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08.26.08: Automotive Stocks Stuck in Neutral

We've all heard about the disaster in the financial sector due to problems in the housing market. But the automotive industry is quickly following the housing into the financial abyss! With slumping sales and losses as preowned SUVs and trucks take a nosedive in value, it looks like the auto industry is in serious trouble right now.

08.22.08: What You Need to Know About the Housing Mess
I've been talking about the housing meltdown for weeks now, and I wanted to follow up with a brief recap to make sure everyone is on the same page. It's important to understand what's going on in the homebuilding sector and financial companies, and what regulators are doing to help because it affects us as investors. As an ex-banking analyst–I used to work for the federal agency that is now running IndyMac (IDMC)–I can tell you that we are only in the second to third inning of the credit crisis. Here's what you need to know...

08.19.08: Most Widely-Held Stocks: Do They Make the Grade?
Stocks are like ice cream—Wall Street’s flavor of the week changes from time to time. Some investors are partial to traditional favorites vanilla and chocolate—i.e. large cap tech stocks, retail chains, energy equipment suppliers, to name a few. Others prefer more exotic flavors, like small- to mid-cap companies that specialize in specific product varieties. So what flavor does Wall Street crave this week? See which of the most widely-held stocks on Wall Street make the grade in PortfolioGrader Pro!

08.12.08: Russia-Georgia Conflict Affects Crude Oil Prices
Russia's making headlines again, this time around for its intense military operation in Georgia. While the world's attention turned to Beijing's Olympic Games, Russian troops advanced into Georgian territory to reclaim the separatist region in South Ossetia. Just today, Russia's president ordered a halt to the invasion, but forces are still authorized to fire on enemies.

I wanted to draw your attention to this conflict because the hostilities could damage a key oil pipeline in the region, dramatically impacting crude oil supplies. Already, crude oil prices are inching their way up and energy stocks moved slightly higher in Tuesday morning trading.

08.06.08: Dow Rallies 300 Points on Fed News
Surprise, surprise: Just as we were expecting, the Fed held rates steady. Wall Street could barely contain itself when the news came out–the result was a whopping 330 point jump in the Dow, the biggest one-day gain since April 1st! The Fed's comments–coupled with another slide in crude oil prices–sparked the day's rally. Here's what happened: The Fed maintained its benchmark federal funds rate at 2%. As I said yesterday, futures markets indicated there was a less than 30% chance the Fed would tamper with rates. The central bank showed a united front on the issue, although some officials expressed concern that keeping rates unchanged would allow inflation to run unchecked. Policymakers have been hard-pressed to juggle slow economic growth and inflation.

08.05.08: Oil Falls, Commodities Crunched
Commodities got stuck between a rock and a hard place on Monday, and commodity-related stocks ran into another crunch. Oil's $6 retreat in the past two days has led to concerns that a weakened U.S. economy will erode demand for crude products. Well, I'm going to stick to my guns and say that this is not a reflection of an oil 'bubble' ready to burst...

07.30.08: Fed Extends Bailout; Bush Signs Housing Bill

Will they make up their minds already? The Federal Reserve announced today it will extend its emergency borrowing program to Wall Street firms. What does this mean? Simply, big investment companies hurting from the mortgage meltdown can get a quick cash fix from the central bank.

This news rides in on the coattails of President Bush's approval of a massive housing bill, intended to bailout 400,000 struggling homeowners.

While all of this is well and good, from an investor's point of view this measure further indicates the magnitude of the ongoing crisis in financial markets. As investors continue to grapple with housing concerns, we have to focus on the real news of the day–the news that could make or break our portfolios...

07.28.08: Investors Grapple with Housing Concerns
As investors grapple with what to do ahead of pending economic data–particularly, second-quarter GDP estimates and June's employment report–the focus is still on financials. Wall Street's top concerns are still whether the housing market has bottomed out, and if we should expect further damage to banks. I've told you repeatedly that you shouldn't expect to see a major turnaround in the financial sector any time soon...

07.24.08: Housing Slump Persists
I told you! Investors distracted by falling crude oil prices and positive earnings announcements forgot about the profound weakness that still exists in the housing market. This mid-morning wake-up call reminded investors just how troubled certain sectors of the economy really are. The announcement led to a sell-off, as stock investors cashed in gains reaped from the recent rally.

