#-ad_banner-#The two titans of retail squared off last week in a discount smack down. The battle should have major  consequences for each other and the broader industry. Amazon.com, Inc. (Nasdaq: AMZN) has amassed a $100 billion revenue base through a combination of solid execution and well-timed promotions. For example, its Amazon Prime service has created a strong base of loyal and sticky customers. Celebrating its 20th anniversary of that service, the company held a special “Prime Day” on July 15, with a range of discounts. The move came as retail Wal-Mart Stores, Inc. (NYSE: WMT) is making its own… Read More

#-ad_banner-#The two titans of retail squared off last week in a discount smack down. The battle should have major  consequences for each other and the broader industry. Amazon.com, Inc. (Nasdaq: AMZN) has amassed a $100 billion revenue base through a combination of solid execution and well-timed promotions. For example, its Amazon Prime service has created a strong base of loyal and sticky customers. Celebrating its 20th anniversary of that service, the company held a special “Prime Day” on July 15, with a range of discounts. The move came as retail Wal-Mart Stores, Inc. (NYSE: WMT) is making its own massive online push. While Amazon was touting its sales event, Wal-Mart cut prices on thousands of products last week and is developing its own loyalty program, which will cost $50 a year. Walmart also lowered its minimum purchase for free shipping to $30 from $50 for the week’s promotions. Wal-Mart’s CEO even took subtle digs at Amazon and its pricey $99 per year membership fee. These two warriors are officially in battle. Tale Of The Retail Tape In tandem with a steady consumer migration toward e-commerce, Amazon’s growth rate has vastly outpaced Wal-Mart’s… Read More

The semiconductor industry has always been extremely cyclical and volatile. Demand for chips fluctuates widely with the product cycles of major tech companies like Apple (Nasdaq: AAPL) and Samsung (OTC: SSNLF). At present, it looks like the industry is signaling a slowdown.  Shares of Samsung are 16% off their year-to-date highs, and this week the company reported its seventh straight decline in quarterly profits. Taiwan Semiconductor Manufacturing (NYSE: TSM) is down 14% since late April on slowing smartphone shipments, and SK Hynix has dropped 20% on the Korean market since early June.  #-ad_banner-#… Read More

The semiconductor industry has always been extremely cyclical and volatile. Demand for chips fluctuates widely with the product cycles of major tech companies like Apple (Nasdaq: AAPL) and Samsung (OTC: SSNLF). At present, it looks like the industry is signaling a slowdown.  Shares of Samsung are 16% off their year-to-date highs, and this week the company reported its seventh straight decline in quarterly profits. Taiwan Semiconductor Manufacturing (NYSE: TSM) is down 14% since late April on slowing smartphone shipments, and SK Hynix has dropped 20% on the Korean market since early June.  #-ad_banner-# These semiconductor stocks have something in common besides their plunging stock prices. They are the three main customers of another company, accounting for more than 30% of its revenues. And while Samsung, Taiwan Semiconductor and SK Hynix are each down double digits in recent months, this shared supplier is only 8% off its year-to-date high. Plus, the stock is trading at a premium to its five-year average price-to-sales multiple.  With second-quarter earnings approaching, this semiconductor equipment supplier may be due for a correction that we can leverage into a 62% gain. Before we get to today’s trade, one… Read More

#-ad_banner-#Although the city of Detroit’s $18 billion bankruptcy declaration in 2013 was taken in stride by the stock market, bond insurance companies lost billions and saw their stocks slide in subsequent month. This time around, Puerto Rico’s current financial struggles might not be so easily digested by the markets. The island’s $72 billion debt burden is so vast that the  governor says it is “just not payable.” In response, investors are fleeing shares of the municipal bond insurers, with losses exceeding 35% for one of the stocks.   Yet demand for insurance in the $3.6 trillion… Read More

#-ad_banner-#Although the city of Detroit’s $18 billion bankruptcy declaration in 2013 was taken in stride by the stock market, bond insurance companies lost billions and saw their stocks slide in subsequent month. This time around, Puerto Rico’s current financial struggles might not be so easily digested by the markets. The island’s $72 billion debt burden is so vast that the  governor says it is “just not payable.” In response, investors are fleeing shares of the municipal bond insurers, with losses exceeding 35% for one of the stocks.   Yet demand for insurance in the $3.6 trillion municipal bond market won’t be drying up, and the recent selloff maybe a buying opportunity, at least for investors that can handle higher volatility and wait for the best of breed to emerge stronger. Bond Apocalypse Puerto Rico’s woes come as no surprise. The popular tax haven collects no capital gains tax and levies only a 4% tax on its residents’ income. Nearly a decade of economic stagnation has precipitated an historic migration of residents to the United States mainland. A third of those born in Puerto Rico now live on the mainland, and the… Read More

Carmakers reported surprisingly strong U.S. light-vehicle sales in May with a seasonally adjusted annualized rate of 17.71 million units, the highest since 2005. Aided by five weekends, including the usual Memorial Day blowouts, daily sales of 62,558 units were 5.5% higher than the same month last year. Besides great weather for car shopping, manufacturers have benefited lately from stronger employment, low gasoline prices and increasing credit availability. But you wouldn’t know it to look at their stock prices. In fact, the First Trust NASDAQ Global Auto ETF (NYSE: CARZ) sank 2.7% over the week after the May sales report was… Read More

