Inflation or deflation danger ahead? The markets say, Yes, but not which
Call it the great inflation vs. deflation battle. On the one side, the U.S. TIPS market. In the last few months demand for Treasury Inflation-Protected Securities from investors worried about a resurgence of inflation has reduced supplies of the bonds at Wall Street...The unemployment rate is doing exactly what it's supposed to do before an upturn in hiring
The unemployment rate continues to climb, and at a faster rate than expected. The official unemployment rate hit 10.2% in October, according to the Bureau of Labor Statistics. That’s up from 9.8% in September and ahead of the 9.9% rate that economists had expected. At...The U.S. Treasury is getting ready for the day the Fed raises interest rates
Oh, those sneaky little dogs at the U.S. Treasury. Did they really think they could start getting ready for higher interest rates without anyone noticing? You’ll find it in the details of the Treasury’s upcoming auction of $81 billion in new and rolled-over U.S. debt....Read their balance sheets to see why you'd rather own Lynas than Ford
Follow the money. Great advice whether you’re trying to unravel political skullduggery or separate stock market winners from wannabees. Too many investors, though, think that the money they should be following is earnings, the most familiar but also most easily...Could the auto industry actually be on the mend? October's numbers say Yes.
U.S. auto sales ran at an annualized rate of 10.5 million in October. That may not impress you if you remember that annual U.S.auto sales ran at 16 million units for nine straight years ending in 2007. That string came to an end in 2008 when auto sales ran at a 13.2...Stocks and bonds take away different messsage from the Fed
Bonds and shares of financial companies didn’t like what they heard from the Federal Reserve Wednesday November 4 at 2:15. Investors and traders in general, on the other hand, were relieved that the Federal Reserve signaled that interest rate policy wasn’t about to...Have stocks moved from dip to consolidation already? And is the next move up?
With the Federal Reserve set to speak on the economy and interest rates later today, November 4, and with potentially market-moving numbers on unemployment due out on November 5 and 6, it is certainly too early to say that the dip, correction, whatever, is over. The...Is gold the new dollar?
News on November 3 that the Reserve Bank of India, the country’s central bank, had purchased 200 metric tons of gold between October 19 and 30 from the International Monetary Fund sent gold soaring to a new all-time high. The yellow metal closed at $1090 an...Why I think this is only a correction
I don’t like the current market or rally much. Stock prices at current levels aren’t supported by today’s economic fundamentals. Or by tomorrow’s either in all likelihood. The last leg of this rally has been built almost solely on speculative cash flows in my opinion....The natural gas glut in the U.S. shows no signs of slowing production
Doesn’t anybody know that there’s a natural gas glut in the United States? In a glut low prices are supposed to force producers to shut wells and reduce production so that demand has a chance to catch up with supply and prices can start to rise. It just doesn’t seem...Some banks struggle as others get back to business as usual
You think the current wisdom that the banking sector is divided into the “have-nots” and the “haves” is an exaggeration? It’s very, very real—and it should be one of your guiding concepts if you’re thinking of buying any stock in the sector. There are banks that have...Up/down, buy/sell, gloom/boom: It's not easy to be a long-term investor
Take the long view The stock market is fixated on the short-term, we all know that. It’s an unusual occasion when stock analysts and investors look more than a few quarters ahead. That means stock prices often tend to respond to short-term news as if it were the only...Now you can follow every stock, every buy, and every sell in my Dividend Income portfolio
2009 wasn’t too bad a year for income investors. 2010 looks challenging. 2011 and beyond look terrible. And that’s why I re-launched my Dividend Stocks for Income Investors portfolio with this October 9 post...Watch out, higher volatility ahead. A jumpy market can cost you a chunk of cash even if the indexes don't plunge.
