January Market Re-Cap 1/30/2010 Monday, Feb 1 2010

U.S. stocks fell this week as worries about technology company earnings and outlooks coupled with uncertainty about the political situation and concerns about sovereign debt stability weighed on sentiment and valuations. Stocks had their worst month since February 2009.

Many investors are left concerned about the supposed “January Effect”  or “Barometer” on the markets. The indicator worked well in 2008, given that it advised investors to avoid what proved to be the worst calendar-year performance since 1937. But the barometer’s track record is dicey, as it often fails to identify the start of new bull markets, such as the market-turnaround years of 1982 and 2003.

Yet the January barometer is still useful, especially from a sector standpoint. Since 1990, the three best-performing sectors in January went on to post a compound annual growth rate of 8.2% in the following 12 months, vs. a 6.1% return for the S&P 500, and beat the market 70% of the time. The worst three sectors gained only 4.3%.

As things stood on the final trading session of the month, the worst performers among the S&P 500’s 10 industry groups were telecommunications services and information technology, down 9.3% and 8.5%, respectively.

Also lagging, materials were off 8.7%, utilities were behind 5.1%, and energy declined 4.5%. Consumer discretionary and consumer staples were also down for January, off 3% and 1.3%, respectively.

On the upside, the health-care sector has tallied a 0.4% gain for January, while industrials and financials were only off 1.2% and 1.5%, respectively

The Dow Jones Industrial Average (.DJI) fell 53.13 points or 0.5% on Friday to close at 10,067.33 for a weekly loss of 1%. The Nasdaq Composite Index (.COMP) fell 31.65 points or 1.5% to close at 2,147.35 on Friday. For the week the index was down 2.6%. The benchmark Standard & Poor’s 500 Index (.SPX) fell 10.66 points or 1% on Friday to close at 1,073.87. The index fell 1.6% for the week.

Top Ten Stories of the Week as Provided by MarketWatch

A FOCUS ON JOBS

Speaking to the nation and members of Congress in a high-stakes policy address, President Barack Obama used his first State of the Union speech to call for a host of job-creation measures and a redoubled effort to finish health-care reform in the midst of a newly challenging political environment for him and his party. Striking a populist tone at times but reaching out to his Republican opponents at others, Obama defended his accomplishments from his first year in office and looked ahead for progress on climate change, education and the war on terrorists. Read more about the State of the Union address

ANOTHER TERM FOR BERNANKE

Federal Reserve Chairman Ben Bernanke survied hard-core opposition to his handling of the financial creisis by some Senate Rebublicans and Demorcats and won approval on Thursdayfor a second four-year term. Bernanake received more “NO” votes than any Fed Chairman in history, but in the end was confirmed by a vote of 70-30. Read more about Bernanake’s Tenure

FEW CLUES ON THE FED

The Federal Reserve will tighten U.S. monetary policy in June. No, it will be September. Wait, it won’t be until after the November election. Check that, not until 2011. How about 2012? In plain English, Fed watchers are all over the place. The central bank repeated its pledge that rates will stay at ultra-low levels for an “extended” period of time, but just how long is that? Read more about what economists are saying about when the Fed will tighten

DEFENDING AIG’S BAILOUT

Facing sharp criticism on Capitol Hill, Treasury Secretary Timothy Geithner and his predecessor, Henry Paulson, defended their decision to complete a $182 billion bailout of American International Group Inc.(AIG), arguing that it was necessary to protect the financial system from implosion. Paulson said an AIG failure would have been devastating to the financial system, while Geithner said taxpayers could recover the cost of the bailout if lawmakers support a proposal to impose a $90 billion fee over 10 years on financial institutions. Read more about their testimony

APOLOGIES TO WALL STREET

We have given the financial industry a trillion dollars in support — even though the big banks and brokerages didn’t need or want our help. Things were just fine in September 2008, but then we had to go and stick our noses into the world of high finance. Now, we’re making matters worse by trying to tell them how much to pay their people, how much risk they can take and what businesses are kosher. Wall Street, forgive us for our meddlesome ways. Forgive us for the sarcasm. Most of all, forgive us for ever trusting you in the first place. Read David Weidner’s commentary on big banks and the little guy

THE IPAD MAKES ITS DEBUT

Apple Inc. (AAPL) ended months of speculation by unwrapping the iPad, a new touch-screen tablet computer that Chief Executive Steve Jobs said would revolutionize how people access their digital content and change the future of personal computing. Jobs said the iPad is designed to fill a gap between the iPod touch and iPhone and its MacBook line of laptop computers. Read more about the highly anticipated device

THE IPAD OR ISNOOZE?

Think Janet Jackson’s bosom wrapped in Brangelina sprinkled with bird flu, Y2K and a bald Britney Spears. Bill Gates could crash his Caddy into a tree, sneak off in a miniature hot-air balloon and sing a duet with Rev. Jeremiah Wright, and he still couldn’t keep up with his heated rival over at Apple when it comes to getting press. It’s almost unfair at this point. Read more about the Apple hype

WHAT, ME WORRY?

