News with Tags "World Stock Market"

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3 Reasons Bank of America Soared in 2012

Posted on Sunday, December 16, 2012 - 05:01 am

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It's been a good year for shareholders of Bank of America (NYSE: BAC  ) . Since the beginning of January, shares of the nation's second largest lender have nearly doubled, increasing by 83%. This makes it the top performing stock on the Dow Jones Industrial Average (DJINDICES: ^DJI  )  by leaps and bounds, and helped the bank to blow away its too-big-to-fail competitors.

BAC Total Return Price Chart

BAC Total Return Price data by YCharts

3 factors contributing to B of A's success in 2012
The first factor underlying its success this year has been the bank's ability to continue distancing itself from the financial crisis. To name only two examples, in February, and along with four other mortgage servicers, B of A entered into the so-called National Mortgage Settlement with 49 state attorneys general and the federal government to resolve claims that it "routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct." For its part, B of A agreed to pay $3.24 billion in penalties to the federal and state governments and provide $8.58 billion in relief to borrowers. According to Brian Moynihan, B of A's CEO, these obligations will be fully satisfied by the end of this upcoming February.

Beyond this, B of A improved the optics on perhaps the biggest outstanding issue depressing its shares -- that is, the extent of future repurchase claims from the likes of Fannie Mae and Freddie Mac. Earlier in the year, I estimated that these could end up costing it anywhere between $4.7 billion and $40.9 billion -- the breadth of the range shows just how little we knew about the potential exposure. But after steadfastly refusing to provide its own estimate, B of A finally came forward with one. In its third-quarter conference call, the bank pegged its exposure at a comparatively reasonable $6 billion in excess of allocated reserves, leading me to predict at the end of October that the bank has finally turned the corner -- shares have since increased an additional 11%.

The second factor is that it's made considerable progress further paring down its noncore operations and transforming itself into a leaner and meaner lender from a regulatory perspective. Again, to name only two examples, in August, B of A sold its international wealth management business to Swiss bank Julius Baer for $882 million. And just this past week, it agreed to sell its stake in a Japanese private bank venture to Mitsubishi UFJ Financial Group for a purported $471 million -- Mitsubishi UFJ is the largest financial conglomerate in Japan and the world's second largest bank holding company. Taken together, in turn, moves like these are positioning B of A to cultivate its core customer base, consumers and businesses in the United States.

Finally, the third factor, albeit related to the second, is that B of A has dramatically improved its capital position throughout the year. As my colleague Amanda Alix noted at the beginning of November, the bank's third-quarter earnings report revealed that its Tier 1 capital ratio under Basel III rules stands at 8.97%, making it the best capitalized too-big-to-fail bank -- Citigroup's (NYSE: C  ) comes in at 8.6%, JPMorgan Chase's (NYSE: JPM  ) at 8.4%, and Wells Fargo's (NYSE: WFC  ) at 8.02%. Not to mention, global banking regulators recently signaled (link opens PDF) that B of A's burden to hold additional capital under the Basel III framework, known as the SIFI cushion, will be less stringent than it is for JPMorgan and Citigroup. Taken together, in turn, it seems highly likely that B of A will get the go-ahead from regulators sometime next year to raise its dividend, which, in turn, should serve as a further catalyst for share-price appreciation.

So, is it too late to buy B of A?
All things considered, I believe that B of A has put itself into a position to outperform over the next few years. And you don't simply have to take my word for it. In our new in-depth report on the lender, senior analyst Anand Chokkavelu predicts that its shares could "double or triple over the next five years." To see why he thinks this could happen, simply download this valuable report by clicking here now.

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Posted by on Sunday, December 16, 2012 - 05:01 am.
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Wall Street to Washington: It’s Time to Lead, or Leave!

Posted on Sunday, December 16, 2012 - 03:37 am

Injured Piggy Bank WIth CrutchesThe thick malaise of the fiscal cliff conversation in Washington, on Wall Street, and on Main Street is exhausting. Politicians have apparently forgotten what it’s like to lead a country through divisiveness and economic hardship, and market participants have sat on their hands so long they’re numb.

The big news each day is the barometric reading of sentiment: optimism, the markets swing up; pessimism, the markets swing down (because it’s that simple, right?), and in between traders and investors, business owners and consumers look at the facts and figures available to them and say “these are all meaningless without context.”

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That context is a reasonable level of certainty about the future. At this point it matters less what the details of any so-called grand compromise look like, and more that any solution is found. If it’s the best thing on the table, even a modest compromise would do instead of whatever economic terror waits on the other side of the fiscal cliff.

