Mar 4, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

US Natural Gas Fund (UNG) Hits New Lows After Inventory Report

Posted: 04 Mar 2010 05:50 PM PST

“How low can it go? That’s the question for investors in U.S. Natural Gas Fund (UNG), which has lost more than half its value over the past year alone. It was among the worst-performing ETFs on Thursday, losing 4% in afternoon trading following a report that natural-gas inventories fell less than expected last week. The ETF set a fresh all-time low of $8.28 during the session,” John Spence Reports From MarketWatch.

Spence goes on to say, “The fund’s collapse along with natural-gas prices … [visit site to read more]


Forex Trading: EUR/JPY Consolidating Within Downtrend

Posted: 04 Mar 2010 05:21 PM PST

Price action on EUR/JPY, a daily chart of which is shown, has consolidated in a sideways pattern for the last week between two key support/resistance price regions: 122.00 and 119.50, the latter level representing a 1-year low for the pair. This consolidation occurs within the context of a strong downtrend and after price broke down below a flag-like consolidation above 122.00.

Currently, any strong breakdown below the current consolidation (119.50 price region) could target further major … [visit site to read more]

The FOMC’s Extended Period

Posted: 04 Mar 2010 05:11 PM PST

“The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipate that economic conditions . . . are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
- FOMC Press Release
27 January 2010
_________________________________________________________________
“I support your recommendation. I would have preferred to eliminate the 'considerable period’ phrase, get it over with, and start the … [visit site to read more]

Stock Picks For Friday 5 March: OceanFreight, GigaMedia

Posted: 04 Mar 2010 04:31 PM PST

( click to enlarge )

GigaMedia (NASDAQ:GIGM) has a very interesting technical daily chart as the stock looks to be ready for a good upside move. The stock closed up $0.03 on Thursday as it hit a high of $3.15 on the day. Looking closely at the technical daily chart, we can see this high broke above Wednesday’s high, which is another signal for an upside move. All indicators are still in Bullish areas. Keep an eye for a possible breakout over $3.15.

( click to enlarge )

OceanFreight … [visit site to read more]

US Dollar Gains After Forex Traders Flock To Safer Assets

Posted: 04 Mar 2010 04:22 PM PST

The U.S. Dollar was up sharply against all major currencies as investors flocked to safer assets following a poor housing report and concerns about Greece’s ability to shore up its budget deficit. More the most part, it was a quiet trade on Thursday as many big Forex players stood on the sidelines ahead of Friday’s U.S. Non-Farm Payrolls Report.
The EUR USD was stable Thursday morning after reports surfaced that investor demand was strong for the newly issued Greek 10-Year Bonds. This had the … [visit site to read more]

How To Calculate The Total Cost Of That ETF

Posted: 04 Mar 2010 04:01 PM PST

Commission-free trades on an exchange traded fund (ETF) are a beautiful thing if you’re an investor who’s seen returns eroded by sundry fees. But it’s important not to become too caught up with the notion of no-transaction fees at the expense of other factors in determining an ETF’s merits.

Many investors have been vexed by commission fees that erode returns, writes Carolyn Bigda for Chicago Tribune. That reality made Schwab and Fidelity’s decision to waive fees on a number of ETFs “a lovely … [visit site to read more]

Global Budget Deficits: A Timeless Love Story

Posted: 04 Mar 2010 04:00 PM PST

The Greek story is a universal tale… It will soon be played by the UK…and then it will be the US.
Let us summarize: Innocent fellows are seduced by debt. They fall in love with deficits. Debt proves to be an evil temptress. Our heroes are ruined.
Isn't the story more or less the same in Britain and America too?
And now the pound is falling. It dropped below $1.50 on Tuesday. Instead of being a refuge against the troubled euro, investors are fleeing the English currency. Why? They figure … [visit site to read more]

China Dumping US Debt Could Be Great For America

Posted: 04 Mar 2010 03:00 PM PST

Providing the world's reserve currency has its privileges. Not the least of which is the continued willingness of foreigners to soak up the massive amounts of debt issued by the US despite the nation's continued debasement of the dollar.
Yet, what if the foreign nations stopped buying? We've certainly heard of the calamity that should result from China cutting the US off, but perhaps we shouldn't be so certain that's the case.
Let's suppose for a minute that it's not. Mike … [visit site to read more]

