Industry News

Turbulent markets drive investor interest in water

Posted on October 18, 2012 by Dana Salvo

By Martin de Sa’Pinto and Raji Menon

Oct 10 - Water has yet to live up to its hype as the commodity bet of the future, but the world’s most basic resource is drawing ever more money as asset managers seek steady inflation-protected returns.

Investment opportunities are increasing as cities in faster growing markets expand and as governments in more developed countries, short of cash, are forced to turn to the private sector to fund upgrades to meet tougher environmental standards.

Meanwhile, investors such as pension funds want alternatives to rock-bottom bond yields and volatile equity markets.

“There are opportunities in the water space that haven’t been seen for decades now that governments have run out of money,” said Zurich-based investor Martin Kloeck, whose Signina Capital recently launched a water fund.

The global business, including drinking and waste water, is thought to be worth about $450 billion a year and is growing at up to 6 percent annually, according to Citigroup.

The assets of funds focused on water and specialist water funds nearly doubled from just over $12 billion in 2010 to nearly $24 billion in 2011, according to data from Lipper, a Thomson Reuters service. That could reach $50 billion by 2015, industry analysts believe.

Growing urban populations and a lack of government money to upgrade infrastructure are increasing the need for private sector investment, said Hans-Peter Portner, who runs Swiss bank Pictet’s $2.9 billion water fund, the world’s largest.

“These drivers are solid as rock,” he said. Read the rest of this entry »

Earnings Look Better, but Market May not Care

Posted on October 16, 2012 by Dana Salvo

Earnings season may not be as weak as analysts had initially projected, but the bad news is that may not be good enough to cheer investors.

Though this quarter’s reporting cycle is not yet a week old, the initial results have been encouraging: Of the 35 companies that gave results last week, the average growth rate was 8.2 percent, well above expectations that corporate profits actually contracted about 2.1 percent.

Numbers at big banks, which are the focus of the early reports, topped expectations and already have given rise to hopes that the rest of the Standard & Poor’s 500 (^GSPC) companies would follow suit.

“Mark my words, the S&P 500′s earnings growth rate will not turn negative during 3Q 2012 earnings season and anyone who says it will has not been following the early reporters very closely,” said Nick Raich, director of research at Key Private Bank in Cleveland.

Maybe so, but initial reaction has been less than enthusiastic to this bit of muted good news.

Last week, the stock market had its worst loss since the summer rally began in early June, penalizingJPMorgan Chase (JPM) and Wells Fargo (WFC) even though both Wall Street titans posted record earnings. Investors worried over net interest margins and forward guidance.

Monday’s action was somewhat better, with stocks gaining after a seemingly positive report fromCitigroup (C), whose stock has been ripping higher in recent months as the company clears the detritus of the 2008 financial crisis from its books.

In the big picture, the market both may be unimpressed with the future earnings outlook and unconvinced of the initial numbers to get much optimism from early beats. Read the rest of this entry »

In North Dakota, Hard to Tell an Oil Millionaire from Regular Joe

Posted on October 4, 2012 by Dana Salvo

The retired men shooting the breeze at Joyce’s Cafe in Stanley don’t look like oil barons but appearances can be deceptive, especially in North Dakota.

Take Robert Western, a farmer who was dressed in rumpled overalls and a baseball cap as he sipped coffee and discussed the oil boom that has transformed this once sleepy town.

“Some of the younger people buy a lot more - machinery, vehicles, things like that,” said the 75-year-old Western. “The rest of us, I guess it doesn’t alter our lifestyle a great deal. I don’t have a lot of needs.”

After he left, his friend Earl Rogstad remarked to a visitor: “It’s too bad Robert didn’t have his airplane ready… He offered last summer to fly me over and see (the oil wells) from the air.”

Western did not mention that he is co-owner of a Piper single engine propeller plane, according to FAA records. He did admit to receiving oil royalties from wells on his farm but locals said he is far from the richest man in town. It is not clear whether Western is a millionaire or merely wealthy.

