Jan 5, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

Former Fed Chairman Paul Volcker Takes The Gloves Off, Criticizes Wall Street

Posted: 05 Jan 2010 12:01 AM PST

Former Fed Chairman Paul Volcker was supposed to stay quiet - banished to the obscurity of a meaningless post. But now “Tall Paul” is fighting back… and he thinks he can win.
“I wish we had fewer financial engineers and more mechanical engineers.”
- Paul Volcker
Has there ever been a better time to be a bureaucrat?

As private sector jobs dry up, hours get cut back, and wages fall, federal workers are doing just fine. In the first 18 months of the recession, according to a USA Today … [visit site to read more]


2010 Surprise: Yen To Weaken And Japanese Stocks To Outperform All Other Markets

Posted: 04 Jan 2010 11:01 PM PST

On CNBC’s Fast Money New Year’s Eve, I was asked to give my “surprise” for 2010. What was it?

Japanese Equities outperform all other markets in 2010.

There are three pillars supporting this view:
The Japanese Economy is Just “Good Enough” to Support Govt. Debt
The BoJ Has Just Begun Quantitative Easing
A Liquidity Fueled Rally Could Ensue
“Good Enough”

One of the only data points for Japan last week was the release of Japanese Industrial Production. The number was nothing short … [visit site to read more]

James Cameron - News Corp’s Billion Dollar Man

Posted: 04 Jan 2010 10:01 PM PST

Hollywood is on fire these days at the box office, having just set records for cinema receipt revenue in 2009 of more than $10.5Billion the trend looked to continue into 2010, and at the center of box office success now stands a single filmmaker: James Cameron.

The latest film from the man behind Terminator, Aliens and Titanic is called Avatar, and it seems like quite a few people have seen it already. $1.0Billion in ticket sales worldwide in only 17 days makes Cameron the only … [visit site to read more]

Will We See Real Financial Regulatory Reform In The US In 2010?

Posted: 04 Jan 2010 09:01 PM PST

Will the change in the calendar bring about change in the prospects for real financial regulatory reform? Will Wall Street and Washington recycle the streamers and party hats used for New Year’s Eve celebrations and declare that the market is up so all is well? If the general media allows the charlatans in Washington and their consorts on Wall Street to frame the regulatory reform debate, America should expect little to no change on this front. In the process, a tremendous opportunity … [visit site to read more]

Platinum ETFs In Focus As Auto Sales Soar

Posted: 04 Jan 2010 08:01 PM PST

After struggling just to survive for much of 2009, the U.S. automotive industry is showing surprising signs of life in early 2010, as surges in foreign demand and better-than-expected domestic results give the struggling sector a boost. While it’s far too early to tell if the turnaround will be sustainable or is simply a blip on the radar, recent developments have investors revisiting a sector that was once left for dead. While this is obviously good news for the “big 3″ (or perhaps … [visit site to read more]

What’s Ahead For The US Economy And Politics In 2010

Posted: 04 Jan 2010 07:01 PM PST

Just about everything you’ll hear coming out of Washington starting now is really about November’s mid-term election. The gravitational pull of the midterms was already apparent last year, as Republicans marched in perfect lockstep to vote against whatever the President and Dems proposed (Republicans always have authoritarian discipline on their side, which is why they’re Republicans) but you haven’t seen anything yet.

The Dems have enough votes to enact health care - the hurdle Bill Clinton … [visit site to read more]

Video: The Day Ahead: U.S. Pending Home Sales

Posted: 05 Jan 2010 12:00 AM PST

The stories, data, and stocks that may have the greatest impact during the next trading session. … [visit site to read more]

S&P 500 Historical Volatility At Two-Year Low

Posted: 04 Jan 2010 06:01 PM PST

While it is widely understood that the VIX (^VIX) has a tendency to fall during the holidays (due largely to fewer trading days), a point that slipped past many pundits is that historical volatility (HV) has been excessively low during the past few weeks. In fact, last Wednesday the 20 day historical volatility in the SPX slipped below 10.00 for the first time since October 2007, about one week after the SPX topped at 1576.

