Jan 11, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

China’s Amazing Green Leap Shows Us The Future Of Oil

Posted: 11 Jan 2010 10:01 PM PST

To their peril, there are two critical points still not comprehended by the majority of foreigners, including investment analysts and other supposed gurus chiming in their opinion on China

Foreigner’s just don’t get it regarding the insane amounts of CASH CASH CASH which exists inside this country, both at the government and private sector level. I will not go into further detail on this here because it is not the main focus of today’s article. Suffice to say the recent report on massively … [visit site to read more]


Fannie And Freddie Have Become The New Go-To Conduit For US Government’s Unlimited Misappropriation Of Taxpayer Funds

Posted: 11 Jan 2010 09:21 PM PST

The AIG (AIG) fiasco was just a warm-up. Turbo Timmy’s latest coup could wind up costing taxpayers trillions - and the country hardly noticed.

Back in April 2009, yours truly wrote a piece titled “The AIG Connection - Far Worse Than You Think”.
In that missive, it was clarified how the Fed and Treasury used AIG as a “beard”… a sort of false-front money conduit through which to funnel cash to other players on Wall Street. Here is the gist:

As soon as the government stepped in to bail … [visit site to read more]

China Has Surpassed The U.S. As The World’s Largest Auto Market With 13.6 Million Vehicles Sold Last Year

Posted: 11 Jan 2010 09:01 PM PST

China dethroned the United States as the world’s largest auto market in 2009 with 13.6 million vehicles sold. It’s the first time since Henry Ford’s assembly line created a mass market for cars and trucks last century that a country other than the United States led the world in auto sales.

China sold more cars than the United States every month last year, except for August when the popular “Cash-for-Clunkers” program bolstered U.S. sales. China’s auto sales, which also were boosted by … [visit site to read more]

Forex Trading: Canadian Dollar Posts Reversal Bottom On Hawkish Prime Minister Comments

Posted: 11 Jan 2010 08:58 PM PST

Surges in natural gas, crude oil and gold helped put the Canadian Dollar in a strong position early in the trading session until Canadian Prime Minister Harper expressed his concerns about the effects of a strong Canadian Dollar on the economy. This breaking news helped trigger a short-covering rally and formed a closing price reversal bottom. This pattern is likely to trigger a 2 to 3 day retracement to the upside.
The U.S. Dollar fell sharply on Monday as bullish traders pared positions on … [visit site to read more]

Emerging Markets Index Above 1,000 For 6 Days

Posted: 11 Jan 2010 08:01 PM PST

Update: The MSCI Emerging Markets Index closed above the benchmark level of 1,000 each day last week and Monday, marking the first time since July 2008 of six straight days above 1,000 (see chart above). Today’s closing value of 1028.07 was the highest since August 1, 2008. By popular demand, the same chart in log version appears … [visit site to read more]

Benefits Of Dividend ETFs

Posted: 11 Jan 2010 07:21 PM PST

After a recession strikes, the priority of many an investor is to locate areas that can help deliver gains. Overlooking the potential of dividend exchange traded funds (ETFs) could leave you missing some great opportunities.

A dividend-focused ETF can help boost returns during bear markets and provide an income stream during bulls. Ilan Moscovitz for The Motley Fool reports that when he ran the numbers for the 2000-2002 bear market, he found that dividend-paying stocks outperformed … [visit site to read more]

Update: 2009 Hedge Fund Index Returns

Posted: 11 Jan 2010 07:01 PM PST

Here is the latest update from HFRI with 2009 index returns.  They are broken down by strategy.  The best performers were Emerging Market, Convertible Arbitrage, and Energy/Material Focused funds.

Source: … [visit site to read more]

Video: The Day Ahead: U.S. International Trade

Posted: 11 Jan 2010 07:00 PM PST

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

What Does The Recent Weakness In The US Dollar Index Mean For Precious Metals Investors?

