The mainstream media has drawn a rather interesting correlation between the price of spot bullion and the price of oil. Not a day goes by that the price of oil is directly correlated between gold and silver prices. In fact, this scenario could not be further from the truth.
While bullion and oil are very speculative investments and do correspond in price with the levels of inflation, they are not directly linked. Oil has a much smaller supply than that of bullion. The daily supplies of oil and other commodities are based on the amount produced on a day to day basis, as no real reserve of ready to use oil is traded. Remember, oil is traded with futures, bullion can be traded by means of a futures platform or a spot market. Read more…
Futures and Commodities
oil
Poor timing, too low price points? No, it appears that Yahoo might be avoiding a Microsoft buyout solely for sentimental reasons. Now that Jerry Yang is the CEO, it appears he’s wanting to hold onto the company he worked so hard to start back in his own college years at Stanford.
Yang owns about 4% of the company that is currently worth $1.5 Billion, his stakes are huge and he’s still drawing the infamous $1 salary that is common with many tech giants. His wealth has been derived in its entirety from the growth and capital gains he’s received as a huge shareholder in Yahoo. As CEO and a founder, it seems that his own unwillingness to sell might lay in a dislike for Microsoft and sentimental views of Microsoft rather than what shareholders want. Read more…
Bonds, ETF, Forex, Futures and Commodities, Investing, Real Estate, Round Up, Stocks
MSFT, YHOO
The Federal Reserve Board meets again tomorrow to discuss the economy, inflationary factors and assess the current interest rate policy. Many analysts are undecided on which way the Fed will turn, will it continue to lower rates amid high inflation or pull back and let the market work itself out. Either action is likely to worry investors, high inflation eats away at returns while less credit means a stagnating economy and likely recession.
From here on out, each decision remains critical. Since the Fed opened its window and the auction block to institutional borrowers it has lent over $360 Billion. Keep in mind that this program was started in December of 2007, it has only been roughly 4 months for an average of $90 Billion per month. This kind of inflate and lend system is troubling many investors. Read more…
Investing
Not just but 2 years ago was Kirk Kerkorian (the Las Vegas real estate billionaire) heavily entangled in the General Motors corporation. Now after Ford’s profitability, the investor is chasing a serious stake in Ford. Kerkorian dumped GM in favor of more investment into his Las Vegas properties, neither of which have proven to be a good investment. GM is still suffering from large pension payments and Las Vegas has cooled with the economy. Read more…
Stocks
F, GM
You wouldn’t believe it but Ford has posted a quarterly profit of $100 Million for the first quarter of 2008. While the automaker has struggled with keeping up on pension programs and the weight they put on the price of automobiles finally good news and profits are coming out of the company. Ford still expects to lose money for the full year but spouts that it should return to profitability in 2009.
Strong profits in Europe and South America followed a weakening dollar and improved the overseas division. Back at home though, Ford struggled to sell its extensive line of “gas-guzzlers” and large trucks to consumers as sales were down 9% year over year. The weakening US sales were easily overwritten by foreign sales however. Read more…
Investing
F
Starbucks released a very critical piece of information today. The economic slowdown in the US is affecting the premium coffee market and hard. Higher prices for coffee from a weakening dollar and slowing demand for a $4 cup of coffee has the luxury item in a headspin. Many Americans are finding that the daily latte proves too much for their pocketbook. Read more…
Investing
SBUX
Trading oil often requires a high level trading account in either the futures market or with a commodity trading firm. There are a few stock sectors that move in reaction to oil prices. Trading these stocks, in many cases, is just as good as trading oil itself. Read more…
Investing
oil, XOM
First quarter venture capital for 2008 was off by 5%, the lowest since 2005. While the sure signs of a market contraction aren’t showing themselves fully ( two consecutive quarters of negative GDP growth) its looking like investors aren’t finding any investment worthy businesses.
This news is more forward looking than a look back. Venture capital investment usually turns into profitable businesses soon to go IPO. It could be that the slowdown in 2005 affected market slowdown in 2007, although its hard to draw a direct line. Venture capital firms helped start giants like Google, Apple, Microsoft, virtually every large corporation publicly held is the product of large investment dollars from these firms. Its easy to see how a slowdown in venture capital can slow market growth and sputter out the IPO market. Read more…
Stocks
This next week will give us a great look into how well or how poorly the US tech sector is doing. Apple, Microsoft and Yahoo are set to release earnings. Microsoft’s success might give new hope to a Yahoo buyout, while the earnings report for Yahoo is of much interest to the Microsoft board.
