Weekly Market Outlook: Despite Risks, Bullish Undertone For Stocks

After a rough start on Monday, it was nothing but buying last week, as Santa Claus brought his usual bullishness. Granted, volume was light, and the rally was largely due to the fact that there just weren't too many compelled sellers.

But still, the recent strength undid a great deal of the damage inflicted two and three weeks ago. As a result, the bulls are (1) back within striking distance of a legitimate breakout, and (2) further away from floors that – if moved under – would likely spark a more intense selloff.

We'll flesh out the details below, right after a closer inspection of the macro economic numbers.

Economic Calendar

Well, surprise surprise – the construction market isn't as bad was first assumed. Housing starts soared to an (adjusted) annual rate of 685K last month, easily topping the expected rate of 627K. Building permits-issued jumped from an annual rate of 644K to 681K. Granted, most of the improvement stemmed from new multi-housing development, but it's progress. New home sales ticked upward from 310K to 315K, which isn't red hot, but again, it's progress.

Even existing homes are looking a little more marketable. The NAHB Housing Market Index pushed upward, from 19 to 21, and though the National Board of Realtors still has egg on its face (thanks to years of over-stated sales activity), existing homes sold at a rate of 4.42 million in November, up from October's annual rate of 4.25 million.

While real estate and construction are looking healthier, the nation's factories and productivity isn't. The GDP growth rate for Q3 was revised downward, from 2.0% to 1.8%. Durable orders soared 3.8% in November, but only because of cars. Taking autos out of the equation, orders were only up 0.3% last month, well off October's growth pace of 1.5%.

The average consumer isn't looking a whole lot healthier though. Incomes grew at only 0.1% last month, versus an expected 0.2% increase. Spending also grew at a tepid 0.1% in November, short of the anticipated 0.3% increase.

The rest of the details are below as always. Overall though, the health of last week's economic numbers would be given a grade of B-… maybe a C+.

Economic Calendar

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As for the coming week, we've got a lot less in store. The only items we're really interested in aside from the continued saga of new and ongoing unemployment claims – which are still inching lower - were Tuesday's consumer confidence (Conference Board's), and Thursday's pending home sales. The former was expected to move higher again, from 56 to 58, matching last week's uptick in the Michigan Sentiment Index. The latter should have grown by 0.6%…an impressive number really given October's stunning 10.4% increase.

S&P 500

We're going to switch the normal order of our chart analysis this week, starting with the weekly chart of the S&P 500 (SPX) (SPY), and then a look at the daily chart. We're doing so because the weekly chart – a 'bigger picture' viewpoint – will add a needed perspective for the near-term outlook.

In a nutshell, the weekly chart has actually been progressing as we'd basically expect it to within a cyclical bull market. [Yes, we said that.... we're in a bull market.] The August pullback was horrifying, and though faster than we normally see pullbacks unfurl, the total depth of the cut wasn't anything odd. Once the bleeding was stopped, that lower 20-week Bollinger band (blue) did its job, pushing the index back into bullish mode and letting it gain more than 17% from the early October low. It's just been a very erratic bullish mode.

Perhaps more important, the SPX is fast approaching a known potential resistance area – the upper 20-week Bollinger band, at 1301.7.

The upper Bollinger band isn't inherently a bearish pivot point. In fact, most of the time since early 2009, the upper band hasn't pushed the market lower, but has rather served as a guidepost, tracing the market's string of higher highs. We only point it out now to let you know there's a possibility of the market hitting that ceiling at turning tail right at a point in time when it seemed like a breakout was underway. As was said though, the odds favor continued bigger-picture bullishness now that the S&P 500 has fought its way back above all of the key moving average lines.

SPX Weekly Chart

We can also see on the weekly chart just how far and how fast the CBOE Volatility Index (VIX) (VXX) (VXZ) has fallen over the last few weeks. This is another bearish red flag, in that the move was not only excessive, but also pulled the Volatility Index down to its lower Bollinger band (which is usually where the downtrends have stopped).

Ideally – for the bulls – the VIX's lower band line won't actually act as a springboard for a bounce, but rather, start to act as a guidepost and gently let the VIX drift lower mirroring the S&P 500s gentle brush with its upper Bollinger band. There's a lot of tension with the VIX right now though, so let's tread lightly.

With the daily chart of the SPX, we can see the index has made its way back above the 200-day moving average line (green). It's not cleared the key resistance level of 1268 though (red, dashed), which has been a major ceiling since early November.

As nice as it normally would be that the SPX has hurdled the 200-day average line, at this point, it's not rally that big of a deal in the grand scheme of things. Aside from being overextended already, the 1268 level is the bigger deal, and beyond that the upper 20-day Bollinger band (brown) at 1278 – and falling – is an even more telling make-or-break line

The market's on the right track, but it could take some time and a few swings to really make our way above this collection of technical ceilings. In the meantime, the key to long-term bullishness will be for the S&P 500 at the very least to keeping finding support at the 20-day and 50-day averages at 1234.

Anything in between 1234 and 1270 is limbo-land.

SPX & VIX Daily Chart

It's also on the daily chart we see a slightly-more-bullish angle with the VIX; it's crossed under its 200-day moving average line at 25.74. Though it still runs the risk of pushing up and off its lower 20-day Bollinger band, this is a great sign of overall net progress in terms of investor confidence/comfort. We'll just be curious to see where the VIX hits a ceiling again the next time it's really tested. That 25.74 line really needs to be a resistance area for the bulls to have complete hope. We'll have to cross that bridge when we come to it though.

Bottom line: Though in a bullish mode, the market's biggest risk to further bullishness (or even bearishness) is the erratic swings it's been making.

Were we not in a mental "all or nothing" mode and could make better-paced moves, trend-spotting would be much easier. As it stands right now though, violent swings in both directions are making it tough to trust stocks. Last week's 3.7% pop is a prime example. The potential profit-taking is already in place, and with a couple of key technical ceilings dead ahead, it's going to be very tough for the SPX to get past the 1270 area. It just needs a better-paced upward move if any rally is going to be sustained.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Clorox: Icahn Withdraws His Director Slate

Clorox (CLX) shares fell 4.9% after the market closed on Friday following a decision by Carl Icahn to withdraw his proposed slate of directors for the company’s board. In a regulatory filing, Icahn citedthe tumultuous market and a lack of shareholder support.

“The Reporting Persons have decided to withdraw their slate of directors after concluding that a considerable base of shareholders would not support their stated campaign at this time. While the Reporting Persons continue to believe that the best way to ultimately maximize shareholder value is through a sale of the Issuer to a strategic buyer, the Reporting Persons respect and understand that several large shareholders may believe that now is not the best time to run that process, given the deteriorating conditions of the financial markets and the Issuer’s view that even the Reporting Persons $80 per share offer substantially undervalues the Issuer.”

Dendreon Investors: Why Shares Are Soaring

The holidays may be over, but the presents keep coming for investors. After the first two trading days this year saw the Dow Jones Industrial Average climb, chatter about "the January effect" foreshadowing a great year began to pick up. Dendreon (Nasdaq: DNDN  ) did a little year-end foreshadowing of its own with a report that sent shares higher by a whopping 50% this morning!

That is how you do an operational update!

I've been upset with Dendreon's management in the past as far as the bungled rollout and the excuse-making (just two months ago they were preemptively blaming Thanksgiving and Christmas for sales-growth shrinkage) and the attitude surrounding the stock was dour. Sales for the fourth quarter topped Wall Street expectations by 14% at $82 million, but growth still shrank sequentially, and management won't budge from their "modest" estimates.

If Provenge can build sustainable momentum, then the company could well be back on its way to reclaiming its "most-favored biotech" throne. After pulling 2011 sales guidance of $350 million to $400 million in August, shares plummeted 65%. The final tally turned out a little over half of that estimate, at $228 million. Provenge's failure to launch became a theme of 2011. It wasn't just enough to get a drug through the rigorous FDA process anymore and expect sales to show up.

Savient Pharmaceuticals (Nasdaq: SVNT  ) actually edged out Dendreon as 2011's worst health-care stock, losing 80% of its value last year. The company was hoping for a buyout, but when its white knight never showed, Savient was forced to launch its gout treatment Krystexxa on its own with poor results. Human Genome Sciences (Nasdaq: HGSI  ) is another headliner here, losing 69% last year as its drug Benlysta, the first lupus treatment approved in half a century, sold less than $20 million in the third quarter, much to the chagrin of marketing partner GlaxoSmithKline (NYSE: GSK  ) . Because of the waxing and waning nature of the disease, doctors appear slow to prescribe the drug in a consistent manner, adopting a wait-and-see approach.