In this spirit, the chief executives from some of America’s biggest businesses have ducked in and out of Washington over the past few weeks to offer advice and try to bring back intelligence on how to prepare their enterprises for whatever future awaits. Honeywell International Inc. (NYSE:HON) CEO David Cote has been among the most involved and vocal of business leaders to participate in the discussion, and his insight into the situation is both concise and honest…

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Posted by on Sunday, December 16, 2012 - 03:37 am.
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Recap of This Week’s Dow Losers

Posted on Sunday, December 16, 2012 - 03:01 am

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The Dow Jones Industrial Average (DJINDICES: ^DJI  ) started this week on a three-day winning streak and managed to stretch the rally Monday and Tuesday. And although the index closed down on Wednesday, it lost only five points after gaining almost exactly 300 points over the previous five days. Then on Thursday the index took a nosedive after Republican Speaker of the House John Boehner held a press conference in which he voiced his disdain about how President Obama was handling the fiscal cliff negotiations. At its low point on Thursday, the Dow had fallen more than 90 points, but managed to close the day down slightly more than 71 points.

On Friday, it seemed as if investors finally began to realize that politicians might not come to a compromise and the economy may fall off the cliff and back into a recession. For the second day in a row, investors were greeted with positive economic data in the morning, but the markets still closed down for the day. Yesterday, the Dow lost another 35 points and managed to end the week down 19 points or 0.14%.

After another wild roller-coaster ride for market participants this week, 14 of the Dow's 30 components ended the week in the red.

But before we get to this week's big losers, I would like to point out that Hewlett-Packard (NYSE: HPQ  ) was the Dow's big winner this week. Shares of the PC company moved higher by 6.49%. The main catalyst for the move higher came early in the week, when rumors were floating around that activist investor Carl Icahn was looking at the stock. While the idea of Icahn moving into the stock is not totally out of the realm  of possibility, given his history with Yahoo! and other high-profile technology stocks in the past.

Now to this week's losers
The biggest Dow loser this week was Wal-Mart (NYSE: WMT  ) , which saw its shares drop 4.61%. CEO Mike Duke stated his concerns this week about the fiscal cliff and how the uncertainty is affecting consumer spending. He said 15% of Wal-Mart's customers have indicated they are cutting back on holiday spending because of the fiscal cliff.  On Wednesday, meanwhile, news broke that Wal-Mart was in talks to purchase the controlling stake of the Turkish retailer Migros. The deal was believed to value Migros at $4 billion. Shares of Wal-Mart were down 1.79% on Wednesday alone.

Shares of United Technologies (NYSE: UTX  ) ended the week lower by 1.24%. The Pentagon announced this week that it will pay 4% less for each F-35 jet it buys from Lockhead Martin and is said to be negating a separate agreement with Pratt & Whitney, a subsidiary of United Technologies. Since the government is purchasing the plan at a reduced rate, it is likely the engines for the F-35, which are made by Pratt & Whitney, will probably be sold at a discount.  

And for the second week in a row, shares of Disney (NYSE: DIS  ) moved lower. Shares slid 1.09% after a fall of 1.06% during the prior week. Two weeks ago, shares moved lower primarily because the stock went ex-dividend. This week there was very little negative news pertaining to the company, but the share price has pulled back from its 52-week high, so some shareholders may just be selling shares at what they feel is the high point.

Another Dow component that recently hit new 52-week highs and pulled back this week on very little news is Home Depot (NYSE: HD  ) . The company was the runner-up in the Dow's Biggest Loser contest this week, as shares of the do-it-yourself home improvement store lost 3.54% during the past five days.

Last week, Coca-Cola (NYSE: KO  ) lost 0.5% of its value, and while the company again managed to make the loser's list, shares were down only 0.1% this week. There were other mild drops at Bank of America (NYSE: BAC  ) , American Express (NYSE: AXP  ) , and IBM (NYSE: IBM  ) , which saw their shares drop 0.18%, 0.03% and 0.21%, respectively.

Foolishly investing
Although the stocks I've discussed here are down, the stocks you own don't need to appear on any loser lists. To get a leg up, check out the company that The Motley Fool's chief investment officer has selected as his No. 1 stock for the next year. During the past few years, the stocks that made this list have crushed the overall markets. To find out the name of the latest company, grab a copy of our brand-new free report: "The Motley Fool's Top Stock for 2013." It's free for a limited time. To be one of the first investors to access the report, click here now. 

