Friday, November 14, 2008
A Strong Dividend With Strong Potential
From to time the markets create great opportunities in strong dividend paying stocks. This is indeed the case with Frontilne (FRO: NYSE). The company is involved in the transportation of crude oil, coal and iron ore. The stock has pulled back from its all time high of 72.36 and it is now trading at forward PE ratio of 6.75. It’s dividend is currently $12.00 or 41.60%. Management also owns 34% of the shares outstanding. What all of this is telling us is that if you are taking a long term approach you will not only receive the strong dividend. But you also will have strong upside growth potential. When you put these two factors together you will receive the dividend and growth. Something that can be difficult to find in an economic environment like this. If you would like to learn more about the company please visit Frontline’s website at http://www.frontline.bm. Another strong dividend opportunities worth some consideration includes: Southern Copper (NYSE: PCU) the current dividend is $1.36 or 10.60%. It’s web site is http://www.southerncoppercorp.com
Monday, August 25, 2008
The Democratic Convention Is Underway
The Democratic Convention will kick off the general election this week. There are three major objectives that the Democrats want to convey. One, that Obama is the candidate of change. This will cover everything from a change of strategy in Iraq to the the Supreme Court. Second, to make millions of undecided voters feel comfortable with Obama. This will be accomplished by Biden touting his years of experince on Capital Hill and foreign policy issues that will help Obama be seen as someone who can make things happen with a seasoned veteran on the ticket. Third, to show that the party is united. Hillary Clinton's speech on Tuesday night won't show any bitterness. However, off camera there may be some complaining. But this will not be shown to the viewers at home and will make the Democrats united behind one candidate.
Bottom Line: With millions of undecided votes up for grabs look for the general election to be close and very heated between the two major candidates.
China And Iraq To Sign Major Oil Agreement
China and Iraq are expected to sign a major agreement this week to develope the Ahdab oil field. The deal is expected to be valued at $1.2 billion. This is one of several contracts that Iraq is using to boost oil production to 3 millions barrels a day with the hope of increasing production to 4.5 million daily by 2013.
The Iraqi government continues to negotiate with 35 major oil compaines for the development of other fields as well. However, some of them are relucatant to do anything citing security concerns and the reduced length of the terms from two years to one. At present, negotions are still on going.
Bottom Line: The development of the oil industry is vital to Iraq's recovery.Oil accounts for 90% of the export earnings and 70% of it's GDP.
Upcoming Events And Economic Numbers
Monday August 25
Existing Home Sales: consensus: 4.90M prior: 4.86M
Tuesday August 26
Consumer Confidence: consensus: 53.0 prior: 51.9
New Home Sales: consensus: 523K prior: 530K
FOMC Minutes
Wednesday August 27
Durable Goods Orders: consensus: .1% prior: .8%
Oil Inventories: prior: 9.390M
Thursday August 28
GDP: consensus: 2.7% prior: 1.9%
Initial Claims: prior: 423K
Friday August 29
Personal Income: consensus: -.1% prior: .1%
Personal Spending: consensus: .3% prior: .6%
Chicago PMI: consensus: 49.9 prior: 50.8
Michigan Consumer Sentiment: consensus: 62.3
Upcoming Earnings
Thursday August 28
Sears Holdings (SHLD): Before the open: estimate: .33
Tiffany (TIF): Before the open: estimate: .54
Dell (DELL): After the close: estimate: .36
Buys
Boeing (BA): We like this as valuation and technical play. The stock recently completed a reverse head and shoulders pattern at 60.77. It has a forward PE of 9.46. There is a history of consistently paying and raising its dividend going back to 1969. Analysts are split on the stock with 12 rating it a buy or strong buy. While 12 have shares rated as a sell or hold.
Bottom Line: Look for shares of Boeing to go to the 52 week high of 107.15.
