Tuesday, August 17, 2010

JPMorgan: Stocks Will Soar 16 Percent by Year's End

By: Dan Weil

The U.S. economic rebound may be slowing, but investment strategists such as JPMorgan Chase’s Tom Lee still see stocks rising for the rest of the year.

Strong earnings will fuel the gains, they say. Lee sees stocks climbing 16 percent for the rest of the year. The Standard & Poor’s 500 Index has appreciated 1.2 percent so far this year – to about 1,100.

A Bloomberg survey of 12 major securities firms shows an average forecast for a 10 percent increase, pushing the S&P 500 to about 1,242.

Stocks are attractive on a price-earnings basis, Lee tells Bloomberg. The S&P 500’s PE ratio stands at 15, which is 16 percent below its average since 1937 when adjusted for interest rates, he says.

Add that to forecasts for earnings growth of 35 percent this year and 16 percent in 2011, and you have a good recipe for a stock market rally, Lee says. (more)

Silver's Big Decline: Disturbing but Necessary?

In this article, we would like to point your attention to the big picture regarding the silver market - since both metals usually move together the below analysis should prove useful to gold investors as well.

On the very-long-term chart this week, emphasis is given to the TRIX indicator, which has declined somewhat in the past weeks. This is a bullish signal for the long-term as important developments usually occur after the TRIX reaches zero. There is a possibility that this level may be reached in the relative near-term, possible once we've seen the end of the summer decline.

A sharp decline in silver’s price could cause a substantial decline in the TRIX, which would be a healthy and normal development for the market. The coming decline might appear scary at the first sight, but if it does materialize - please keep in mind that it's something that will allow the market to move even higher in the long run. (more)

The Best Gold Interview of 2010

Jeff Clark, Casey's Gold & Resource Report ,

Much of what passes for “insider” information these days is often conspiracy-edged or largely conjecture. True inside information is actually hard to come by. So what follows is the refreshingly candid and uncut version of my talk with a first-hand participant in the murky and little-understood world of gold bullion, mints, and bullion dealers.

Customarily, when considering a company for a potential recommendation, I hold a series of discussions with management. It was during one of these vetting procedures that I spoke with Andy Schectman of Miles Franklin – and heard some disturbing reports about supply that every investor should know. Andy is a bullion seller, so you’re welcome to take his comments with a grain of salt. On the other hand, what he sees week after week and what he hears from his high-level industry contacts might just make you pull back on that salt shaker and re-inventory the number of ounces you own...

Jeff Clark: Andy, tell us about the kinds of contacts you have in the industry and where you get your information.

Andy: I’m associated with two of the six primary mint distributors in the United States. There are only six primary precious metal distributors here because the qualifications are very difficult to meet. Aside from having $100 million in annual sales, you have to extend a $50 million line of credit to the U.S. Mint, and very few companies can do that. So in working with these companies, I’m privy to information that many others aren’t. (more)

BNN: Top Picks

Jamie Horvat, senior portfolio manager, Sprott Asset Management, shares his top picks.

click here to view

Hour Action in Gold by Trader Dan

courtesy of jsmineset

10 S&P Stocks With the Strongest Potential

By David Sterman / Seekingalpha,

Many companies are handling these tough times in a defensive crouch. Keeping sales stable and expenses at a minimum enables them to survive until the economy gets back on its feet. But select companies are able to take advantage of these challenging times, aggressively seeking ways to boost sales.

I screened the entire membership of the S&P 500 Index to find companies that have been able to defy the slowdown and that keep powering the top line to new heights.

The screen revealed a number of oil and gas names that are expected to derive higher sales from firming energy prices in 2011. But it's unclear if the economic growth will be sufficient to boost energy prices enough to help these companies sharply boost sales in 2011, as analysts currently suspect. So, I've removed names such as EOG Resources (NYSE: EOG), Apache (NYSE: APA), Range Resources (NYSE: RRC), Chevron (NYSE: CVX) and others from this list. (more)

U.S. stocks step cautiously; Dow extends loss to fifth day

(MarketWatch) -- U.S. stock investors avoided any big moves ahead of the week's major U.S. economic reports Monday, though negative sentiment about global growth was enough to push the Dow Jones Industrial Average to its fifth day of losses.

Indecision about the global economy marked the day's trading, with stocks swinging between modest gains and losses for much of the low-volume session.

By the close, the Dow Jones Industrial Average (DOW:DJIA) had lost 1.1 points, or 0.01%, to 10,302.01. Over the last five days, it's lost nearly 400 points. The other benchmark indexes quit their losing streak, however, to end with modest gains.

"Investors are continuing to react to the onslaught of marginally negative news regarding the pace of the global economic recovery," said Fred Dickson, chief investment strategist at Davidson Cos.

Wall Street staged an early retreat after a regional manufacturing report came in short of estimates and Japan joined the list of countries with slowing economic growth. (more)

Cotton Tests 1995 Peak as Supply Drops, Levi's Raises Prices


Cotton may climb to the highest price since 1995 as rising demand in emerging markets for everything from shirts to bed sheets forces textile makers to restock inventories that are the tightest in 13 years.

Export sales by the U.S., the largest shipper, are off to their fastest start since 1993 as apparel demand in China, the biggest consumer, increased 24 percent, government data show. Cotton may advance 13 percent to a 15-year high of 94.9 cents a pound before new supplies are harvested in October, according to 17 analysts surveyed by Bloomberg on Aug. 12 and Aug. 13.

The commodity is projected to extend its gains because demand is growing in Asia’s developing nations, even as signs emerge that the U.S. economic recovery may slow. While the rally is enriching some cotton investors, it’s also boosting costs for Levi Strauss & Co. and Hanesbrands Inc., the maker of Hanes underwear and the Wonderbra. The last time cotton traded above 90 cents a pound, in 2008, some merchants including Paul Reinhart Inc. were forced into bankruptcy.

“Global consumption is exploding,” said Ron Lawson, a managing director at Logic Advisors, a commodity consultant in Sonoma, California. “We just can’t get enough cotton in place to meet the growing demand.”(more)

Tons of gold imports turn to dust on arrival

Several tons of gold imported into the UAE by traders and investors turned out to be fake on closer inspection, resulting in millions of dirhams in losses and high levels of stress to the victims.

Speaking to Emirates 24|7, Mohamad Shakarchi,, Managing Director of Emirates Gold, said: "A lot of people in the UAE who tried to import gold at lower prices or through dubious overseas companies have been cheated.

We have inspected many consignments from African countries, especially Ghana, and found that there is not an ounce of gold in them.

For importing pure dust or other metals with yellow colour, these traders have paid several million dirhams.” (more)

Stocks, Housing and Economy, Mass Delusion American Style

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." - Charles Mackay- Extraordinary Popular Delusions and the Madness of Crowds

The American public thinks they are rugged individualists, who come to conclusions based upon sound reason and a rational thought process. The truth is that the vast majority of Americans act like a herd of cattle or a horde of lemmings. Throughout history there have been many instances of mass delusion. They include the South Sea Company bubble, Mississippi Company bubble, Dutch Tulip bubble, and Salem witch trials. It appears that mass delusion has replaced baseball as the national past-time in America. In the space of the last 15 years the American public have fallen for the three whopper delusions: (more)

Gerald Celente on Goldseek radio 14 Aug 2010

Chart of the Day