A focus on rising deficits in the U.S. and some other developed countries could prove misplaced as policymakers attempt to avoid a double dip, according to some economists attending the annual gathering of business leaders and politicians in the Swiss mountains. The potential for fiscal crises has been identified as a top fear by participants in this year’s annual meeting of the World Economic Forum. Read more about what’s going on in Davos

TOYOTA’S BIG RECALL

Japanese automaker Toyota Motor Corp. (TM) expanded its recall late in the week to another 1 million vehicles and said it would be recalling vehicles in Europe to correct problems leading to unexpected acceleration. The latest recall, to fix problems with floor mats that block accelerator pedals, came on top of an earlier move to recall models with problems in the accelerator mechanism itself. Read more about Toyota’s recall

HIGHEST FORECLOSURE RATES

The Las Vegas metropolitan area suffered a foreclosure rate that was five times the national average and the highest rate in the country in 2009, according to a report by RealtyTrac, an online foreclosure marketplace. The 20 cities with the highest rates of foreclosure notices were all in California, Florida, Nevada and Arizona — states with markets that got extremely hot during the real-estate boom, according to RealtyTrac’s year-end report. But the trouble isn’t over yet. Read more about the foreclosure data

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Weekly Market Re0Cap for 1/15/2010 Friday, Jan 15 2010

For the second week in 2010 the market saw gains. While it was a bit of  a turbulent ride ending in a 100+ point sell of on the Down on Friday we still picked up nearly 2% this week. J.P. Morgan released it’s Q4 numbers today, which were over all good year over year numbers, but signaled a week economic outlook. Thus begins earnings season. We have quite a few announcements next week which should make for a volatile market, but one that is surely not unexpected.

The biggest question of the week was the absence of the ”Retail Investor”, as much of this rally has been on the back of institutional investors and hedge funds. The average retail client hasn’t participated and it will be interesting to see when they take notice and begin to put their money to work.

The Dow Jones Industrial Average (.DJI) fell 100.90 points or 0.9% on Friday to close at 10,609.65. For the week the index gained 1.7%. The Nasdaq Composite Index (.COMP) fell 28.75 points or 1.2% to close at 2,287.99 on the day while recording a 0.8% increase for the week. The broader Standard & Poor’s 500 Index (.SPX) dropped 12.43 points or 1.1% to close at 1,136.03 on Friday. For the week the benchmark index added 1.9%.

This Week’s Top 10 Stories Provided by MarketWatch

Charging financials

President Barack Obama is proposing a special 10-year fee on large financial companies to repay taxpayers for the “extraordinary” assistance they got to keep the economy from collapsing in late 2008. The assessment on excess liabilities at big firms is designed to raise about $90 billion over 10 years. It would remain in place for at least a decade, or until all losses from the Troubled Asset Relief Program were repaid. Read more about Obama’s plan .

Big, bad bank CEOs

A commission studying the recent financial crisis had some harsh words for big bankers this week. Members of the commission — charged with identifying the root cause of the crisis and making recommendations by December — lashed out at investment-bank executives, comparing the practice of packaging and selling “toxic” mortgage securities with that of someone who sells a car with faulty brakes and buys an insurance policy on the buyer of those cars. Read more about the panel .

So much for innovation

How in the world did we ever get by without mortgage derivatives? Let’s take a trip back in time. Banking in the post-Depression, Glass-Steagall era pretty much worked like this: You deposited your paycheck in the bank. You borrowed for your car and your home — if the bank granted you the credit. If you wanted to buy stock or take some risk, you went to your broker or a casino. Things have changed a great deal since then. Read David Weidner’s column about financial innovation .

Caution from J.P. Morgan

J.P. Morgan Chase & Co. (JPM) reported that it earned more than analysts expected in the fourth quarter, but its credit costs remained high and it set aside nearly $2 billion to cover consumer-loan losses. Remarks from Chief Executive Officer Jamie Dimon dashed the hopes of some investors who had expected him to be more upbeat on the company and the banking business. Read more about J.P. Morgan’s results .

A disappointing kickoff to earnings season

Investors didn’t exactly cheer the latest results from Alcoa Inc. (AA), which posted a narrower fourth-quarter loss earlier in the week, marking the unofficial kickoff of corporate earnings season. While Alcoa could point to improving aluminum prices and lower corporate costs, the market focused on its ongoing struggle to boost sales in a crowded marketplace and on adjusted per-share earnings that fell short of analysts’ expectations. Read more about Alcoa’s results .

Hefty charges for SocGen

French bank Societe Generale warned that it would take another 1.4 billion euros ($2.02 billion) of charges on risky mortgage assets, virtually wiping out its profit for the fourth quarter. In a brief trading update, the bank said it had again marked down the value of its mortgage holdings to reflect rising loss rates on both prime and subprime loans. Read more about SocGen’s update .

Strong quarter isn’t enough for Intel

Shares of Intel Corp. (INTC) fell Friday, even though the semiconductor giant reported strong fourth-quarter results that won rave reviews from Wall Street. But its results triggered worries about a peak in earnings growth. Intel had an impressive run leading up to Thursday’s report, which indeed confirmed what analysts had believed was a strong quarter. Read more about Intel’s results .

Google considers China exit

Elsewhere in tech, Wall Street analysts worried about whether Google Inc. (GOOG) would follow through on its threat to cease operations in China. Late Tuesday, the company announced it has been the target of “highly sophisticated” cyber-attacks on its infrastructure. Chief Legal Officer David Drummond said the attacks originated in China and seemed to be aimed at identifying advocates for human rights in that country. If Google does leave China, though, it would lose access to the world’s most coveted, fastest-growing Internet market. Read more about Google’s China concerns .

A drop for retail sales

U.S. retail sales fell a seasonally adjusted 0.3% in December on widespread weakness across different kinds of stores, the Commerce Department estimated. That decline was unexpected, as economists surveyed by MarketWatch were forecasting a 0.5% gain. Auto sales disappointed, dropping 0.8% in dollar terms even as the automakers reported higher unit sales. Plus, bad weather during the month likely affected results. Read more about the latest sales data .

New high for foreclosures

The number of U.S. residential properties receiving at least one foreclosure filing jumped 21% in 2009 to a record 2.82 million, according to a RealtyTrac report. Nevada’s foreclosure rate led the U.S. last year, with just over 10% of all housing units in the state being hit with some sort of proceeding. Just four states — California, Florida, Arizona and Illinois — accounted for more than half of the nation’s 2009 total, with more than 1.4 million properties receiving a foreclosure filing. Read more about the 2009 foreclosure data .