The Democratic Convention will kick off the general election this week. There are three major objectives that the Democrats want to convey. One, that Obama is the candidate of change. This will cover everything from a change of strategy in Iraq to the the Supreme Court. Second, to make millions of undecided voters feel comfortable with Obama. This will be accomplished by Biden touting his years of experince on Capital Hill and foreign policy issues that will help Obama be seen as someone who can make things happen with a seasoned veteran on the ticket. Third, to show that the party is united. Hillary Clinton's speech on Tuesday night won't show any bitterness. However, off camera there may be some complaining. But this will not be shown to the viewers at home and will make the Democrats united behind one candidate.
Bottom Line: With millions of undecided votes up for grabs look for the general election to be close and very heated between the two major candidates.
China And Iraq To Sign Major Oil Agreement
China and Iraq are expected to sign a major agreement this week to develope the Ahdab oil field. The deal is expected to be valued at $1.2 billion. This is one of several contracts that Iraq is using to boost oil production to 3 millions barrels a day with the hope of increasing production to 4.5 million daily by 2013.
The Iraqi government continues to negotiate with 35 major oil compaines for the development of other fields as well. However, some of them are relucatant to do anything citing security concerns and the reduced length of the terms from two years to one. At present, negotions are still on going.
Bottom Line: The development of the oil industry is vital to Iraq's recovery.Oil accounts for 90% of the export earnings and 70% of it's GDP.
Upcoming Events And Economic Numbers
Monday August 25
Existing Home Sales: consensus: 4.90M prior: 4.86M
Tuesday August 26
Consumer Confidence: consensus: 53.0 prior: 51.9
New Home Sales: consensus: 523K prior: 530K
FOMC Minutes
Wednesday August 27
Durable Goods Orders: consensus: .1% prior: .8%
Oil Inventories: prior: 9.390M
Thursday August 28
GDP: consensus: 2.7% prior: 1.9%
Initial Claims: prior: 423K
Friday August 29
Personal Income: consensus: -.1% prior: .1%
Personal Spending: consensus: .3% prior: .6%
Chicago PMI: consensus: 49.9 prior: 50.8
Michigan Consumer Sentiment: consensus: 62.3
Upcoming Earnings
Thursday August 28
Sears Holdings (SHLD): Before the open: estimate: .33
Tiffany (TIF): Before the open: estimate: .54
Dell (DELL): After the close: estimate: .36
Buys
Boeing (BA): We like this as valuation and technical play. The stock recently completed a reverse head and shoulders pattern at 60.77. It has a forward PE of 9.46. There is a history of consistently paying and raising its dividend going back to 1969. Analysts are split on the stock with 12 rating it a buy or strong buy. While 12 have shares rated as a sell or hold.
Bottom Line: Look for shares of Boeing to go to the 52 week high of 107.15.
Monday, August 18, 2008
Fears Of A New Cold War With Russia Erupt
The recent conflict with Georgia has caused many to wonder if we are facing the
a new version of the old Soviet Union?
No. While tensions have certainly risen. We are seeing the new Russia reasserting itself. Former Soviet Republics are nervous about recent events and fear that they will be next. Ukraine especially feels this way. Having heard the same rhetoric from Russia about the treatment of ethnic Russians. Its hard push to join NATO. And that Russia views it as an important part of its territory.
Bottom Line: The situation is complicated and NATO is split about what should be done. Poland and the Baltic Republics want a hard line stance. While, Germany, France, and Italy want to avoid a confrontation because they are dependent on Russian oil. For the time being there is little the alliance can do.
US Trade Will Continue To Soar
US exports will grow by an even bigger amount next year. The trade deficit will drop to $448 billion as exports grow by 7%. The strong demand is coming from Asia, Canada, Mexico, and Brazil. Also free trade agreements with Chile, Peru, and Central America will help out tremendously. Many small and medium sized businesses will benefit from the free trade agreements because of the demand for: infrastructure equipment, medical supplies, and cosmetics.
The increase in trade will help balance out the economy and will cause the dollar to stabilize as we move into next year.