In Dendreon's case, if sales meaningfully strengthen in 2012 not only does the company have a chance to achieve the peak sales of Provenge, but at this depressed price it becomes an attractive take-out candidate. Sure, there are new competitors on the horizon, but this is biotech -- there are always exciting drug candidates making their way through clinical trials. So while Medivation's (Nasdaq: MDVN  ) MDV3100 and its stellar efficacy look great so far, investors should not just assume Provenge's life span will be cut short by the oral medication. Plus, with 1 in 6 men expected to be diagnosed with prostate cancer, there should be more than enough patients to go around in what is estimated as a $9 billion market.

Look, I've been hard on Dendreon out of love. They have a great product that can save lives. I own shares and discussed a potential rebound this year despite the rollout challenges and the lower-than-expected margins due to Provenge's unique manufacturing process. But it all starts with getting doctors to prescribe the drug, and that's why today's report is a step in the right direction.

And while we are discussing the reemergence of Dendreon's potential to deliver outstanding investment returns, Motley Fool co-founder David Gardner has found another health-care stock on the cusp of blockbuster growth and is offering to share it with you for free in our special report "Discover the Next Rule-Breaking Multibagger." It's available for a limited time, so download this must-read special free report right now and don't miss your opportunity for truly market-beating returns.

Russell 1,000 Stocks With the Lowest PEG Ratios

For those interested, below is a list of the Russell 1,000 stocks with the lowest PEG ratios (Price to Earnings/Expected 5-Year Growth Rate). From Investopedia.com:

The PEG ratio is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued.

A lot of investors use 1 as their line of demarcation for PEG ratios. A PEG of 1 or less (where expected growth is greater than the P/E) would be considered attractive. In the Russell 1,000, 154 stocks have a PEG ratio of 1 or less. Below are the 44 stocks in the index with PEG ratios of less than 0.75.

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Why Dividends Are Safer Than Fixed Income

You know you’re a market junkie when, after a long week of writing about the markets and watching practically every one of your stocks tick, the first thing you do Saturday morning is devour the business newspapers.

That’s me. And since I’m the editor of The Ultimate Income Letter, I was like a kid on Christmas morning this weekend when Barron’s cover story was about how investors can find yield in this low-interest-rate environment.

I’ve been reading Barron’s for 20 years, and think they do a nice job.

But the advice in this week’s cover story was so off the mark, my mouth was agape like a voter who just heard that members of Congress are allowed to trade on very sensitive non-public information.

The Barron’s article detailed 11 types of investments that can help generate above-average yields, including several fixed income ideas. While I believe bonds warrant a place in a well-rounded portfolio, I would be very hesitant to add any new bond positions unless they’re shorter-term in nature.

Interest Rates Are Low

Interest rates are at historic lows. To get two percent on a Treasury, you need to lock up your money for 10 years. Buy a five-year Treasury and you’ll take home a measly 0.91 percent.

Perhaps interest rates stay at these low levels for a while. It’s hard to imagine they can go much lower. The chances are better that three and certainly five years from now, rates will be higher. As a result, bond prices will fall.

Here’s why. If you buy a two-percent 10-year bond today at par, 100, what would happen to demand if, next year, new 10-year Treasuries carry interest rates of 2.5 percent? In order to be able to sell your two-percent bond, you’d need to lower the price. No one is going to pay full price for a two-percent bond when they can get 2.5 percent in the open market.

Some of the ideas in the Barron’s article might make sense if you’ve owned them for a few years already and are enjoying the above average income they spin off. But to buy them now is like buying a house where you know there’s a sinkhole in the front yard.

Other Examples

Let’s take a look at what’s wrong with some of the recommendations in the article.

Closed-End Bond Funds – It’s a tough time to buy bonds right now, but it’s a horrible time to buy bond funds. At least when you buy a bond, you’ve got a good shot at getting your money back at maturity. But with a bond fund, there is no maturity and when rates go up, the value of the bonds held in the fund go down.

Even if you’re in a fund trading at a discount, the likelihood of making money in a rising interest rate environment is fairly slim.

High Yield Bonds – If interest rates rise, high yield bonds will get crushed, particularly those that mature in a longer timeframe.

In both of the above cases, if you’re going to buy corporate bonds, you’re better off buying those with very short maturities. Oxford Club bond maven Steve McDonald writes about this very topic in the upcoming issue of The Ultimate Income Letter. If you want to see what Steve has to say, click here so that you’ll be sure to receive the next issue.

Municipal Bonds – The fears about muni defaults are overblown. According to the Nelson A. Rockefeller Institute of Government at the University at Albany, state tax revenue was up 8.6 percent in the fiscal year for 46 states and the most recent quarter was the sixth straight quarter of growth.

Also, Standard & Poor’s recently reported that “muni” bond defaults were down 69 percent in 2011.

Personally, I like municipal bonds as their after-tax returns beat Treasuries. However, I would take the same approach to them as I would to other bonds – stay away from funds and buy individual bonds. And only buy those with shorter maturities – one to three years.

I suspect rates will stay stable or even fall in the next 12 to 24 months, but should eventually rise over the long term. You don’t want to get caught holding any bonds that mature in 10 to 30 years if rates start climbing in the future.

Equipment Leasing – Firms buy groups of contracts signed by companies that are leasing heavy equipment such as drilling rigs or railroad cars. It’s similar to buying a mortgage-backed security in that the assets are pooled, bundled and then sold to investors. Yields are decent in the six-percent to eight-percent range currently.

However, this is a terrible idea for most investors. The investment is a bit esoteric for most people and really requires a significant amount of work to understand just what you’re getting into and checking out the broker selling it. It’s not like you can call up Schwab and buy an equipment-leasing direct investment. Specialized investment firms offer them and should be scrutinized thoroughly.

Immediate Fixed Annuities – The only idea I hated more than the equipment leasing suggestion was that of immediate fixed annuities. With a fixed annuity, you send a chunk of money to an insurance company and then you receive a fixed payment from then on for the rest of your life.

If you live long enough, you’ll make more than you contributed. Barron’s quoted Steve Horan, Head of Private Wealth at the CFA Institute, who said, “Some investors are going to die early and since the insurance company isn’t going to have to make their payments, they use them to benefit those still living.”

Isn’t that similar to a Ponzi scheme? I don’t like my payments relying on someone else’s misfortune. I’d hate to be reading a newspaper story about a senior citizen getting hit by a bus and thinking, “That’s terrible, but I hope he was in my insurance company’s fixed annuity pool.”

Rather than sending your money to an insurance company, who will then pay generous commissions to the broker who sold you the annuity, invest the money yourself and take out what you need each year.

To get decent yield today, have a combination of quality dividend paying stocks and some bonds in your portfolio – though if you’re adding bonds, be sure they’re shorter-term maturities.

For long-term investors, I prefer dividend paying stocks that increase their dividend on an annual basis. By choosing the right stocks, you should be able to stay ahead of inflation with increasing income every year as well as participate in capital appreciation when the stock price goes up over the course of time.

Believing In A Completely New Bank

Picking the right bank is like picking out a new doctor or dentist. There is a certain level of trust involved with these types of relationships and in some capacity they control a very personal part of your life.

You’ll find hundreds of main reasons why you want to enhance your bank. They may have changed their recommendations, interest levels dropped their CDs, checking accounts, or savings accounts. It might be simple such things as you don’t like the wallpaper they’ll use, but biggest point may be bear in mind that obtaining a new bank isn’t always easy to find, and in addition takes research and persistence.

The initial step to locating a brand new bank would be to learn to really read bank reviews, how to compare banks from each other, and outline what you are actually searching for inside a new bank. Do comprehensive research compare what each bank needs to offer.

Ask yourself just what it had been that made you leave your previous bank? What didn’t they have for you personally? What benefits are you currently searching for? Along with other questions such as these.

Once you figure out all these questions you can begin to shop and compare banks. This can involve comparing your local bank branches to those of national chains, such as Bank of America or Citi Bank. Look at what sort of benefits and services that national banks have over local.

Not all banks are going to have the same policies and chances are there won’t be one bank that has everything you want. Unfortunately life is full of compromise.

According to what you look for compromising is probably not very hard. If you are searching to save extra money, choosing a bank that has lower interest on checking accounts may not matter. Requiring to compromise doesn’t mean you have to omit luxuries, it really means you have to choose what you look for.

Obtaining a new bank may be hard but it’s important to choose one which meets your requirements. You’ll want depend upon your bank given that they hold your hard gained money, and by doing this, your existence.

Looking to find the best info on how to compare banks, then visit www.BankReviews.org to find the best advice on bank reviews for you.

Top Stocks For 2011-12-13-20

ATA Reports Fiscal 2012 Second Quarter Financial Results and Raises Fiscal 2012 Net Income Guidance to Between RMB55.0 Million and RMB60.0 Million

Company to Hold Conference Call on November 7 at 8 a.m. ET

ATA Inc. (Nasdaq: ATAI), a leading provider of computer-based testing and testing-related services in China, announced preliminary unaudited financial results for its fiscal second quarter ended September 30, 2011 (”Second Quarter 2012″).

