Markets rarely move at random. InvestorPlace’s leading analysts break down macro trends, sector dynamics, and recurring market patterns to help investors understand what is changing, what matters most, and where opportunities may emerge.
A top Japanese newspaper is reporting that Toyota Motor Corp. (TM) will be cutting its dividend. The world's biggest carmaker has hit a snag recently as brake problems and recalls have hurt Toyota's image. But if rumors about the dividend cut prove true, investors will be scratching their heads since TM has plenty of cash on hand.
Stock buybacks are back in fashion. That's because as the economic recovery takes hold and earnings improve across the broader market, U.S. stocks are sitting on a record pile of cash. And repurchases are one way they're spending it. Across the S&P 500 index, stock buybacks totaled $137.6 billion last year. But this year U.S. firms have scheduled buybacks or are planning repurchases that will almost double last year's total -- to the tune of $235 billion in 2010, according to Mizuho Financial Group Inc.
By
Jim Woods, Editor-in-Chief, Successful Investing, Intelligence Report, Bullseye Stock Trader
On Wednesday morning, Family Dollar Stores (FDO) came out with a most impressive fiscal second-quarter financial report. The company said earnings jumped 33% over the same period a year ago, but that wasn't the only good news. The discount retailer also lifted its full-year earnings outlook to $2.48 to $2.58 a share from $2.15 to $2.35, citing strong sales momentum in the quarter as the primary reason. That sales momentum is indeed strong, as the company saw an 11% rise in same-store sales in March, the first month of its fiscal third quarter.
When Google (GOOG) offered to buy privately-held mobile advertising network provider AdMob for $750 million, the California-based start-up took the money. That was last November, not long after AdMob had turned down a rumored offer from Apple (AAPL). Now the FTC may be mounting a lawsuit to sue Google.
The Chinese government has ordered the closure by the end of 2011 of steel mills with blast furnace capacities of less than 400 cubic meters. China's 2009 steel production capacity was listed as 700 million tons, and the country's mills produced less than 568 million tons in that year. Closing the mills is intended to improve both steel pricing and margins. China buys iron ore from BHP Billiton (BHP), Rio Tinto (RTP), and Vale (VALE), and all of these stocks have been affected by the move.
When a company's flagship product hits the skids, almost nothing good can come of it. Monsanto Corp. (MON) reported second quarter 2010 earnings this morning, and its glyphosate-based products, including best-selling Roundup weed killer, showed a negative gross profit of -$1 million. That's a change of -$438 million in one quarter in just one segment of the company's business. Competitor Mosaic Co. (MOS) missed estimates last week and shares fell 4%. Potash Corp. (POT) and Syngenta (SYT) share prices have remained essentially flat for the past 3 months.
Celgene Corporation (CELG) is about to get a name above and beyond its Revlimid at its first R&D analyst and investor day in several years. The company plans to show its start beyond the single key identifier of Revlimid, its multiple myeloma drug, as well as Thalomid. Celgene is not a one-hit wonder with no pipeline, but the company and the drug Revlimid are almost synonymous. The company hopes to change that Thursday.
Contrary to a seemingly endless stream of pitches, the dollar is far from floundering. In fact, if you look at how the dollar is doing so far this year against the two largest alternatives – the euro and the yen -- so far it's either up over 6 percent or at worst near flat respectively. Some of the best currency ETFs and currency funds to play the current conditions are icn, cyb, gch, ifn, if and awf.
Ronald McDonald debuted in 1963 with TV personality Willard Scott donning the clown costume for the first time in an ad spot for McDonald's (MCD). But if some health advocates have their way, the fiery-haired clown's days are numbered.
By
Jon Markman, Editor, Trader's Advantage and CounterPoint Options
Recent reports out of investor conferences and management updates make it look as if the first-quarter earnings reports will rock. Here are a few news items from Honeywell (HON), Ball Corp. (BALL) and Applied Materials (AMAT) in the past week that have already caught investors' imaginations:
By
Jim Woods, Editor-in-Chief, Successful Investing, Intelligence Report, Bullseye Stock Trader
It was quite a weekend for Apple (AAPL) and sales of its much-hyped tablet computer, the iPad. Despite its lampooned name, the iPad sold over 300,000 units the first day, a number which included pre-orders for the device. Though the official sales numbers for the opening weekend aren't yet in, industry analysts estimate that Apple sold between 600,000 and 700,000 iPads in just two days. If this figure holds up, it would easily best the 500,000 many pundits on Wall Street were hoping for in order to declare the iPad an opening weekend success.
At the end of December, SandRidge Energy Co. (SD) estimated that it held 1.3 trillion cubic feet equivalent of natural gas reserves. Of that amount, 52% was estimated natural gas reserves and the rest was oil. Today that calculation changed with a merger with Arena Resources, Inc. (ARD) in a transaction worth about $1.6 billion in cash and stock. SandRidge's action runs counter to the current drive by oil companies. Think Exxon Mobil Corp. (XOM) paying $40 billion for XTO Energy (XTO).
The move by the world's three largest iron ore producers to shift from annual to quarterly prices has resulted in a doubling of iron ore prices for the April-June 2010 quarter. Chinese steelmakers feel this price rise most acutely because they lead the world in imports of iron ore.
The Dow is closing in on 11,000 points for the first time since September of 2008. Investors everywhere are obviously glad to see the landmark index is still tacking on gains -- but they are conflicted about what the 11k mark means. Some are optimistic that Dow 11,000 is just another mark on the slow but steady road to recovery, and others are convinced that the benchmark will just be fleeting level achieved before the inevitable sell signal on an overbought market.
Australia leads the world in coal exports, with some 261 million metric tons shipped in fiscal year 2009. The country produces two main types of coal: black coal, much of which is exported; and brown coal, most of which is burned in Australia to generate electricity. Stocks involved include Peabody Energy (BTU), Yanzhou Coal (YZC) and CNOOC Ltd. (CEO).
A new 675-mile, 42-inch natural gas pipeline from the gas fields of Wyoming to a point in southern Oregon from where the gas will be fed to users in Oregon, California, and Nevada. El Paso Corp. (EP) received approval from the Federal Energy Regulatory Commission to proceed with its Ruby Pipeline project.
The housing market is improving. Foreclosures are slowing. Sales are up, at least in middle income housing. BUt homebuilder stocks may be in a far different boat ahead. There is some comfort that those companies which have survived to date are likely to survive 2010 and beyond. That is why the gains have been exponential from the March 2009 lows in many stocks. But some recent analyst calls in the sector may only highlight some of the risks in remaining bullish in homebuilders despite the notion that the recovery news is now already happening.