Upcoming Events and Economic Numbers
Tuesday August 19
Housing Starts: consensus: 963K prior: 1.066M
Producer Price Index: consensus: .6% prior: 1.8%
Wednesday August 20
Oil Inventories: prior: -316K
Thursday August 21
Jobless Claims: prior: 450K
Leading Indicators: consensus: -.2% prior: -.1%
Philadelphia Fed: consensus: -14.1 prior: -16.3
Upcoming Earnings
Monday August 18
Lowes (LOW): Before the open: estimate: .56
Tuesday August 19
Home Depot (HD): Before the open: estimate: .61
Target (TGT): Before the open: estimate: .76
Hewlett Packard (HPQ): After the close: estimate: .76
The recent conflict with Georgia has caused many to wonder if we are facing the
a new version of the old Soviet Union?
No. While tensions have certainly risen. We are seeing the new Russia reasserting itself. Former Soviet Republics are nervous about recent events and fear that they will be next. Ukraine especially feels this way. Having heard the same rhetoric from Russia about the treatment of ethnic Russians. Its hard push to join NATO. And that Russia views it as an important part of its territory.
Bottom Line: The situation is complicated and NATO is split about what should be done. Poland and the Baltic Republics want a hard line stance. While, Germany, France, and Italy want to avoid a confrontation because they are dependent on Russian oil. For the time being there is little the alliance can do.
US Trade Will Continue To Soar
US exports will grow by an even bigger amount next year. The trade deficit will drop to $448 billion as exports grow by 7%. The strong demand is coming from Asia, Canada, Mexico, and Brazil. Also free trade agreements with Chile, Peru, and Central America will help out tremendously. Many small and medium sized businesses will benefit from the free trade agreements because of the demand for: infrastructure equipment, medical supplies, and cosmetics.
The increase in trade will help balance out the economy and will cause the dollar to stabilize as we move into next year.
Upcoming Events and Economic Numbers
Tuesday August 19
Housing Starts: consensus: 963K prior: 1.066M
Producer Price Index: consensus: .6% prior: 1.8%
Wednesday August 20
Oil Inventories: prior: -316K
Thursday August 21
Jobless Claims: prior: 450K
Leading Indicators: consensus: -.2% prior: -.1%
Philadelphia Fed: consensus: -14.1 prior: -16.3
Upcoming Earnings
Monday August 18
Lowes (LOW): Before the open: estimate: .56
Tuesday August 19
Home Depot (HD): Before the open: estimate: .61
Target (TGT): Before the open: estimate: .76
Hewlett Packard (HPQ): After the close: estimate: .76
Monday, August 11, 2008
Conflict Erupts Between Russia And Georgia
In the shadow of the Olympics Russia and Georgia are engaged in a full scale war. The recent news of missile and bombing attacks on Georgian Airbases and civilian areas shows Russia's reemergence on the World scene and its intentions to dominate or at least weaken the surrounding republics that were once part of the Soviet Union. While it is unlikely that this will spread into a much larger conflict, there have been fears in the west comparing this to past Soviet and Czarist Empire ambitions.
Bottom Line: The is very little that the U.S. or NATO can do other than work the phones in hopes of persuading the two sides to pull back. The big risk, is the lack of any major intervention may encourage Russia to seize territory from other former Soviet Republics.
Is Now A Good Time To Invest In China
China's economy is growing at an incredible rate. However, many are concerned about the country's potential slow down. The Shanghai Stock Exchange is down 55.2% from its October peak. It was down as much as 58%. Some are calling this, "Double bear market territory." That being said, those who are avoiding China are missing the big picture. China, has become the second most important country on the planet. In 2007, it contributed more to global growth than the United States. The first time since the Great Depression. Second, its manufacturing sector is now bigger than that of the U.S. And third, China is now the number two manufacturer of cars and the number one producer of merchant ships.
Bottom Line: It would not be surprising to see the standard of living in China grow by 8000% during our lifetimes. However, it will not happen overnight and will not occur in a straight line. The way we recommend to invest in China is through ADR's that trade in the United States or through ETF's that can give you growth as well as strong dividends.