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Posted by on Sunday, December 16, 2012 - 03:01 am.
Filed under Uncategorized, World. Tagged with: • • •
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Recap of This Week’s Dow Losers

Posted on Sunday, December 16, 2012 - 03:01 am

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The Dow Jones Industrial Average (DJINDICES: ^DJI  ) started this week on a three-day winning streak and managed to stretch the rally Monday and Tuesday. And although the index closed down on Wednesday, it lost only five points after gaining almost exactly 300 points over the previous five days. Then on Thursday the index took a nosedive after Republican Speaker of the House John Boehner held a press conference in which he voiced his disdain about how President Obama was handling the fiscal cliff negotiations. At its low point on Thursday, the Dow had fallen more than 90 points, but managed to close the day down slightly more than 71 points.

On Friday, it seemed as if investors finally began to realize that politicians might not come to a compromise and the economy may fall off the cliff and back into a recession. For the second day in a row, investors were greeted with positive economic data in the morning, but the markets still closed down for the day. Yesterday, the Dow lost another 35 points and managed to end the week down 19 points or 0.14%.

After another wild roller-coaster ride for market participants this week, 14 of the Dow's 30 components ended the week in the red.

But before we get to this week's big losers, I would like to point out that Hewlett-Packard (NYSE: HPQ  ) was the Dow's big winner this week. Shares of the PC company moved higher by 6.49%. The main catalyst for the move higher came early in the week, when rumors were floating around that activist investor Carl Icahn was looking at the stock. While the idea of Icahn moving into the stock is not totally out of the realm  of possibility, given his history with Yahoo! and other high-profile technology stocks in the past.

Now to this week's losers
The biggest Dow loser this week was Wal-Mart (NYSE: WMT  ) , which saw its shares drop 4.61%. CEO Mike Duke stated his concerns this week about the fiscal cliff and how the uncertainty is affecting consumer spending. He said 15% of Wal-Mart's customers have indicated they are cutting back on holiday spending because of the fiscal cliff.  On Wednesday, meanwhile, news broke that Wal-Mart was in talks to purchase the controlling stake of the Turkish retailer Migros. The deal was believed to value Migros at $4 billion. Shares of Wal-Mart were down 1.79% on Wednesday alone.

Shares of United Technologies (NYSE: UTX  ) ended the week lower by 1.24%. The Pentagon announced this week that it will pay 4% less for each F-35 jet it buys from Lockhead Martin and is said to be negating a separate agreement with Pratt & Whitney, a subsidiary of United Technologies. Since the government is purchasing the plan at a reduced rate, it is likely the engines for the F-35, which are made by Pratt & Whitney, will probably be sold at a discount.  

And for the second week in a row, shares of Disney (NYSE: DIS  ) moved lower. Shares slid 1.09% after a fall of 1.06% during the prior week. Two weeks ago, shares moved lower primarily because the stock went ex-dividend. This week there was very little negative news pertaining to the company, but the share price has pulled back from its 52-week high, so some shareholders may just be selling shares at what they feel is the high point.

Another Dow component that recently hit new 52-week highs and pulled back this week on very little news is Home Depot (NYSE: HD  ) . The company was the runner-up in the Dow's Biggest Loser contest this week, as shares of the do-it-yourself home improvement store lost 3.54% during the past five days.

Last week, Coca-Cola (NYSE: KO  ) lost 0.5% of its value, and while the company again managed to make the loser's list, shares were down only 0.1% this week. There were other mild drops at Bank of America (NYSE: BAC  ) , American Express (NYSE: AXP  ) , and IBM (NYSE: IBM  ) , which saw their shares drop 0.18%, 0.03% and 0.21%, respectively.

Foolishly investing
Although the stocks I've discussed here are down, the stocks you own don't need to appear on any loser lists. To get a leg up, check out the company that The Motley Fool's chief investment officer has selected as his No. 1 stock for the next year. During the past few years, the stocks that made this list have crushed the overall markets. To find out the name of the latest company, grab a copy of our brand-new free report: "The Motley Fool's Top Stock for 2013." It's free for a limited time. To be one of the first investors to access the report, click here now. 

Your 98.79% Chance at Beating the Market
If you're interested in the best odds in the universe — including a 70.84% chance at DOUBLING the market's return over the long haul — here's some very good news for you... Motley Fool Supernova is re-opening to new members for the first time ever on January 15!

Get this: We arrived at these odds from 10,000 random back-tested portfolios made up of Co-founder David Gardner's personal stock picks between December 2002 and December 2011...

So, what's INSIDE Motley Fool Supernova?!? Simply enter your email address. And David Gardner will take you on a personal tour. And reveal his up-to-the-minute top picks for 3-D Printing, Entertainment, Social Networking, Personal Wellness, Next-Gen Education, and more!

