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Jul 6, 2010

Money Morning : The Numbers Blews Everyone Away. July 6th., 2010

July 6, 2010
The Numbers Blew Everyone Away…
China's latest export blew the analysts away. They posted a spectacular 48.7% increase over last year. New loans exceeded 630 billion yuan ($92 billion), and consumer prices rose 3.1%. Is the China miracle exploding again? Chief Investment Strategist, Keith Fitz-Gerald, has uncovered five unique ways to take advantage of China’s latest number - enough to hand wealth builders an estimated $165,360. Complete details here.

History Shows Stock Market Plunge May Just Be Par for the Course

By Jon Markman, Contributing Editor, Money Morning

Although the stock market plunge last week was certainly unsettling, history and a slew of positive leading indicators show that this may just be part of a normal pattern with better news ahead.

Stocks were hammered on Tuesday as a negative revision to an economic report out of China and fears over European bank funding set off a global firestorm of selling. A very weak consumer confidence report didn't help matters.

The major U.S. stock indices fell through critical support levels, with the S&P 500 returning to levels first reached last August. That's almost an entire year of stock market appreciation out the window.

In the end, the Dow Jones Industrial Average lost 2.7%, the S&P 500 lost 3.1%, the NASDAQ lost 3.9%, and the Russell 2000 lost 4%. Large-cap stocks outside the United States fell 3.5%, while emerging market stocks fell 4%. Some of the European exchanges fell the most, including iShares MCSI Spain Index ETF (NYSE: EWP), down 5%, and iShares MCSI Switzerland Index Fund ETF (NYSE: EWL), down 6%.

Click here to see how the stock market plunge fits a historical pattern...

Markman on...
- Canada: The World’s Economic Compass
- Commodities Are Key as China Continues to Call the Shots

The New Global Power Broker in Oil

Uganda has found oil, and lots of it. But it lacks the ability to turn crude into product - gasoline, diesel, jet fuel, and low-sulfur heating oil. So it must rely upon exporting that production as raw material - at a far lower price than the refined product would command.

It's a huge problem, and hardly limited to producing countries. But several heads-up companies are beginning to solve it. And they stand to make a killing doing so. Indeed, the new global power broker in oil has emerged… Full story.

Inflation Isn't Dead, Just Sleeping - And TIPS Can Protect You When It Awakens

[Editor's Note: In the current economic malaise, inflation has become a forgotten foe. But it could come back. This latest installment of Money Morning's "Defensive Investing" series details a low-risk strategy for dealing with that age-old enemy of long-term investors.]

By Larry D. Spears, Contributing Writer, Money Morning
Investors are always on the lookout for hot tips. The best tips highlight investments that pack a big potential profit punch, but that haven't yet started their move.

That's just what we have for you here.

We're not talking about the "inside scoop" on some obscure stock. What we're referring to are government-backed "TIPS" - or, as they're more formally known, Treasury Inflation-Protected Securities.

Admittedly, inflation hasn't been a major concern of late. The U.S. Consumer Price Index (CPI) was actually down by 0.2% in May, extending a 0.1% drop in April, while May's core inflation - which is the CPI measured without the volatile food and energy components - was just 0.1% higher. That's why many market analysts and media pundits are now saying deflation is much more of a worry for U.S. markets than inflation.

However, many of Money Morning's top experts - including Chief Investment Strategist Keith Fitz-Gerald and Contributing Editor Martin Hutchinson - disagree with that assessment. Recognizing the inevitable inflationary impact of increasing deficit spending, growing federal debt, rising state and local taxes and a weakening U.S. dollar, they see renewed upward price pressure not too far down the road.

That makes this the perfect time to learn about TIPS and how they can protect you when inflation again rears its ugly head.


Buy, Sell or Hold: Even After a Near-30% Gain Campbell Soup Co. (NYSE: CPB) Still Has Room to Run

By Horacio Marquez, Contributing Editor, Money Morning

I first recommended Campbell Soup Co. (NYSE: CPB) on June 1, 2009. At the time of our recommendation, our price target was a minimum of $32. The stock is now trading just above $35 today - a 27% increase.

What's more is that Campbell, which boasts a strong brand and above-average international sales potential, is poised to keep its winning streak intact.

The market sometimes offers us compelling propositions, like it did last year, when the stock inexplicably sold off. We took ready advantage of the situation. Campbell Soup has a very large, stable and increasing cashflow. It is so stable that it is almost boring. In fact, this company's stability qualifies it more as a dividend play than anything else.

In the two consecutive quarters following our initial recommendation, Campbell Soup torched estimates, as analysts on Wall Street had not caught on to our emerging markets growth story. The Street caught on in the last quarter but still has not fully recognized this company's potential.

Read full story...

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