Upcoming Events And Earnings
Tuesday August 12
Trade Balance: consensus: -61.9B prior: -59.8B
Wednesday August 13
Import and Export Prices: prior: .9%
Retail Sales: consensus: .5% prior:.1%
Business Inventories: consensus: .5% prior: .3%
Oil Inventories: prior:1.614M
Thursday August 14
CPI: consensus: .4% prior: 1.1%
Initial Claims: prior: 455K
Friday August 15
NY Empire Index: consensus: -5.0 prior: -4.9
Industrial Production: consensus: 0.0% prior: .5%
Michigan Sentiment: consensus: 62.0 prior: 61.2
Upcoming Earnings
Wednesday August 13
Deere (DE): Before the bell: consensus: 1.37
Thursday August 14
Wal Mart (WMT): Before the bell: consensus: .84
Friday August 15
JC Penny (JCP): Before the bell: consensus: .42
Buys
The Greater China Fund (GCH). This ETF invests in the public equity markets of China. It is right off it's 52 week low of 11.59. Which, is also where long term support levels are at. The current dividend is $8.50 or 69.70%. This is one way to get involved in the growth of China and receive a strong dividend as well.
In the shadow of the Olympics Russia and Georgia are engaged in a full scale war. The recent news of missile and bombing attacks on Georgian Airbases and civilian areas shows Russia's reemergence on the World scene and its intentions to dominate or at least weaken the surrounding republics that were once part of the Soviet Union. While it is unlikely that this will spread into a much larger conflict, there have been fears in the west comparing this to past Soviet and Czarist Empire ambitions.
Bottom Line: The is very little that the U.S. or NATO can do other than work the phones in hopes of persuading the two sides to pull back. The big risk, is the lack of any major intervention may encourage Russia to seize territory from other former Soviet Republics.
Is Now A Good Time To Invest In China
China's economy is growing at an incredible rate. However, many are concerned about the country's potential slow down. The Shanghai Stock Exchange is down 55.2% from its October peak. It was down as much as 58%. Some are calling this, "Double bear market territory." That being said, those who are avoiding China are missing the big picture. China, has become the second most important country on the planet. In 2007, it contributed more to global growth than the United States. The first time since the Great Depression. Second, its manufacturing sector is now bigger than that of the U.S. And third, China is now the number two manufacturer of cars and the number one producer of merchant ships.
Bottom Line: It would not be surprising to see the standard of living in China grow by 8000% during our lifetimes. However, it will not happen overnight and will not occur in a straight line. The way we recommend to invest in China is through ADR's that trade in the United States or through ETF's that can give you growth as well as strong dividends.
Upcoming Events And Earnings
Tuesday August 12
Trade Balance: consensus: -61.9B prior: -59.8B
Wednesday August 13
Import and Export Prices: prior: .9%
Retail Sales: consensus: .5% prior:.1%
Business Inventories: consensus: .5% prior: .3%
Oil Inventories: prior:1.614M
Thursday August 14
CPI: consensus: .4% prior: 1.1%
Initial Claims: prior: 455K
Friday August 15
NY Empire Index: consensus: -5.0 prior: -4.9
Industrial Production: consensus: 0.0% prior: .5%
Michigan Sentiment: consensus: 62.0 prior: 61.2
Upcoming Earnings
Wednesday August 13
Deere (DE): Before the bell: consensus: 1.37
Thursday August 14
Wal Mart (WMT): Before the bell: consensus: .84
Friday August 15
JC Penny (JCP): Before the bell: consensus: .42
Buys
The Greater China Fund (GCH). This ETF invests in the public equity markets of China. It is right off it's 52 week low of 11.59. Which, is also where long term support levels are at. The current dividend is $8.50 or 69.70%. This is one way to get involved in the growth of China and receive a strong dividend as well.
Monday, August 4, 2008
Stevens Indictment Helps Democrats
With the recent indictment of Senator Ted Stevens of Alaska on charges stemming from a bribery investigation, makes it more certain that the Democrats will pick up more seats in the Senate. At the very least they should pick up at least five to eight seats and there is the possibility that they could pick up enough seats to stop filibusters. The Republicans are in danger of loosing seats in: Alaska, Colorado, New Mexico, New Hampshire, Maine, Mississippi, North Carolina, Oregon, Minnesota, Kentucky, and Texas.
Bottom Line: The Democrats are on a roll right now. The Stevens indictment only makes the Republicans look corrupt and out of touch with the people.