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Posted by on Sunday, December 16, 2012 - 03:01 am.
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US STOCKS-Wall Street to open flat after data, eyes on ‘cliff’

Posted on Friday, December 14, 2012 - 19:25 pm

* Consumer prices drop in Nov; manufacturing picks up in Dec

* 'Fiscal cliff' still preoccupies investors

* Futures: S&P up 0.7 pts, Dow (NYSE: DPD - news) up 23 pts, Nasdaq (Nasdaq: ^NDX - news) down 9 pts

By Leah Schnurr

NEW YORK (Frankfurt: A0DKRK - news) , Dec 14 (Reuters) - Wall Street was set to open little changed as investors digested the latest round of economic data, while concerns about a lack of progress by politicians in ongoing fiscal negotiations remained at the forefront.

S&P 500 (SNP: ^GSPC - news) index futures gave up earlier gains shortly after data showed consumer prices fell in November (Xetra: A0Z24E - news) for the first time in six months, indicating inflation pressures were muted. Separate data showed manufacturing grew at its swiftest pace in eight months in December.

The consumer price data "shows that despite all the action by the Federal Reserve to stimulate the economy, we are still seeing very little, if any, inflation in the system," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Meanwhile, data out of China was encouraging for its key trading partners, including the U.S., and for the prospects for world economic growth. It showed manufacturing in the world's second-largest economy grew at its fastest pace in 14 months in December.

Shares of Apple (NasdaqGS: AAPL - news) were down 2.4 percent at $516.80 in premarket trading as UBS (NYSEArca: DJCI - news) cut its price target to $700 from $780.

Apple will also release its iPhone 5 in China on Friday but its longer-term hopes may depend on new technology being tested by China's top telecoms carrier.

President Barack Obama and House of Representatives Speaker John Boehner held a "frank" meeting Thursday to try to break an impasse in negotiations over the "fiscal cliff," tax hikes and spending cuts set to kick in early in 2013.

Frustration has mounted over the lack of progress in the discussions, with market participants' worries reflected in a 0.6 percent drop in the S&P 500 on Thursday. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to be reached eventually, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.

"I think the market is convinced, due to the fact that we haven't seen much of a pullback, that some (fiscal) compromise will happen before the end of the year," said Art Hogan, managing director of Lazard Capital Markets in New York.

"The bad news is, in large part, we've seen the market ignore relatively good news in the economic data stream as we focus on the fiscal cliff," he said.

Worries over the outcome of the talks ended the S&P 500's six-day winning streak on Thursday, but the index has performed well over the past month. On Wednesday, the S&P hit its highest intraday level since late October.

S&P 500 futures rose 0.7 point but were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones (DJI: ^DJI - news) industrial average futures gained 23 points, and Nasdaq 100 futures fell 9 points.

Schlumberger (NYSE: SLB - news) fell 3.6 percent to $69.93 after it said lower drilling activity would hurt its fourth-quarter earnings.

Adobe Systems (NasdaqGS: ADBE - news) jumped 5.2 percent to $37.36 in premarket trading after the company said it expected profit and earnings to grow from 2013 onwards.

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Posted by on Friday, December 14, 2012 - 19:25 pm.
Filed under World. Tagged with: • • •
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US STOCKS-Wall Street to open flat after data, eyes on ‘cliff’

Posted on Friday, December 14, 2012 - 19:25 pm

* Consumer prices drop in Nov; manufacturing picks up in Dec

* 'Fiscal cliff' still preoccupies investors

* Futures: S&P up 0.7 pts, Dow (NYSE: DPD - news) up 23 pts, Nasdaq (Nasdaq: ^NDX - news) down 9 pts

By Leah Schnurr

NEW YORK (Frankfurt: A0DKRK - news) , Dec 14 (Reuters) - Wall Street was set to open little changed as investors digested the latest round of economic data, while concerns about a lack of progress by politicians in ongoing fiscal negotiations remained at the forefront.

S&P 500 (SNP: ^GSPC - news) index futures gave up earlier gains shortly after data showed consumer prices fell in November (Xetra: A0Z24E - news) for the first time in six months, indicating inflation pressures were muted. Separate data showed manufacturing grew at its swiftest pace in eight months in December.

The consumer price data "shows that despite all the action by the Federal Reserve to stimulate the economy, we are still seeing very little, if any, inflation in the system," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Meanwhile, data out of China was encouraging for its key trading partners, including the U.S., and for the prospects for world economic growth. It showed manufacturing in the world's second-largest economy grew at its fastest pace in 14 months in December.