For Second Quarter 2012, ATA’s total net revenues more than doubled to RMB70.4 million (US$11.0 million) from RMB33.3 million in the prior-year period, primarily due to increased revenues from the Securities Association of China exam, which was postponed from Second Quarter to Third Quarter in the prior year. Revenues from HR Select for Second Quarter 2012 increased 121.3% to RMB6.4 million (US$1.0 million), and revenues from TOEIC increased 74.0% to RMB5.5 million (US$0.9 million).

Gross profit for Second Quarter 2012 increased 163.4% to RMB40.1 million (US$6.3 million) from RMB15.2 million in the same period last fiscal year. Gross margin increased to 56.9% in Second Quarter 2012, compared to 45.7% in the prior-year period, primarily due to realizing greater economies of scale, especially in our testing services.

Higher revenues contributed to income from operations in Second Quarter 2012 of RMB2.2 million (US$0.3 million), compared to an operating loss of RMB16.9 million in the prior-year period.

Net income for Second Quarter 2012 was RMB1.4 million (US$0.2 million), compared to a net loss of RMB14.8 million in the prior-year period.

For Second Quarter 2012, basic and diluted earnings per common share were both RMB0.00 (US$0.00), compared to a loss of RMB0.33 in the same period last fiscal year. Basic and diluted earnings per ADS were both RMB0.00 (US$0.00) in Second Quarter 2012, compared to a loss of RMB0.66 in the prior-year period.

In Second Quarter 2012, ATA delivered a total of 1.8 million billable tests, an increase of approximately 62.5% from the prior-year period. The Company believes it has the largest test center network of any commercial testing service provider in China and continues to expand, with a network of 2,115 authorized test centers throughout China as of September 30, 2011.

ATA is a leading provider of computer-based testing services in China. The Company offers comprehensive services for the creation and delivery of computer-based tests based on its proprietary testing technologies and test delivery platform. ATA’s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology services, banking, teaching, securities, insurance, and accounting. ATA’s test center network comprised 2,115 authorized test centers located throughout China as of September 30, 2011. The Company believes it has the largest test center network of any commercial testing service provider in China.

ATA has delivered more than 34.7 million billable tests since ATA started operations in 1999.

For more information, please visit ATA’s website at http://www.ata.net.cn.

Semtech Corp. (Nasdaq:SMTC) a leading supplier of analog and mixed-signal semiconductors, announced it is establishing a scholarship fund at the California Community Foundation (CCF) in Los Angeles and the Ventura County Community Foundation (VCCF) with a $20,000 per year scholarship donation to assist low-income graduating high school seniors in Ventura and Los Angeles counties to pay for college education expenses.

Semtech Corporation is a leading supplier of analog and mixed-signal semiconductors for high-end consumer, computing, communications and industrial equipment. Products are designed to benefit the engineering community as well as the global community.

Integrated Device Technology, Inc. (Nasdaq:IDTI) the Analog and Digital Company� delivering essential mixed-signal semiconductor solutions, announced results for the fiscal second quarter ended October 2, 2011. �During our fiscal second quarter, we continued to streamline operations and introduce innovative mixed-signal solutions for our three target markets — communications infrastructure, cloud computing and consumer mobility,� said Dr. Ted Tewksbury, president and CEO of IDT. �Despite macroeconomic headwinds, we experienced strong sequential growth in Serial RapidIO� switches for wireless base stations and timing solutions for consumer devices, as well as robust design activity for new products.�

Integrated Device Technology, Inc., the Analog and Digital Company�, develops system-level solutions that optimize its customers� applications.

TeleTech Holdings Inc. (Nasdaq:TTEC) one of the largest global providers of strategic and technology-enabled business process outsourcing solutions that accelerate commerce and lifetime customer value, named Regina Paolillo as its new chief financial officer (CFO), chief administrative officer and executive vice president.

For nearly 30 years, TeleTech and its subsidiaries have helped the world�s largest companies achieve their most ambitious goals. As the go-to partner for the Global 1000, the TeleTech group of companies delivers technology-based solutions that maximize revenue, transform customer experiences and optimize business processes.

Las Vegas Housing: Cues for a Bottom

Interesting news on the Las Vegas housing market this week - sales reached a 5-year high according to DataQuick. Surprised?

The positive signals have been building for the last 14 months:

• The deceleration of Las Vegas' price declines in January 2010.

• Towards the end of 2010, inventory started spiking causing downward price pressure in Q4, but the relative drop in prices compared to the influx of new inventory was mild.

• By October 2010, the trends showed that house-flippers re-emerged in Las Vegas.

More recently, the price of new listings (the new sellers entering the market each week - black line below) moved above the overall market ask price (all available sellers - orange line below) by mid-October 2010:

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Price of new listing and aggregate market ask prices since September 2010:

On a percentage basis:

Price of new listings as a percentage of aggregate market ask prices

With price reductions leveling off this Spring (still elevated but down from the 55% range we saw back in early 2009):

Percentage of active market sellers that have reduced their asking price in the most recent 90-day period

The cues are there for a bottoming in Las Vegas. Remember the house wants you to win - that's the only way you'll come back for more...

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Top Stocks To Buy For 12/2/2012-3

Caterpillar Inc. NYSE:CAT increased 1.11% closed at $78.60, its overall trading volume was 4.56 million shares during the last session. The trailing twelve month return on investment remained 4.81% while its earning per share reached $3.03.

General Dynamics Corporation NYSE:GD gained 0.50% closed at $68.12, its total trading volume during the last session was 3.46 million shares. The trailing twelve month return on investment remained 12.01% while its earning per share reached $6.28.

United Technologies Corporation NYSE:UTX advanced 0.09% closed at $74.77, its overall trading volume during the last session was 2.65 million shares. The trailing twelve month return on investment remained 11.87% while its earning per share reached $4.59.

Deere & Company NYSE:DE reported the gain of 1.72% closed at $76.80, its total trading volume was 2.57 million shares during the last session. The trailing twelve month return on investment remained 4.26% while its earning per share reached $2.76.

Northrop Grumman Corporation NYSE:NOC increased 1.57% closed at $63.22, its overall trading volume was 1.78 million shares during the last session. The trailing twelve month return on investment remained 8.74% while its earning per share reached $6.33.

Weekly Indicators: Strong Crosscurrents Edition

By New Deal Democrat

In the rear view mirror Q4 2011 GDP was revised up to 3.0%. Monthly releases were sharply mixed with some significant advances and some jarring declines. Consumer confidence was up strongly to a near 1 year high. This is a large component of the Conference Board's revamped LEI. Residential spending continued to increase. Vehicle sales were up sharply to nearly a 4 year high. The Chicago PMI increased strongly as well. On the other hand, the ISM manufacturing index unexpectedly fell, although still showing expansion. Personal income and spending were up only weakly. Personal consumption expenditures were flat for the fourth month in a row. Nonresidential construction spending fell. Durable goods fell strongly in January, wiping out December's similar increase and then some.

I watch the high frequency weekly indicators because, even if there is more noise, if there is a turning point, it will show up in these indicators first. In addition to the chronic issue of gasoline costs, with one or possibly two exceptions, no such turning point is evident.

Let's turn first to the negative statistic. The American Association of Railroads reported a decline in weekly rail traffic for the week ending February 25, 2012, with U.S. railroads originating 281,644 carloads, down 5 percent compared with the same week last year. Intermodal volume for the week totaled 214,402 trailers and containers, down 2.8 percent compared with the same week last year. Last week I noted that Railfax is back with some free graphs. One of them is particularly helpful in interpreting the recent swings in the AAR weekly reports. Here is a graph of the 13 week average of carloads for the last two years (black=total, green = intermodal, orange = cyclical, blue= baseline):

The YoY comparisons may have been decidedly erratic this winter because of the batch of winter storms that hit in 2011, skewing weekly comparisons. The Railfax graph shows that rail traffic continues to trend higher on a YoY basis measured over 13 weeks. If this graph does not begin to turn up in the next few weeks, we'll know that we have a problem. Until then, the jury is out.

Employment related indicators were neutral to positive:

The Department of Labor reported that Initial jobless claims remained at 351,000 last week. The four week average declined by 5000 to 354,000. This is the lowest reading since spring 2008.

The American Staffing Association Index fell by 1 to 86 last week. It remains almost midway between its levels of 2011 and 2007. Seasonally we want to see this move slightly higher over the next 4 weeks.

The Daily Treasury Statement showed that for the 20 reporting days of February 2012, $158.3 B was collected vs. $144.9 B for February 2011. Because this year had one more day of reporting than last year, the reports are not truly comparable. For the 20 reporting days ending Wednesday March 2, 2011, $154.9 B was collected, meaning the most comparable 20 day increase this year was +2.2%. This is positive but quite weak.