07.22.08: Crude Oil Prices Distract Investors
It sure seems like financials have taken a backseat to crude oil prices, doesn't it? Sure, major banks like Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) beat the Street's expectations, but a loss is a loss! As the banks and major brokerages clean house, investors seem distracted by the recent slide in crude oil prices. But does the sell-off indicate that the crude bubble is bursting? Hardly! Less than two weeks ago, the same investors who are now pulling money out of the market drove prices to new highs above $147 a barrel! Anyone who says the current declines in crude oil prices indicate a drop in demand and a significant increase in supply can't see the forest from the trees...

07.15.08: Crude Oil Prices Dropped? Big Deal!
Crude oil prices dropped by the second-largest margin on record Tuesday. But before you give up on alternative energy stocks and use your stimulus checks as a down payment on an SUV, take a deep breath. Crude oil prices are likely to surge again in the coming weeks, and any talk of a crude oil futures caught in a bursting bubble is just fantasy.

07.11.08: Future Looks Brighter for Solar
The Bureau of Land Management took a lot of heat for placing a ban on new solar projects on public land due to concerns over the environmental impact of sun-powered generators. They worried that an environmentally friendly energy plan would hurt the environment! The freeze – which we mentioned in last Thursday's issue of What's Working on Wall Street Now – was in place less than a month before it was repealled. This bodes extremely well for our energy stocks!

07.08.08: Housing's Where the Hurt Is
If ever there was a buyer's market for future homeowners, you would think now would be it. Unfortunately, numbers show that few people are looking for a house right now.

07.01.08: What a June Swoon!
A new month is here. And thank goodness! There wasn't a lot to be cheerful about in June, after the stock market suffered its worst monthly decline in more than half a decade.

The S&P 500 lost 8.6% in June and the Dow shed 10.2%. It was the worst monthly performance for both indexes since September 2002, and the worst June performance for both the Dow and S&P since 1930.  During the month, 91% of the industries in the S&P 500 declined, with almost all of those falling by 10% or more.

06.26.08: Dow Breaks 2-Year Lows
U.S. stocks plunged sharply Thursday on signs of further deterioration in financial markets and another surge in oil prices. The Dow Jones Industrials lost 350 points by the end of the trading day, dropping to its lowest level in two years. Goldman Sachs (GS) downgraded brokerage stocks and put Citigroup (C) on its 'conviction sell' list under the expectation that the financial services behemoth would face an additional $9 billion in write-downs. Goldman said that although the market expects another investment bank failure, it's 'hard pressed' to raise the group's rating for the immediate future because the fundamentals of the major brokerages are still deteriorating.

06.24.08: Finding the Next Microsoft
Bill Gates is the type of innovator who only comes along once every century or so. Sure, there are many able-bodied CEOs out there, and every now and again a company can leave it's mark on the way the world does business. But not like Gates and Microsoft (MSFT) have. Whether you're an investor playing the stock market, a computer geek who was awed by Windows or just a worker who has seen virtually every task migrate to computers, you have to admit Gates is at the top of the business world.

06.19.08: Is the Dow's big decline over yet?
The Dow lost more than 130 points Wednesday, falling below the 12,000 level during intraday trading for the first time since mid-March. But are you really surprised? When three of the nation's largest brokerages not only underperform but decline even further, the news causes investors to second guess whatever optimism exists and unnerves the financial markets.

06.11.08: Stimulus Checks Help Offset Economic Woes
Ben Bernanke addressed a Fed conference in Massachusetts on Monday night to quell fears about the Labor Department's recent report that showed a 0.5% jump in unemployment. Despite the recent spike, he said, the economy appears to have averted a 'substantial downturn,' due in part to the Fed's interest rate cuts, heightened demand from abroad for U.S. exports and the government's $168 billion in stimulus check payouts.

06.06.08: Unemployment and your investments
The Labor Department announced that unemployment has soared half a percent to 5.5% in May, the largest one-month increase in 12 years. It's no wonder, seeing the news we've had in recent days

06.04.08: Get set for an election year rally
Historically, the market lags between May and October. But during presidential election years, Wall Street usually rallies into the November election and then for about 100 days after a new president takes the oath of office in late January.

06.03.08: How to invest amid bad news
Another week, and more bad news for the financial and automotive sector. Newspapers and television seem to do a better job of telling you what to avoid than how to invest profitably. But there is a better way to watch market trends and make your stock picks.

05.28.08: The Hurricane Threat
As the 2008 Atlantic hurricane season starts on June 1, many investors are afraid of a big storm hitting Gulf Coast refineries. Amid the current global crude crunch, such an event would push prices at the pump even higher.