Hold onto your hats! I’m afraid that investors are in for a big step up in volatility. Take Friday’s 250-point drop in the Dow Jones Industrial Average. Scary? You bet. But I’d argue that it was just “normal” volatility these days. It wasn’t the result of...The dollar turns from earnings headwind to tailwind in the fourth quarter
The weak dollar will finally start showing up as a plus in company earnings in the fourth quarter. It’s been one of the puzzles of recent quarters how a falling dollar could hurt earnings at U.S. companies with big overseas sales such as McDonald’s (MCD), PepsiCo...Who will replace the fallen? (Banks, that is)
Mr. Market abhors a vacuum just as much as Mother Nature. If the big U.S. banks are less interested in what you and I would call traditional banking, if many regional U.S. banks are cutting back on lending to shrink their balance sheets so that they don’t have to...Three very cautious cheers for the GDP numbers
U.S. GDP grew by 3.5% in the third quarter of 2009. That was a bigger increase from the third quarter of 2008 than the 3.2% that the majority of economists had been expecting. This marks the first time that the economy has grown after four straight quarters of...So far–so far–this is a normal correction. Watch the GDP number on Thursday
I know this is painful. Stocks, mine in the JubakPicks.com portfolios and in my own portfolios, are down. And it’s starting to feel serious. Stocks have dropped for four trading sessions in a row and for six of the last seven. Since the decline began, small cap...Dollar up and stocks down–don't expect that to continue
I can’t tell you where stocks are headed in the short term but it does look like the days of the dollar rally are numbered. Why do I think that? The central bank of India tells me so. And if the recent relationship between the U.S. dollar and global equities...Roubini, the bear who got it right, predicts another asset bubble bust
Bad times are coming, according to Nouriel Roubini, although they may be a year or two away. The New York University professor of economics is worth listening to since he called the U.S. housing bust and global financial crisis not only exactly right but in time to do...Saving the big banks but destroying banking
There have been no obituaries. No eulogies. No burial services. But this quarter marks the death of traditional bank at the big money center banks. Oh, I know we’ve seen amazing earnings reports from the likes of Goldman Sachs (GS) and JPMorgan Chase (JPM) this...Washington isn't ready to let Bank of America and Citigroup out of the woodshed just yet
Shares of Bank of America (BAC) are under pressure today—down about 5.5% as I write this at 1 p.m.—on a Wall Street Journal report that the bank may have to raise billions more in capital before it can pay back taxpayer bailout funds. Here’s the problem. Before the...Will the U.S. recession end on Thursday?
Thursday October 29 is the day when the U.S. Bureau of Economic Analysis is expected to report that the U.S. economy grew by 3.2% in the third quarter. That will put an end to a string of four straight quarters of economic contraction. The U.S. economy has gotten...The weak dollar/strong stocks feedback loop is still alive and well
The U.S. dollar traded to another low and stocks rallied. What else is new? This feedback loop has been locked into place for months and it’s showing no signs of taking a vacation. Here’s how it works. A falling dollar leads to increases in the price of...To find the next McDonald's look to emerging markets
By 2015 one-third of companies in the Financial Times Global 500, a list that’s roughly the global equivalent of the U.S. Standard & Poor’s 500 stock index, will come from the world’s emerging markets, according to Bain & Co. Makes sense to me. Economic growth...Rallies after short-term dips making bears cautious
It’s drops like we had at the end of the day on Wednesday followed by rallies like we had on Thursday that are keeping bears from launching a major attack on this rally. Wednesday’s sell off at the end of the day looked like it might lead to a big enough...Oh! Canada: The country joins Brazil in trying to weaken its own currency against the U.S. dollar.
Talk is cheap but the Canadian loonie isn’t. So the Bank of Canada is using words to try to slow the rise of the Canadian currency against the U.S. dollar. The loonie is up 19% against the U.S. dollar in 2009 and that’s bringing real pain to the...A note of caution on commodities from one of the world's biggest commodity producers
Nobody watches China more intently than BHP Billiton (BHP). That country is the critical market for the Australian mining company’s iron, copper, coal, oil–you name it. So when BHP Billiton sounds a note of caution on the staying power of China’s...Break up the banks!
Finally someone with real power in the current financial world has stated the obvious: The world’s big banks need to be broken up into utilities that do what you and I think of as banking and speculative trading companies that take risky bets on the markets with...Jim’s Daily Email Alerts:
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