Gasoline prices are more than 10% higher than one year ago while usage continues to be much lower: Oil fell about $2 this week to close at $106.70. Gas at the pump rose another $.13 to $3.72. Both of these are significantly above the point where they can be expected to exert a constricting influence on the economy. Gasoline usage, at 8363 M gallons vs. 9162 M a year ago, was off -8.7%. This is one of the weakest weekly comparisons since the YoY declines began last March. The 4 week moving average is off -6.7%.

Housing reports were positive:

The Mortgage Bankers' Association reported that the Refinance Index decreased -2.2% from the previous week, still close to its highest level in over half a year. The seasonally adjusted Purchase Index increased +8.2% from the prior week, and was -4.8% lower YoY. This is a rebound from the bottom of its 21 month overall flat range.

YoY weekly median asking house prices from 54 metropolitan areas at Housing Tracker were again up +4.1%. This number has stabilized on a YoY basis in the last month, which is what I would have expected. I expect this series to continue positive, but it will be interesting to see if it drifts lower as we hit the peak selling season. It remains at odds with the Case-Shiller reports of worsening YoY declines in price for comparable sales. One of the two is going to turn.

Sales remained positive. The ICSC reported that same store sales for the week ending February 25 were off -1.0% w/w, but increased 2.7% YoY. Shoppertrak reported +2.8% YoY gains. Johnson Redbook reported a 3.4% YoY gain. These reports have taken on added significance. If the consumer is beginning to fold, I would expect to see YoY comparisons under 2% as a warning signal. There's no such signal yet.

Money supply was mixed and Credit spreads narrowed:

M1 declined -0.3%t last week, but was up +0.1% month over month. On a YoY basis it fell to +18.6%, so Real M1 is up 15.7%. YoY. M2 fell -0.1% week over week, but was up +0.3% month over month. It was up 10.0% YoY, so Real M2 was up 7.1%. In short, real money supply indicators continue strongly positive on a YoY basis, although not so much as in previous months.

Weekly BAA commercial bond rates were flat at 5.15%. Yields on 10 year treasury bonds rose .04% to 2.01%. The credit spread between the two, which had a 52 week maximum difference of 3.34% in October, tightened again this past week to 3.14%. Narrowing credit spreads are not at all what I would expect to see if we were going into a recession.

Finally, the JoC ECRI industrial commodities index continued to increase, from 127.52 to 128.13. This is almost certainly the most heavily weighted component of ECRI's WLI, and is consistent with an increase in that index again next Friday.

Turning now to high frequency indicators for the global economy:

The TED spread is at 0.410 down from 0.420 week over week. This index is back slightly below its 2010 peak, and has declined from its 3 year peak of 2 months ago. The one month LIBOR is at 0.243, down .002 from one week ago. It is well below its 12 month peak set 2 months ago, remains below its 2010 peak, and ihas now completely returned to its typical background reading of the last 3 years.

The Baltic Dry Index at 771 was up 54 from 717 one week ago, and up 121 from its 52 week low of 3 weeks ago, although still well off its October 52 week high of 2173 (please note that even so this is nothing even remotely close to its decline during the Great Recession. This type of decline has happened 4 times since March 2009 without triggering any "double dip."). The Harpex Shipping Index rose by 1 to 376 in the last week, off of its 52 week low. Please remember that these two indexes are influenced by supply as well as demand, and have generally been in a secular decline due to oversupply of ships for over half a decade. The Harpex index concentrates on container ships, and led at recent tops and lagged at troughs. The BDI concentrates on bulk shipments such as coal and grain, and lagged more at the top but turned up first at the 2009 trough.

Just like last year, I believe that Oil's choke collar is beginning to be felt. Nevertheless, the overall tone remains positive for now. Weekly retail sales reports and gasoline usage have assumed increased importance as warning signals for any further deterioration.

Top Stocks For 5/16/2012-6

Dr Stock Pick HOT News & Alerts!

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Tuesday Dec. 15, 2009

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Crown Equity Holdings, Inc. (OTC BB: CRWE.OB) announced the expansion of its operations. The company will relocate to a new and larger office effective December 15th. The new corporate address will be located at 5440 W. Sahara Avenue. Suite 205, Las Vegas, Nevada 89146. Since January 1, 2009, the company has added 13 additional contractors, a 225% increase.

SIRIUS XM Radio (Nasdaq: SIRI) announced today that it will broadcast The History of Howard Stern: Act III, the highly anticipated third chapter of the original, exclusive radio documentary series that offers listeners a rare behind-the-scenes look at the life, career and achievements of Howard Stern. The History of Howard Stern: Act III will air from December 21 - January 1 on Howard 100 and Howard 101, Howard’s two exclusive SIRIUS XM channels.

Peoples Educational Holdings, Inc. (NASDAQ: PEDH) will announce its financial results for the second quarter ended November 30, 2009 on Thursday, January 14, 2010, after the market close. The Company will hold a conference call the same day at 5:00 pm Eastern Standard Time to discuss the results. Participating in the call will be Brian Beckwith, President and Chief Executive Officer, and Michael DeMarco, Executive Vice President and Chief Financial Officer.

Allied Wireless Communications Corporation (AWCC), a subsidiary of Atlantic Tele-Network, Inc. (Nasdaq: ATNI), today announced plans to locate its corporate headquarters in Little Rock, Arkansas. Atlantic Tele-Network (ATN), a telecommunications/wireless company will invest more than $200 million through the purchase of existing wireless assets from Verizon Wireless and the refurbishment of its new headquarters for AWCC. AWCC currently plans to create at least 200-250 jobs in Little Rock, most of which will be highly paid, professional and technical positions.

Cumberland Pharmaceuticals Inc. (Nasdaq: CPIX) today announced new top-line results for a patient preference study evaluating Kristalose (lactulose) for Oral Solution, a prescription laxative packaged as a crystalline powder, compared to similar products in liquid forms.

Biogen Idec (NASDAQ:BIIB) announced today that it is prepared to run a proxy contest to replace at least a majority of the directors of the Board of Facet Biotech Corporation (NASDAQ:FACT) if: Facet shareholders tender a majority of the company’s shares outstanding before Biogen Idec’s tender offer expires and the Facet Board refuses to listen to the explicit wishes of its stockholders.

China to Kick Off $300 Billion Investment Vehicle for FX

(Photo: AP)

China is on the verge of launching a new $300 billion investment vehicle that would boost returns on foreign exchange reserves by setting up funds targeting two separate regions—the U.S. and Europe.

The vehicle had been planned prior to the onset of the European debt crisis, and was designed to boost returns on China's foreign exchange reserves by making more aggressive overseas investments, Reuters reported. The vehicle, according to two sources who declined to be named, is to operate two funds, one focused on U.S. investments and the other on European investments.

The new vehicle, details of which are still under discussion, would be affiliated with China's State Administration of Foreign Exchange (SAFE). That is the portion of the central bank that is responsible for the daily management of China's $3.2 trillion in foreign exchange reserves.

The U.S.-focused fund would be named Hua Mei, or China-US, and the Europe-focused fund is named Hua Ou, or China-Europe. Fund styles will be similar to that of the low-key Hong Kong-based Hua An, which in English is known as SAFE Investment Company Ltd., said the source, and through which SAFE has purchased stocks in dozens of overseas-listed companies.

Beijing has indicated recently that it intends to invest in the real economies of Europe and the U.S. aside from bond investments. The new venture will likely be Shanghai-based, according to the source, who said, "The company will issue yuan bonds. Then it can use the yuan to buy foreign currency from the central bank or even commercial banks for overseas investment."

The new vehicle is expected to have an arrangement similar to that of the China Investment Corp (CIC), the country's sovereign wealth fund. When CIC was created in 2007, China's Ministry of Finance issued 1.55 trillion yuan in special yuan bonds to swap yuan for $200 billion worth of foreign currency from SAFE as the initial batch of funds for CIC to manage.

Steve Wynn: A Power Play by Gambling’s Machiavelli

Apple�s (NASDAQ:AAPL) Steve Jobs could be intolerable, yet he turned out to be one of history�s greatest CEOs. The same goes for Oracle�s (NASDAQ:ORCL) Larry Ellison. These guys could make grown men cry.

Steve Wynn, CEO of Wynn Resorts (NASDAQ:WYNN), also deserves to be in that category. Over the weekend, Wynn made a big-time power play:� He forced a buyout of the 20% stake in Wynn Resorts held by Kazuo Okada.� In fact, it came at a�steep 30% discount. And Wynn will get the cash in�the form of a 10-year loan, with a meager 2% interest rate!

How often do you see something like this? In Wynn’s case, it�s certainly part of his take-action approach to business. True, he claimed the deal was necessary because of his fear that some of Okada�s actions would jeopardize Wynn Resort’s gaming licenses (The Wall Street Journal had reports of improper payments in the Philippines).

But there’s probably much more to this. Wynn and Okada were already involved in litigation (concerning a $129 million loan from Wynn to a university in Macau). If anything, it appears Wynn just wanted to find a way to consolidate his power base.