Posted: 11 Jan 2010 06:44 PM PST

During the past week we’ve sent a Market Alert to our Subscribers, in which we commented on the current developments on the precious metals market, and indicated what action appears to be profitable under those conditions, and in the following essay we would like to elaborate on one of the points raised in that particular message.

One of the factors that we mentioned was the USD Index, which was (and still is) very close to the cyclical turning point, as suggested by the previous analysis. … [visit site to read more]

S&P 500 Hits Key Resistance Level, But Will It Hold?

Posted: 11 Jan 2010 06:11 PM PST

We’ve come up to another key level to watch in the S&P 500, but this time, it looks like the last major line of defense for the bears/sellers in this market… and with further upside momentum, we’ll shatter right through it too.

Let’s see this monthly level and note what to expect from here.

We’ve hit the 1,150 target today, which is the falling 50 month exponential moving average, the last monthly (obvious) line of defense for bears.

We’ve already broken above the 50% … [visit site to read more]

US Economic Data Preview For The Week Starting 12 January

Posted: 11 Jan 2010 06:01 PM PST

Trade balance (Tuesday 12) - Following unexpected improvement in October, shrinking from USD35.7bn to USD39bn, the trade balance deficit is expected to widen to USD36.4bn in November. In view of consumer spending rebounds in recent months, imports are likely to increase more than exports notwithstanding a weak US Dollar and global economic recovery.

Retail sales (Thursday 14) - November retail sales rose above market expectations (1.3% m/m versus +0.5% m/m), indicating strengthened … [visit site to read more]

Not A Positive Economic Picture

Posted: 11 Jan 2010 05:37 PM PST

For months now, there’s been considerable debate about whether the U.S. economy is on the road to recovery.
Bulls point to the massive monetary and fiscal stimulus that’s been pumped into the economy, the sharp rebound in share prices, and the relative improvement in certain indicators as a reason for optimism.
Bears — like me — note the persistent negative sentiment on Main Street and in many corporate boardrooms, the steady increase in foreclosures, personal bankruptcies, and the ranks of … [visit site to read more]

Singapore Stock Market:

Posted: 11 Jan 2010 05:21 PM PST

Morning Highlights
Singapore Stocks opened slightly higher today, with the STI up 4.06 points to 2937.62, after US industrial shares lifted the Dow and the S&P 500 to new 15-month highs overnight.
Singapore News Updates:

Olam has agreed to buy 99.5% of the outstanding shares and voting rights in Crown Flour Mills Limited ("CFM") with its wheat milling and noodle manufacturing facilities along with accompanying additional assets for a total purchase consideration of US$107.6 million. … [visit site to read more]

Forex Trading: USD/JPY Retreating From Resistance In Downtrend

Posted: 11 Jan 2010 05:11 PM PST

After having hit a 4-month high at the top of a medium-term downtrend channel extending from the April 2009 high, price action on USD/JPY (a daily chart of which is shown) has respected that downtrend resistance by tentatively retreating. This medium-term downtrend channel resides within a larger, long-term downtrend channel extending from the June 2007 high.

Currently, a key bearish event to watch for would be a significant breakdown below the steep intra-channel uptrend support line (of … [visit site to read more]

Cocoa ETN On The Rise

Posted: 11 Jan 2010 05:01 PM PST

The recession has proven that chocolate is a comfort food that is not easily given up. Like other commodity funds, the cocoa exchange traded note (ETN) has been on the rise, but unlike other commodities, cocoa is backed by a lot of people with a sweet tooth.

According to Mintel, chocolate sales around the world didn’t miss a step during the recession, and sales growth are likely to increase. Marcia Mogelonsky, global food and drink analyst at Mintel, noted that consumers who cut back on … [visit site to read more]

The Financial Crisis Inquiry Commission Should Investigate The Following Targets

Posted: 11 Jan 2010 04:25 PM PST

Will America ever truly learn what happened on Wall Street that brought our markets, our economy, and our country to its knees?

