January 31, 2012
Equities Sector Coverage: Wall Street Enjoys Best January in Over a Decade
 The S&P Case Shiller Home Price Index showed that the 20-City Composite showed a 1.3% decline in prices in November versus October and 3.7% year over year. The Chicago PMI Index fell to 60.2 in January with an elevated Prices Paid component at 62.4 and with the Employment Index slumping to 54.7. Consumer Confidence declined to 61.1 in January well below the expected reading of 70.0. The Present Situation component fell to 38.4 from 46.5. Remember that the neutral zone for this measure of confidence is 90 to 120. The Dow Jones Industrial Average traded higher at the open to 12,720.10 still below last Thursday’s year to date high at 12,841.95 and below its May 2nd 2011 high at 12,876.00. After digesting weaker than expected economic data the Dow fell to 12,567.33 then rebounded above 12,640 into the final half (more)…
Why Jim Rogers Is Bearish on the U.S. and Facebook
 Famed investor Jim Rogers has already said he wouldn’t buy Facebook when the social networking giant files for its IPO later this week. “No, that kind of stock I don’t buy. They are usually very, very expensive. A lot of people like to buy expensive stocks like that, but I do not,” said Rogers to CNBC yesterday. However, that Rogers seems bearish on the internet company shouldn’t necessarily drive one away from Facebook. Rogers is bearish on…well, just about everything in America these days. “It has been demonstrated many, many times before that sellers are usually smarter than the buyers, and they usually know when the best time to sell is, and Facebook is doing it,” he said. Rogers also stated his general opposition to the high prices in the Tech sector, saying ”I am interested in technology in some shape or (more)…
Chinese Internet Stocks Coming Back in a Big Way
 Shares of Chinese internet stocks have enjoyed quite a run, to say the least, thus far in 2012. After a frenzy of successful IPOs in the first half of 2011, these companies fell as hard as any industry in the market. As the IPO market dried and Chinese stocks in the U.S. faced increased scrutiny, many investors fled these seemingly speculative stocks in the face of uncertain times. Now with January’s early bull run and the upcoming Facebook IPO, investors are regaining their appetite for one of the most alluring sectors of the market in terms of growth potential. Whether or not this run is here to stay or just a repeat of last year’s up-and-down ride remains to be seen. Perhaps it was investors who were at fault. So quick were they to pair these Chinese upstarts to their (more)…
China Stocks Face Headwinds in Short Term
 Good news on the European debt- front helped China stocks close higher Tuesday, although they still face some medium-term headwinds. After Monday’s decline the Hang Seng Index in Hong Kong opened strongly on a rebound in Shanghai and Shenzhen and after Wall Street stabilized to erase most of its early losses. The Hang Seng struggled in the early afternoon but recovered most early gains on news Greece was making progress in negotiations with debt-holders. The Index added 1.1% to close at 20,390, and the index of Chinese companies gained 1.4% to 11,299. Turnover rose to near the year-high. But further short-term gains may be hard to come by. For one thing most analysts say that the sharp early 2012 rally pushed the market into overbought territory. And then there’s the prospect of a continued decline in China’s growth rate. A (more)…
What Does the Super Bowl Mean to the Market?