Sell Bank Stocks: The “Truth” Behind Non-Performing Loans

Posted: 04 Mar 2010 03:00 PM PST

Whoever said, "Opposites attract," didn't know what they were talking about…or maybe they did know and just didn't provide all the details.
The world around us provides ample evidence that opposites do, in fact, attract…but not always toward a favorable outcome. Sometimes opposites attract like gravity attracts a crippled airliner…or like a field mouse attracts a rattlesnake…or a bare foot attracts a rusty nail…or a Rusty Nail attracts an alcoholic…or accounting chicanery … [visit site to read more]

Max Capital-Harbor Point To Merge

Posted: 04 Mar 2010 02:30 PM PST

Yesterday, reinsurers Max Capital Group Ltd. (NASDAQ:MXGL) and closely held Harbor Point announced their intention to merge. Upon doing so, both companies would dissolve and a new entity named Alterra Capital Holdings would be formed, with Harbor Point holding 52% ownership and Max Capital holding the rest. The new company will be listed on Nasdaq and trade under the ticker symbol ALTE.
The stock-for-stock merger will see Max Capital compensating the shareholders of Harbor Point with 3.7769 Max … [visit site to read more]

Daily ETF Roundup: UNG Hits All Time Low

Posted: 04 Mar 2010 02:22 PM PST

Thursday saw the Dow Jones Industrial Average climb back into the black for 2010, as a recent rally has now erased February's steep losses. A series of analyst upgrades gave markets a boost, although health care stocks continued to show weakness. Also on Thursday, retailers reported strong improvements in February sales. A week full of statistical releases will come to a climax on Friday morning when a highly-anticipated payrolls report–which is expected to show further reductions to … [visit site to read more]

PNC Resumes Old Pay Policy

Posted: 04 Mar 2010 02:10 PM PST

PNC Financial Services Group (NYSE:PNC) announced yesterday that it is coming back to its prior compensation policies meant for its executives. This announcement comes after the company last month freed itself from the Troubled Asset Repurchase Program (TARP).
In August of last year, the company increased the salary of five of its senior executives entirely in the form of stock units to comply with the TARP requirement. This mode of compensation has been eliminated in 2010. However, for 2010, the … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: DIS, ANF, WEN

Posted: 04 Mar 2010 02:05 PM PST

The latest in news, commentary, and information on what’s moving the US equities markets. … [visit site to read more]

Portfolio Allocation - Quarterly Rebalancing

Posted: 04 Mar 2010 02:01 PM PST

As I continue my journey into Asset Allocation enlightenment, I thought it would pay to see what would happen to my model portfolios if we changed the time frame between rebalancing.

I looked into annual rebalancing at first.  Basically at the start of each year, we would make sure the entire portfolio had the right percentage of each mutual fund.  We learned that doing this kept our asset allocations from deviating too far from where they would be if we never rebalanced.  In … [visit site to read more]

Titanium Metals (NYSE:TIE): Investing In Aviation Growth

Posted: 04 Mar 2010 02:00 PM PST

The economic center of gravity will not always reside in the United States. In fact, it's already in the process of shifting from the US to Asia and the Middle East. Forward-looking investors cannot afford to ignore this trend.
One of my favorite ways to invest in the rapidly growing emerging markets is through the back door, so to speak. Invest in companies, wherever they are, that have what these economies need or want, but don't have. Airliner production is a classic example.
I bet most … [visit site to read more]

Raising Price Target For Moody’s

Posted: 04 Mar 2010 01:52 PM PST

Moody's Corp (NYSE:MCO) is an industry leader in credit ratings. We maintain our Neutral rating on Moody's but raise our price target to $29.00 from our previous  target of $25.00 on better-than-expected results.
Results for 2009, although below year-ago levels, were better than the Zacks Consensus Estimates, reflecting an improvement in credit markets, continuing strength in corporate debt issuance and growth in Moody's Analytics business.
We believe that Moody's remains a solid … [visit site to read more]

USB Adds $90M To SolarCity Fund

Posted: 04 Mar 2010 01:34 PM PST

U.S. Bancorp (NYSE:USB) has agreed to put an additional $90 million into its fund for privately held SolarCity to finance commercial and residential solar projects in 2010 in Arizona, California, Colorado, Oregon and Texas.
This represents the third deal between U.S. Bancorp and SolarCity. In Jun 2009, U.S. Bancorp Community Development Corporation (USBCDC), a unit of U.S. Bancorp, and SolarCity entered into an agreement to install solar electric panels on homes and businesses in California, … [visit site to read more]

Tenneco Forms Chinese JV

Posted: 04 Mar 2010 01:18 PM PST

Tenneco Inc. (NYSE:TEN) has formed a joint venture (JV) with a Chinese company, Changchun FAW Sihuan Group Ltd. — a subsidiary of FAW Group Corp. The JV aims at manufacturing and supplying emission control components and systems for passenger and commercial vehicles in China.
Tenneco will have a 41% equity share in the JV while FAW Sihuan will have 49%. On the other hand, Tenneco Tongtai (Dalian) Exhaust System Co., in which Tenneco has an 80% stake, will have a 10% stake in the … [visit site to read more]