Shares of Apple (NasdaqGS: AAPL - news) were down 2.4 percent at $516.80 in premarket trading as UBS (NYSEArca: DJCI - news) cut its price target to $700 from $780.

Apple will also release its iPhone 5 in China on Friday but its longer-term hopes may depend on new technology being tested by China's top telecoms carrier.

President Barack Obama and House of Representatives Speaker John Boehner held a "frank" meeting Thursday to try to break an impasse in negotiations over the "fiscal cliff," tax hikes and spending cuts set to kick in early in 2013.

Frustration has mounted over the lack of progress in the discussions, with market participants' worries reflected in a 0.6 percent drop in the S&P 500 on Thursday. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to be reached eventually, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.

"I think the market is convinced, due to the fact that we haven't seen much of a pullback, that some (fiscal) compromise will happen before the end of the year," said Art Hogan, managing director of Lazard Capital Markets in New York.

"The bad news is, in large part, we've seen the market ignore relatively good news in the economic data stream as we focus on the fiscal cliff," he said.

Worries over the outcome of the talks ended the S&P 500's six-day winning streak on Thursday, but the index has performed well over the past month. On Wednesday, the S&P hit its highest intraday level since late October.

S&P 500 futures rose 0.7 point but were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones (DJI: ^DJI - news) industrial average futures gained 23 points, and Nasdaq 100 futures fell 9 points.

Schlumberger (NYSE: SLB - news) fell 3.6 percent to $69.93 after it said lower drilling activity would hurt its fourth-quarter earnings.

Adobe Systems (NasdaqGS: ADBE - news) jumped 5.2 percent to $37.36 in premarket trading after the company said it expected profit and earnings to grow from 2013 onwards.

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Posted by on Friday, December 14, 2012 - 19:25 pm.
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Solar Stocks Surge and Bernanke Launches QE4: Market Recap

Posted on Thursday, December 13, 2012 - 11:41 am

The markets were mixed Wednesday on Wall Street. After an initial rally, equities fell in late-afternoon trading despite the best efforts of the Federal Reserve, which concluded its last meeting of the year.

At the close: DIJA: -0.02%, S&P 500: +0.04%, Nasdaq: -0.28%.

On the commodities front, Oil (NYSE:USO) climbed 1.15 percent to $86.78 per barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing 0.19 percent to $1,712.80 per ounce, and Silver (NYSE:SLV) climbing 1.49 percent to $33.51 per ounce about 1 minute after the bell.

Here’s your Cheat Sheet to today’s top stock stories:

Shares of Molycorp, Inc. (NYSE:MCP), a development-stage producer of rare-earth products, closed down 3 percent after CEO Mark Smith’s unexpected departure. The company is being investigated by the Securities and Exchange Commission over its financial disclosures and is dealing with a lawsuit related to engineering problems at a mine.

Are you worried about the Fiscal Cliff? Click here to get our Gold & Silver Premium Newsletter OVER 50% OFF now!

Solar Stocks Surge: Solar stocks took off like a rocket on Wednesday afternoon following news that Chinese officials would spend at least $2.1 billion to support the struggling industry. The Market Vectors Solar Energy ETF (NYSE:KWT) closed up 6.34 percent, while the Guggenheim Solar ETF (NYSE:TAN) closed up 8.62… (Read more.)

Federal Reserve Launches QE4! On Wednesday, the Federal Reserve concluded its two-day Federal Open Market Committee meeting. Despite launching a third round of quantitative easing known as QE-infinity in September, the central bank launched QE4… (Read more.)

Will This Compromise Satisfy Germany? While many of the European Union’s 27 countries support the European Central Bank’s proposed banking union, Germany and Great Britain have had reservations. But as Reuters reported on Wednesday, Germany has indicated that it is ready to back the ECB as the chief supervisor of banks, which is an important step towards implementing the policy, as all members of the EU must approve the union for the project to progress… (Read more.)

An Economic Weathervane for Consumers: It’s that time of year again, when American consumers enter the liminal zone between Thanksgiving and Christmas, with too little left to spend and too much left to buy. At least, that’s the traditional scenario for the first few weeks of December. But consumers this year are uniquely burdened… (Read more.)

Don’t Miss: Will This Banking Compromise Satisfy Germany?

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Posted by on Thursday, December 13, 2012 - 11:41 am.
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Solar Stocks Surge and Bernanke Launches QE4: Market Recap

Posted on Thursday, December 13, 2012 - 11:41 am

The markets were mixed Wednesday on Wall Street. After an initial rally, equities fell in late-afternoon trading despite the best efforts of the Federal Reserve, which concluded its last meeting of the year.