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Weekly Market Re-Cap 1/08/2010 Friday, Jan 8 2010

U.S. stocks ended the first week of the year with decent gains as investors appeared to shrug off the worst news contained in the December payrolls report. Looking ahead to earnings probably didn’t hurt, either, since U.S. corporations are expected to show profit increases for the first time since the second quarter of 2007. Revenue is expected to rise, too, according to Thomson Reuters.

Profit at large U.S. companies is expected to rise 184% in the period and break a string of nine quarters of profit declines. A lot of that rise will be thanks to a big jump in financial profits. Without them, overall profit at Standard & Poor’s 500 corporations is expected to increase by 8%. Revenue among S&P companies is forecast to climb 7%.

The Dow Jones Industrial Average (.DJI) rose 11.33 points or 0.1% to close at 10,618.19 on Friday. The Dow spent most of the day in the red, but its rise on the day gave the blue chip index a 1.8% gain for the week. The Standard & Poor’s 500 Index (.SPX) rose 3.29 points or 0.3% to close at 1,144.98 on Friday. For the week the benchmark index was up 2.7%. The Nasdaq Composite Index (.COMP) rose 17.12 points or 0.7% on Friday to close at 2,317.17, a gain of 2.1% for the week.

This Weeks Top 10 Stories of the Week Provided by MarketWatchU.S. job losses resumed in December, while the unemployment rate was steady at 10% on a huge decline in the number of people looking for work, the Labor Department estimated Friday. Nonfarm payrolls fell by a seasonally adjusted 85,000 in December following a revised 4,000 gain in November, which was the first increase in payrolls since December 2007. Read more about the jobs data .

Help unwanted

Revved-up car salesAutomakers slammed the books on one of their worst years in decades, while eagerly touting December’s 15% surge in U.S. car sales as evidence that 2010 is going to be far better. Ford Motor Co. (F) led the charge, breaking further away from still-struggling Detroit rivals. Read more about the latest car-sales data .

Santa delivers for U.S. retailersU.S. retailers enjoyed their best monthly sales in about two years in December, topping Wall Street’s expectations and issuing a batch of rosier earnings outlooks. The results were in stark contrast to those of a year ago, when retailers were caught with far too much inventory as the economy plunged and consumers went into hiding. That forced retailers to slash prices in desperation — a phenomenon they avoided this year through far tighter inventory management. Read more about retailers’ happier holidays .

Snow costs U.K. retailersMarks & Spencer (UK:MKS) said heavy snowfall throughout the U.K. over the past two weeks has cost it “millions of pounds” in lost sales, but economists expect the overall impact on the economy to be negligible. The U.K. is in the grip of its longest cold snap in almost 30 years. Parts of Scotland and Northern England were most affected earlier this week, but the front began spreading to southern areas. Read more about the disruptive weather .

Novartis bids for rest of AlconNovartis AG (CH:NOVN) kick-started buyout activity in 2010, saying it will pay $39.3 billion for the 75% of eye-care specialist Alcon Inc. (ACL) it doesn’t already own. The Swiss pharmaceutical giant, which bought 25% of Alcon from Nestle (NSRGY) in April 2008, said that it’s exercised a call option to buy Nestle’s remaining 52% stake for $28.1 billion, or $180 a share. Once that deal has been completed, Novartis plans to push through the acquisition of the remaining 23% of the stock in a share-swap deal valued at $11.2 billion. Read more about Novartis’ plans .

Buffett sets a roadblockKraft Foods’ (KFT) bid to buy chocolate maker Cadbury (CBY)(UK:CBRY) hit a roadblock after Warren Buffett’s Berkshire Hathaway (BRKA)(BRKB) voted against a proposal to fund the deal by issuing millions of new shares. Berkshire, which is Kraft’s biggest shareholder, said the plan to issue up to 370 million new shares would “give Kraft a blank check,” allowing it to change the offer for the U.K. chocolate maker in any way it wishes. Read more about Kraft’s ongoing courtship for Cadbury .

‘Tightening signal’ from ChinaChina’s central bank guided interbank interest rates higher Thursday, the latest in a series of moves that analysts say indicate a “tightening bias” and could lay the groundwork for an eventual rate hike. The People’s Bank of China sold 60 billion yuan ($8.8 billion) worth of three-month bills at 1.3684%, 4 basis points higher than last week. The change in yield marked the first in its weekly open-market operations since Aug. 13. Read more about China’s move .

Fed sees slow growthRecent signs of an improving economy didn’t sway Federal Reserve officials from their belief that the recovery would be gradual relative to past recoveries and inflation would remain tame, according to minutes of the latest policy meeting. Incoming data has started to take a more positive tone in the weeks before the Fed’s closed-door meeting on Dec. 15-16. Fed officials welcomed the better news but said it did not change their outlook. Read more about what the Fed said .

Tablets to take offGraphics chip maker Nvidia (NVDA) said its new Tegra chip, which took 500 engineers to design, will help usher in the age of the tablet — a small computer with the power of a laptop but the mobility and energy efficiency of a wireless phone. Nvidia said it’s also produced new graphic chips for use in 3-D displays, and that it’s partnered with a number of companies to help make 3-D a mainstream product — one of the major themes at the Consumer Electronics Show this year. Read more about the CES .

Tech-gadget frenzy beginsIt’s the first week after the holidays, and folks are sporting their new gadgets on the streets like the shiny silver six-shooters of Western days of old. Can tech stocks keep up with the hype? Even as fresh Droids, BlackBerrys, and iPhones are pried from holiday gift boxes and activated on the fly, a wall of buzz about coming iSlate tablets, 3-D television and biodegradable laptops is hitting this tech-torn land. What does this all mean for tech stocks? Read more of David Callaway’s commentary .

