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| Weekly Wrap Up |
After two lackluster weeks, equities were back in fashion last week with the blue chip DJIA gaining 3.98% and the broader S&P 500 putting on 4.5%. Traders looked past the mediocre economic data that had plagued the market up until last week and started anticipating a great earnings season (which officially started on Wednesday with Alcoa (AA: Charts, News, Offers) beating expectations by putting up a profit, but kicks into gear this week with the major banks due to report). Last time around, earnings, on average, beat on the back of cost-cutting. Now the market is looking for revenue growth and if top line numbers do not impress, a pullback in stocks is likely. Stocks were in the green for 4 out of the 5 trading sessions last week. An interest rate hike (by the Australians) was actually greeted by enthusiasm as some took it to be a sign that the global economy is returning to normal. Goldman upgraded the banking sector on Monday (a little late to the party, of course). AT&T (T: Charts, News, Offers) was a laggard after the company said it will allow internet phone applications to run on the iPhone (i.e. a major concession as these apps compete directly with AT&T's core business). The commercial paper market looks to be back in shape with $67.6 billion worth of issues. Initial jobless claims fell 33,000 to 521,000, i.e. their lowest level since January. The trade deficit numbers gave a boost to the markets as the deficit unexpectedly declined on the back of strong exports, no doubt driven by the weakening dollar. The greenback continued to lose ground with inflation looming on the horizon and not surprisingly, gold, the traditional safe haven, had its best week since April, gaining $44.60/ounce over the week to close at $1,047.80.
Looking forward, this week will see a slew of earnings reports with Johnson & Johnson (JNJ: Charts, News, Offers), Intel (INTC: Charts, News, Offers), CSX (CSX: Charts, News, Offers)( Tuesday), JP Morgan (JPM: Charts, News, Offers), Morgan Stanley(MS: Charts, News, Offers) (Wednesday) and Goldman (GS: Charts, News, Offers) and Google (GOOG: Charts, News, Offers)(Thursday) being some of the major names on deck. Wednesday will also see the release of minutes from the last Fed meeting providing another insight into when the central bank with start to tighten monetary conditions. Finally, the Consumer Price Index (CPI), the best inflation gauge, will be out Thursday. More Market News
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| Economic News |
Rates Move Up Down Under; Don't Expect Us to Follow
The surprise interest-rate hike by the Reserve Bank of Australia sent ripples through the global markets. But the move said more about the state of the economy Down Under than anywhere else.
Even so, markets drew inferences about the strength of the world economy and the status of the U.S. dollar. Stocks rallied and gold broke out to a new high. But to tie those moves to the RBA rate hike is a heroic stretch.
Rarely, if ever, has the action of Australian central bank attracted so much notice. But its quarter-point hike in its key short-term policy rate, to 3.25%, was the first official interest-rate increase of the Group of 20 major nations in this cycle. (Source: Barron's) Click here to read the full article
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Beware the gold bubble
Signs of gold fever are everywhere. TV commercials scream, "Sell your baubles, prices are reaching the sky!" Investors have poured more than $12 billion this year into SPDR Gold Trust (GLD: Charts, News, Offers), the big exchange-traded fund.
Top-ranked manager John Hathaway of the Tocqueville Gold Fund offers this astounding prediction: The price of the precious metal could rise to more than $5,000 an ounce.
And if that's not enough to convince you, gold futures for December delivery rose $27 to an intraday record high of $1,045 an ounce in New York trading Tuesday.
But amid the buying frenzy and after a decade-long run-up that has seen the price quadruple, is gold still a smart investment? (Source: CNN Money) Click here to read the full article
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A Stable King Dollar and Lower Tax Rates Could Save the Nation
Team Obama is in economic trouble on two fronts right now: The dollar could be headed toward its demise while the jobs and unemployment numbers have gotten worse. (The unemployment rate is up to 9.8 percent as of the September report released last week.) And there’s a simple policy mix the White House could adopt to fix this. It could enact the Mundell-Laffer supply-side approach of a steady King Dollar for price stability and low marginal tax rates to spur jobs and economic growth. (Source: National Review Online) Click here to read the full article
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| Business News |
Occidental-Phibro, a Conservative Match Made in Heaven?
Occidental Petroleum's (OXY: Charts, News, Offers) announcement to buy Phibro, the energy trading unit under Citigroup C, left lots of analysts and industry-folk scratching their heads -- surprised the oil and gas company would part from its typically conservative path.
Occidental said Friday it would pay $250 million-- or net asset value -- for Phibro, a successful and, more recently, controversial firm that primarily trades in oil and gas.