No doubt, more litigation is inevitable. Yet Wynn Resorts’ corporate bylaws allow for a forced buyout. So it could be tough for Okada to fight back.

And Wall Street likes the latest twist as well. In today�s trading, the shares of Wynn closed up nearly 6% to $119.40. Then again, investors probably think Wynn Resorts will face fewer distractions, and they also realize that Wynn himself will never cower from making tough choices. Besides, when it comes to the gambling business, he has a knack for finding massive�growth opportunities.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of �The Complete M&A Handbook, All About Short Selling and All About Commodities. Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

1 Reason to Expect Big Things From Astronics

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.

Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Astronics (Nasdaq: ATRO  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Astronics doing by this quick checkup? At first glance, pretty well. Trailing-12-month revenue increased 16.6%, and inventory increased 6.2%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue expanded 18.0%, and inventory improved 6.2%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 8.4%, and inventory grew 0.2%.

Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)

A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."

On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.

What's going on with the inventory at Astronics? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, work-in-progress inventory was the fastest-growing segment, up 35.1%. On a sequential-quarter basis, raw materials inventory was the fastest-growing segment, up 5.4%. Astronics seems to be handling inventory well enough, but the individual segments don't provide a clear signal. Astronics may display positive inventory divergence, suggesting that management sees increased demand on the horizon.

Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide the market's best returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.

I run these quick inventory checks every quarter. To stay on top of inventory and other tell-tale metrics at your favorite companies, add them to your free watchlist, and we'll deliver our latest coverage right to your inbox.

• Add Astronics to My Watchlist.

Where Does Coke Earn All That Money?

Please enable Javascript to view this video.

This video is part of our "Motley Fool Conversations" series, in which analyst Austin Smith discusses topics around the investing world.

In today's edition, Austin looks at beverage wonder-company Coca-Cola (NYSE: KO  ) . We all know Coke is big, but to shed some light on just how big investors should consider these facts:�

• The Coca-Cola logo is recognized by 94% of the world's population.�
• 3.1% of all beverages consumed in the world are Coke products.�
• The Coca-Cola brand is worth an estimated $74 billion. The total value of Budweiser, PepsiCo, Starbucks, and Red Bull brands combined is worth only $50 billion.�

And even though 100% of the company's revenue comes from non-alcoholic beverages, that doesn't make it any less dynamic. It has huge markets all around the globe, and investors should understand where the cash comes from in each if they want to invest in this company today.

The only problem with investing in Coca-Cola is that everyone already knows about it and the cat's out of the bag. If you were hoping to get the edge on Wall Street, you can do it by reading our report: "The Motley Fool's Top Stock for 2012." In it you'll learn about an emerging-markets retailer that's still flying under many investors radar. Click here to access your report -- it's totally free.

The Best Stock to Own for a Housing Recovery

Here's some good news, if you're up for it: I've found a stock that could return 200% or even more over the next three to five years.

These aren't the 1990s, though, so it isn't simply a matter of buying shares and then watching the price rise. Much more patience is necessary to reap the potential rewards of this stock because returns are heavily influenced by the housing market, which is expected to remain in a slump for a while longer.

  A sharp rebound could be just around the corner, though. The National Association of Home Builders (NAHB) predicts 800,000 housing starts (new residential building projects) in 2012, a 34% gain compared with the 597,000 forecasted for all of 2011. Moody's chief economist Mark Zandi says housing starts should jump by 49% next year, to about 1 million, based on factors like record corporate earnings and fewer mortgage delinquencies.

If the NAHB and Zandi are right, then the future looks very bright for Masco Corp. (NYSE: MAS), a Michigan-based building materials company.

Masco is big player in the home improvement products space, boasting name brands like Behr and Kilz paint, Kraftmaid cabinets and Peerless and Delta faucets. The company had a long history of profitability before 2008, but the recession and housing slump have taken a toll, as you may have guessed. Overall sales fell 36% in the past four years, from $11.8 billion in 2007 to $7.5 billion in the past 12 months. Diluted earnings per share (EPS) fell a whopping 394% during that time, from $1.05 in 2007 to a loss of $3.09 in the past 12 months. Investors have responded by punishing the stock, which is down 35% year-to-date and has lost an average of 22% for the past three years.

But when a housing recovery does occur, there may be no better way to play it than by owning stock in Masco. It's a solid firm that has been around for decades, and I think shares have been way oversold, especially since management has been taking meaningful steps to maximize profits the moment housing rebounds. A key strategy has been to improve cost-efficiency -- for example, by trimming $180 million in salaries and other fixed costs from the cabinetry, installation and specialty products segments. Together, these segments pulled in about 40% of revenue, or $3 billion, in the past 12 months. (Specialty products include things like windows, patio doors and staple gun tackers.)

Also, the company is almost finished with a series of hefty one-time charges against earnings totaling $2.7 billion. These charges date as far back as 2003 and are mainly related to the cost of acquisitions, such as the purchase of Erickson Construction in 2007, and to "goodwill impairment." Goodwill is an accounting term for intangible assets like brand recognition and customer loyalty. Since the tough economy has cost Masco many customers, the value of its customer loyalty has fallen precipitously (by an estimated $1.5 billion). One-time charges have to be accounted for on the company's financial statements, which should look much better going forward as these charges wind down.

Sales of decorative and architectural products such as paint, stains and hardware, which account for 22% of revenue, have barely suffered at all despite a tough economy because people are currently more inclined to do home improvements than buy new homes. Indeed, revenue in this segment is off less than 5% from the 2006 peak of $1.8 billion. Gross margins have also been resilient, only falling to 23.5% from the 2006 peak of 27.5%. Analysts say this segment is especially likely to achieve record sales with only a modest gain in housing activity. Decorative and architectural products tend to be cheaper, but they can make a big difference in a home's appearance, so consumers may initially spend more money on these products in a housing upturn. A stronger housing sector should also stimulate sales of kitchen and bathroom cabinetry, not only in new construction but also for renovations, since kitchens and bathrooms are the two most frequently remodeled rooms in peoples' homes.

The plumbing segment, which generates about 35% of sales, has also held up reasonably well. Although revenue in this segment is currently about 20% below peak levels ($3.3 billion in 2006), analysts say things might have been even worse if not for strong sales of innovative new products such as Touch20 for faucets (a technology that lets the user adjust the flow of water by touching the faucet with a wrist or elbow rather than the hands.) Like cabinetry, plumbing supplies should also sell well when the housing market improves because of increased demand for new construction and existing home renovations.

Risks to consider: The biggest risk is the NAHB and Mark Zandi are wrong and housing continues to languish for another two or three years or more, depressing Masco's profits and stock price for longer than expected.

Bund Sale Increases Odds Of Eurozone Breakup

by Scott Boyd

As evidenced by the poor showing for German bonds at yesterday’s Bundesbank bond offering, it is obvious for all to see that the debt contagion tide is now threatening Germany’s coastline.

Of the 6 billion euros ($8.1 billion) in German sovereign debt offered for sale, nearly half was withdrawn due to lack of interest. For bonds that did attract buyers, yields were pushed higher; 10-year bonds alone rose four basis points to 1.96 percent. Not surprisingly, the euro struggled falling to $1.3350 by mid-morning in New York. Should weak demand and rising yields persist in future debt auctions, German officials will be forced to reconsider Germany’s place within the Eurozone.

Chancellor Merkel has publically and consistently maintained Germany’s commitment to the preservation of the eurozone. Nevertheless, the Chancellor has not wavered on her demand that countries receiving emergency funding must also commit to bringing deficits in line with eurozone membership rules. As seen with Greece in particular, this means the imposition of very unpopular government spending cuts and the introduction of new taxes and other fees to generate revenue.

Needless to say, those countries finding themselves in this position have not been keen on adopting these “austerity” requirements. After all, in one form or another, three European government leaders have fallen in recent weeks due to the backlash of the population forced to accept these stringent measures.

Be that as it may, Merkel continues to advocate for this approach while sharply condemning the creation of a “communal” eurozone bond as recommended by some officials. The idea is that a bond backed by the entire eurozone could be offered instead of individual sovereign debt in order to raise funds for those countries forced to pay exaggerated rates to attract investors.

But with yesterday’s auction, this avenue may no longer be an option.

If German sovereign debt – the highest- rated of all the eurozone countries – is indeed falling out of favor as suggested by today’s auction, how can bonds backed by the entire region, including the problem economies, expect to do better? More to the point, what does this new reality mean for the future of the eurozone?

Make no mistake, Merkel has always understood that Germany’s economy was vulnerable to the malaise spreading through the periphery economies. This is precisely why the Chancellor has argued against participating in a eurozone bond. But with the disappointing results of yesterday’s auction serving as a warning, lawmakers may be forced to take a stronger stance to protect Germany’s interests even if this is detrimental to the eurozone’s future prospects.