“You can’t tell the average Joe farmer from the average Joe millionaire,” said Ward Heidbreder, Stanley city coordinator.

Average income in Mountrail County, the hub of the North Dakota oil production boom, roughly doubled in five years to $52,027 per person in 2010, ranking it in the richest 100 U.S. counties on that basis including New York City, and Marin, California.

The boom could be creating up to 2,000 millionaires a year in North Dakota, said Bruce Gjovig, founder of the Center for Innovation at the University of North Dakota.

Many oil region residents receive $50,000 or $60,000 a month in oil royalties and some more than $100,000, said David Unkenholz, a senior trust officer at First International Bank & Trust in Watford City, the seat of McKenzie County, which is the No. 2 oil producing county in the state behind Mountrail.

The oil is so plentiful that in Stanley, where the population has about doubled to 3,200 in the last five years, a well drilled under the town means that many homeowners could receive a small oil royalty check.

A lot of North Dakota’s new wealthy simply stash the cash in savings and checking accounts with “ridiculously large” balances, banker Unkenholz said.

The monster homes, ostentatious diamond rings or luxury sports cars of California and New York are virtually nonexistent in North Dakota. Looking for wealth here is a subtle exercise.

Locals point to pickup trucks. The boom has boosted truck sales decked out with extras at Stanley’s Ford dealer, Prairie Motors Inc, co-owner Gary Evans said. Read the rest of this entry »

Wall Street Week Ahead: Bulls eye Spain, Bernanke and jobs

Posted on September 30, 2012 by Dana Salvo

(by Rodrigo Campos): Wall Street will open October with a busy week, highlighted by low expectations for global manufacturing data and the U.S. jobs report. Any positive surprises may help lift the market.

Spain is the wild card. And if it’s played well, then the bulls might dance.

The S&P 500 (^INX)(^GSPC) finished its third positive quarter in the last four on Friday, despite suffering its largest weekly percentage decline since June. For the past three months, the S&P 500 gained 5.9 percent - its best third quarter since 2010. In contrast, the index was down 1.3 percent for the week.

The benchmark S&P 500 earlier this month reached its highest level since late 2007. Yet uncertainty remains over whether stocks can hold their gains against the headwinds of a struggling economy. That explains, in part, the retreat over the last several days.

The S&P 500 hit a high of 1,474.51 in mid-September before pulling back by a bit more than 2 percent. A run at 1,500 seems possible, but the flurry of economic and world events ahead probably will prevent a major advance in the coming week.

Bulls are betting that last week’s Spanish budget proposals will be a preamble to a bailout request by Mariano Rajoy’s government. The move would be seen as a first step to get the finances of the euro zone’s fourth-largest economy in order and would clear some of the market uncertainty regarding the euro zone crisis.

Monetary policy is also on the list of market catalysts this week. Federal Reserve Chairman Ben Bernanke is scheduled to speak on Monday and the minutes of the latest FOMC meeting are set for release on Thursday. The week’s agenda includes meetings of the European Central Bank, the Bank of England and the Bank of Japan.

Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin, said he believes “we could see a rebound” this week “if we get some of the stars aligning and have Spain ask for a bailout, the ECB announcing favorable terms for that bailout, and if we see the Bank of Japan announce further monetary intervention. Read the rest of this entry »

Stocks face earnings and data hurdles in Wall Street Week Ahead

Posted on September 24, 2012 by Dana Salvo

Stocks could struggle to stay close to nearly five-year highs this week as worries mount about third-quarter earnings and the market appears primed for a pullback from recent stimulus-driven gains.

A bevy of economic reports, including durable goods orders, will grab attention, particularly after the Federal Reserve unveiled its plan on September 13 for a third round of aggressive stimulus to help revive the flagging U.S. economy.

While the action ignited a rally in stocks, analysts have worried that it may suggest the U.S. economy is in worse shape than many had feared.