Citigroup, which has received about $45 billion in government bailout money, was widely criticized over a $100 million compensation package that was expected to be paid this year to Andrew Hall, the trading phenom who heads Phibro. (Source: BNET) Click here to read the full article
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Lifeboats For A Sinking Dollar
With the dollar off 23% since March against a basket of world currencies, investors must ensure that they're diversified into foreign asset classes, U.S. companies with major offshore profits and natural resources. Go for gold if you like to gamble.
Pretend you're an economic superpower like China, and you need to diversify away from the declining value of the U.S. dollar, the currency in which one of your biggest international investments is denominated: U.S. Treasury securities. (Source: Forbes) Click here to read the full article
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BofA's Best Execs Already Call the Shots
The succession race at Bank of America (BAC: Charts, News, Offers) is the corporate spectacle of the year. By now everyone knows departing CEO Ken Lewis has left no clear heirs. But so far, the speculators have buzzed about a group of brand-new executives and overlooked a trove of potential, if temporary, leaders: the bank's government-engineered board of directors.
The most-hyped internal candidates may actually be long shots with the wrong experience, while the least-hyped could inherit the bank.
Look beyond oft-mentioned Sallie Krawcheck--only six weeks into her new job as head of wealth management. There is veteran bank exec Barbara Desoer, who modernized BofA's technology and is fixing the mess that is mortgage lender Countrywide Financial. Or peer past Thomas Montag, the former Merrill Lynch trading executive and head of investment banking for just a month. (Source: The Big Money) Click here to read the full article
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| Technology Focus |
Sergey Brin Blows Smoke Up Your Ass
At least it's an exotic experience. How many times have you had a man worth billions work so hard to whip out his Google (GOOG: Charts, News, Offers), leak on your leg, and swear to God it's raining?
Today, Sergey Brin does his best to sell you the snake-oil that his Google Book Search project is an undiluted good for the world, all those annoying monopoly worries aside. In an op-ed piece for the New York Times, the Google cofounder pimps out his best messiah impersonation, promises that he and Larry have your best interests at heart, and gets all weepy that anyone might not trust his baby with control over the digital archive of all human knowledge. We knew this piece was coming, because he hinted at it in Wednesday's presser at Google's New York office. But this is an astonishingly fatuous argument. If this is all Google's got, don't expect the feds to green-light the book settlement deal. (Source: The Big Money) Click here to read the full article
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Uncovering Steve Jobs' Presentation Secrets
Steve Jobs does not sell computers; he sells an experience. The same holds true for his presentations that are meant to inform, educate, and entertain. An Apple presentation has all the elements of a great theatrical production -- a great script, heroes and villains, stage props, breathtaking visuals, and one moment that makes the price of admission well worth it. Here are the five elements of every Steve Jobs presentation. Incorporate these elements into your own presentations to sell your product or ideas the Steve Jobs way. (Source: BusinessWeek) Click here to read the full article
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FCC launches probe of Google Voice service
Federal regulators will look into complaints by AT&T Inc. that Google Inc.'s (GOOG: Charts, News, Offers) free messaging and calling service, Google Voice, blocks calls to rural communities where local phone companies charge high connection fees.
The Federal Communications Commission on Friday sent a letter to Google requesting information about its Voice service, which lets people sign up for one number that can route incoming calls to cell, office or home phones. The service also lets users place calls, including international calls, at low rates. (Source: MSNBC) Click here to read the full article
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| Your Money |
For some, hard times are a gateway to new careers
For millions of Americans, the recession has been a curse. For a relative few, it's something more complicated: A catalyst for change. An opportunity to grow. A kick in the butt.
In some cases, economic necessity has been the mother of re-invention. It has forced people to pursue careers they might never have considered if they hadn't gotten -- or quit before getting -- the ax.
So a lumber mill worker becomes a nurse, a bus driver turns to welding, a paralegal sets out to sell cosmetics, an interior decorator learns to cook barbecue.
Some unpack an old skill, like the piano. Others trade on a personal passion -- for people, pets or, in one case, piñatas. Some get help from the government. Others go it alone. (Source: USA Today) Click here to read the full article
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Crafty Ways Restaurants Cut Costs
When it comes to dining out, Kevin Moll is the kind of frugal patron restaurant owners would love to see more of. The father of two from Denver always passes on the cream and sugar. He never pours a blob of ketchup next to his fries. Even better, after enjoying a plate of barbecued ribs, he usually prefers to wipe his saucy fingers with a cloth napkin, since the cleanup job would require at least three of the paper variety. And don't even get him started on carbonated beverages. This is a guy who prefers cola a little watered down. With hard times still taking a bite out of restaurant profits, more Kevin Molls are turning up at their tables--not as patrons but as professional nitpickers. (Source: Yahoo Finance) Click here to read the full article
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| Market Overview |
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| DJIA |
9,864.94 |
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