Yahoo’s stock is still at the post-Microsoft offer price of $28 per share even as the possibility of a merger seems entirely out of the question. For this reason alone, Yahoo has much more to lose from a earnings release than it has to gain. Google posted a 42% increase in revenue, Yahoo is expected to follow. A very good earnings report from Yahoo is unlikely to change the price of the stock, which has been left at the $28-30 level since the Microsoft offer. Read more…
Stocks
Revenue was up 42% year over year, mostly from the differential between foreign currencies and the US dollar. Marketing on Google Adwords, the main component of Google’s earnings, looks cheap to firms located overseas. Foreign companies now have an advertising advantage against US competition, this works well for Google. International businesses and advertising now accounts for the majority of Google revenue, sitting at a perfect 51%. Read more…
Stocks
GOOG
IBM released earning statements showing that earnings jumped 26% due to higher software and services sales. This news comes just a day after Intel produced very good numbers, looks like the tech sector is the one to beat in 2008. Read more…
Stocks
IBM
There is a serious resistance line still in play on the daily Dow chart. After the financial industry got the boot from investors, the market has fared pretty well. We’re back in the 12000s and keeping a reasonable trading range but there is just one trendline still in the way of Dow 13000. Read more…
Investing, Stocks
DOW
Bear Stearns issued an earnings report today that showed the company produced a $115 Million dollar profit in the first quarter of 2008. That amounts to annual earnings of $460 Million per year, while BSC is valued currently at $1.38 Billion. With that kind of earning potential, JP Morgan still has a lot of juice to squeeze out of its assets. Read more…
Stocks
BSC, JPM
The upward swing in commodity prices has certainly pushed prices up all around. As mentioned last article, oil prices have affected everything that requires delivery.
Kroger has profited heavily from the rise in commodities, as they secure foods on contract long before actual delivery. Unlike giants like WalMart that buy goods at market price hoping to flip them before the price changes, Kroger takes an added step which has added to the bottomline. As egg and sugar prices towered upward, Kroger had a locked in price much lower than the market price. Kroger could either pocket the difference, or use lower prices as a competitive advantage. Its safe to say that it did both, subsidizing prices to near sale-like values and pocketing a little extra on the side. Read more…
Stocks
KR
Oil prices are sure to affect more than just the casual commuter. The price of oil is so high now that the price of goods are following. Very few items that are sold in stores are local, most must be shipped around the country and around the world before making it to the aisle of your favorite supermarket. Today, the price of oil can affect everything from commodity prices, the cost to fly to a vacation spot, or the price of millions of goods made with oil such as plastics. Read more…
Round Up
Recession worries might soon be behind us, not because of economic growth but instead, the Federal Reserve actions are now holding strong. An inflationary cycle has push all economic indicators up, giving wall street new hope and worried investors back to the markets.
In every economic recession the Federal Reserve has acted exactly the same, ease lending rates and force new credit into the financial system. Their latest actions of increasing new credit to banks, issuing $30 Billion in credit to finance the Bear Sterns buyout and Congress’s economic stimulus package of $150 Billion will soon make its way into the economy and into the pockets of Americans eager to become consumers once again. Read more…
Forex, Hedge Funds
As the primaries wind down and the 2008 election year politicking reaches full swing, there is one major industry that is going to get a boost no matter the outcome, that is healthcare.
Election year politicking is dirty to say the least, Congressional bills get more and more ridiculous as each side hopes to present the other as complete trash. During cycles like this bills regarding guns, marriage, healthcare and military expenditures come full circle to be voted on. Read more…
Investing
Microsoft and Exxon Mobil look like great investments but their market caps are extremely high. There is some benefit here, the price of both of these companies is very stable so you’re less likely to lose your shirt. However, large market cap stocks move less thus produce smaller profits. Its nice to invest in a stock that retains value but you also want to be able to avoid entering a stock with little price action. Read more…
Stocks
The jobless report was released today which shows the amount of new people currently seeking unemployment benefits. This month showed a jump of 38,000 people to 407,000 people. Remember that this statistic is for the amount of NEW people, not an accumulation of people over the course of the year. This is 407,000 people who have lost a job in the last month. Just a year ago the stats showed just 319,000 people seeking unemployment benefits, a near 30% increase year over year. Read more…
Round Up
Now that we have a confirmation that recession might be around the corner from Ben Bernanke, we’re pretty sure that one is coming. A recession is a contraction in money supply, business and the velocity of money. Its hard to shop for a bargain in a recession because you never know how bad things just might get. Read more…
Investing
Ben Bernanke
I’d first like to start by saying that any company that can improve the bottom-line by means of cutting costs is a great company indeed. Sure we like to see a company with increased market share and revenue, but cost cutting is a great way to increase profits and show that the company is concerned about waste. There are millions of companies out there that are extremely profitable and would only be more profitable by decreasing expenses. When a company starts to look inside its offices to cut expenses, we’re all happy investors.
Dell has done just that. Read more…
Investing, Stocks
DELL