Germans To Greeks: Sell The Acropolis, Parthenon, And Your Aegean Islands

Posted: 04 Mar 2010 01:15 PM PST

The rhetoric is heating up between the Germans and Greeks. In the latest episode, two German politicians told Germany's bestselling Bild newspaper that Greece should set about selling assets to work down its debt, including publicly-owned uninhabited islands, and national historical treasures like the Acropolis and the Parthenon.
From the Guardian:
"Alongside austerity measures such as cuts to public sector pay and a freeze on state pensions, why not sell a few uninhabited islands or … [visit site to read more]

Pepsi Bottling Lowered To Neutral

Posted: 04 Mar 2010 01:03 PM PST

We recently downgraded the shares of Pepsi Bottling Group (NYSE:PBG) from Outperform to Neutral. Pepsi Bottling Group is the world's leading bottler and distributor of Pepsi-Cola beverages and commands a strong portfolio of globally recognized brands.
However, a leveraged balance sheet and intense competition from other bottlers continue to affect the
company's performance. This leaves limited space for above-market performance of the company.
Pepsi Bottling Group's balance sheet is highly … [visit site to read more]

Duke University CFO Survey: Good News And Bad News

Posted: 04 Mar 2010 01:01 PM PST

What can we learn from those who sign the checks at over a thousand companies around our country? Let’s review a synopsis of a recently released Duke University CFO Survey. This analysis, On the Mend, is presented by CFO Magazine:
At last, some good news. For the first time in more than a year, finance chiefs expect double-digit growth in earnings and significant growth in capital spending over the next 12 months, according to the Duke University/CFOMagazine Global Business Outlook … [visit site to read more]

Bristol Inks Deal With Allergan

Posted: 04 Mar 2010 12:44 PM PST

Bristol-Myers Squibb Co. (NYSE:BMY) and Allergan, Inc. (NYSE:AGN) entered into an agreement to develop and commercialize AGN-209323, Allergan’s mid-stage pipeline candidate. AGN-209323 is being developed to treat neuropathic pain, or chronic pain usually accompanied by tissue injury.
AGN-209323 was discovered as part of collaboration between Allergan and ExonHit Therapeutics SA. The pain is common in people suffering from arthritis, cancer and nerve damage. The drug can be administered orally.
The … [visit site to read more]

AIG Ratings Unchanged By A.M. Best

Posted: 04 Mar 2010 12:33 PM PST

Subsequent to the announcement by American International Group Inc. (NYSE:AIG) to sell the AIA Group, its pan-Asian life insurance companies, to Prudential Plc. (NYSE:PUK), A.M. Best Co. said that the ratings of AIG and its subsidiaries remain unchanged.
The deal is valued at approximately $35.5 billion. This includes about $25 billion in cash, $8.5 billion in face value of equity and equity-linked securities and $2.0 billion in face value of preferred stock of Prudential. Subject to other terms of … [visit site to read more]

France ETF (EWQ) In Focus After Disappointing Unemployment Numbers

Posted: 04 Mar 2010 12:29 PM PST

France, one of Europe's largest economies, reported disappointing employment figures this week, calling into question the sustainability of the recovery in one of Europe's few stable markets. The French job market sharply worsened, as the unemployment rate spiked to 9.9% (9.6% without French overseas dependencies included), the worst level since 1999. In order to rectify the situation, the government has announced several plans in order to spur industrial growth, specifically in green … [visit site to read more]

US Broadband Plan A Costly Affair

Posted: 04 Mar 2010 12:16 PM PST

The Federal Communications Commission (FCC) plans to spend lavishly on expanding broadband access in the U.S. The FCC's forthcoming National Broadband Plan (NBP) will propose up to $25 billion in new federal spending to Congress to expand nationwide broadband lines and build a wireless Internet network.
The estimate includes $12 billion to $16 billion to be spent over the next 10 years to construct a wireless broadband network for police and firefighters (emergency public safety broadband … [visit site to read more]

Three Key Differences Between Platinum And Palladium

Posted: 04 Mar 2010 12:06 PM PST

Historically, precious metals investing for U.S. investors has been limited to gold and, to a lesser extent, silver. But recent innovation in the space has doubled the available resources; earlier this year, London-based ETF Securities launched the ETFS Physical Platinum Trust (PPLT) and ETFS Physical Palladium Trust (PALL), the first physically-backed ETFs offering exposure to platinum and palladium. The reception to these products has been overwhelming; investors poured over $600 million … [visit site to read more]

How To Make Money Playing Prediction Markets And Binary Options

Posted: 04 Mar 2010 12:01 PM PST

This article provides an introduction to both utilising implicit predictions in binary options, as well as some pointers on trading. Prediction markets provide an interesting venue for gauging the probability of an event based on the trading of both informed and uninformed participants.