Future Oil Production Will Rise
Demand for oil is softening. There are no shortages. Everywhere individuals and businesses are adopting permanent energy saving techniques. The warnings about running out of oil are incorrect. Even with older wells in the U.S. and Europe slowing down, new innovations and huge reserves off the Coast of Brazil could potentially put 50 billion barrels on the market. Other likely large fields include: the Arctic, the U.S. Coast, and the West African Coast. Supplies will outpace demand despite the continuing rapid growth in the emerging countries.
Bottom Line: The doom and gloom forecast made a decade ago underestimated the impact that conservation, alternative energy and the the new fields will have. Look for oil production to rise 11%
Upcoming Events and Economic Numbers
Monday August 4
Personal Income: consensus: -.1% prior: 1.9%
Personal Spending: consensus: .5% prior: .8%
Factory Orders: consensus: .7% prior: .6%
Tuesday August 5
ISM Services: consensus: 48.0 prior: 48.2
FOMC Meeting and Statement
Wednesday August 6
Oil Inventories: prior: -81K
Thursday August 7
Jobless Claims: prior: 448K
Pending Home Sales: consensus: -1.3% prior: -4.7%
Friday August 8
Productivity: consensus: 2.6%
Upcoming Earnings
Monday August 4
Fannie Mae (FNM): Before the open: estimate: -.69
Tuesday August 5
Cisco Systems (CSCO): After the close: estimate: .39
Wednesday August 6
Verisign (VRSN): After the close: estimate: .23
Stock Buys
American Express (AXP). We like this as a contrarian and valuation play. It has a forward PE of 11.96. Analysts have become negative on the stock with 13 rating it a sell or hold. While six have it rated as a buy or strong buy. AXP has a history of paying and raising its dividend going back to 1977. At current oversold levels a move to 45.00 is possible.
With the recent indictment of Senator Ted Stevens of Alaska on charges stemming from a bribery investigation, makes it more certain that the Democrats will pick up more seats in the Senate. At the very least they should pick up at least five to eight seats and there is the possibility that they could pick up enough seats to stop filibusters. The Republicans are in danger of loosing seats in: Alaska, Colorado, New Mexico, New Hampshire, Maine, Mississippi, North Carolina, Oregon, Minnesota, Kentucky, and Texas.
Bottom Line: The Democrats are on a roll right now. The Stevens indictment only makes the Republicans look corrupt and out of touch with the people.
Future Oil Production Will Rise
Demand for oil is softening. There are no shortages. Everywhere individuals and businesses are adopting permanent energy saving techniques. The warnings about running out of oil are incorrect. Even with older wells in the U.S. and Europe slowing down, new innovations and huge reserves off the Coast of Brazil could potentially put 50 billion barrels on the market. Other likely large fields include: the Arctic, the U.S. Coast, and the West African Coast. Supplies will outpace demand despite the continuing rapid growth in the emerging countries.
Bottom Line: The doom and gloom forecast made a decade ago underestimated the impact that conservation, alternative energy and the the new fields will have. Look for oil production to rise 11%
Upcoming Events and Economic Numbers
Monday August 4
Personal Income: consensus: -.1% prior: 1.9%
Personal Spending: consensus: .5% prior: .8%
Factory Orders: consensus: .7% prior: .6%
Tuesday August 5
ISM Services: consensus: 48.0 prior: 48.2
FOMC Meeting and Statement
Wednesday August 6
Oil Inventories: prior: -81K
Thursday August 7
Jobless Claims: prior: 448K
Pending Home Sales: consensus: -1.3% prior: -4.7%
Friday August 8
Productivity: consensus: 2.6%
Upcoming Earnings
Monday August 4
Fannie Mae (FNM): Before the open: estimate: -.69
Tuesday August 5
Cisco Systems (CSCO): After the close: estimate: .39
Wednesday August 6
Verisign (VRSN): After the close: estimate: .23
Stock Buys
American Express (AXP). We like this as a contrarian and valuation play. It has a forward PE of 11.96. Analysts have become negative on the stock with 13 rating it a sell or hold. While six have it rated as a buy or strong buy. AXP has a history of paying and raising its dividend going back to 1977. At current oversold levels a move to 45.00 is possible.
