Jon Markman's Trader's Advantage

Daily Issues

Trades Update

May 15, 2012

More trouble in Greece kept stocks down for the day, with all three U.S. major indexes posting losses. Once again, Greek politicians failed to form a post-elections government, and a huge withdrawal by Greek depositors from their local banks seemed a sign that that country will eventually withdraw from the euro currency. As a result, the euro fell beneath $1.28, and Spanish and Italian debt sales suffered as investors fled to the safer bet of German bonds. Some positive news did come out of the United States today: The sentiment index for homebuilders rose from 24 in April to 29 in May, beating this month's expectations of 26, and consumer retail sales were up 0.1%, according to a Commerce Department report for April. But this wasn't enough to save U.S. markets -- the Dow and S&P ended down about 0.5%, while the Nasdaq was down 0.3%. In today's Trader's Advantage, I have several New Buys and Shorts for you, and I'll update you on some of our current holdings as well. I also have five new Watch List items that I'll be keeping an eye on going forward, and I'll answer some of your questions in Markman's Inbox. Continue Reading »

Banks Back Investors Into a Corner

May 14, 2012

Stocks sank Monday following negative headlines out of Europe and continued concerns regarding the extent of the surprise JP Morgan (JPM) losses. Meanwhile, U.S. industrial stocks feel the heat as people realize that fewer products will be heading over to Europe. Still, the most important players in the markets today aren't hedge funds, congressmen or CEOs. Central banks control the cost and availability of money, and they're turning the investment world upside down and inside out, creating all kinds of havoc. The unexpected $2 billion loss announced by JP Morgan last week has led to a wipeout of financial stocks in the past three days.

By forcing the cost of government bonds to just above zero, the central banks have taken away one of the cornerstones of investing from retirees and other investors. No one is satisfied with such puny returns on Treasurys and CDs, so the Fed has essentially forced investors into risky investments such as stocks, leaving many out on a limb with little understanding of how to climb down to safety. In today's Trader's Advantage, I'll explain why I'm looking for both long and short positions, and I'll share which sectors are the most fundamentally weak as well as which one sector looks to have clear sailing on the back of low interest rates. I'll review two trades we were stopped out of today, and I'll update you on several existing recommendations. Continue Reading »

Trades Update

May 11, 2012

It has been a rough week for the major indexes, which gapped lower starting on Tuesday and only recouped some of those losses toward the end of the week. For today, the Dow and S&P 500 closed down around 0.3%, while the Nasdaq ended up 0.01%. As a result of all this volatility, investors are trading carefully and sticking primarily with consumer staples. Some of our positions fared poorly in this environment and ultimately stopped out at a loss -- but we made some good money on our candy manufacturer holding earlier in the week. Financials struggled -- especially JP Morgan (JPM), which gapped lower to close down -9.3%. Yesterday, the largest U.S. bank announced a $2 billion loss due to poor management; this is cause for concern because JPM is considered one of the best financials at managing risk. In today's Trader's Advantage, we're in one new position today, and I'll update you on several others, plus two items for our Watch List. Continue Reading »

In The News

3 reasons stocks are down; 2 reasons for a rebound

May 10, 2012

The most likely outcome is a more slippage, then a rebound over the next month. We need to watch that advance, if it occurs, closely because if it is anemic,... Continue Reading »

Fight the Spanish heat with Mexico’s Femsa

May 4, 2012

As concerns over the health of the Spanish economy grow, concerns over Latin American companies tied to Spain grow as well. I believe those fears are unfounded when it comes... Continue Reading »

3 reasons May will sting; 1 reason it won’t

May 1, 2012

So long, April, time to focus on May, which is a month that a lot of investors tend to worry about. The last two Mays featured the start of a... Continue Reading »

What Europe can learn from Apple

April 26, 2012

The tech giant is firing on all cylinders right now, the exact opposite of the Continent. With a look at how Apple does business, Europe may find a few answers... Continue Reading »

What Dutch, Wal-Mart ills mean for investors

April 24, 2012

The Netherlands’ AAA credit rating could be at risk, and U.S. investors need to pay close attention. Also, Wal-Mart scandal won’t go away quickly or quietly. Continue Reading »

Why Spanish banks are dragging down Europe

April 23, 2012

Financial troubles in Europe are about to bleed back into the front pages. Now we just have to hope that first-quarter earnings growth reports in the U.S. and new monetary... Continue Reading »

Digging for value in the coal bin and soda aisle

April 19, 2012

Beverage giant Femsa is a good, solid, long-term growth stock to buy on dips to support your speculations in the likes of coal stocks ACI, ANR and more. Continue Reading »

Pain in Spain could bring summer repeat to U.S.

April 16, 2012

It is unlikely that U.S. equities will be able to sidestep damage from the risk of high oil prices, slowing growth in China and another European sovereign debt blowup. The... Continue Reading »