The ultimate form of control that Germany could take would be to withdraw from the eurozone and return to its own currency. Legal issues and other concerns notwithstanding, a return to the Deutsche mark would enable Germany to manage its own currency and remove itself from the debt crisis engulfing the eurozone.

Some day we may look back at this auction as the one event that really marked the beginning of the end of the eurozone.

Market Analysis – Don’t Let This Pullback Scare You

Stocks were hit hard yesterday because of worse-than-expected manufacturing data and concerns that today’s jobs report will be lower than expected. Stocks started off on the downside and never recovered, with selling picking up into the close.

News that the International Monetary Fund raised its forecast of 2010 global growth from 2.5% to 3.1% had no impact. Instead investors seemed focused only on the jobless claims. Initial claims climbed 17,000 to 551,000, and continuing claims came in at 6.09 million.

This all backed the ugly ADP numbers on Wednesday, and set the stage for a nasty non-farm payroll report today.

The Wall Street Journal noted, “The market found the Institute for Supply Management’s monthly index of U.S. manufacturing activity particularly worrying. The measure fell to 52.6 in September from 52.9 in August.”

The Nasdaq (NASD) was hit hardest of all the indices, off more than 3%, as technology stocks were pummeled and the U.S. dollar was stronger again, indicating that a turn higher may be occurring.

Along with stocks, basic commodities were weak all day. The Dollar Index was up nearly 0.7%.

At the close, the Dow Jones Industrial Average (DJI) was off 203 points to 9,509, the S&P 500 (SPX) fell 27 points to 1,030, and the Nasdaq lost 65 points to 2,057.

The NYSE traded 1.6 billion shares with decliners ahead of advancers by 5-to-1. On the Nasdaq 844 million shares traded with decliners there ahead by more than 5-to-1.

November crude oil gained 21 cents, closing at $70.82 a barrel, and the Energy Select Sector SPDR (XLE) closed at $52.24, down $1.68.

December gold fell $8.60 to $1,000.70 an ounce. The PHLX Gold/Silver Index (XAU) lost $7.61, closing at $157.80.

What the Markets Are Saying

Despite yesterday’s broad selling, the major indices are still trading within the bull channel that began several months ago. After such a dramatic rally we might expect at least a mild correction, and we appear to be getting that now.

Following a reversal on Sept. 23, the S&P 500 has fallen almost 5%, but is still above the next level of support, a conjunction of the support line of the bullish channel and the 50-day moving average — both now at 1,020.

Chart-wise the next band of support is at 980 to 1,010. This is a strong support zone with the month of August providing most of the trading. Note, too, that the Relative Strength Index (RSI) has fallen from over 70 in August to 46. Thus, the chances of a breakdown from the next support zone are slim, barring some unforeseen calamity.

Bull markets, especially in their early phase two stages, are known for quick and shocking rounds of profit-taking. Smart buyers will use a pullback like this to buy stocks that they have been eyeing for weeks, while weak holders will run for cover.

The jobs numbers this morning could result in some selling and then a reversal up. You must have conviction to climb the “wall of worry” — and this appears to be just another brick in that wall.

Today’s Trading Landscape

There are no significant earnings to be reported today, but the following economic reports are due: non-farm payrolls (the consensus expects -170,000), unemployment rate (the consensus expects 9.8%), and factory orders (the consensus expects 1%).

The old ways of investing don’t work anymore. But trading options founded on scientific principle can and does work in volatile times like these. Learn how to leverage the power of technical analysis to identify the short window when a trade is set to go straight up or down. Get your FREE copy here!

Top Stocks For 2011-12-15-14

CRWE, Crown Equity Holdings, Inc, CRWE.OB

DrStockPick Stock Report!

DrStockPick News Report!

“Crown Equity Holdings, Inc. Announces Appointment of

Sean Hong to International Vice President”

DrStockPick Stock Report! Tuesday July 28, 2009

Crown Equity Holdings, Inc. Announces Appointment of Sean Hong to International Vice President

Crown Equity Holdings, Inc. (OTC Bulletin Board: CRWE.OB) announced on July 24, 2009 the appointment of Sean Hong to the position of International Vice President.

In his new position, Mr. Hong will be responsible for the company�s International operation activities. Sean Hong will assume his role immediately and will report to Kenneth Bosket, President/CEO of Crown Equity Holdings, Inc.

�We are extremely pleased with the value Mr. Hong brings to our company and its shareholders,� said Mr. Saucedo-Bardan, Chairman of Crown Equity Holdings, Inc.

About Crown Equity Holdings, Inc.

Crown Equity Holdings, Inc. is a family tree of company division businesses. Starting in 2003 as a group of professionals in the securities industry who assisted private companies in going public.
Based in Las Vegas, Nevada, Crown Equity Holdings, Inc. (CRWE) continues to provide small business owners with the knowledge required in taking their company public, as well as offering brand awareness through advertising and IR/PR campaigns. Crown Equity Holdings, Inc. has successfully assembled a portfolio of multiple business divisions with a diverse brand of product and services having strong market potential.

With companies such as: Crown Trading Systems, Inc., CTS Products, CRWE News, CRWE Domains, CRWE Newswire, Stock IR and DrStockPick.com. Overall, this company is out to increase shareholders value while increasing their products and services.

This press release contains �forward-looking statements� within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve significant risks and uncertainties. Actual results may vary materially from those in the forward-looking statements as a result of the effectiveness of management�s strategies and decisions, general economic and business conditions, new or modified statutory or regulatory requirements and changing price and market conditions. No assurance can be given that these are all the factors that could cause actual results to vary materially from the forward-looking statements.

Contact:
Kenneth Bosket
Crown Equity Holdings, Inc.
702 448-1543
info@crownequityholdings.com

Keep a close eye on CRWE, do your homework, and like always BE READY for the ACTION!

"Microchip Medicine" Will Save Millions of Lives

A new generation of medical devices is set to have a profound impact on American health - and wealth.

You see, I know from detailed research and analysis that more than 100,000 people in the U.S. die each year from bad reactions to drugs.

That's more than three times as many as those who die from all street drugs, including heroin.

Fortunately, a better way is just on the horizon.

Indeed, new "microchip medicine" technology by itself could save as many as 1 million American lives roughly every decade.

It's proof that you should never throw a good idea away. The two researchers behind this new breakthrough device first thought of it more than 15 years ago.

Now, their tiny product appears headed to produce some big results.

Microchip Medicine BreakthroughsTo reach this breakthrough, the two Massachusetts Institute of Technology (MIT) researchers teamed up with their colleagues at a small biotech firm called MicroCHIPS. The firm is privately held.

But if it ever goes public, you'll want to keep an eye on MicroCHIPS as a potentially winning investment - one that also will benefit millions.

Here's why: A new study showed that doctors can safely implant a small semiconductor into a patient's body.

In turn, doctors can program the microchip to deliver the correct doses of medicine at precisely the right times.

The chips operate wirelessly and can be programmed as needed to change doses. How cool is this?

This particular study involved providing drugs to women who suffer from osteoporosis. But I believe it could be used with dozens of diseases treated with prescription drugs.

But don't take my word for it. Here is what MIT professor Robert Langer had to say.

"You could literally have a pharmacy on a chip," Langer told the college journal MIT News.

His partner, Michael Cima, also addressed one of my main concerns, which is patient safety. Of course, he didn't directly discuss saving lives.

But he seems to understand instinctively how difficult it is for patients on multiple drugs to keep taking them in the correct sequence.

The microchip technology avoids the "compliance issue completely," Cima says, adding that it "points to a future where you have fully automated drug regimens."

Bingo. That's what I'm talking about.

In the very near future, your doctor will no longer bother with injections or pills. Instead, he will implant a microchip in your body.

That chip - or something similar - will deliver the right drugs at the right time.

To keep you safe, your doctor will get alerts from your body delivered wirelesslyfrom your chip directly to his computer network.

Some obstacles remain, however.

Right now, the chips can only deliver 20 doses. But MicroCHIPS is working on a system that will increase that number to 100.

In fact, I predict that in the next few years, patients will receive several different prescribed drugs from a single chip.

After all, we live in an Era of Radical Change in which devices get ever more powerful as they get smaller.

Microchip Medicine Means Longer LifespansThe combination of new computers, software and biotech will combine to help us live well beyond 100 with much better physical and mental health.

More breakthroughs are on the way...

Take the "crab" that can eat the cancer inside your body.

Actually, it's a crab-like robot brought to you by researchers atNational University of Singapore.

They designed these medical bots to enter a patient's stomach through an endoscope. It's a small camera guided by a wire.

A surgeon then guides the "medbot" to the cancer. Once on target, the bot uses a pincer to cut out the cancer, which the robotic arm then removes.

This could have a major medical impact across the board. That includes those stricken with stomach cancer.

Stomach cancer remains a leading killer worldwide and is common in East Asia. Researchers said the robot recently helped remove early-stage stomach cancers in five patients in India and Hong Kong.

