Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
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The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| My
Thoughts on the Market |
Published: July 12, 2004
The major averages traded slightly lower
in last week’s holiday-shortened trading environment. The Nasdaq
underperformed the other major indices amid notable weakness in
semiconductor and software shares.
The main culprit last week: disappointing corporate
earnings reports. Earnings warnings out of Conexant (CNXT, $2.32),
Veritas Software (VRTS, $18.50) and JDA Software (JDAS, $10.59) all
prompted major slides in technology stocks and helped to push the Nasdaq
lower.
But the week’s most important mover was web giant
Yahoo (YHOO, $30.11), which reported earnings last week and announced
guidance for the rest of the year. While earnings and revenue numbers
looked solid, the firm's guidance was slightly under Wall Street
expectations and the stock sold off sharply, dragging other big web
names like eBay (EBAY, $83.78) and Amazon (AMZN, $48.32) lower in
sympathy. After a nice run-up in many ‘Net names this year,
near-perfect news appears to be already baked into the cake. As such,
even the slightest earnings misses have resulted in major selling.
Also weighing on stocks last week was a rally in crude
oil prompted by attacks on major pipelines in Iraq. After a decent
pullback in gasoline and oil prices since the beginning of June, prices
look set to rise again. That, as we’ve pointed out on numerous
occasions, acts as an important drag on economic growth. This uptick in
oil also serves to highlight the continued risk of terror events; a risk
that will likely remain on the front burner as the Presidential election
season comes into play this fall. Sadly, the major party conventions in
Boston and New York City, as well as other election events, could offer
many high-profile targets for terrorists.
The bulls would argue that this earnings season will
prove an upside catalyst for stocks. According to data from First Call,
earnings warnings have actually been running at a rate roughly in line
with the last few quarters and well under the levels witness in the bear
market of 2002. In addition, the vast majority of earnings reports due
out later this month should well be impressive. Finally, the recent
weakness witnessed in various economic data items may be only a
temporary phenomenon due in large part to a seasonally weak second
quarter. And while economic weakness is never a good sign, at least it
takes some of the pressure off the Fed to raise interest rates.
WHERE DO WE GO FROM HERE?
My staff and I continue to advise caution in this market environment.
There is little catalyst for stocks to rise when traders already expect
stellar earnings. What's more, the continued threats of terrorism,
rising interest rates and high energy prices should be enough to keep a
lid on any market rallies.
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Please Note: The above article was merely a
small excerpt from an issue of our premium, long-term-oriented investing
newsletter -- the Market Advisor. To receive your copy of
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