At the close: DIJA: -0.02%, S&P 500: +0.04%, Nasdaq: -0.28%.

On the commodities front, Oil (NYSE:USO) climbed 1.15 percent to $86.78 per barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing 0.19 percent to $1,712.80 per ounce, and Silver (NYSE:SLV) climbing 1.49 percent to $33.51 per ounce about 1 minute after the bell.

Here’s your Cheat Sheet to today’s top stock stories:

Shares of Molycorp, Inc. (NYSE:MCP), a development-stage producer of rare-earth products, closed down 3 percent after CEO Mark Smith’s unexpected departure. The company is being investigated by the Securities and Exchange Commission over its financial disclosures and is dealing with a lawsuit related to engineering problems at a mine.

Are you worried about the Fiscal Cliff? Click here to get our Gold & Silver Premium Newsletter OVER 50% OFF now!

Solar Stocks Surge: Solar stocks took off like a rocket on Wednesday afternoon following news that Chinese officials would spend at least $2.1 billion to support the struggling industry. The Market Vectors Solar Energy ETF (NYSE:KWT) closed up 6.34 percent, while the Guggenheim Solar ETF (NYSE:TAN) closed up 8.62… (Read more.)

Federal Reserve Launches QE4! On Wednesday, the Federal Reserve concluded its two-day Federal Open Market Committee meeting. Despite launching a third round of quantitative easing known as QE-infinity in September, the central bank launched QE4… (Read more.)

Will This Compromise Satisfy Germany? While many of the European Union’s 27 countries support the European Central Bank’s proposed banking union, Germany and Great Britain have had reservations. But as Reuters reported on Wednesday, Germany has indicated that it is ready to back the ECB as the chief supervisor of banks, which is an important step towards implementing the policy, as all members of the EU must approve the union for the project to progress… (Read more.)

An Economic Weathervane for Consumers: It’s that time of year again, when American consumers enter the liminal zone between Thanksgiving and Christmas, with too little left to spend and too much left to buy. At least, that’s the traditional scenario for the first few weeks of December. But consumers this year are uniquely burdened… (Read more.)

Don’t Miss: Will This Banking Compromise Satisfy Germany?

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Posted by on Thursday, December 13, 2012 - 11:41 am.
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Is the Fiscal Cliff Just Too Big to Save?

Posted on Thursday, December 13, 2012 - 11:08 am

“We cannot offset the full impact of the fiscal cliff — it’s just too big”

–Dr. Ben Bernanke, Chairman, Federal Reserve

Index ETFs finish mixed and flat after way too much QE4 and Congressional bickering

Where do we start with the debacle of our Index ETFs and United States as a whole?  The SPDR S&P 500 ETF gained .05% after the Fed announced QE4, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) added .01% (really?) after the Fed announced QE4, the PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ) lost .21% after the Fed announced QE4, and the iShares Russell 2000 Index ETF (NYSEARCA:IWM) lost .56% after the Fed announced QE4.

Investing Insights to Explore Now: ETF Trading Signals>>

So, Dr. Bernanke’s $45 million per month additional purchases of US Treasury Bonds  comes on top of the $40 billion per month of mortgage backed securities that the Fed is already buying.  And, Dr. Ben has indicated that he will keep both purchasing programs running until unemployment dips below 6.5% (in other words, indefinitely) in addition to keeping interest rates at a big ol’ near zero.  So, even though the official name of today’s easing bonanza is called QE4, perhaps we should be calling it QE 3.5?  Also, should I feel relieved that inflation is not expected to rise above 2.5%?  I don’t think so, as the US Dollar will likely continue to be beaten into more of a bloody pulp than before.

Wednesday’s easing bonanza was also short lived by index ETFs, as markets and index ETFs quickly rose in excitement and then immediately cratered to flat and mixed.  So basically, Dr. Ben’s easing injections are not as potent and not so long lived as they once were, which is incredibly troubling because I believe the man has run out of bullets to save this whole thing from falling off the cliff.

But we do not have to worry about the Fed not being able to keep us from falling off of the cliff, because Congress might run us off of the cliff anyways, as Congress, not surprisingly I might add, has not yet reached a fiscal cliff deal.  House Speaker Boehner has called on the House to cancel any holiday plans, as the fiscal cliff is now just 19 days away, we are just one day closer to a 4% decline in GDP come January, and this Congressional session officially ends this Friday.