The Singapore team also reported three other benefits - no scars, less time in surgery and reduced risks of infection.

Bad Vision?... There's an App for ThatFinally, your smart phone may soon be able to give you an eye exam. This new $2 app comes to you from MIT Professor Ramesh Raskar.

He notes that some 2 billion people in the world need glasses. But millions in developing nations can't get their eyes checked.

His Netra systemuses an eyepiece that clips to the smart phone. It then measures your vision.

Raskar's team says Netra uses cheap optics and interactive software to replace costly laser-based gear.

He talked about Netra's potential in a YouTube video. He says the team is working with eye clinics and eye-glass firms to get the new tech out in the field.

So, you can see that at the very least, some of this new technology will improve human health. Others will help us live much longer.

Still others will no doubt save millions of lives someday.

And remember, as investors we will benefit as well, since some new medical devices are bound to result in some very profitable stock plays.

In the future issues I'll discuss them.

[Editor's Note: Today's Private Briefing features another biotech profit play - a "baby biotech" whose breakthrough therapy has led to a billion-dollar deal. The stock has doubled in the last six months. But Martin Hutchinson explains why there's more to come. Click here to find out more.]

5 Wild ETFs to Spice Up Your Portfolio in 2012

There�s something about a brand new year that inspires us to strike out in bold new directions, seeking out whatever future fortune awaits us. For example, this could be the year when you break out of your conservative investing strategy and sample some of those enticing unconventional instruments that bet on volatility, commodities, or even your personal interests.

While boldness can have its rewards — most notably, potentially hefty yields — investments such as precious metals, futures, or hot technology niches often aren�t well-suited to the goals of income investors. Enter a wild new array of exchange-traded funds (ETFs) that boast a diversified play in some of the more exotic sectors while still providing liquidity since they trade over a major exchange.

ETFs typically track a basket of equities or seek to replicate the price and performance of a specific index, such as the S&P 500. These investments have become increasingly popular because many have the tax advantages of index mutual funds, and often with lower fees.

That growing popularity has resulted in a widening array of flavors: funds for volatility, managed futures, commodities, niche markets and the like. These five ETFs may be just the thing for investors seeking to walk on the wild side:

ETRACS Daily Short 1-Month S&P 500 VIX Futures ETN (NYSEArca:AAVX). Europe triggered a lot of volatility in the market last year. Since the region�s myriad woes are far from resolved — and other challenges loom — don�t be surprised to see volatility continue at least through the first half. AAVX, which launched last September, aims to reflect potential returns of an unleveraged investment in short-term futures contracts on the CBOE Volatility Index. With a market cap of just under $10 million, it’s up 49% in the past month. At about $97, the ETF has a 13-week yield of 26% and a one-month yield of 32%. Its expense ratio is on the high side at nearly 1.4.

VIX Short-Term Futures ETF (NYSEArca:VIXY). Although volatility funds have dropped substantially in the past six weeks, they�re far from skunks at the garden party. European debt concerns persist, and there are plenty of other challenges that could trigger more market volatility — especially the West�s worsening relations with Iran and the possible interruption of oil shipments through the Straight of Hormuz. VIXY measures the movements of a combination of VIX futures and aims to track VIX fluctuations over a specific, future time horizon. With a market cap of $26.6 million, VIXY is still up 55% over its July low, even after dropping about 33% last month. At about $66.50, VIXY�s six-month return of more than 55% offsets its �21.7% one-month yield. Its expense ratio is 0.9.

2x Gold Bull/S&P 500 Bear Profile (NYSEArca:FSG). Fluctuations in the price of gold have made and lost fortunes. FSG is one fund that allows investors to play the spread. The index tracks the difference in daily returns between the gold and U.S. equity markets. This is another ETF that has swung radically over the past six months, which is not surprising given the traditional relationship between stocks and precious-metal prices. With about $11 million in assets under management, FSG fell about 50% from September to December. It has regained about 15% since then. At about $27, FSG�s six-month return of 3% to 5% looks a lot better than its one-month �14% return. Its expense ratio is 0.75.

NASDAQ Global Auto Index Fund Profile (NYSEArca:CARZ). Car lovers looking for broader diversification in the sector might find this ETF appealing. It�s based on the Nasdaq OMX Global Auto Index, a modified market-cap-weighted index that tracks the performance of the largest and most liquid global automakers. With a market cap of $3.5 million, CARZ is up about 12% from its low in September and could get back on track depending on the health of the global auto market in 2012. At about $23, the ETF has a three-month return of 3.9% and a one-month return of �3%. Its expense ratio is 0.7%.

ISE Cloud Computing Index Fund Profile (NYSEArca:SKYY). If hot new information technologies are your thing, SKYY might be worth a look. Cloud computing is one of the hottest� buzzwords going into 2012, and there are sound business reasons — namely cost and collaboration — for organizations to adopt the technology. SKYY is based on a modified equal-dollar-weighted index designed to track the performance of companies actively involved in the cloud-computing industry. Launched in July, the ETF has a market cap of $64 million and is up about 17% over its low in August. At about $17.40, it has a three-month return of 3.5% and a one-month return of �5.6%. Its expense ratio is 0.6%.

As of this writing, Susan J. Aluise did not hold a position in any of the investments named here.

Green Subsidies: A Cautionary Tale

By Karl Smith

by Adam Ozimek

The size of European and Asian country’s green energy industries and the generous government subsidies and industrial policy they thrive on is looked at jealously by many American commentators who wonder “why not us?”.

Leaving aside, for the moment, the disagreement about whether the composition of American industries is a worthwhile goal of public policy, there are reasons to be wary of heavy-handed green industrial policy. An article in the New York Times today is a great cautionary tale.

Generous subsidies from the Spanish government created a fast growing solar industry the small city of Puertollano. Things did not stay so rosy, however:

But as low-quality, poorly designed solar plants sprang up on Spain’s plateaus, Spanish officials came to realize that they would have to subsidize many of them indefinitely, and that the industry they had created might never produce efficient green energy on its own.

In September the government abruptly changed course, cutting payments and capping solar construction. Puertollano’s brief boom turned bust. Factories and stores shut, thousands of workers lost jobs, foreign companies and banks abandoned contracts that had already been negotiated.

This is the same government which, according to the Economist, spent an estimated 570,000 euros per green job. These are things to remember when people wonder why we can’t have “successful” green jobs programs like they have in Europe and Asia.

How Fast Is the Cash at Synaptics?

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Synaptics (Nasdaq: SYNA  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better.

Here's the CCC for Synaptics, alongside the comparable figures from a few competitors and peers.

Company	TTM Revenue	TTM CCC
Synaptics	$579	�33
Cypress Semiconductor (Nasdaq: CY  )	$973	�79
Analog Devices (NYSE: ADI  )	$2,993	�104
Atmel (Nasdaq: ATML  )	$1,877	�122

Source: S&P Capital IQ. Dollar amounts in millions. Data is current as of last fully reported fiscal quarter. TTM = trailing 12 months.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

While I find peer comparisons useful, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Synaptics, consult the quarterly period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at Synaptics looks very good. At 32.6 days, it is 6.6 days better than the five-year average of 39.2 days. The biggest contributor to that improvement was DPO, which improved 10.7 days compared to the five-year average. That was partially offset by a 4.4-day increase in DSO.

Considering the numbers on a quarterly basis, the CCC trend at Synaptics looks weak. At 43.6 days, it is 15.2 days worse than the average of the past eight quarters. Investors will want to keep an eye on this for the future to make sure it doesn't stray too far in the wrong direction. With quarterly CCC doing worse than average and the latest 12-month CCC coming in better, Synaptics gets a mixed review in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

To stay on top of the CCC for your favorite companies, just use the handy links below to add companies to your free watchlist.

• Add Synaptics to My Watchlist.
• Add Cypress Semiconductor�to My Watchlist.
• Add Analog Devices�to My Watchlist.
• Add Atmel�to My Watchlist.

Google: Rev Growth Rate, Margins to Decline With MMI, Says Barclays

With Google (GOOG) having won approval from the European Union today of its takeover of Motorola Mobility (MMI), and with U.S. antritrust approval expected later this week, Barcalys Capital’s Anthony DiClemente offers his perspective on what the integration of Moto will mean to Google’s financial structure.

DiClemente, who has an Overweight rating on shares of Google, and a $700 target, warns that the most difficult thing for investors to swallow is that revenue growth and pre-tax profit (Ebitda) margin will be lower with the incorporation of Moto:

Pro Forma for MMI we believe GOOG�s 2012E and 2013E y/y revenue growth rates could become ~16% and 15% (from 23% and 19%), respectively, 2012E/2013E PF EPS growth rates would remain relatively unchanged, and 2012E/2013E PF EPS could be $43.84/$52.40. We think the biggest optical change for investors will be EBITDA margins, which would become significantly lower for the overall company, mostly as a result of MMI�s substantial COGS expense line. As a result, GOOG�s EBITDA margins could be 40.9% in 2012 (from 55.2% pre-acquisition), however, these margins could rise to 45.2% by 2016, partially as the result of some assumed cost synergies in R&D and SG&A.