05.27.08: Housing Hasn't Reached Tipping Point, But Could Soon
A Realtors’ group said Friday that April sales by homeowners declined by 1%, while inventory jumped 10% and home prices tumbled another 8%. This is just another chapter in the mess that is housing right now in America. But what do all these gloomy numbers really mean week after week? Well, it shows we haven’t reached the tipping point yet.

05.22.08: The Sky's the Limit for Oil
In the latest chapter of election-year politics, oil industry executives have been getting grilled on Capitol Hill this week. "People listening just don't get it ... when demand isn't going crazy, why are prices going crazy?" asked Sen. Herb Kohl, a Democrat from Wisconsin. It’s a legitimate question: If people are really driving less and buying more fuel-efficient cars, how can oil continue to go up? If we use less, shouldn’t the price drop?

05.08.08: Talk About a High Flying Stock
Sometimes it’s not just the idea behind a movie that counts, but the people who control its path. This was certainly true with Marvel’s (MVL) newly released Iron Man. The popular comic book company has been made wealthy and successful by several different comic-inspired ventures throughout the year, but nothing has caught the media’s attention quite like their first company financed, developed and produced feature film.

04.30.08: Final Fed Cut
The Fed announced a 25 basis point cut today bringing the Fed Funds rate down to 2%, the lowest level in four years. Overall the Fed admits that “economic activity still remains weak” but they have hopes that the cut will help inflation to moderate over time spurring economic growth.

04.28.08: Painting the World Green
In light of recent Earth Day celebrations, I thought I’d take a moment to talk about the U.S.’s trendy “green economy” and some potential investment opportunities that may emerge as alternative energy sources move to the forefront of industry.

04.18.08: Don't be Fooled by Google's Earnings
On Monday, April 14, I told you all to sell Google (GOOG). Now I understand that Google’s positive earnings threw everyone for a loop, but I must reiterate my previous advise–it’s still time to sell Google. Every Google-related story I follow is making this sell advice increasingly obvious. I don’t work on emotions people, I work on facts and the fact of the matter is that the company’s operating margins remain under compression hurting the stock overall.

04.14.08: Saying Good Bye to Google

Wall Street has been in a fuss over Google’s (GOOG) future ever since merger talks came about from Microsoft and Yahoo. While this merger gossip doesn’t bother me I am, however, concerned about Google’s future for a very different reason.

04.08.08: The Results Are In!

Our Blue Chip Growth stocks started the second quarter on a very strong note, and as our stocks release their first-quarter earnings reports, I expect they will emerge as the market's newest and strongest leaders.

04.01.08: Hello Q2!
What a way to start the second quarter! The market staged a big rally today with the Dow Industrials closing 391.47 points higher at 12,654.36. The NASDAQ was in its own good mood: It ended the day up 83.65 points at 2,362.75.

03.31.08: Farewell, First Quarter
The upcoming first-quarter earnings season will be a mixed bag–just like the fourth quarter was–but those stocks with superior fundamentals will emerge as the stock market's newest leaders.

03.24.08: Hear Bear Roar
The folks at JPMorgan (JPM) and Bear Stearns (BSC) must've had a busy weekend. This morning JPMorgan announced an amendment to its merger, boosting Bear's price per share to $10 (five times its initial offer). That certainly put Bear Stearns' shareholders in a good mood, and it helped Wall Street start the week on a strong note as well. The Dow finished the day 187.32 points higher at 12,548.64. The NASDAQ was up 68.64 points to end at 2,326.75.

03.18.08: Fed Interest Rate: The Fed Cuts 0.75%
Breaking news! The Fed cut interest rates by 0.75%, putting the Fed Funds rate at 2.25%. The Fed had to step in with a large rate cut–clearly it's the economy, not inflation, that's the Fed's biggest concern right now. Yesterday the 3-Month Treasury Bill yielded 1.11%, and it even fell below 1% at one point–that's something we haven't seen in 50 years! It's clear that there's a lot of fear out there.

03.17.08: All Eyes Are on the Fed
What a difference a week makes. Bear Stearns (BSC) blew up on Friday, losing half of its value within 30 minutes of the market's open. Fearing residual fallout to other financials, the Fed stepped in to save it. Then this morning JPMorgan Chase (JPM) made a $2 per share buyout offer, sending stocks sinking.

03.11.08: The Fed To the Rescue!
The S&P 500 posted its best one-day performance in five years on Tuesday, and the Dow finished the day 416.66 points higher. The reason was, once again, the Fed came to the rescue. It announced plans to pump $200 billion into the markets to add liquidity and help ease some of the strain the credit crisis has been causing. On Wednesday the Dow opened higher before gradually losing steam to end the day down just 46 points.