Carmakers reported surprisingly strong U.S. light-vehicle sales in May with a seasonally adjusted annualized rate of 17.71 million units, the highest since 2005. Aided by five weekends, including the usual Memorial Day blowouts, daily sales of 62,558 units were 5.5% higher than the same month last year. Besides great weather for car shopping, manufacturers have benefited lately from stronger employment, low gasoline prices and increasing credit availability. But you wouldn’t know it to look at their stock prices. In fact, the First Trust NASDAQ Global Auto ETF (NYSE: CARZ) sank 2.7% over the week after the May sales report was released.  Investors have been worried that strong economic data would encourage the Federal Reserve to raise interest rates and choke off big-ticket purchases like new cars. While this may eventually be the case, higher rates could actually be a tailwind for automakers in the second quarter.  Higher Rates May be Good Thing for Near-Term Investors  A surge in interest rates could end up helping car manufacturers in a way that investors have yet to grasp. The rate on the 10-year Treasury has shot up from 1.87% at the beginning of the quarter to around 2.5%. Read More

#-ad_banner-#In the face of historic monetary stimulus from nearly every major central bank in the world over the past few years, an investment in gold would have seemed to be a “no-brainer.” Yet the precious metal’s price, around $1,178 per ounce, has barely budged. Now may be the time to give gold a fresh look.  Fundamental drivers appear in place for long-term upside, and technical support could provide a near-term catalyst. Moreover, shares of gold mining companies are selling at steep discounts to historical multiples and the slightest hint of stabilization could bring investors back in… Read More

#-ad_banner-#In the face of historic monetary stimulus from nearly every major central bank in the world over the past few years, an investment in gold would have seemed to be a “no-brainer.” Yet the precious metal’s price, around $1,178 per ounce, has barely budged. Now may be the time to give gold a fresh look.  Fundamental drivers appear in place for long-term upside, and technical support could provide a near-term catalyst. Moreover, shares of gold mining companies are selling at steep discounts to historical multiples and the slightest hint of stabilization could bring investors back in a big way. A confirmation of fundamentals for gold prices would send gold mining shares soaring. Fundamentals May Finally Be Turning Higher For Gold Gold’s recent subdued performance can be attributed to tepid global growth that has kept inflation at bay. Yet there are signs that both are on the way up. The World Bank estimates global growth of 2.8% this year and 3.3% in 2016. Economic growth in the stagnant eurozone is expected to jump 1.5%, the fastest pace since 2010. Prices in the eurozone… Read More

#-ad_banner-#Since the 1950’s, computer data has been stored on spinning platters, known as hard disk drives. These drives consume a lot of energy and give off a lot of heat. A half century later, hard disk drives met their match in solid-state storage drives, which are much faster, have no moving parts and are available in DRAM and NAND flash memory (I’ll talk about the difference between the two shortly). But adoption of solid-state technology has been slow due to their relatively high price points. Yet the cost to build solid-state devices is slowly dropping, and over an extended time period, it… Read More

#-ad_banner-#Since the 1950’s, computer data has been stored on spinning platters, known as hard disk drives. These drives consume a lot of energy and give off a lot of heat. A half century later, hard disk drives met their match in solid-state storage drives, which are much faster, have no moving parts and are available in DRAM and NAND flash memory (I’ll talk about the difference between the two shortly). But adoption of solid-state technology has been slow due to their relatively high price points. Yet the cost to build solid-state devices is slowly dropping, and over an extended time period, it is increasingly the better choice. The Storage Networking Industry Association calculated the total cost of ownership for hard disk and solid-state storage. As the chart below illustrates, the cost to operate solid-state storage over five years is nearly a third that of hard disk drives. Hard disk drives still represent the majority of memory, but they are experiencing annualized unit sales declines in excess of 15% due to the new price advantage of solid state. Unit volume for solid-state drives is expected to grow at an annual pace of 59% to 3.9 million units over the three years… Read More

The surge in natural gas production has changed the energy landscape in the United States. Production jumped 44% between 2005 and 2014 compared to a decline of 4.5% over the previous nine-year period. Prices for natural gas at the Henry Hub in Louisiana jumped 162% between 2002 and 2008 on lower production and an economic boom in emerging markets. By 2012, prices had fallen nearly 70% to $2.75 per million BTU. Beyond a few spikes on colder weather, prices have flatlined between $2.50 and $3.50 for the past two and a half years.  Futures prices on… Read More