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Top 10 Stories of 2009 Monday, Jan 4 2010

Four reasons America’s drive for a longer life is stuck in neutral

How long can you expect to live? The answer to that tantalizing question tells a lot about the success of a nation — or the lack of it. See Marshall Loeb.

Five reasons buying a home in 2009 is a bad idea

The unemployment rate is creeping up and home prices keep falling: Two great reasons why it might be best to put your home buying plans on hold. See Real Estate.

Five reasons buying a house now is a wise move

People are afraid to buy a home in times like these, with the economy tanking and home prices continuing to fall. But if you’re brave enough to stray from the herd, you might be in for the home-buying opportunity of a lifetime. See Real Estate.

Position yourself now for $300-a-barrel oil

Human beings are a predictable bunch and we tend to wait until things get to a painful crisis mode before taking drastic action. My question is why does it always have to get to that point? Take the most recent run-up of oil prices, when crude hit $147 a barrel and gasoline was trading around $5. See Trading Strategies.

Seven new tax perks you don’t want to miss

In all the hoopla surrounding the current stimulus package, it’s easy to forget that other stimulus bill — the one in 2008 that resulted in a good-sized check for many U.S. taxpayers. See Tax Watch.

Berkshire’s Buffett cops to mistakes, likes long-term horizon

Following Berkshire Hathaway Inc.’s worst year on record, Chairman Warren Buffett told shareholders Saturday that the economy would remain in “shambles” during 2009 and beyond, offering no prediction about the future may hold for U.S. stocks. See full story.

America’s soul is lost, collapse is inevitable

Jack Bogle published “The Battle for the Soul of Capitalism” four years ago. The battle’s over. The sequel should be titled: “Capitalism Died a Lost Soul.” Worse, we’ve lost “America’s Soul.” And, worldwide, the consequences will be catastrophic. See Paul. B. Farrell.

Six reasons I am calling a bottom and declaring a new bull market

OK, so you’re one of millions of investors impatiently waiting on the sidelines, sitting with $2.5 trillion cash under your mattress, waiting for the right moment, that signal screaming: “Bottom’s in, start buying!” Yes, it’ll go down again, but the bottom’s in, thanks to a great March, possibly the third best month since 1950, so it’s time to jump back in and buy, buy, buy! See Paul B. Farrell.

Even Jack Bauer couldn’t stop ‘The Goldman Conspiracy’

Two mind-numbing fast-paced dramas. Two parallel worlds. One real, one fiction, both deadly. Jack Bauer, mythic hero of “24.” Dying from a deadly bio-pathogen leaked from weapons developed by Starkwood, a rogue mercenary army attacking the presidency, hell-bent on taking over America. The other drama in play: “Hank the Hammer” Paulson, iconic Wall Street hero, a Trojan Horse placed inside Washington by Goldman Sachs as Treasury Secretary in control of America’s $15 trillion economy. Goldman, a modern dynasty with vast financial powers much like those once used by the de’ Medici, Rothschilds and Morgans to control nations. See Paul B. Farrell.

Obama fails to win Nobel Prize in economics

In a decision as shocking as Friday’s surprise peace prize win, President Obama failed to win the Nobel Memorial Prize in Economic Sciences Monday. See MarketWatch First Take.

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Weekly Market Re-Cap and Outlook 12/11/2009 Friday, Dec 11 2009

This was a relatively sleepy week on Wall Street with rather average volume and somewhat range bound trading. U.S. stocks were mostly higher for the week, though technology stocks were lower because weakness in chip makers on Friday undercut strength in some other areas of tech and telecoms.

Retail sales saw a modest gain which was a positive sign to the markets early in the week. However we finished the week with the House of Representatives passing two bills that many believe will severely hamper the financial system and add billions more to our growing deficit. The Senate is seen as being a bit more sensible and will most likely strike down many of the most intrusive portions of the proposed bills.

Next week President Obama will be meeting with leaders of the nations 12 largest banks, and the Fed will meet to decide what if anything to do with interest rates. There is no expectation in the markets for a change in rates. We will also see the whole sale and consumer price indexes, both used to gage inflation, later in the week.

The Dow Jones Industrial Average (.DJI) rose 65.67 points or 0.6% to close at 10,471.50 on Friday and mark a 0.8% gain for the week. The broader Standard & Poor’s 500 Index (.SPX) rose 4.06 points or 0.4% on the day to close at 1,106.41. For the week, the index added less than 0.1%. The Nasdaq Composite Index (.COMP) fell 0.55 point to close at 2,190.31 on Friday. For the week the index fell 0.2%.

Top Ten Stories of the Week as Provided by MarketWatch

A new era at AOL

After a decade under Time Warner’s (TWX) umbrella, AOL Inc. (AOL) once again stands on its own after being spun out from its big media parent. The Internet pioneer faces several questions as it regains its independence. Can the company survive on its own in a brutally competitive marketplace dominated by the likes of Google (GOOG)? Will shareholders simply dump the stock, rather than bet on what would be an astounding reversal of fortune? Read more about the challenges facing an independent AOL .

Encouraging economic signs

U.S. retail sales rose an encouraging 1.3% in November, marking the third increase in the past four months, according to Commerce Department data released Friday. Excluding the 1.6% rise in auto sales, sales rose 1.2%. Economists surveyed by MarketWatch expected total sales to rise 0.5% and sales excluding autos to rise 0.4%. Read more about the surprisingly strong report .