As an investor, trader or someone with a general interest in things like economics related events you can use predict markets to help get an idea of the probability of the event occurring. You can then … [visit site to read more]

America The Service Industry

Posted: 04 Mar 2010 12:00 PM PST

Miserable cities…ghost towns…angry voters…
Market flash:
The Dow was flat yesterday. Gold rose $2. And Greece said it was making progress towards cutting its deficit.
Yesterday we looked at America's most miserable cities. Today, let's take a gander at its new "ghost towns."
There are many towns and cities that are losing population…losing key industries…and probably on the verge of extinction. USA Today mentioned some of them in a cover story this Tuesday.
Ravenswood, W. Va., … [visit site to read more]

Hanesbrands Downed To Neutral

Posted: 04 Mar 2010 12:00 PM PST

We recently downgraded the shares of Hanesbrands Inc. (NYSE:HBI) from Outperform to Neutral. This is because intense competition from established players, a debt-heavy balance sheet and exposure to adverse foreign currency translations limit the above-market performance of the company.
Hanesbrands faces intense competition in both domestic and international markets from other established players, including Berkshire Hathaway Inc. (NYSE:NKE), Adidas AG, Warnaco Group Inc. (NYSE:WRC), Maidenform Brands … [visit site to read more]

Nucor Downgraded By Moody’s

Posted: 04 Mar 2010 11:47 AM PST

Recently, credit ratings agency Moody’s Investors Service (NYSE:MCO) has cut Nucor Corporation's (NYSE:NUE) unsecured debt rating one notch to "A2″ from "A1″ and affirmed the steel maker’s Prime-1 short-term debt rating. Moody's judges obligations rated "A” as “upper-medium grade”, subject to “low credit risk”, but are susceptible to impairment over the long term. The agency judges Prime-1 rated issuers as having a superior ability to repay short-term debt obligations. The unsecured debt … [visit site to read more]

DuPont Emerging Stronger

Posted: 04 Mar 2010 11:30 AM PST

DuPont (NYSE:DD) recently announced that it is emerging stronger from the global economic crisis after undertaking several measures last year to better position it for sustainable growth. 
 
DuPont maintained its R&D investment at $1.4 billion in 2009 during the economic crisis and introduced more than 1,400 new products, up 60% over 2008. The company delivered $1.1 billion in fixed cost productivity and $1 billion in working capital productivity. Free cash flow was $3.2 billion at … [visit site to read more]

Not-So Honest Accounting Of Government Finances

Posted: 04 Mar 2010 11:20 AM PST

Happy inauguration day! Today we begin with this little known factoid: For the first 143 years of the American Republic, presidents were inaugurated on March 4, the only day of the year that is also a command.
The date was moved up to Jan. 20 in 1932 when the activist president Franklin Delano Roosevelt couldn't wait to wring his hands around the neck of the US economy. Roosevelt set in motion 78 years of what the economist Friedrich von Hayek called the "fatal conceit" – the arrogant … [visit site to read more]

Novell Receives Buyout Offer (revised)

Posted: 04 Mar 2010 11:20 AM PST

Enterprise software marker and leading technology company Novell, Inc. (NASDAQ:NOVL) announced that it has received a buyout offer from Elliott Associates, L.P., the largest institutional stockholder of Novell, which holds approximately 8.5% of NOVL common stock. Elliott is an investment firm with over $16 billion in assets.
Under the unsolicited offer, Elliott Associates plans to acquire Novell for $5.75 per share in cash, which implies an enterprise value net of cash of $1.0 billion. This price … [visit site to read more]

Underreported Money Supply May Be Disguising Hyperinflation

Posted: 04 Mar 2010 11:00 AM PST

Is annualized M1 money supply growing at three times the rate the Federal Reserve is reporting?  This is a critical question recently explored by Zero Hedge, which believes the actual growth rate of US dollars "is approaching hyperinflationary levels."
According to Zero Hedge:
"For historical reasons unimportant to the point of this analysis, the Federal Reserve in the past has only created cash currency.  However, the unprecedented changes it has engineered over the past two … [visit site to read more]
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