We should not expect the incestuous Wall Street-Washington partners to implicate themselves and thoroughly expose their shortcomings. A full 16 months since the failure of Lehman Bros. and how much have we truly learned? What change has really occurred? Who has been fired in Washington? Who has been indicted on Wall Street? Will the Financial Crisis Inquiry … [visit site to read more]

Road Map To Recovery: Follow The 10-Month Average Of The S&P 500 Index

Posted: 11 Jan 2010 04:05 PM PST

Getting both sides of a bear market and recovery right is the biggest test that investors face because it requires doing an about-face on a winning strategy.

The ideal investor would have sold in October 2007 when stocks were making new all-time highs, then stayed out of all subsequent rallies during the worst bear market in seven decades, and then bought back into the market at its once-unimaginable low after not just the wheels of the economy had fallen off, but seemingly the engine, doors … [visit site to read more]

Why Not Let The Whole Banking System Collapse?

Posted: 11 Jan 2010 04:00 PM PST

The news this morning tells us that markets are rising. Investors are bullish because China's exports are recovering, says the new analysis.
Meanwhile, celebrated short-seller Jim Chanos says China is going to blow up. It's going to be "Dubai times 1,000," he says.
Our old friend Jim Rogers disagrees. He thinks Chanos hasn't looked long enough or deeply enough into the China story. He thinks China is a buy.
And what do we think?
We don't think. We listen:
"Something like 50% of … [visit site to read more]

Cartoon: Tallest Stack Of Borrowed Money In Perspective

Posted: 11 Jan 2010 03:01 PM PST

Source: Bob Englehart, Comics.com, January 8, … [visit site to read more]

China: Bubble Vs. Bust

Posted: 11 Jan 2010 03:00 PM PST

We're here in Britain's former South China Sea jewel for the next few days to collect passport stamps and chat with locals. We're trying to work out whether China is the world's biggest opportunity…or the world's biggest bubble. Probably, it's a bit of both.
On the one hand, there is plenty of hot, speculative money chasing pricier and pricier real estate investments in Beijing, Shanghai and right here on Hong Kong Island. Today's South China Morning Post reports that prices in … [visit site to read more]

Nippon Telephone Downgraded

Posted: 11 Jan 2010 02:50 PM PST

We downgrade our recommendation for Nippon Telegraph & Telephone Corp. (NTT) to Neutral, which means the stock will perform in line with the broader market. Overall performance has been impacted by less-than-anticipated sales of mobile handsets due to weak economic conditions in Japan together with significant declines in average revenue per user (ARPU) as subscribers migrate to discounted service plans.
The company faces intense pricing pressure from smaller telecom service providers. … [visit site to read more]

Broadcom Launches SoC Solution

Posted: 11 Jan 2010 02:34 PM PST

Broadcom Corporation (BRCM) recently launched the highly integrated digital terrestrial converter box system-on-a-chip (SoC) solution designed for Japan’s upcoming transition to digital TV broadcast transmission.
This integrated chip solution features an ISDB-T tuner and is expected to address Japan’s analog broadcast shut-off program along with meeting the requirements of ISDB-T digital programming on a worldwide basis through cost effective and low power chip solutions. The Japanese … [visit site to read more]

OGE Gets OK On Wind Farm Energy

Posted: 11 Jan 2010 02:17 PM PST

OGE Energy Corporation (OGE) received approval from the Oklahoma Corporation Commission (OCC) to purchase electricity from wind farms currently under development in northwestern Oklahoma. This regulatory approval enabled the company to increase its renewable energy capacity to 550 MW. OGE Energy, prior to the regulatory approval, had 270 MW of wind capacity in northwestern Oklahoma near Woodward.
The OCC order clears the way for OGE Energy’s customers to receive electricity from a 150 MW wind … [visit site to read more]

China Passes More Milestones… Time To Slow Down?