Monday, July 28, 2008
Obama Impressive in Europe
Obama had a great week. The stops in Iraq, Afghanistan, Israel, and Europe has made him look Presidential easing concerns about his lack of national security experience. This trip also put him into the main focus of the mainstream media and left McCain on the outside looking in. Obama gained support to focus more an Afghanistan. A view that the Chairman of the Joint Chiefs Admiral Michael Mullen agrees with.
Bottom Line: Obama is continuing to adapt and overcome any potential weakness that could hurt him in the general election While it is to early to tell what potential benefits this will have for him, early indications are this trip will help neutralize the criticism about his lack of foreign policy experience.
Energy Alternative Becoming More Attractive
With oil prices continuing to remain high other alternatives are continuing to be explored. An area that is getting a big push includes: synthetic gasoline and diesel.These fuels are made from biomass but are chemically similar to petroleum based products. They can be shipped, pumped and stored the same way as crude oil. In the coming years demand will soar for cellulose ethanol and synfuels. Many businesses will start using crop and forestry waste, sawdust, orange peels, and other products to develop income in the coming years.
Bottom line: Even with oil prices remaining at high levels the worlds dependency on crude oil will continue to drop as research and development of alternatives become more viable.
Upcoming Events and Economic Numbers
Tuesday July 29
Consumer Confidence: consensus: 50 prior: 50.4
Wednesday July 30
Oil Inventories: prior: -1,558M
Thursday July 31
GDP (advanced): consensus: 1.8% prior: 1.0%
Jobless Claims: consensus: 380k prior: 406K
NAPM Chicago: consensus: 49.0 prior: 49.6
Friday August 1
Unemployment: consensus: 5.6% prior: 5.5%
Construction Spending: consensus: -.3% prior: -.4%
ISM Manufacturing: consensus: 50.5 prior: 50.2
Upcoming Earnings
Monday July 28
Verizon (VZ): Before the open: estimate: .65
Amgen (AMGN): After the close: 1.02
Southern Copper (PCU): After the close: estimate: .68
Tuesday July 29
General Motors (GM): Before the open: -2.45
Wednesday July 30
Visa (V): After the close: estimate: .48
Walt Disney (DIS): After the close: estimate: .61
Thursday July 31
Exxon Mobil (XOM): Before the open: estimate: 2.52
Master Card (MA): Before the open: estimate: 2.02
Friday August 1
Chevron (CVX): Before the open: estimate: 3.03
Obama had a great week. The stops in Iraq, Afghanistan, Israel, and Europe has made him look Presidential easing concerns about his lack of national security experience. This trip also put him into the main focus of the mainstream media and left McCain on the outside looking in. Obama gained support to focus more an Afghanistan. A view that the Chairman of the Joint Chiefs Admiral Michael Mullen agrees with.
Bottom Line: Obama is continuing to adapt and overcome any potential weakness that could hurt him in the general election While it is to early to tell what potential benefits this will have for him, early indications are this trip will help neutralize the criticism about his lack of foreign policy experience.
Energy Alternative Becoming More Attractive
With oil prices continuing to remain high other alternatives are continuing to be explored. An area that is getting a big push includes: synthetic gasoline and diesel.These fuels are made from biomass but are chemically similar to petroleum based products. They can be shipped, pumped and stored the same way as crude oil. In the coming years demand will soar for cellulose ethanol and synfuels. Many businesses will start using crop and forestry waste, sawdust, orange peels, and other products to develop income in the coming years.
Bottom line: Even with oil prices remaining at high levels the worlds dependency on crude oil will continue to drop as research and development of alternatives become more viable.
