19.63% since January 1 but up 10.11% for the last week and 9.23% for the past month.
Due to lingering economic weakness in the United States, hopes for more quantitative easing to stimulate growth are firing up energy stocks, particularly coal.  The weak jobs report for June was just more proof that the economic recovery in the United States is anemic, at best.  Quantitative Easing 2, from November 2010 to June 2011, sent the share prices of energy company equities higher due to speculative effects.  Quantitative Easing 2 consisted of the Federal Reserve inflating its asset sheet to acquire about $700 billion in US Treasuries to underwrite the budget deficit for the United States Government.... Continue to read.

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The World, and Everything in it: Fed trio move closer to QE3

English: President Barack Obama confers with Federal Reserve Chairman Ben Bernanke following their meeting at the White House. (Photo credit: Wikipedia)

In a speech to a bankers' convention in Idaho, John Williams, the president of the San Francisco Federal Reserve Bank, said progress on bringing down the unemployment rate is now running at a “snail's pace,” and perhaps even stalled.He said the Fed is on the “edge” of being forced from the sideline to once again prop up growth. Fed Chairman Ben Bernanke told reporters last month that the Fed was watching the labor market closely to decide whether or not to undertake more easing steps. Earlier on Monday, two of the most dovish Fed officials speaking at a conference in Bangkok, also expressed concern that the economy was struggling and said they would support more quantitative easing. Boston Fed President Eric Rosengren said more quantitative easing is appropriate as labor market growth has slowed fairly noticeably and the global economy is vulnerable to financial shocks. The U.S. created just 80,000 jobs in June, further evidence that the economy has hit another rough patch. The unemployment rate was See complete MarketWatch coverage. The unemployment rate was unchanged at 8.2%... Continue to read.

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Emerging Stocks Drop Most in 2 Weeks on China Concerns

 (Photo credit: Wikipedia)

Emerging-market stocks tumbled the most in two weeks after Chinese Premier Wen Jiabao said the world’s second-largest economy faces “relatively large” downward pressure. The MSCI Emerging Markets Index (MXEF) Index lost 1.1 percent to 935.66 by the close in New York, the steepest drop since June 25. Technology companies led the retreat with HTC Corp. (2498), Asia’s second-largest smartphone maker, sliding to a two-year low after profit declined. Power company OAO E. On Russia slumped 2.8 percent in Moscow while OAO Magnit, Russia’s largest food retailer by market value, surged the most in a week. Brazilian markets were closed for a holiday. China’s Wen said the government will intensify fine-tuning of policies, the state-owned Xinhua News Agency reported yesterday. The nation’s inflation eased to a 29-month low in June, the National Bureau of Statistics said today in Beijing. Spanish 10-year debt yields topped 7 percent. U.S. employers added fewer workers to payrolls than forecast in June, a July 6 report showed.... Continue to read.

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Roubini: My 'Perfect Storm' Scenario Is Unfolding Now

Nouriel Roubini - World Economic Forum Annual Meeting 2012 (Photo credit: World Economic Forum)

"Dr. Doom" Nouriel Roubini says the "perfect storm" scenario he forecast for the global economy earlier this year is unfolding right now as growth slows in the U.S., Europe as well as China. In May, Roubini predicted four elements – stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together to create a storm for the global economy in 2013. “(The) 2013 perfect storm scenario I wrote on months ago is unfolding,” Roubini said on Twitter on Monday. Chinese inflation data released on Monday, suggested that the economy is cooling faster than expected, while employment data out of the U.S. on Friday indicated that jobs growth was tepid for a fourth straight month in June. Roubini said that unlike in 2008 when central banks had “policy bullets” to stimulate the global economy, this time around policymakers are “running out of rabbits to pull out of the hat." Policy easing moves by the European Central Bank, Bank of England and the People’s Bank of China last week did little to inspire confidence in global stock markets. “Levitational force of policy easing can only temporarily lift asset prices as gravitational forces of weaker fundamentals dominate over time,” he said. ... Continue to read.

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Japan Core Machine Orders Plunge 14.8% In May

Mr 100% (Photo credit: Wikipedia)

Core Machine orders in Japan plummeted a seasonally adjusted 14.8 percent on month in May, the Cabinet Office said on Monday, coming in at 671.9 billion yen. That was well shy of forecasts for a contraction of 2.6 percent percent on month following the 5.7 percent increase in April.

On a yearly basis, core machine orders added 1.0 percent – also sharply below estimates for a rise of 7.0 percent following the 6.6 percent increase in the previous month.

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