Posted: 11 Jan 2010 02:00 PM PST

Two more notable milestones for China:
First, Chinese banks are now the most highly (over?) valued banks in the world. If you measure a company's worth by price-to-book value, there's been a remarkable changing of the guard. There's quite a few different ways to take in this chart… we'll let you come to your own conclusion:

Second, China is now the world's biggest exporter (according to their data, anyway). The Red nation announced over the weekend that 2009 exports exceeded $1.2 … [visit site to read more]

China Unicom To Launch Uphone

Posted: 11 Jan 2010 02:00 PM PST

Second-largest Chinese wireless carrier China Unicom (CHU) is warming up to carve a niche in the Android cell phone market, as the carrier introduces the first batch of its customized Android handsets (under the "Uphone” moniker) in January 2010. However, the official release date has not been confirmed by the Chinese operator.
China Unicom's Android project is backed by Google's (GOOG) Open Handset Alliance ("OHA”) program. The company is developing Uphone leveraging its … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: AA, CVX,

Posted: 11 Jan 2010 01:44 PM PST

The latest in news, commentary, and information on what’s moving the US equities markets. Watch this broadcast LIVE at 4:00 pm EST daily @ “http://www.nyx.com/marketmonitor” … [visit site to read more]

Costco Initiated As Neutral

Posted: 11 Jan 2010 01:43 PM PST

We initiate our coverage on Costco Wholesale Corporation (COST) with a Neutral recommendation, meaning the stock will perform in-line with the broader market. The company is one of the largest retailers in the warehouse club market in terms of revenues.
Earnings for the last quarter came in line with the Zacks Consensus Estimate. However, deflated gasoline prices, coupled with depressed consumer spending, dragged domestic store sales growth.
Costco sells foods and general merchandise … [visit site to read more]

Video: Oil Trades Above $83, Then Slips

Posted: 11 Jan 2010 01:34 PM PST

Front month crude prices kicked off a new week mixed despite a boost in Chinese crude demand and a weaker US dollar. … [visit site to read more]

Video: Ford’s Fusion Hybrid Wins 2010 North American Car Of The Year

Posted: 11 Jan 2010 01:34 PM PST

Ford started 2010 on a good note after its 2010 Ford Fusion Hybrid won the award for the North American car of the year while announcing that it will build new hybrid and plug-in vehicles at its Michigan plant. … [visit site to read more]

IRAs And Roth IRAs: What You Need To Know Before You Make This Retirement Account Switch

Posted: 11 Jan 2010 01:33 PM PST

Monday, January 11, 2010: Issue #1172
Let's talk retirement – and specifically, Individual Retirement Accounts (IRAs).
Simply put, these are accounts that investors set up to save for retirement. They come in various forms, including the two that I'm going to talk about here – traditional IRAs and Roth IRAs.
On the surface, a Roth IRA seems like the best bet, as it allows for tax-free accumulation of profits on your contributions. A great idea, for sure. But there's a catch: It's … [visit site to read more]

Ford’s Global Focus

Posted: 11 Jan 2010 01:26 PM PST

Ford Motor Co. (F) will unveil its first global car, Focus 2012, in the Detroit Auto Show. The model will echo the "One Ford” concept, incorporated by the company CEO Alan Mullaly, to focus on cars that can be engineered once and sold around the world in more or less the same form. With the launch, the automaker will also fulfill its commitment towards building small and fuel-efficient cars. The new Focus is set for a global launch in 2011.
The new Focus replaces the original Focus, … [visit site to read more]

AMAG Pharma Guides On Feraheme

Posted: 11 Jan 2010 01:10 PM PST

Recently, AMAG Pharmaceuticals Inc. (AMAG) stated that it expects net revenues between $12 and $13 million from its lead anti-anemia injectable product Feraheme for the fourth quarter of fiscal 2009 (ended December 31).
AMAG had launched the Feraheme (ferumoxytol) injection in the United States on July 13, 2009. It is an intravenous iron replacement therapy to fight anemia in patients with chronic kidney disease (CKD). The drug can be used by patients even if they are undergoing dialysis.
The … [visit site to read more]

