Over the past few months, an economic slowdown in China has led to a series of economic headwinds for many of the country’s key trading partners.  Indeed, for the first time in several years, economists have raised the prospect of a possible recession in Asia and Latin America, joining the ranks of major European economies already mired in a slump. For Mexico’s Cemex (NYSE: CX), the world’s third-largest cement maker and producer of concrete, any fresh slowdown could cause real distress for its rebounding… Read More

Over the past few months, an economic slowdown in China has led to a series of economic headwinds for many of the country’s key trading partners.  Indeed, for the first time in several years, economists have raised the prospect of a possible recession in Asia and Latin America, joining the ranks of major European economies already mired in a slump. For Mexico’s Cemex (NYSE: CX), the world’s third-largest cement maker and producer of concrete, any fresh slowdown could cause real distress for its rebounding stock. For investors who have managed to profit from this stock’s heady two-year rebound, now is the time to book profits as shares could give up those gains if cash flow doesn’t improve. Even before the recent slowdown in China and elsewhere, Cemex has been through a rough period. Anemic levels of construction have hurt pricing and demand for cement, leading this company to bleed… Read More

Bonds are supposed to be safe investments. But what most fixed-income investors don’t realize is that bonds have rarely been more risky. That’s because with interest rates near record… Read More

In China, the economic news is going from bad to worse. The country’s Purchasing Manager’s Index (PMI), which in May dropped to 49.2, signaling contraction, has slipped further in the first three weeks of June, to 48.2. A key component of the PMI, new export orders, fell to just 44.0. In May, imports fell to their lowest levels in roughly nine months, due in large part to growing commodities stockpiles. Pricing power at key companies is dropping, thanks to chronic industrial overcapacity. Weaker… Read More

In China, the economic news is going from bad to worse. The country’s Purchasing Manager’s Index (PMI), which in May dropped to 49.2, signaling contraction, has slipped further in the first three weeks of June, to 48.2. A key component of the PMI, new export orders, fell to just 44.0. In May, imports fell to their lowest levels in roughly nine months, due in large part to growing commodities stockpiles. Pricing power at key companies is dropping, thanks to chronic industrial overcapacity. Weaker corporate profits are raising concerns for the Chinese banking system, as many banks have issued a tremendous amount of loans to manufacturers and real estate developers in recent years. The era of easy money in China appears to be winding down as interest rates are quickly moving higher. (The seven-day repurchase rate shot above 8% this week, after being below 4% for much of the past few years.) Economists cite a… Read More

Even as the S&P 500 has risen 20% over the past 12 months, the champagne is really flowing in Japan, where the Nikkei index is up a stunning 60%.#-ad_banner-# But it’s time to put the cork back in the bottle. As my colleague Joseph Hogue recently noted, the Japanese economy holds the risk of a deep blow-up. Joseph focused on Japan’s potentially ruinous debt load and didn’t even touch… Read More

Even as the S&P 500 has risen 20% over the past 12 months, the champagne is really flowing in Japan, where the Nikkei index is up a stunning 60%.#-ad_banner-# But it’s time to put the cork back in the bottle. As my colleague Joseph Hogue recently noted, the Japanese economy holds the risk of a deep blow-up. Joseph focused on Japan’s potentially ruinous debt load and didn’t even touch on two other major concerns. First, Japan’s decision to end its use of nuclear power is leading to a massive spike in fossil fuel imports. Japan now looks set to run massive trade deficits far into the future. Second, Japan is aging fast. Consider these stats: Roughly 23% of Japan’s citizens are now over 65, up from 11.6% in 1989. This figure is set to keep rising. (As a point of reference, roughly 14% of all Americans are over 65, and this percentage is expected to rise to 20% by… Read More

Even as Europe struggles to avoid further meltdowns, the economic pulse across the English Channel is starting to quicken. A steady drumbeat of positive economic reports has led to expectations that much better days lie ahead in 2014 and 2015 for the U.K. economy. Meanwhile, British stock prices, which have failed to keep pace with their U.S. counterparts, are starting to emerge as timely bargains. Green Shoots Back in 2010 and 2011, U.S. economists started to notice signs of… Read More

Even as Europe struggles to avoid further meltdowns, the economic pulse across the English Channel is starting to quicken. A steady drumbeat of positive economic reports has led to expectations that much better days lie ahead in 2014 and 2015 for the U.K. economy. Meanwhile, British stock prices, which have failed to keep pace with their U.S. counterparts, are starting to emerge as timely bargains. Green Shoots Back in 2010 and 2011, U.S. economists started to notice signs of life among both manufacturers and consumers, citing a rising tide of “green shoots” that popped up from the soil. That early evidence of a moderate recovery in the U.S. eventually led to robust share price gains across all U.S. asset classes. Fast-forward to 2013, and the same playbook appears to be emerging in the U.K. For example: After shrinking 0.2% in the fourth quarter of 2012, the U.K. economy grew 0.3% sequentially in the first quarter of 2013, and grew a further 0.6% in the second quarter. Read More