Restructuring pay at Goldman

Investment bank Goldman Sachs Group (GS) unveiled compensation changes in the wake of pressure from some shareholders. Goldman said its 30-person management committee will get bonuses in the form of “shares at risk” in 2009 instead of cash. The shares cannot be sold for five years. The five-year holding period includes a bulked-up provision that lets Goldman take the shares back if employees conduct “materially improper risk analysis” or fail to voice concerns about risks enough. Read more about Goldman’s new policies .

Britain taxes banker bonuses

The British government said banks would pay a one-time, 50% tax on bonuses worth more than 25,000 pounds ($40,700) in an effort to encourage banks to rebuild their capital bases and continue lending to individuals and businesses. Chancellor of the Exchequer Alistair Darling delivered the blow in his annual pre-budget report, which also laid out the government’s plans to cut the deficit over the next four years. Read more about Britain’s plan .

Failure is relative

If there’s any place among the industrialized Western economies where disappointment and dread outstrip the U.S. gloom, it’s the U.K. The Brits share many of our problems: high debt, unemployment and a wrecked financial system. But where the U.S. has a mix of anger and optimism, the U.K. is more gloom and despair. It also has a longer, steeper road back. The trademark good cheer isn’t gone, but it’s faint. Read more of David Weidner’s column about Britain’s woes .

Apple to take on the tablet

Apple (AAPL) is on track to launch a much-anticipated, tablet-sized computing device early next year, according to brokerage reports this week. The end-of-the year business period has become known as the “iPod quarter” for Apple, due to the historically strong sales of the company’s digital-media players. But with iPod sales showing signs of leveling off, Apple is believed to be working on a new, tablet-style device that will help the company continue with its multiyear streak of hit products. Read more about Apple’s potential plans .

A renewable revolution

U.S. Secretary of Interior Ken Salazar told reporters Thursday in Copenhagen that his country stands on the cusp of a renewable-energy revolution and that clean-energy legislation will trigger massive new investment in the sector. Large-scale renewable energy projects are a hot topic in Copenhagen, and concrete political initiatives that arise out of the climate summit in Denmark could further galvanize investors’ interest in the renewable-energy sector. Read more coverage of the Copenhagen summit .

Tall order for United

United Airlines parent company UAL (UAUA) said it ordered 50 new wide-body, long-haul jetliners from Boeing (BA) and Airbus in one of the largest commercial aircraft orders by a U.S. carrier in more than a year. It signals that after nearly two years of demand erosion followed by heavy industry losses, airlines are beginning to see signs of recovery and financial stability. Read more about what United’s move means for the industry .

Putting reform in perspective

As the clock ticks toward what could be final congressional approval of the most sweeping health-reform legislation in more than 40 years, a little perspective is in order. The health-care system is complex, yet Americans’ experiences with it are deeply personal, making it a prime candidate for distortions and emotional manipulation. Three experts who follow health-care policy weighed in on five of the biggest myths and half-truths about the proposed overhaul. Find out what they said about health-care reform .

Where were they 10 years ago?

Another decade is behind us, meaning a new crop of newsmakers has burst onto the scene, from the boardrooms of Corporate America to the hearing rooms of Washington. What follows is a look at five of the most significant forces in the financial world of the past 10 years. It’s actually eight people in all, three individuals, one duo and a trio — all with one thing in common: They managed to keep their heads above water, for the most part, during a difficult decade and remain major financial newsmakers. Some even thrived under tough circumstances. Find out who they are .

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Barclays Wealth gives recipes for Asia exposure Thursday, Dec 10 2009

NEW YORK (Reuters) – A “fusion portfolio” with Western ingredients and Asian techniques is among Barclays Wealth’s favorite recipes for investing in fast-growing Asian economies.

The money management firm, with $221 billion in assets, advises its affluent clients to have “substantial exposure” to the economic growth of Asia excluding Japan — which it forecasts to remain the most dynamic region for “years to come.”

In the first half of this year, all clients had to do was buy an exchange-traded fund indexed to Asian equities, said Aaron Gurwitz, managing director and head of investment strategy at the firm.

But now that regional stock indexes such as the Shanghai Composite .SSEC have rallied nearly 80 percent so far this year, more complex strategies are required.

“Now you have to find other ways, be more selective,” Gurwitz said on Thursday at the Reuters Investment Summit in New York.

He recommends investors seek active fund managers to map opportunities still remaining in Asia or indirect forms of exposure to the region.

And he gives one recipe of his own — the Asian Fusion Portfolio:

- Look at the list of recommended stocks by Barclays Capital, those with a “buy” rating, and that belong to a sector with at least “neutral” rating;

- Rank those companies by a portion of their revenues generated in Asia ex-Japan;

- Cut the list off at 50 percent.

“That gave us a list of 11 companies that we like for lots of reasons and also give you exposure to non-Japan Asia,” Gurwitz said.

He did not want to name specific companies, but said they are mostly technology and infrastructure suppliers.

“Everybody has a mental checklist that they use when deciding whether to make a particular investment — what is the valuation, yield, liquidity, market share,” Gurwitz said.

“I want to add a question: Does this investment give me exposure to economic growth in Asia?”

BRAZIL, COMMODITIES

Brazil gets a lot of “yes checks” on Gurwitz’s expanded checklist, for its sound macroeconomic policies, high interest rates, central bank practical independency, and exports to Asia.

“Interestingly, the Brazilian and the Chinese economy fit like two pieces of the same puzzle,” he said, recommending investors focus especially on local-currency government bonds.

A diversified commodities portfolio is another favorite investment at Barclays Wealth not only because it provides exposure to Asia, but also because commodities “have not done so well as they should in the early stages of the recovery.”

Barclays Wealth sees commodity and stock prices being able to keep rising because it sees benchmark interest rates remaining at historic lows for a very long period.