Investing Lessons From Bernstein, Rosenberg And Farrell

Posted: 11 Jan 2010 01:01 PM PST

I have over the past year referred to parting comments from Richard Bernstein and David Rosenberg as they left Merrill Lynch for less restrictive surroundings. We were again reminded of these lessons, together with those by legendary Merrill analyst Bob Farrell (who retired in 1992), in a recent report by Jeff Saut as extracted below.
Treasure these words of wisdom and stick them onto your wall so that you are always reminded of them.
Richard Bernstein’s lessons
1. Income is as … [visit site to read more]

Patterson-UTI Rig Count Picks Up

Posted: 11 Jan 2010 12:53 PM PST

One of the largest onshore contract drillers in the U.S., Patterson-UTI Energy Inc. (PTEN) has declared its Dec. 2009 drill rig count to average 118, up from 104 in the previous month. The company operated 108 rigs in the U.S. and 10 in Canada in December, compared to 96 rigs in the U.S. and 8 rigs in Canada during November.
Patterson-UTI's activity levels in the U.S. peaked in early October 2008 with a rig count of 275. Since then, the company has been witnessing a steep and rapid decline … [visit site to read more]

Video: Alcoa Takes Center Stage

Posted: 11 Jan 2010 12:48 PM PST

Jason Weisberg of Seaport Securities, gives his take on how Alcoa’s earnigns could play out in the market. … [visit site to read more]

Rents Are Rising In The Empire Of Debt’s Capital City

Posted: 11 Jan 2010 12:38 PM PST

As The Daily Reckoning has anticipated for some time, a shift in power and money is taking place… office rents in Washington, DC are quickly becoming the highest in the nation, even more expensive than those in New York City. It's yet another indication that the US capital, home to the political elite that controls the American purse strings, is becoming the new center of wealth generation for lobbyists, government contractors, law firms, and the like. Worse still, it's a development … [visit site to read more]

Viacom Downgraded To Neutral

Posted: 11 Jan 2010 12:34 PM PST

We have downgraded our recommendation for Viacom Inc. (VIA.B) from Outperform to Neutral ahead of its fourth quarter 2009 financial results.

According to our assessment, the company's advertising revenue will remain challenged due to continuation of demand softness in the advertising market throughout the world. Viacom derives substantial revenues from the sale of advertising on a variety of platforms, and a decline in advertising expenditures could adversely affect the company's revenues … [visit site to read more]

Pool Corp. To Underperform

Posted: 11 Jan 2010 12:16 PM PST

We are downgrading our recommendation on the shares of Pool Corporation (POOL) to Underperform. We are concerned about the pace of recovery, especially in the pool construction/major renovation business.
Pool Corp.'s third-quarter earnings came in at 35 cents per share, seven cents short of the Zacks Consensus Estimate. The company reported a 13% year-over-year drop in net sales to $430.1 million. New pool construction was down sharply, and the recession is forcing consumers to cut back on … [visit site to read more]

Time To Invest In China… A Little

Posted: 11 Jan 2010 12:00 PM PST

Anthony Bolton may be Britain's greatest investor. He ran the Fidelity Special Situations Fund from 1979 until his retirement in 2007. Over that 28-year span, the fund earned nearly 20% annually, thoroughly beating the market average of 13% over that time.
Because of his long and exceptional track record running a mutual fund and because of his association with Fidelity, he has been tagged the "Peter Lynch of Britain." (Lynch ran the Fidelity Magellan Fund from 1977–1990 and posted a … [visit site to read more]