Historical volatility in the SPX did rise a little to end … [visit site to read more]

Forex Trading: USD/CAD Displays New Year Bearishness And Dips Below 1.0400

Posted: 04 Jan 2010 05:31 PM PST

Price action on USD/CAD, a daily chart of which is shown, on the first trading day of the New Year has displayed a marked bearishness that has brought the currency pair back down to dip below strong recent support in the 1.0400 price region.

This tentative bearishness exists within the context of both a long-term general downtrend extending from the March 2009 high, as well as a flatter medium-term downtrend extending from at least August of 2009. The last bounce down off the medium-term … [visit site to read more]

As Long As Prices Remain Above The Breakout Point, Gold And Gold ETF Should Be Bullish

Posted: 04 Jan 2010 05:21 PM PST

Figure 1 is a monthly chart of the SPDR Gold Trust (GLD). The breakout (blue up arrows) from the extended base resulted in the strong surge in GLD shares over the last part of 2009. Gold’s parabolic move resulted in selling in December, but as long as prices remain above the breakout point, gold and GLD should be bullish. This level of support is at approximately $96.

Figure 1. GLD/ monthly

That’s the long term picture.

The intermediate term picture is a little less bright … [visit site to read more]

GDP Data Weighs On Singapore ETF (EWS)

Posted: 04 Jan 2010 05:14 PM PST

The new year will begin with a bang for Singapore equities, which look to be in focus early in 2010 after the latest round of data gave conflicting indications on the health of the market recovery there. A decline in manufacturing activity caused Singapore’s economy to contract at a quicker-than-expected pace in the fourth quarter. But full year GDP for the island nation declined much less than analysts had predicted, giving hope that a turnaround is already well underway. GDP declined 6.8% … [visit site to read more]

Why Didn’t The Stock Market Move?

Posted: 04 Jan 2010 05:01 PM PST

Have you ever wondered why the market often times makes a very early move one way or the other then just seems to sit all day? Take today (Monday), for instance. The market moved solidly higher on the open, but has sat at up 160 points all day. Why? Let’s look at a 5 minute graph of today’s price movement for the Dow Jones Industrial Average:

The market has traded in a 10 to 15 point range for the better part of the last 4 hours. Why isn’t it moving? A lack of overall trading volume … [visit site to read more]

Junior Oil Buyout Validates All Cardium Players

Posted: 04 Jan 2010 04:56 PM PST

Junior oil producers with land packages in the Cardium formation are jumping up Monday after Berens Energy (BEN-TSX) was bought out today by Petrobakken for $2.70 a share. Berens’ stock price had moved up from 50 cents to $2 over the last six months as its Cardium land position became more widely known.

This transaction is significant for a couple reasons.  It’s a huge validation of the emerging Cardium play.  The Cardium has quickly become the next “hot” play in Canada, after the … [visit site to read more]

Failed Decade For US Stock Market Investors

Posted: 04 Jan 2010 04:48 PM PST

The first ten years of the new millennium provided for a decade of "zeros" indeed… a "decade that began with such promise" ended up in abject failure for those heavily invested in the stock markets of the developed world.
According to the New York Times:
"…it became a decade that richly earned the name "the zeros." For the entire developed world, that was just about the decade's total return.
"The United States stock market lagged even that modest return. According to the … [visit site to read more]

Stock Options Wrap-Up For Monday: Sentiment Indicator Signals Potential Top Of This Market Cycle?

Posted: 04 Jan 2010 04:37 PM PST

The market continues to stay in a tight range, thus no cards are really being shown at this point. Some noteworthy sentiment information - the AAII’s (American Association of Individual Investors) sentiment indicator measuring the ratio of bullishness vs. bearishness of their members has recently spiked up to levels of .68, which we have not seen since September of ‘08. Is this a potential top of this market cycle? This AAII sentiment indicator could be impacted more by the lack of … [visit site to read more]

Monday ETF Roundup: UNG, EWZ Surge

Posted: 04 Jan 2010 04:15 PM PST

The new year on Wall Street got off to perhaps the best start possible on Monday, as strong manufacturing data spurred hopes of a sustained recovery effort in 2010. Trading activity jumped from last week, but remained well below normal levels, indicating that the surge was perhaps attributable in part to a lack of full market participants.