Gurwitz is not worried about potential bubbles resulting from an extended period of low interest rates.

“The thing that concerns me about all the liquidity that has been created, particularly in the developed countries, it’s that it’s sitting as excess reserves in central banks, it’s not being used to generate economic growth or job creation,” he said.

“Before I start worrying about bubbles I have to stop worrying about the fact that the banks aren’t lending the money to anybody.”

Still, Gurwitz said he would love to figure out where the next bubble will be to profit from it before it bursts.

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Year End Tax Tips Saturday, Dec 5 2009

Vertical Advisors YE Considerations for 2009

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Weekly Market Re-Cap 12/04/2009 Saturday, Dec 5 2009

U.S. stocks recorded respectable gains for the week, thanks mostly to a big rally on Tuesday. The good sentiment from that day faded even after data showed the U.S. unemployment rate unexpectedly dropped in November and the number of jobs lost in the economy was far smaller than forecast.

I wouldn’t read too much into this employment number though. While it is good to see the drop in the mainstream unemployment numbers it’s a bit misleading, and does not account for the addition to the U-3 Unemployment numbers.

Job losses at only 11,000 is good news but unemployment fell to 10% as much because folks left the labor force throwing up their arms in frustration as folks finding new work. In the household survey used to calculate the unemployment rate, 227,000 adults were added to the rolls of the employed or self-employed but the number choosing not to look for work increased by 291,000.

I expect the unemployment rate to go up again unless more people quit the labor force or productivity growth falls to subpar levels (below 2%). The increases were not where we would expect them from stimulus spending government employment was up 7,000 and construction dropped another 27,000. Manufacturing lost another 41,000. The big gains were in private professional services. Considering the drop in new unemployment claims, which still remain high but are falling, we should expect the bleeding to end by January or February. But thanks to labor force growth, the unemployment rate should stay above 10% until stronger growth can be achieved.

In a healthy economy, the labor force grows about 1% per year and productivity increases by about 2%; therefore, GDP growth must exceed 3% to bring down true unemployment. Economists don’t expect that in 2010

The Dow Jones Industrial Average (.DJI) rose 22.75 points or 0.2% to close at 10,388.90 on Friday to mark a 0.8% gain for the week. The Nasdaq Composite Index (.COMP) rose 21.21 points or 1% to close at 2,194.35 on Friday. For the week the index was up 2.6%. The broader Standard & Poor’s 500 Index (.SPX) added 6.06 points or 0.6% to close at 1,105.98 on the day. The benchmark index’s gain for the week was 1.3%.

As always I welcome your thoughts and would be more than happy to talk with you regarding any questions or concerns you may have. Please feel free to contact me at 949-209-9441, or matt@mktwealthmanagement.com.  

Best regards,

 Matthew Todsen
President / CEO
MKT Wealth Management

This Weeks Top Ten Stories Provided by MarketWatch

Hiring may return soon

The U.S. unemployment rate fell to 10% and only 11,000 jobs were lost in November. This report was much better than expected and set the stage for a surge in stocks. Analysts said it looked as though significant hiring in the U.S. economy might begin sooner than expected. Read about job losses in the U.S. economy.

Troubles in Dubai

Stocks in Dubai and Abu Dhabi got punished earlier this week in the wake of woes at Dubai World. The government-owned conglomerate asked creditors for a standstill on its debt, stunning the investment world and triggering turbulence in global financial markets. The company’s liabilities are estimated at about $60 billion. Read more about the ripple effects of Dubai World’s problems .

GM’s exit ramp

General Motors announced Tuesday that Chief Executive Fritz Henderson, after just eight months at the helm, has resigned from his post despite signs the auto industry may be stabilizing. Ed Whitacre, the Detroit giant’s current chairman and retired head of AT&T, said that he will take over on an interim basis and that the search for a new chief will begin immediately. Read more about Henderson’s exit .

A smoother ride

Ford Motor (F) said this week that it sold roughly the same amount of vehicles in November as it did a year ago, while results from General Motors and Chrysler also signaled perhaps the worst has passed for the beleaguered auto industry. Overall, the seasonally adjusted annual rate of sales topped Wall Street targets, marking the best month for sales since September 2008, excluding the anomaly of last summer’s cash-for-clunkers program. Read more about auto-sales results .

No early Santa for retail

A barrage of holiday promotions leading up to Black Friday weekend and easy comparisons against the year-earlier doldrums failed to deliver November same-store-sales improvements for most retailers, setting the stage for a highly competitive December. From discounters to department stores, retailers turned in disappointing numbers. Read more about the latest sales results .

Still some deals for shoppers

Consumers who skipped the Black Friday deluge of deep discounting haven’t necessarily missed out on all the best deals of the holiday season, but shoppers who hold out too long thinking retailers will cave with major price cuts late in the game may find themselves out of luck. Electronics, apparel, department, warehouse and even grocery stores have a number of strategically planned promotions on tap from now until Christmas. Read more about the bargains out there .

Turning up the volume

This week, Nokia (NOK)(FI:NOK1V) predicted that global mobile-phone unit sales would recover to rise 10% next year, forecasted an improvement in the operating margin at its main division and vowed to revamp its creaky user interface. The forecast for a 10% rise in handset volumes in 2010 was good news, compared with a 7% drop in the third quarter, according to Nokia estimates. Read more about the mobile-phone giant’s predictions .

Payback from B. of A.

Bank of America (BAC) said it will repay $45 billion it got from the government after raising $18.8 billion by selling new common securities, setting the giant lender on course to wean itself from taxpayer support. The company said it got the go-ahead from the Treasury Department and banking regulators to buy back the preferred securities that it sold to the government through the Troubled Asset Relief Program, or TARP. Read more about Bank of America’s plans .