Fluor Group Wins Wind Farm Bid

Posted: 11 Jan 2010 11:58 AM PST

Fluor Corporation (FLR) announced that its UK division, Fluor Limited, and SSE (Scottish and Southern Energy plc), have been awarded exclusive rights by The Crown Estate to develop the Round 3 offshore wind farm zone in the Firth of Forth, off the coast of Scotland.
The proposed wind farm zone is located approximately 22 kilometers from the East coast of Scotland, and covers an area of 2,852 square kilometers in the outer Firth of Forth. The zone has a potential installed capacity of up to … [visit site to read more]

Investing In Brazil: Two Ways To Profit From This Emerging Market’s Multiple Growth Trends

Posted: 11 Jan 2010 11:57 AM PST

Soccer… the Samba… and carnivals.
These are the things that spring to mind when you mention Brazil.
But these days, the country is increasingly considered an excellent destination for investment capital, too. In fact, it may very well become one of the 21st century's new economic powers, alongside places like China and India.
The solid economic foundation is already in place…
~ Commodities: Brazil holds a strong position in commodities like sugar, iron ore, soybeans, orange juice, … [visit site to read more]

Heartland Settles Data Breach

Posted: 11 Jan 2010 11:45 AM PST

To resolve the 2008 data breach claims with major card issuers, Heartland Payment Systems (HPY) said on Friday that it will pay about $60 million to issuers of Visa (V) credit and debit cards. The 2008 data breach allowed hackers to gain card information. 

The payment will help the Visa issuers to cover losses that they had incurred after Heartland’s computer network was hacked in late 2008. The system used to process Visa, MasterCard (MA), American Express (AXP) and Discover … [visit site to read more]

DuPont Receives Grant

Posted: 11 Jan 2010 11:30 AM PST

EI DuPont de Nemours & Company's (DD) Circleville plant in Ohio received $50.73 million in tax credits for a new production line under the American Recovery and Reinvestment Act. The $50.73 million in tax credits will be used to expand production of high-performance polyvinyl films, part of the critical backsheet component of solar panels. The credit makes up only a chunk of nearly $125 million awarded to Ohio from the Recovery Act’s Advanced Energy Manufacturing Tax Credit program. … [visit site to read more]

Teva-AstraZeneca Settle Dispute

Posted: 11 Jan 2010 11:15 AM PST

Generic player, Teva Pharmaceuticals Industries Ltd. (TEVA) recently settled its patent dispute with AstraZeneca (AZN) related to its generic version of AstraZeneca's Nexium. The companies entered into another agreement as well, related to Teva's generic version of AstraZeneca's Prilosec. 

Under the terms of the Prilosec agreement, Teva will continue to market its generic version of the product in the U.S. and will make a one-time payment to AstraZeneca, which will release Teva … [visit site to read more]

The Last Big Question: Will Health Care Reform Be Paid For By The Rich Or The Middle Class?

Posted: 11 Jan 2010 09:34 AM PST

There's only one big remaining issue on health care reform: how to pay for it. The House wants a 5.4 percent surtax on couples earning at least $1 million in annual income. The Senate wants a 40 percent excise tax on employer-provided "Cadillac plans." The Senate will win on this unless the public discovers that a large portion of the so-called Cadillacs are really middle-class Chevys, expensive not because they deliver more benefits but because they have higher costs.
The dirty little … [visit site to read more]

Things Are Falling Apart In Eurozone

Posted: 11 Jan 2010 02:01 AM PST

As fears of a dollar meltdown have loomed ever larger in recent years, major investors, including central banks, have moved significant portions of their cash reserves into the euro, the currency of the European Union (EU). And while it is true that the euro offers some shelter from the American economic catastrophe, the currency does come with baggage that investors should not ignore.

Introduced as an accounting medium in 1990, the euro became an actual currency in 1992. It is … [visit site to read more]

FX Options Weekly Outlook

Posted: 10 Jan 2010 02:00 PM PST

Jason Ayres, founder of OptionSource.net, provides a look a head of this week’s FX activity. … [visit site to read more]

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