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What really makes this whole situation all the more awesome is what Dr. Bernanke stated today:  “We [the Fed] cannot offset the full impact of the fiscal cliff — it’s just too big.”  This shiny statement comes at a great time right?  The Fed is out of bullets, we are veering towards a 4% recession in 2013, and Congress and the President are still bickering.  In short, I am scared for my country, as anyone five years ago could not have made up this nightmare, let alone dreamed it, and worst of all, we might have to live it in just 19 days.

Ok, enough doom and gloom for now, because, the beauty of our system is based on the fact that we have the freedom and choice to make money in even the worst of times, and this country has been through much, much worse.  Problems arrive “hand in hand” with opportunities, and even in our small microcosm of advanced traders, we always try to make money in up or down markets by utilizing the power of Exchange Traded Funds.

Bottom line: The United States is in a big mess currently, and no amount of QE4 or Congressional bickering is going to fix it, at least for today.  Despite all of the troubles however, problems and opportunities always arrive hand-in-hand and money can always be made.  Even in our small world, we can always prevail with a disciplined approach to trading these turbulent times via Exchange Traded Funds (ETFs).

Investing Insights to Explore Now: ETF Trading Signals>>

John Nyaradi is the author of The ETF Investing Premium Newsletter.

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Posted by on Thursday, December 13, 2012 - 11:08 am.
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Asia stocks firm after Fed, while Japan soars

Posted on Thursday, December 13, 2012 - 10:56 am

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) — Asia stocks traded mostly higher Thursday, with Japanese shares rallying, after the U.S. Federal Reserve announced new policy targets and an expansion to its asset-buying program.

Japan’s Nikkei Stock Average /quotes/zigman/5986735 JP:100000018 +1.68%  surged 1.7% after closing at its highest level since April on Wednesday, while South Korea’s Kospi /quotes/zigman/1652118 KR:SEU +1.38%  rose 0.8%, Taiwan’s Taiex /quotes/zigman/1565586 XX:Y9999 +0.87%  added 0.6%, and Singapore’s Straits Times Index /quotes/zigman/1709939 SG:STI +0.45%  added 0.4%.

But other major bourses saw more muted action, with Australia’s S&P/ASX 200 index /quotes/zigman/1653884 AU:XJO -0.02%  ending little changed after reaching its best level in around 17 months on Wednesday.

Hong Kong’s Hang Seng Index /quotes/zigman/2622475 HK:HSI -0.47%  also traded flat after also hitting a mid-2011 high on Wednesday, while the Shanghai Composite Index /quotes/zigman/1859015 CN:000001 -1.02%  fell 0.6%, paring its month-to-date advance to just over 4.5%.

The mixed-to-better performance in Asia echoed U.S. trading overnight, when the Dow Jones Industrial Average /quotes/zigman/627449 DJIA -0.02%  and S&P 500 /quotes/zigman/3870025 SPX +0.04%  ended almost flat after Federal Reserve Chairman Ben Bernanke warned that the Fed does not have the ability to shield the economy from the fiscal cliff of large potential tax hikes and spending cuts. Read: U.S. stocks erase gains on Bernanke talk

The U.S. central bank chief made the comments at a news conference Wednesday to discuss the Fed’s newly announced plan to expand its asset-buying program and to hold rates close to zero until unemployment falls below 6.5% or until inflation accelerates. Read: Fed sets jobless, inflation targets; to buy bonds

Broadly, “[Asia] sentiment has been boosted by the Fed’s confirmation of outright purchase of long-dated Treasurys, which translates into a bigger asset-purchase program,” said Frances Cheung, strategist at Crédit Agricole.

“Flows into Asian markets are likely to continue,” she said.

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Japanese stocks were the stand-out Thursday, climbing significantly as the dollar /quotes/zigman/4868099/sampled USDJPY +0.2980%  shot above the ¥83 mark overnight for the first time since April 2, after sitting in the low ¥82 range the previous day.

While the move partly stemmed from the Federal Reserve’s announcements and a steeper Treasury curve, according to BNP Paribas currency strategists, “at the same time markets remain clearly focused on the Bank of Japan’s policy” ahead of Japanese leadership elections this weekend and a central-bank decision next week.

Speculation that leadership change in Sunday’s election would lead to pressure on the Bank of Japan to expand its already loose monetary policy has hammered the yen and boosted currency-sensitive companies in recent weeks.

Many Tokyo-listed exporters added to gains on Thursday, with TDK Corp. /quotes/zigman/198474 JP:6762 +5.56%   /quotes/zigman/198479/quotes/nls/ttdkf TTDKF -14.34% jumping 4.6%, and Pioneer Corp. /quotes/zigman/196846 JP:6773 +2.83%   /quotes/zigman/529202/quotes/nls/pncoy PNCOY +9.39% rallying 3.8%.