New media venture

Comcast (CMCSA)(CMCSK), General Electric (GE) and Vivendi (VIVDY) announced a long-awaited plan that will see the largest U.S. cable operator get a 51% stake of NBC Universal, putting it in control of a broadcast television network, one of the five major movie studios, and several top-of-the-line cable channels. Together with its existing cable and Internet businesses, Comcast would oversee assets with revenue of $51 billion in 2008, topping many other media giants. Read more about the NBC Universal deal .

Wall Street’s fuzzy math

Remember Harper’s Magazine? The monthly general-interest publication has produced some important journalism over the years, but most of us know it for a relatively recent invention: its regular index of quirky statistics. Since numbers rule on Wall Street, it’s a natural touchstone for a Harpers-like index. What follows is a collection of data that tell part of the story of what’s happening in the industry and culture of Wall Street – but it’s more of a carper’s index. Read David Weidner’s column .

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Weekley Market Re-Cap 11/26/2009 Sunday, Nov 29 2009

While Black Friday, by every early indication, had done everything asked of it — and more, it seemed, than pessimists had expected of it — it failed to wrest Wall Street’s post-holiday spotlight from a corporate debt crisis on the far side of the globe.

The Dubai World story had captivated and frustrated markets beginning late Wednesday, when U.A.E. city-state Dubai, the controlling stakeholder, raised a red flag by announcing — with, it should be noted, holidays looming in the Muslim world as well as in the U.S. — a restructuring of the flashy conglomerate and a six-month standstill on its debt.

An ultimate default, of course, is the market’s chief fear, with banks around the world suffering severe collateral damage.

It was, as MarketWatch assistant managing editor Tom Bemis wrote, an important real-world stress test of the global financial system — a test whose results, so far, are mixed, with most European markets recovering from Thursday’s drubbings in Friday action but U.S. stocks only managing to salve Friday’s deepest wounds.

Friday’s declines left the main U.S. stock gauges in the red for the week — the Dow (DJIA) and Nasdaq (COMP) by 0.1% and the S&P 500 (SPX) by a razor-thin 0.01%.

As always I welcome your thoughts and would be more than happy to talk with you regarding any questions or concerns you may have. Please feel free to contact me at 949-209-9441, or matt@mktwealthmanagement.com.  

Best regards,

 Matthew Todsen

President / CEO

MKT Wealth Management

Top 10 Stories of the Week Provided by MarketWatch

A big Black Friday

The indications were almost uniformly upbeat Friday as the holiday shopping season got underway. Five thousand customers outside Macy’s in Manhattan before the doors opened at the crack of dawn. Five hundred free breakfasts snapped up in 20 minutes at a Florida shopping center. Long lines at Best Buy stores in various geographies. Conspicuous consumption at the Garden State Mall in New Jersey. Shoppers in the nation’s capital paying surrogates $20 to endure out-the-door lines in their stead. See full story on retail’s Black Friday.

A Dubai World of hurt?

U.S. banks are likely less exposed than their European counterparts to a potential debt default by Dubai World, but a lack of transparency and the interconnectedness of the modern financial system make it difficult to know which institutions are ultimately exposed, analysts said Friday. See full story on the banking industry’s potential exposure to Dubai World’s debt crisis.

The new gold bugs

Gold has long been favored by a fringe of the investment world. This year, however, some of the world’s leading hedge-fund managers have loaded up on the precious metal. Some are concerned that government efforts to avoid another Great Depression could undermine major currencies and fuel rampant inflation. Find out more about the latest generation of gold bugs.

Surge in home sales

Sales of new homes rose 6.2% in October, boosted by strong results in the South, according to the latest data from the Commerce Department. The seasonally adjusted annual rate of 430,000 was well above the 390,000 pace that economists surveyed by MarketWatch had expected. Read more about the latest housing data .

China’s data ‘disconnect’

A sharp rise in Chinese car sales and vehicle ownership hasn’t been reflected in nationwide gasoline consumption this year, an anomaly that has some analysts scratching their heads in search of answers. The disconnect has sparked a range of possible explanations — and some suspicious musings. Read more about China’s car sales .

Profits rise at H-P

Hewlett-Packard (HPQ) reported a 14% gain in quarterly profit, despite a dip in sales, as the Silicon Valley behemoth reeled from lower revenue in its key PC and printer segments. But the Palo Alto, Calif.-based company also posted a higher revenue for its information-technology services business, underscoring H-P’s transformation from a traditional hardware maker. Read more about H-P’s results .

Troubles in Saab deal

Swedish carmaker Koenigsegg backed out of its deal to buy Saab from General Motors, leaving the Detroit giant with another European name plate it had initially planned on selling. GM and Koenigsegg reached a binding agreement on the cash-bleeding Saab brand back in August, two months after the two automakers signed a letter of intent. Read more about the Saab deal .

With age comes wisdom

Hunting for a job is never easy, particularly in labor markets like this one, but it can be even harder when your hair is going gray. Even if age bias were rare — and many say it’s not — after a rejection or three, it can become difficult to go to another job interview without the worrisome feeling that stereotypes are working against you. But that attitude may torpedo your chances of landing a job. Get some tips on finding that job .

Problem banks

The number of distressed banks in the U.S. rose to the highest level in 16 years in the third quarter, and the insurance fund used to protect bank depositors swung to a negative balance, according to a report released by the Federal Deposit Insurance Corp. The FDIC’s Deposit Insurance Fund, which is used to protect depositors, swung to an $8.2 billion loss in the third quarter, the largest drop since the savings-and-loan crisis of the 1990s. Read more about the troubled banks .

