Posts Tagged ‘Stock Market News’
It’s looking like the main stock market averages are hitting key resistance levels as they continue with their upward bias. Trading volume has been mediocre, but, then again, it’s been that way since the financial crisis. What the stock market really needs is a good catalyst—a positive catalyst that can help investors take their buying to the next level.
If there is one investment to avoid in 2011, it will be bonds. Why? Simply because interest rates are headed higher in 2011.
No, we won’t see a spike in short-term interest rates. The Fed will not let that happen. But the Fed cannot control long-term interest rates.
If you need sure-bet plays in retail, you have to stick with Wal-Mart Stores, Inc. (NYSE/WMT) and Costco Wholesale Corporation (NASDAQ/COST).
Costco delivered with strong results on Wednesday, after posting earnings of 312 million dollars, or $0.71 per diluted share, above the consensus estimate of $0.69 per diluted share, according to Thomson Reuters.
The bulls appear to be in full control at this juncture.
On the charts, the NASDAQ has joined the Russell 2000 to move above their respective previous chart highs. This is bullish, but we need to see if the indices can hold.
What a month December has been so far for the stock market. The Dow Jones Industrial Average is up 3.5% in the first two days of December—its biggest two-day rally since July.
What’s fueling the rise in stock prices? Several factors.
I’m looking at the major business newspapers this morning and I see one big story missing from page one of these newspapers, “Dow Jones up 250 points yesterday, single-day gain of 2.3%!”
Yesterday’s big rise in the Dow Jones Industrial Average is very significant for the stock market.
Volatility abounds and it is coming from every which direction. The Eurozone’s fiscal problems unfortunately persist. Inflation has become a real threat in China and other emerging markets. The U.S. Federal Reserve’s second round of quantitative easing is controversial and, as such, has only dialed the knob on volatility up.
The majority of the news is on Ireland and the fear that the debt issues there could spread throughout Europe and further dampen growth there.
But I have talked enough about Europe and will swing my focus to China—my favorite growth region for growth investors looking to increase portfolio returns.
The numbers don’t lie.
Important economic news and my analysis to share with PROFIT CONFIDENTIAL readers:
Jobless claims in the U.S. declined to 407,000 last week, according to the Labor Department, the lowest level since July 2008. My take: The economy is clearly improving. If the jobless claims are falling, then the unemployment rate for November 2010 will fall.
A company like Caterpillar Inc. (NYSE/CAT) has got to be one of the ultimate benchmark stocks to follow. If business is good in the global economy, so is business at Caterpillar.
This stock is hitting new 52-week highs, and it has been a tremendous wealth creator since the financial crisis in stocks ended. I wouldn’t be surprised if the company split its shares two-for-one in the near-future. Recently, the company issued bonds to Chinese investors in renminbi-denominated currency.
The Fed has really been put through the ringer after it decided to push its way into the Treasury market one more time and unleash Quantitative Easing II (QE2) onto the U.S. financial systems in an effort to keep interest rates low and stimulate lending, borrowing and spending. In other words, everyone and their mother think that the Fed is back at its old tricks—fighting the debt mountain and dead economy with easy money.
Are we seeing signs of the perfect storm arising in the stock markets? Not only do we have growth issues in the United States, but Europe and Asia continue to pose issues. I’m not saying the good times are over, but, for now, the market risk is higher. The inability of the major stock indices to break back to the previous highs was a red flag in my view.
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