To be sure, stocks are at lofty levels and are likely to attract investors hoping the market will ride out the year on a positive note. The Dow Jones industrial average (^DJI) and the benchmark Standard & Poor’s 500 index (^GSPC)(^INX) remain close to highs not seen since December 2007. The S&P 500 is up 16.1 percent since the end of 2011.

“I think the market certainly is ripe for a pullback. But whatever the pullback, it’s going to be rather shallow,” said Peter Cardillo, chief market economist at Rockwell Global Capital, in New York.

“Any disappointment in key economic data that would reverse the market’s feeling the economy has stabilized, I think could trigger a 2 to 4 percent pullback,” he added.

Some of that move was seen last week in stocks. The S&P 500 slipped 0.4 percent for the week. The Dow industrials and the Nasdaq each finished the week down 0.1 percent. Read the rest of this entry »

Asian stocks touched their highest in more than four months

Posted on September 17, 2012 by Dana Salvo

Asian stocks touched their highest in more than four months on Monday and gold, oil and copper hovered near multi-month highs, after rallying late last week on hopes that fresh stimulus from the world’s …

SINGAPORE - Asian stocks touched their highest in more than four months on Monday and gold, oil and copper hovered near multi-month highs, after rallying late last week on hopes that fresh stimulus from the world’s top central banks will support flagging growth.

The dollar languished near its lowest in seven months, as the aggressive new securities-buying program announced by the Federal Reserve on Thursday tempted investors back into riskier assets such as equities and commodities.

MSCI’s broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> edged up 0.2 percent, having reached its highest level since early May. Tokyo markets were closed for a holiday.

Most of the regional gains came in the growth-sensitive materials and energy sectors.

“The materials sector has broken out of a downtrend,” said IG Markets analyst Stan Shamu in Melbourne. Read the rest of this entry »

Playing the Election Winner: Obama v. Romney

Posted on September 6, 2012 by Dana Salvo

If election-year patterns are any guide, investors can expect solid gains for their 2012 stock portfolios.

Indeed, the Standard & Poor’s 500 index has risen in the final seven months in 13 of the last 15 presidential elections, according to the Stock Trader’s Almanac. And since 1896, the Dow Jones Industrial Average has produced an average 9 percent gain during election years when an incumbent president sought a second term - regardless of the outcome.

But the fortunes of individual sectors will also rise and fall in the years ahead depending on which political party wins the White House in November, since policy decisions impact corporate profits.

That spells opportunity for tactical investors who know where to look.

If Romney Wins

A win for Republican presidential candidate Mitt Romney, for example, would likely bode well for dividend-paying stocks, mainly utilities, telecommunications and consumer staples, says Sam Stovall, chief equity strategist for S&P Capital IQ.

That’s because Romney would hold the dividend tax rate at 15 percent rather than allowing the Bush-era tax cuts to expire, which would push dividend taxes to ordinary income rates.

Under President Barack Obama, the wealthiest taxpayers could pay 39.6 percent on dividends — assuming the Bush tax cuts expire - plus a new 3.8 percent tax on passive income from dividends, interest and capital gains, compliments of the 2010 health care law.

“Obama has been talking about raising taxes for those people making $200,000 or more, and households making $250,000 or more, so a lot of investors would be caught up in that,” said Stovall. “The dividend tax for them would effectively triple.”

A selection of stocks with the best investment recommendations by S&P analysts and the highest dividend yields include Philip Morris International (PM) , Altria Group (MO) , Lorillard (LO) , Frontier Communications (FTR) , Windstream (WIN) , and UGI Corp (UGI) . Read the rest of this entry »

Bernanke lifts Wall Street, keeps stimulus in play

Posted on September 1, 2012 by Dana Salvo

Stocks rose on Friday after Federal Reserve Chairman Ben Bernanke, expressing “grave concern” for the stagnating U.S. job market, said the central bank was prepared to take further steps to strengthen the economy if necessary.