Calculating GDP growth

Spurred by government stimulus programs, the economy expanded at a 2.8% annualized rate in the third quarter, the Commerce Department reported. However, the 2.8% growth rate is below the government’s initial estimate of 3.5% due to downward revisions in consumer spending and business investment in nonresidential structures, as well as changes to imports and exports. Despite the downward revision, growth in the third quarter was the strongest in two years, the government said. Read more about the GDP data .

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Weekly Market Re-Cap 11/13/2009 Friday, Nov 13 2009

U.S. stocks recorded another weekly gain as investors warmed to M&A activity, better-than-expected corporate earnings, a big run up in the price of gold and some lukewarm economic data. Don’t however let the recent run in the markets lull you into a comfort zone. The battle between Politicians and the Economy will continue for the next several months if not years.

Look to Target and TJX, each of which are expected to show strong numbers, to point the way for expectations on the American consumer heading into Black Friday. We will also have some reports out on inflation this coming week which should help markets as the declining dollar and disinflationary environment act as a bit of a temporary tail wind.

The Dow Jones Industrial Average (.DJI) rose 73 points or 0.7% to close at 10,270.47 on Friday, for a gain of 2.5% for the week. The Nasdaq Composite Index (.COMP) added 18.86 points or 0.9% on the day to close at 2,167.88. For the week the gauge of technology shares rose 2.6%. The broader Standard & Poor’s 500 Index (.SPX) gained 6.24 points or 0.6 % on the day to close at 1,093.48 on Friday for a weekly gain of 2.3%.

As always I welcome your thoughts and would be more than happy to talk with you regarding any questions or concerns you may have. Please feel free to contact me at 949-209-9441, or matt@mktwealthmanagement.com.  

Best regards,

 

Matthew Todsen

President / CEO

MKT Wealth Management

Top 10 Stories of the Week Provided by MarketWatch

Settlement for longtime rivals

Intel (INTC) will pay Advanced Micro Devices (AMD) $1.25 billion as part of a settlement of “all outstanding legal disputes,” capping what had turned into a protracted and costly battle between the world’s biggest makers of personal computer chips. Some analysts quickly hailed the agreement as the right path to take for both companies, though Intel Chief Executive Paul Otellini portrayed it as a painful, but pragmatic, compromise. Read more about the Intel/AMD settlement .

Wall Street embraces tech deal

3Com (COMS) shares surged as analysts cheered Hewlett-Packard’s (HPQ) move to acquire the networking-equipment maker for $2.7 billion in cash. Palo Alto, Calif.-based Hewlett-Packard expects 3Com will help expand its offerings of products such as Ethernet switches and network routers, as well as increase its position in the Chinese market. Read more about Hewlett-Packard’s deal to buy 3Com .

Outlook disappoints at Wal-Mart

Wal-Mart Stores (WMT) said its third-quarter profit rose a better-than-expected 3.2%, helped by inventory control and international demand, offsetting a shortfall in its U.S. namesake unit. The retailer also raised its full-year outlook but gave a fourth-quarter forecast that may fall short of Wall Street’s expectations against a soft sales outlook. Read more about Wal-Mart’s results .

Housing back into hibernation?

Residential builder stocks have heated up recently on encouraging quarterly results and new legislation that expands tax breaks for companies and home buyers. However, the industry is hunkering down for a tough winter that could see an even bigger drop-off in activity than normal due to rising unemployment in the economic recession. Read more about the outlook for home builders .

Bid gets hostile for Cadbury

Kraft Foods (KFT) launched a hostile $16.46 billion bid for Cadbury (UK:CBRY)(CBY), an offer that the British chocolate producer rejected, labeling it as “derisory.” The terms of Kraft’s offer, valued at 9.8 billion pounds, were unchanged from the company’s original proposal in early September — but the drop in Kraft’s own stock in that time has lowered the value of the offer. Read more about Kraft’s attempt to buy Cadbury .

The Wall’s fall

Twenty years ago, the wall dividing East and West Berlin — the symbol of the Iron Curtain between Western Europe and the Communist Bloc — tumbled. For German stocks, it’s been a wild ride, but ultimately a fruitful one. A bubble emerged quickly after the fall of the wall. Read more about what happened to German equities after the Wall came down .

Tough choices for Taiwan

As Taiwan grapples with an economic slowdown, a new administration is pursuing unprecedented trade deals with arch-rival mainland China, a move necessary for Taiwan’s future — but also one that threatens its current de-facto independence. Read more about trade issues faced by Taiwan .

Helping the ‘unbanked’

Amarillo Bank is one of 31 commercial institutions in 26 states participating in a Federal Deposit Insurance Corp. program to offer short-term, small-dollar loans of under $2,500 to low-income Americans, many of whom have low or no credit scores. So far, the banks collectively have offered $28 million in loans under $2,500. The FDIC’s goal is to help the estimated 80 million to 100 million so called under-banked Americans avoid payday loans or overdraft programs that provide quick cash, but carry high fees or triple-digit interest rates. Read more about the FDIC’s program .

Offer isn’t in the mail

Credit-card issuers are dramatically reducing solicitations to new customers ahead of sweeping legislation that will reset card rules for both consumers and lenders. The Synovate Mail Monitor fell in the third quarter to 272.5 million mailings, marking the eighth straight quarter that credit-card solicitations sent to U.S. households declined. That’s a 71% drop since the third quarter last year. What’s more, as defaults swell in tandem with the growing numbers of unemployed, issuers have become increasingly pickier about who gets the solicitations. Read more about credit-card offers .

Tweeting into the ether

Tech columnist Therese Poletti decided to create her own personal Twitter account about a month ago, and no one seemed to care. After one month, she has five followers, which led her to contemplate some questions about our culture. Will Twitter become the new barometer of how we gauge our self-worth? If you have a small number of Twitter followers, what does it mean? Read more about her Twitter issues .

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