Saturday, May 23, 2009

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Research Recap - Fitch says Improvement in US Banks May be Fleeting.

Recession Turns Malls Into Ghost Towns - WSJ.com. 'Some analysts estimate that the number of so-called "dead malls" -- centers debilitated by anemic sales and high vacancy rates -- will swell to more than 100 by the end of this year.'

Are Emerging Markets Safer Than Developed Markets? Gary Gordon on Greenfaucet. "For all of the talk about EEM rising 55% off its March lows, XLF has catapulted more than 100%. Moreover, the daily price range for XLF has approximated 7% in 2009, close to double the daily price range of iShares MSCI Emerging Markets (NYSE: EEM). You can see similar price volatility differences by looking at the weekly closing prices of XLF and EEM. (Which line looks more erratic/volatile/risky to you?)"

Poll: How much federal income tax should a family of four that makes $100,000 pay?

Rising Dividend Investing - Green Shoots For Deere. Greg Donaldson is a conservative dividend growth investor and DE is an unusual stock for him to be recommending. Future increased sales of agricultural machinery to developing nations does seem like a good bet, but DE's current yield is mediocre and its dividend history is really terrible. Granted, they have increased the dividend substantially in each of the last four years, but before that the most recent dividend increase was in 1997, and the dividend was actually cut 75% in 1986. Nevertheless, if we get a pullback to S&P 800 this summer it might be worth a look.

Correction is mild so far - Carl Swenlin. "What we are left with at this point is a short consolidation with a short-term double top and neckline support at about 880 on the S&P 500. With the market coming off extremely overbought medium-term conditions, it would be reasonable to have expected a more energetic decline. The fact that the correction has so far taken the form of a sideways consolidation, tells us that the medium-term market bias is still bullish. That is not to say things can't get worse in a big hurry, but so far the market is holding up pretty well. Bottom Line: The predominant feature on the chart is still the developing reverse head and shoulders formation. We are not really any closer to it than we were last week -- we still need a correction to about 800 to form a credible right shoulder. I think we could see this happen in the next several weeks."

Yale’s Swensen Recommends TIPS to Hedge ‘Substantial Inflation’. The TIP chart has been monotonous lately, consisting mostly of sideways movement interspersed with occasional thrusts that never seem to go anywhere. TIP is apparently caught in the crossfire between rising interest rates and the threat of future inflation.

On the Radar: Recent Intermarket Relationships - Brett Steenbarger. "Some intermarket relationships impacting recent trading: weak stocks (top chart), weak dollar versus euro (second chart from top), strong gold (second chart from bottom), rising Treasury rates (bottom chart). Could we be looking at inflation sooner than expected? If so, that would have important implications for Federal Reserve policy, interest rates, commodities, and the prospects for sustained economic recovery.

OPEC meets next week; expected to keep output steady after oil price rise.

Goose flies upside-down. "The manoeuvre may look painful but it is a known tried and tested way of braking, called whiffling."

New Zealand couple disappear after $10m transferred into their account in bank error.

"Never risk more than 1 percent of total equity on any trade." - Larry Hite
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