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What'sHot Today: |
U.S. stock index futures were flat inearly trading. Asia and Europe rallied.Crude oil was trading near $47 per barrel. Today's Economic Calendar:
NASA: Beyond the Wildest of Dreams. Here's onewhere taxpayers are getting their money's worth five-fold. NASA's twinMars rovers, Spirit and Opportunity, have outlived their expected90-day lifespans twenty times over. Both rovers were expected to lastabout 90 days, but are still working, digging up samples, analyzingdata, and beaming it accross the galaxy. China and U.S. manufacturing data suggests slowingeconomic remain in place. China's equivalent of the U.S.'s ISMdata was slightly higher but still below levels which show that theeconomy is growing. But that's good news compared to the most recentU.S. data, where the ISM Index fell nearly four points in December to areading of 32.4. Painting a more gloomy picture were the particulars ofthe report, where eight out of the ten categories followed fell. Theonly two that climbed were customer inventories and imports. Both arecategories that you don't want to be climbing. According to the highlights of the report, some ISM members noted thatDecember had been the "slowest month" in years, while others noted that"North and South America are slow but not off substantially from plans.Europe has slowed down dramatically, while Asia — particularly China —has virtually shut down." Obama tax cut proposal seems to be good idea, yetdetails remain fuzzy. President elect Obama has announced a $300billion tax cut that, in principle, is being well received byexecutives and Republicans. There are no details available yet. But itis an interesting start to his economic stimulus plan, to be sure. |
2009 looks to be a year with thepotential for significant developments in thestock market and geopolitics where there is little room for error, evenfor themost astute and discerning investor. There are clearly two major themes underlying the two areas that willlikely shape the year. As the worst news about the financial markets indecades has surfaced, investors seem to have developed a "what else canhappen"" attitude, leading to the potential for higher returns instocks. On the geopolitical front, the U.S. withdrawal from Iraq, andits effects have yet to be felt. But there are hints about what'scoming there as well. Value, BrandLoyalty, and Responsible Management 2009 is likely to be a stock picker's year, which means that moneymanagers are likely to focus their efforts on individual stocks, notindexes. And while there are no guarantees that stock prices are goinghigher in w year following the worst returns in decades, there areplenty of reasons for prices to rally; lower interest rates,significant amounts of pessimism, and a Federal Reserve with theprinting presses on high. Still, investors should not expect to have aneasy time picking winners, as old-fashioned value criteria are back envogue. And that makes this a laser beam, not a shotgun market. The major influence will be consumers and businesses with tighterbudgets and an eye for value. It will be this demand for "good stuff"for less, and service with a smile that will rule the roost. That meansthat well run companies, with real, useful, reliable products and theability to manage their sales, assets, and future lines of products arethe ones that are likely to catch the eyes and wallets of moneymanagers, since they will be the ones that will be busy. More thananything, and barring a continued deterioration of the global eocnomy,management teams that can actually deliver substantial and believableresults are the most likely to be rewared with potentially higher stockprices. That means that companies with brand names and a loyal following arelikely to do better than the rest of the pack. Two good examples areMcDonalds' (NYSE: MCD) and Wal-Mart (NYSE: WMT), both components of theDow Industrials. Other such companies can be found in our Fallen AngelsPortfolio, including Hewlett Packard Compaq (NYSE: HPQ), and IBM (NYSE:IBM). To be sure, this isn't earth shattering stuff. But it is whatworks in the early stages of a new bull market, if that's indeed whatthe last few days of trading indicate. Nowhere was this concept, and its global presence, clearer to us thanover our recent stay in Disneyworld, where huge crowds of domestic andinternational guests battled long lines and high prices, just to be ina place that delivered what they perceived was of value to them andtheir families. Best of Sectors In 2009, investors will have to focus on the best stocks in the bestsectors, and our early picks for the year are:
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