Sharp Corp. /quotes/zigman/197304 JP:6753 +6.38%   /quotes/zigman/197313/quotes/nls/shcaf SHCAF +6.11%  soared 10.6%, Panasonic Corp. /quotes/zigman/194943 JP:6752 +7.85%   /quotes/zigman/525474/quotes/nls/pc PC +7.31% climbed 8.5% and Sony Corp. /quotes/zigman/197500 JP:6758 +6.36% /quotes/zigman/197524/quotes/nls/sne SNE +3.44%  improved by 6.6%.

Mazda Motor Corp. /quotes/zigman/195040 JP:7261 +4.41%   /quotes/zigman/200120/quotes/nls/mmtof MMTOF +9.68% drove 4.4% higher, and Honda Motor Co. /quotes/zigman/193651 JP:7267 +2.73%   /quotes/zigman/193599/quotes/nls/hmc HMC +1.57% advanced 2.7% despite its Canadian unit announcing a recall of some vehicles.

Stan Shamu, market strategist at IG Markets, said that the dollar may make further gains against the yen in the near future.

“Many Japanese exporters put currency hedges in place around ¥83.00 to protect against adverse Japanese yen strength; if these firms believe the pair will have a sustained move above?¥83.00, then you may see a number of them unwind these hedges, pushing U.S. dollar/yen even higher,” he said.

Over in Hong Kong, transport firms saw some share-price strength, with ports operator Cosco Pacific Ltd. /quotes/zigman/14493 HK:1199 +0.18%  up 0.9%, and airline Cathay Pacific Airways Ltd. /quotes/zigman/13952 HK:293 +1.18%  rising 1%.

Aluminium Corp. of China Ltd. /quotes/zigman/5308 HK:2600 -2.30%   /quotes/zigman/294208/quotes/nls/ach ACH +0.44%   /quotes/zigman/1875337 CN:601600 -1.45%  advanced 1.7% in Hong Kong, but fell 0.2% in Shanghai, while PetroChina Co. /quotes/zigman/21986 HK:857 -1.11%   /quotes/zigman/257868/quotes/nls/ptr PTR +0.57%   /quotes/zigman/1876553 CN:601857 -0.57%  edged up 0.2% in Hong Kong but slipped 0.5% in Shanghai.

Power companies weighed in Hong Kong, with China Resources Power Holdings Co. /quotes/zigman/29072 HK:836 -5.16%   /quotes/zigman/29073/quotes/nls/crpjf CRPJF -3.59% falling 4.3%, and CLP Holdings Ltd. /quotes/zigman/18434 HK:2 -3.57%   /quotes/zigman/209180/quotes/nls/clphy CLPHY -3.11%  down 3.4% after reports it plans to raise about $984 million via a share placement. Read: CLP Holdings raises $982 million from share sale

South Korean shares took support from technology companies, with heavyweight Samsung Electronics Co. /quotes/zigman/189457 KR:005930 +2.13%   /quotes/zigman/189458/quotes/nls/ssnlf SSNLF 0.00%   extending its recent all-time highs with another 2% gain Thursday.

Seoul’s shipping sector got a boost as STX Pan-Ocean Co. /quotes/zigman/383713 KR:028670 +6.68% rose another 6.7% to extend week-to -date gains to just under 40%.

Late Wednesday, conglomerate STX Corp. /quotes/zigman/1639957 KR:011810 -0.83%  said that it’s in talks with multiple investors to sell its 27.4% stake in the shipping company, Dow Jones Newswires reported, citing a STX executive. Shares of STX Corp. traded 1% lower in Seoul.

In Australian action, furniture retailers gained, with Super Retail Group Ltd. /quotes/zigman/349175 AU:SUL +2.28%  up 2.3%, and Harvey Norman Holdings Ltd. /quotes/zigman/132359 AU:HVN +3.56% , also a leading electronics and appliances seller, rallying 3.6%.

On the downside in Sydney, supermarket operator Wesfarmers Ltd. /quotes/zigman/181308 AU:WES -1.19%   /quotes/zigman/528090/quotes/nls/wfafy WFAFY -0.78%  fell 1.2%, and telecom Telstra Corp. /quotes/zigman/189274 AU:TLS -0.47%   /quotes/zigman/189273/quotes/nls/ttraf TTRAF -0.83%  lost 0.5%.

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Posted by on Thursday, December 13, 2012 - 10:56 am.
Filed under World. Tagged with: • • •
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