Though Bernanke, speaking in Jackson Hole, Wyoming, dashed some hopes for a signal of quick action, his comments bolstered bets that the central bank was closer to providing more stimulus for an economy that is close to stalling.

Stocks had been flat for much of the week ahead of Bernanke’s speech, though expectations of additional stimulus from the Fed helped the market this month. All three indexes posted gains for August.

“I think the debate is how strong growth is and how aggressive the Fed is going to be,” said Giri Cherukuri, head trader at OakBrook Investments LLC, in Lisle, Illinois.

“Hopefully the economy will just get better on its own, but I think the Fed is saying they’re going to be there and is trying to tell the market that they have some power to help things along.”

Energy and materials shares were among the best performers, with the S&P energy index (.GSPE) up 0.9 percent and the S&P materials index (.GSPM) up 1.1 percent.

The Fed’s next policy meeting is in mid-September, and many analysts are looking to it for a decision on a third round of quantitative easing.

Read the rest of this entry »

Apple’s $1B patent verdict could corner market

Posted on August 26, 2012 by Dana Salvo

It was the $1 billion question Saturday: What does Apple Inc.’s victory in an epic patent dispute over its fiercest rival mean for the U.S. smartphone industry?

Analysts from Wall Street to Hong Kong debated whether a jury’s decision that Samsung Electronics Co. ripped off Apple technology would help Apple corner the U.S. smartphone market over Android rivals, or amount to one more step in a protracted legal battle over smartphone technology.

Many analysts said the decision could spell danger for competitors who, like Samsung, use Google Inc.’s Android operating system to power their cellphones.

“I am sure this is going to put a damper on Android’s growth,” New York-based Isi Group analyst Brian Marshall said, “It hurts the franchise.”

The Silicon Valley jury found that some of Samsung’s products illegally copied features and designs exclusive to Apple’s iPhone and iPad. The verdict was narrowly tailored to only Samsung, which sold more than 22 million smartphones and tablets that Apple claimed used its technology, including the “bounce-back” feature when a user scrolls to an end image, and the ability to zoom text with a tap of a finger.

But most other Apple competitors have used the Android system to produce similar technology, which could limit the features offered on all non-Apple phones, analysts said.

“The other makers are now scrambling” to find alternatives, said Rob Enderle, a leading technology analyst based in San Jose.

Seo Won-seok, a Seoul-based analyst at Korea Investment said that the popular zooming and bounce-back functions the jury said Samsung stole from Apple will be hard to replicate.

The companies could opt to pay Apple licensing fees for access to the technology or develop smarter technology to create similar features that don’t violate the patent — at a cost likely to be passed onto consumers. Read the rest of this entry »

Awesome Penny Stocks - What Really Happened?

Posted on August 23, 2012 by Dana Salvo

Awesome Penny Stocks - What’s the real deal?

What Happened? That’s the question we have, along with many other stock traders.

After a flurry of rumors and hype concerning VLNX- (Vision Plasma Systems, INC.), AWESOME PENNY STOCKS sent emails to their subscribers announcing it as its next pick. The days that followed that announcement turned into a blood bath for most everyone that bought the stock. A nosedive took place as millions of shares flooded the market and investors took massive losses. So, What Happened? Was this a pump and dump?

Many questions have surfaced concerning the future of APS as well as thousands of irate investors. It seems we have not heard the last of them. APS is already sending teasers about their next upcoming pick for this Monday. I’m sure many will be taking a cautious approach this time. In the mean time I would suggest those of you who previously drank the APS Kool-Aid consider other options. Not all Penny Stock Newsletters are a scam. A select few online newsletter sites have a consistent track record and good intentions.

There are many other awareness groups that work with real companies with bright futures. My advice to anyone wanting to make profits in the penny stock market:

1. Do your own due diligence!

2. Do not buy stocks that have a huge market cap that is not justified by fundamentals!

3. Do not fall for the excessive HYPE!