Among traders, George Soros is a legend for making big bets that pay off. His most famous trade — a bet against the Bank of England — made him $1 billion in one day. Since then, Soros has added to his wealth with other timely market calls. Soros analyzes global economic trends and often takes positions when he suspects a trend has gone too far. Few traders have the ability to process information in the way that Soros does, and even fewer have the courage of conviction… Read More

Among traders, George Soros is a legend for making big bets that pay off. His most famous trade — a bet against the Bank of England — made him $1 billion in one day. Since then, Soros has added to his wealth with other timely market calls. Soros analyzes global economic trends and often takes positions when he suspects a trend has gone too far. Few traders have the ability to process information in the way that Soros does, and even fewer have the courage of conviction needed to act quickly and decisively on their analysis.#-ad_banner-# Japan is the latest example of Soros’ investment process. The Wall Street Journal reports that he is using the recent drop in Japan’s stock prices to buy. He is also shorting the yen after its recent rise. A weaker yen would help Japanese exporters increase their profits and is bullish for the country’s stocks. Soros hasn’t confirmed the rumors,… Read More

You may not be familiar with the name “Grantham, Mayo, Van Otterloo & Co.” — but you should be. Led by fund industry guru Jeremy Grantham, GMO is a Boston-based money management firm with… Read More

A bird in the hand is worth two in the bush. If the two market crashes since the turn of the century have taught us one thing, it is that this proverb is extremely relevant to investing. Investors relying only to future growth in stock prices for their returns were badly burned as they saw their portfolios decimated by the dot-com bust and the Great Recession. Those investors holding portfolios with an even mix… Read More

A bird in the hand is worth two in the bush. If the two market crashes since the turn of the century have taught us one thing, it is that this proverb is extremely relevant to investing. Investors relying only to future growth in stock prices for their returns were badly burned as they saw their portfolios decimated by the dot-com bust and the Great Recession. Those investors holding portfolios with an even mix of dividends and growth were certainly not immune, but they could at least look to past cash returns for overall performance.#-ad_banner-# On average since 1962, the market has suffered crashes of more than 20% in a year once every seven and a half years. Still, investing is about long-term returns, and even the best dividend stocks may not get your portfolio to its goal. So what’s an investor to do? The answer lies… Read More

There’s a sector in China that’s booming right now, and U.S. companies are just now starting to take advantage. Consider a few statistics. In 2000, a mere 4% of urban Chinese households were considered middle class. By 2012, that figure had grown to 66%. If current trends continue, by 2022 the middle class population will be 75% of urban households. That’s nearly 630 million consumers — nearly twice the entire population of the United States.#-ad_banner-# The average annual income of the urban Chinese middle class was $760 per… Read More

There’s a sector in China that’s booming right now, and U.S. companies are just now starting to take advantage. Consider a few statistics. In 2000, a mere 4% of urban Chinese households were considered middle class. By 2012, that figure had grown to 66%. If current trends continue, by 2022 the middle class population will be 75% of urban households. That’s nearly 630 million consumers — nearly twice the entire population of the United States.#-ad_banner-# The average annual income of the urban Chinese middle class was $760 per person in 2000. In cities like Bejing or Shanghai, disposable income now averages nearly $12,000 per person. In addition, these figures are probably underestimated, as tax avoidance runs rampant in China. In another emerging trend, China has begun to implement a financial assistance program for some of its residents. Due to the lack of safety-net welfare programs like Social Security, the Chinese savings rate is around 50%. Compare this to the savings rate for American households, which was 2.6% as of this… Read More

Trouble is brewing in the Western economies again.  The U.S. economy is growing slowly at best, while the European economy is still contracting. European consumer confidence is still very low, and housing markets are worrisome. The average European is cutting back on their expenditure and is rather saving money than spending it. This means that companies relying on these markets for much or all of their revenue can do little more than cut… Read More

Trouble is brewing in the Western economies again.  The U.S. economy is growing slowly at best, while the European economy is still contracting. European consumer confidence is still very low, and housing markets are worrisome. The average European is cutting back on their expenditure and is rather saving money than spending it. This means that companies relying on these markets for much or all of their revenue can do little more than cut costs and protect market share.  If you’re a large company that wants to grow even larger, you need to be present in the emerging markets. The so-called BRIC countries (Brazil, Russia, India and China) and many other developing economies are growing at a fast clip. They have young, dynamic populations that are working hard and growing wealthier every year. But rather than risk your money by investing directly in these volatile economies, why not… Read More