 The stock market is a vast and complicated mechanism, combining hundreds of different market trends from around the globe along with thousands of different companies into a complex and unpredictable economy that’s driven by broad macro-economic factors that affect us all, right? Wrong! The really important information is the Super Bowl! The Super Bowl Indicator Theory Okay, so the idea that the winning league in the Super Bowl will accurately predict the direction of the market over the next year is ridiculous, right? There’s no real connection between the old AFL/NFL divide and something so important as the Dow Jones Industrial Average? Common sense would say no. However, the idea that wins by original AFL teams winning the Super Bowl foretells a bear market while original NFL teams winning predicts a bull market persists. Why? Because, judging by the Dow (more)…
All That Is Needed Is a Spark
 Investor’s first read: Brooksie’s edge before the open DJIA: 12,574.14 S&P 500: 1313.01 The Stock Trader’s Almanac’s January Barometer is about to make it’s annual appearance as we wrap up trading today’ In a nutshell, the direction of the S&P 500 index in January sets the tone for prices throughout the year, though “counter” moves are frequent. So far, the S&P500 is ahead 4.4%, which ranks right up there with past Januarys that were followed by boomers. Since 1960, there have been 7 January’s that posted 4% moves. In neither case was the market down for the year, in fact in all cases, the S&P 500 closed 20% higher on average The Almanac boasts only six significant errors in 60 years. With the DJIA at 12,392 on Jan.10, I headlined, “ Odds of a 600 to 1,000-point Surge in (more)…
Top Five Stocks with Strong Debt/Equity Ratios
 Debt is clearly something on the mind of many Americans. Since the collapse of housing market, a variety of different forms of debt have dominated the news cycles. Debt for the federal government, debt for state governments, debt for European governments, upside-down mortgages, it’s clear that much of the world’s economy runs on money that isn’t there. As such, how much debt a company is carrying can be a very important consideration. To be sure, high levels of debt could just mean that a company is aggressively expanding, pursuing promising business prospects while they’re present and wisely investing in their future. However, debt in all forms brings some degree of risk with it, and companies that aren’t carrying very much debt more often than not are standing on more stable footing than those with loads of outstanding notes. One way (more)…
January 30, 2012
Equities Sector Coverage: Opportunistic Investors Help to Reverse Early Losses
 Personal Income rose 0.5% in December but Spending was flat as the Savings Rate increased to 4% from 3.5%. The Dow Jones Industrial Average traded down to a day’s low at 12,529.41 on Monday, down from last Thursday’s year to date high at 12,841.95 and below its May 2nd 2011 high at 12,876.00. An afternoon rebound had the Dow above 12,650 into the final half hour of trading. The NASDAQ traded down to 2782.44 Monday morning after setting a year to date high at 2834.30 last Thursday, which was below its May 2nd 2011 high at 2887.75. An afternoon rebound had the NASDAQ above 2815 into the final hour of trading. Asian stocks were lower on Monday with the Nikkei 225 ending their session 8,793 – down 0.54% on the day. The Hang Seng closed at 20,160 – down 1.66% (more)…
Healthcare Starts 2012 With a Flurry of Acquisitions
 The last month was a wild one for the Healthcare sector as a series of mergers and acquisitions have dominated the news. A number of smaller healthcare companies were bought up by larger rivals looking to add valuable brands and potential new drugs to their portfolios. Never Micromet a Company They Didn’t Like Amgen (AMGN), the independent biotech giant, agreed on Thursday to purchase cancer-drug developer Micromet (MITI) for $1.16 billion. This would represent a price of $11 per share for Micromet, a 33-percent premium on Micromet’s price at market close on Wednesday. At the heart of the deal was blinatumomab, an antibody that Micromet currently has in phase-2 clinical trials. The antibody is being created to treat acute lymphoblastic leukemia and is in trials for treating non-Hodgkins Lymphoma. “We believe that this transaction represents an attractive opportunity for Micromet, its (more)…
Myth No. 2: Some Common Sense About Executive Bonuses
 Our second effort of 2012 covers a widely held belief that corporate bonuses are too high. Widely held outside of business – especially among government officials and students — this myth rests on the notion that large bonuses are inherently unfair. How could someone who earns a salary also justify a hefty bonus? Or, so the myth goes. Let’s explore this myth. First, executives get results. In business, this means profit. If profits are attained, the stockholders will benefit; managers who helped achieved those results should benefit also. Executives are salaried; they do not work by a time clock with a set hourly pay rate. This confirms that they are paid to achieve results. Critics of bonuses often do not work on this basis. Union members, other hourly workers as well as most students think of pay being related directly (more)…
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