The surge in natural gas production has changed the energy landscape in the United States. Production jumped 44% between 2005 and 2014 compared to a decline of 4.5% over the previous nine-year period. Prices for natural gas at the Henry Hub in Louisiana jumped 162% between 2002 and 2008 on lower production and an economic boom in emerging markets. By 2012, prices had fallen nearly 70% to $2.75 per million BTU. Beyond a few spikes on colder weather, prices have flatlined between $2.50 and $3.50 for the past two and a half years.  Futures prices on the Chicago Mercantile Exchange (CME) suggest traders are not expecting much to change this year, with the December contract priced at $3.17. But two catalysts may prove speculators wrong and spark a rally in natural gas prices. Traders who get positioned now stand to make up to 50% profits without ever touching a futures contract.  #-ad_banner-# Natural Gas Exports About to Surge Natural gas exports have increased along with the production surge, but regulations that prohibit export to non-free trade agreement countries without approval seriously limit how much can be exported.  Price differences between… Read More

Interest rates have jumped on stronger economic growth in the United States and abroad causing prices for rate-sensitive investments to plunge. Traditionally low-risk investments like the iShares 20+ Year Treasury Bond Fund (NYSE: TLT) and the Utilities Select Sector SPDR ETF (NYSE: XLU) have booked large losses that will likely extend when the Fed finally starts to lift rates. But utilities still play a vital role for many investors that need consistent income and can be a blessing when the general market tumbles. #-ad_banner-# Using one of my favorite options strategies for reducing… Read More

Interest rates have jumped on stronger economic growth in the United States and abroad causing prices for rate-sensitive investments to plunge. Traditionally low-risk investments like the iShares 20+ Year Treasury Bond Fund (NYSE: TLT) and the Utilities Select Sector SPDR ETF (NYSE: XLU) have booked large losses that will likely extend when the Fed finally starts to lift rates. But utilities still play a vital role for many investors that need consistent income and can be a blessing when the general market tumbles. #-ad_banner-# Using one of my favorite options strategies for reducing risk can provide extra income for those investors while maintaining a position in the sector for longer-term portfolio diversification. Taper Tantrum, Round 4 — Rates Surge Volatility due to rapidly rising interest rates is nothing new for investors in utility stocks. Rates on the 10-year Treasury jumped 1.3% in 2013 when the Federal Reserve announced that it would begin tapering its $70 billion monthly bond purchases. Shares of the SPDR utility fund dropped 10.2% in the four months leading up to September of that year. Markets have seen two other periods of rate hike fears since then. The first was… Read More

The great bond exodus may have begun. Fears of Federal Reserve-induced interest rate increases are pushing bond yields up and bond prices down. In fact, more than $1.2 trillion in value has been wiped out in the global bond market since April.  The selloff has accelerated when the June employment report showed that wages in May increased by the most since August 2013. Signs of an economic recovery in Europe have also pushed losses on global bonds even further. The yield on the German 10-year bund has jumped nearly ten-fold since late April. #-ad_banner-#The fallout is already being… Read More

The great bond exodus may have begun. Fears of Federal Reserve-induced interest rate increases are pushing bond yields up and bond prices down. In fact, more than $1.2 trillion in value has been wiped out in the global bond market since April.  The selloff has accelerated when the June employment report showed that wages in May increased by the most since August 2013. Signs of an economic recovery in Europe have also pushed losses on global bonds even further. The yield on the German 10-year bund has jumped nearly ten-fold since late April. #-ad_banner-#The fallout is already being felt with bond funds. The iShares 20+ Year Treasury Bond Fund (NYSE: TLT) and the SPDR Barclays Long-term Corporate Bond ETF (NYSE: LWC) have both lost roughly 10% in the past two months. Despite the idea that bonds are a safe investment and a hedge against stock market losses, the correlation between global bonds and stocks has recently increased to 0.30, the highest correlation since the Federal Reserve announced it would begin tapering quantitative easing in 2013. That means returns on stocks and bonds are moving in similar directions and there may be nowhere to hide for investors. Looking for… Read More

Higher interest rates are setting up to be one of the major market themes of 2015. Global rates are surging, and despite the fact that the International Monetary Fund (IMF) urged the Federal Reserve to hold off on increasing the fed funds rates, investors remain on edge. This is wreaking havoc on the bond market, sending prices plummeting as investors sell bonds with lower fixed rates. The iShares 20+ Year Treasury Bond ETF (NYSE: TLT) has lost more than 10% over the past two months. #-ad_banner-# Stocks in the S&P 500 are not doing that much better,… Read More

Higher interest rates are setting up to be one of the major market themes of 2015. Global rates are surging, and despite the fact that the International Monetary Fund (IMF) urged the Federal Reserve to hold off on increasing the fed funds rates, investors remain on edge. This is wreaking havoc on the bond market, sending prices plummeting as investors sell bonds with lower fixed rates. The iShares 20+ Year Treasury Bond ETF (NYSE: TLT) has lost more than 10% over the past two months. #-ad_banner-# Stocks in the S&P 500 are not doing that much better, down 2% from their May high, and investors are scrambling to cover their portfolios in the event of higher rates. But one sector stands to benefit from the increase in yields. It booked the second highest earnings growth in the first quarter and could jump when second-quarter results come out. Risks remain but options traders can take advantage of a powerful strategy to minimize losses while amplifying potential returns into 50%-plus profits by the end of summer. Interest rates can be a mixed bag for companies in the financial sector. While low rates drive down borrowing costs, they also limit… Read More