Upcoming Events and Economic Numbers
Tuesday July 29
Consumer Confidence: consensus: 50 prior: 50.4
Wednesday July 30
Oil Inventories: prior: -1,558M
Thursday July 31
GDP (advanced): consensus: 1.8% prior: 1.0%
Jobless Claims: consensus: 380k prior: 406K
NAPM Chicago: consensus: 49.0 prior: 49.6
Friday August 1
Unemployment: consensus: 5.6% prior: 5.5%
Construction Spending: consensus: -.3% prior: -.4%
ISM Manufacturing: consensus: 50.5 prior: 50.2
Upcoming Earnings
Monday July 28
Verizon (VZ): Before the open: estimate: .65
Amgen (AMGN): After the close: 1.02
Southern Copper (PCU): After the close: estimate: .68
Tuesday July 29
General Motors (GM): Before the open: -2.45
Wednesday July 30
Visa (V): After the close: estimate: .48
Walt Disney (DIS): After the close: estimate: .61
Thursday July 31
Exxon Mobil (XOM): Before the open: estimate: 2.52
Master Card (MA): Before the open: estimate: 2.02
Friday August 1
Chevron (CVX): Before the open: estimate: 3.03
Sunday, July 20, 2008
Uncertainty Remains As Investors Are Concerned About Future Growth Prospects
Franklin Roosevelt said in 1933, " We have nothing to fear but fear itself." The Majority of analysts and investors are seeing nothing but doom and gloom. It is important to remember that nothing lasts forever and like all the crisis events over the years this to shall pass. Many will look back at this market talking about what a great buying opportunity it was.
This is one of those rare occasions when smart investors can pick up great companies for pennies on the dollar. Similar to periods such as 1907, 1920, 1933, 1982 and 2002 just to name a few examples. Historically, stocks have outperformed every single investment consistently over time. Regardless of high energy prices, wars, or real estate implosions. Many choose to sit in cash waiting until they " feel better " about things. However, that sets them up to miss out on the good buys only to chase the market when it has already ran.
Bottom Line: At today's prices stocks are a screaming buy. The S&P 500 is trading at a 2008 PE multiple of 14. Many companies are trading far below that. Also, after seeing 2007 earnings drop by 6%, 2008 earnings should grow at 5% and even more next year. Buying stocks during the Bear Markets ensures that you will catch the big bounce on the way up.
Economic Growth Continues Despite Credit Woes
Despite all of the economic worries the economy is continuing to still show positive GDP growth. The first quarter GDP came in at +1% and manufacturing has rebounded into expansion territory. All of this taking place in the backdrop of high energy prices and a credit crunch. As we move into the next week many will be watching the second quarter earnings reports to gage how well corporate profits have been holding up.
Bottom Line: Despite all of the woes we expect GDP growth to come in at +1.5% for 2008. Thanks to strong exports and the economic stimulus package. We do not expect the Fed to raise interest rates until early next year. The dollar should fall to a new low against the Euro. But then will recover to about 1.52 as the European Economies continue to slow. Oil prices will continue to fall as world wide demand declines. However, the price will continue to remain high on a historical basis.
Upcoming Events and Economic Numbers
Monday July 21
Leading Economic Indicators consensus: -.1% prior: .1%
Wednesday July 23
Oil Inventories prior: 2.952M
Beige Book
Thursday July 24
Jobless Claims consensus: 372K prior: 366K
Existing Home Sales: consensus: 4.95M prior: 4.99M
Friday July 25
Durable Goods: consensus: .1% prior: 0.0%
Consumer Sentiment
New Home Sales: consensus: 505K prior:512K
Upcoming Earnings
Monday July 21
American Express (AXP): Before the open estimate: .85
Apple Inc. (AAPL): After the close estimate: 1.08
Texas Instruments (TXN): After the close estimate: .46
Tuesday July 22
Caterpillar (CAT): Before the open estimate: 1.54
DuPont (DD): Before the open estimate: 1.07
Freeport McMoran (FCX): Before the open estimate: 2.43
United Parcel Service (UPS): Before the open estimate: .85
Yahoo (YHOO): After the close estimate: .12
Wednesday July 23
Amazon.com (AMZN): After the close estimate: .26
Bidu.com (BIDU): After the close estimate: .97
AT and T (T): Before the open estimate: .76
Pfizer (PFE): Before the open estimate: .54
Thursday July 24
3M (MMM): Before the open estimate: 1.25
Dow Chemical (DOW): Before the open estimate: .85
Wynn Resorts (WYNN): After the close estimate: .92
Stock Buys
Freeport-McMoran Copper and Gold (FCX). We started recommending this at 86.95 and continue to like it on the pullbacks. FCX is trading at a forward PE of 7.80. It has hit long term support levels of 98.00 and remains in the long term up trend. FCX will be reporting earnings on Tuesday. If Freeport-McMoran beats their numbers and their forward guidance is good, shares, could easily take out the 52 week high of 127.24.