The ETFdb 60 Index jumped 14.63 points, or 1.4%, in the year’s first session, as almost every asset class finished higher in what was perhaps a … [visit site to read more]

Biggest Gains Come From Small-Cap Stocks

Posted: 04 Jan 2010 04:12 PM PST

With 2009 officially in the rear view mirror, now is an opportune time to look back at the best performing stocks of last year. In 2009, the Russell 2000 small-cap index rose 24% to finish the year at 625.39. That level was just a hair shy of the 636.46 high as the index gained momentum to close out the year, and a vast improvement from the dark days of March when the Russell fell to 343.

The Russell’s performance shows that small cap stock returns were impressive in 2009, especially … [visit site to read more]

Asia’s Economic Recovery Gathering Steam With China Leading

Posted: 04 Jan 2010 04:11 PM PST

Manufacturing data today (Monday) confirmed that Asia’s economic recovery is gaining strength, and China - whose economy may have expanded at a rate of 9.5% in the fourth quarter - is leading the revival.

The China Federation of Logistics and Purchasing on Sunday said the country’s official purchasing managers’ index (PMI) rose to 55.2 in December from 54.3 a month earlier. That’s the biggest increase since April 2008, and it was aided by an increase in trade. The gauge of export … [visit site to read more]

U.S. Escalates Trade Dispute With China

Posted: 04 Jan 2010 04:08 PM PST

The United States launched another salvo in a trade dispute with China last week when it imposed new duties on imports of steel pipes, escalating tensions between the two powers.

The Chinese government quickly fired back, accusing the U.S. of “protectionism.”

The U.S. International Trade Commission (ITC) voted unanimously on December 30 to impose duties between 10.36% and 15.78% on the pipes, which are used mostly by the oil and gas industries. Those new tariffs are designed to … [visit site to read more]

Economic, News And US Earnings Reports For The Week Of Jan 4 - 8

Posted: 04 Jan 2010 04:01 PM PST

This week is a busy week on the economic front.  On Friday comes the important jobs report with unemployment rate still expected to be over 10%.  In additon, we are going to get a picture of the manufacturing services situation, pending home sales and consumer spending via auto/truck sales.

On the earnings front, several notable companies include: Family Dollar (FDO), Monsanto (MON), Bed Bath & Beyond (BBBY) and Constellation Brands (STZ)

You can view all the detailed … [visit site to read more]

Keep Your Portfolio Healthy With Campbell Soup Co. (CPB)

Posted: 04 Jan 2010 04:01 PM PST

On June 1 of last year I recommended buying Campbell Soup Co. (CPB). It was a contrarian call at the time, since many brokers and independent analysts had rated the stock a “hold.”

That’s because most analysts think of Campbell the same way they think of many other consumer staples businesses - as a stable, slow moving business with no real short-term catalyst for growth.

You see, very few remember the tremendous upside that Warren Buffet realized when he invested in another “dull” … [visit site to read more]

“Aughts” Ruined By Wall Street

Posted: 04 Jan 2010 03:00 PM PST

We're back in the USA after 15 years of living in Europe.
Bethesda is one of America's wealthiest suburbs. Money from all over the nation rolls this way. The playing field is tilted in Bethesda's direction.
"I was sitting in the Starbucks, having a cup of coffee," Elizabeth reported. "One man next to me was on the phone. He was talking about some deal he had done with the US Army in Afghanistan. It sounded as though he was very happy with it. The man next to me on the other side was … [visit site to read more]

Shell Steps In For Petrobras Stake

Posted: 04 Jan 2010 02:28 PM PST

Royal Dutch Shell (PBR), Brazil's state-controlled oil firm. Petrobras has decided to offload this stake to the ONGC for concentrating on upstream activity in its home country, Brazil.
ONGC has made 10 gas discoveries, including the ultra deep-sea UD-1 find in the KG block where Hydro Oil and Energy India BV — a unit of Norway's Statoil ASA (STO) — and Cairn India hold 10% apiece.
The discoveries are estimated to hold anywhere between 5 and 15 trillion cubic feet (Tcf) of reserves. … [visit site to read more]
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