Franklin Roosevelt said in 1933, " We have nothing to fear but fear itself." The Majority of analysts and investors are seeing nothing but doom and gloom. It is important to remember that nothing lasts forever and like all the crisis events over the years this to shall pass. Many will look back at this market talking about what a great buying opportunity it was.
This is one of those rare occasions when smart investors can pick up great companies for pennies on the dollar. Similar to periods such as 1907, 1920, 1933, 1982 and 2002 just to name a few examples. Historically, stocks have outperformed every single investment consistently over time. Regardless of high energy prices, wars, or real estate implosions. Many choose to sit in cash waiting until they " feel better " about things. However, that sets them up to miss out on the good buys only to chase the market when it has already ran.
Bottom Line: At today's prices stocks are a screaming buy. The S&P 500 is trading at a 2008 PE multiple of 14. Many companies are trading far below that. Also, after seeing 2007 earnings drop by 6%, 2008 earnings should grow at 5% and even more next year. Buying stocks during the Bear Markets ensures that you will catch the big bounce on the way up.
Economic Growth Continues Despite Credit Woes
Despite all of the economic worries the economy is continuing to still show positive GDP growth. The first quarter GDP came in at +1% and manufacturing has rebounded into expansion territory. All of this taking place in the backdrop of high energy prices and a credit crunch. As we move into the next week many will be watching the second quarter earnings reports to gage how well corporate profits have been holding up.
Bottom Line: Despite all of the woes we expect GDP growth to come in at +1.5% for 2008. Thanks to strong exports and the economic stimulus package. We do not expect the Fed to raise interest rates until early next year. The dollar should fall to a new low against the Euro. But then will recover to about 1.52 as the European Economies continue to slow. Oil prices will continue to fall as world wide demand declines. However, the price will continue to remain high on a historical basis.
Upcoming Events and Economic Numbers
Monday July 21
Leading Economic Indicators consensus: -.1% prior: .1%
Wednesday July 23
Oil Inventories prior: 2.952M
Beige Book
Thursday July 24
Jobless Claims consensus: 372K prior: 366K
Existing Home Sales: consensus: 4.95M prior: 4.99M
Friday July 25
Durable Goods: consensus: .1% prior: 0.0%
Consumer Sentiment
New Home Sales: consensus: 505K prior:512K
Upcoming Earnings
Monday July 21
American Express (AXP): Before the open estimate: .85
Apple Inc. (AAPL): After the close estimate: 1.08
Texas Instruments (TXN): After the close estimate: .46
Tuesday July 22
Caterpillar (CAT): Before the open estimate: 1.54
DuPont (DD): Before the open estimate: 1.07
Freeport McMoran (FCX): Before the open estimate: 2.43
United Parcel Service (UPS): Before the open estimate: .85
Yahoo (YHOO): After the close estimate: .12
Wednesday July 23
Amazon.com (AMZN): After the close estimate: .26
Bidu.com (BIDU): After the close estimate: .97
AT and T (T): Before the open estimate: .76
Pfizer (PFE): Before the open estimate: .54
Thursday July 24
3M (MMM): Before the open estimate: 1.25
Dow Chemical (DOW): Before the open estimate: .85
Wynn Resorts (WYNN): After the close estimate: .92
Stock Buys
Freeport-McMoran Copper and Gold (FCX). We started recommending this at 86.95 and continue to like it on the pullbacks. FCX is trading at a forward PE of 7.80. It has hit long term support levels of 98.00 and remains in the long term up trend. FCX will be reporting earnings on Tuesday. If Freeport-McMoran beats their numbers and their forward guidance is good, shares, could easily take out the 52 week high of 127.24.
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