That would make Google’s stock multiple more expensive than the current 13.8 times P/E:

As a result, our $700 price target could imply ~16.0x our post-MMI 2012 estimated PF EPS, and a ~9.5x EV/EBITDA multiple on our post-MMI 2012E EBITDA estimate of $20.1bn.

DiClemente thinks as a result of the shifts in financial structure, it’s possible investors may start to value Google on a sum-of-the-parts basis, and he offers his suggested model of such in a table:

Barclays offers its estimate for what a sum-of-the-parts valuation might look like after Google’s acquisition of Motorola Mobility is consummated.

Google shares today are up $7.15, or 1%, at $613.06.

Update: The U.S. Department of Justice’s Antitrust division tonight said it closed its investigation of the Moto acquisition, deeming it “unlikely to substantially lessen competition.” The announcement was made along with a notice that the Department also ended its examination of Apple‘s (AAPL) acquisition of patents from Novell and the acquisition of patents of Nortel from a group including Apple, Microsoft (MSFT) and Research in Motion (RIMM). The announcement follows an announcement by Googleearlier in the day that it won European Union clearance for the deal.

Top Investors Reveal Their Holdings: Soros, Buffett, Einhorn, and More

With reporting by Avi Salzman and Brendan Conway

Every three months, many investors are forced to release a list of their stock holdings as of the end of the most recent quarter. The 13f filings are a little dated (45 days old) and they don’t include options and some other kinds of holdings, but they nonetheless offer a glimpse into the portfolios of some of the most closely followed investors in the world. The filings for the end of the fourth quarter began trickling out late on Tuesday, and they reveal quite� a few compelling bits of information: that John Paulson liquidated his Bank of America (BAC) holdings just before the stock went on a tremendous run, that Bill Ackman suddenly soured on Lowe’s (LOW),� and that George Soros and David Einhorn took a liking to some big tech stocks. We’ve broken down the holdings of some top investors below:

Warren Buffett

AP

Berkshire Hathaway (BRKB) doesn�t change its stock portfolio very much each quarter, but investors tend to watch the company�s incremental moves closely. Warren Buffett has put his two newest deputies and likely successors, Todd Combs and Ted Weschler, in charge of parts of the portfolio, but Buffett is still the head honcho.

In the fourth quarter, Berkshire bought Davita (DVA), which runs dialysis centers, and Liberty Media (LMCA), a communications and entertainment company. The company ended the quarter with 2.7 million shares of Davita and 1.7 million shares of Liberty Media.

Berkshire also trimmed and added to various positions in its legendary portfolio.

It raised its stake in Wells Fargo (WFC) to 384 million shares, up from 361 million at the end of the third quarter. It raised its stake in DirecTV (DTV) to 20 million shares from 4.2 million shares. Its CVS Caremark (CVS) stake was 7.1 million, up from 5.7 million. And Berkshire�s Visa (V) position rose to 2.9 million shares, up from 2.3 million.

Berkshire cut its Johnson & Johnson (JNJ) stake to 29 million shares from 37 million.

Bill Ackman

Activist investor and Pershing Square Capital Management chief Bill Ackman disposed of a sizable but brief-lived stake in hardware retailer Lowe�s Cos. (LOW) late last year, a Tuesday afternoon filing showed.

A previously reported stake of 21.2 million Lowe�s shares was nowhere to be seen in a 13-F SEC filing that showed Ackman�s holdings as of Dec. 31. �A call to Pershing Square requesting comment was not immediately returned.

It was a short-lived investment. Pershing only disclosed the position in its third-quarter filing in November, which showed that he held about 1.7% of the company as of late September. Lowe�s stock is up 7.1% for the year and it was up about 0.8% around midday on Wednesday.

Tuesday�s filings also showed a big stake in whiskey maker Beam Inc. (BEAM) after the company separated last year from the former Fortune Brands.�The 20.8 million Beam shares under Pershing�s control are worth more than $1.1 billion as of Tuesday�s closing price � or about one-eighth of the company�s entire market capitalization. The Deerfield, Ill.-based company�s stock edged up 0.7% to $54.18 Tuesday and gained fractionally in after-hours trading.

That�s in addition to his previously disclosed position in Fortune Brands Home & Security (FBHS), the other wing of the old Fortune Brands.

Ackman has an extensive presence in the consumer-goods industry. Other positions he�s previously disclosed include Family Dollar Stores (FDO), Kraft Foods (KFT) and J.C. Penney (JCP). Photo via Bloomberg News.

David Einhorn

Bloomberg News

Greenlight Capital�s David Einhorn apparently got bullish on tech companies toward the end of 2011, according to a filing released after the market closed Tuesday.

Greenlight added a 3-milion-share position in Yahoo (YHOO) and a 2.9-million share position in Research in Motion Limited (RIMM). He also bought 14 million shares of Dell (DELL). His position in Microsoft (MSFT) was basically unchanged, but he added to his Apple (AAPL) position, ending the quarter with about 1.5 million shares, up from 1.3 million.

John Paulson

Bloomberg

Hedge-fund manager John Paulson appears to have dumped his Bank of America (BAC) and Citigroup (C) stock holdings some time last quarter, after an especially tough 2011. It means he disposed of his BofA common shares before they staged a 45% rise this year.

The head of Paulson & Co. suffered last year as sagging bank stocks tarnished what had become a reputation as one of Wall Street�s shrewdest investors. But he held onto sizable positions in the financial sector into the fourth quarter, a November filing showed.

The�latest SEC filing gave no sign of what used to be a 64.3 million-share BofA stake and another 25.1 million shares in Citi.

It�s not exactly clear when the stakes were disposed of. But in the case of BofA, it doesn�t much matter. The stock didn�t start posting substantial gains until 2012 was underway.

The fund manager did hold onto a batch of warrants in Bank of America, according to the filing.

It�s been a big day for Paulson news. The Wall Street Journal earlier reported on the hedge-fund manager�s effort to break up the 200-year-old Hartford Financial (HIG).

David Tepper

Bloomberg News

Appaloosa Management’s David Tepper appears to have reduced his equity portfolio considerably in the fourth quarter, according to a filing released after the close of trading on Tuesday. The value of Tepper�s stock holdings fell to $765 million from $1.5 billion at the end of the third quarter.

Over two quarters, the drop is even more pronounced; Tepper reported stakes worth $4.2 billion at the end of the second quarter. (Of course, options and other assets don�t show up in quarterly filing reports, so it�s unclear how much Tepper actually took off the table.)

Tepper�s entire 2.5 million-share stake in Citigroup (C), which he reported at the end of the third quarter, is gone in the new filing, as is his 4.3-million-share stake in AMR Group (AMR), his 2.9 million share stake in Delta (DAL) and his 9.3-million-share stake in US Airways (LCC). Tepper opened a new 1.2-million-share position in Oracle (ORCL).

George Soros

Associated Press

Billionaire hedge-fund manager George Soros entered 2012 with a leaner, more concentrated stock portfolio that sported bigger stakes in Google (GOOG), Delta Air Lines (DAL) and Wells Fargo (WFC) a filing late Tuesday shows.

The head of Soros Fund Management LLC showed 145 positions in stocks and other securities in its most recent quarterly SEC filing, a drop of about two-thirds from the 473 positions a quarter earlier, Dow Jones Newswires reported late Tuesday. The figures show what Soros was holding as of Dec. 31.

Soros� stake of 259,900 Google shares, up from 1,126 shares last time around, is worth about $158 million. That�s now one of the biggest positions in his portfolio.

Soros also showed 1.8 million Delta shares, up from about 28,000 at the end of the third quarter, and a tenfold increase in Wells Fargo, to 1.2 million shares.

Meanwhile, Amazon (AMZN) appeared to fall out of Soros� favor. A stake of 206,000 shares disclosed in the third quarter didn�t appear in the latest filing.

It�s also worth noting the sizable change in the value of reportable securities. Soros showed $4.6 billion in stocks and other assets for the quarter, down from�$5.8 billion as of Sept. 30 and likely reflecting a shift from stocks into other assets for which the SEC doesn�t require a disclosure.

U.S. Market Moves Ahead

Stocks overcame early losses, buoyed by economic data and strong performances from two individual stocks that helped pull up indexes.

The Dow Jones Industrial Average dropped after the market opened Thursday, but quickly recovered and spent the rest of the day in positive territory, with a late-day run that fell shy of closing above the 13000 mark. Still, the Dow closed at a 52-week high, up 46.02 points, or 0.4%, to 12984.69.

The Standard & Poor's 500-stock index finished up 5.80 points, or 0.4%, at 1363.46, and the Nasdaq Composite closed up 23.81 points, or 0.8%, at 2956.98.

A Silver Lining of the Global Crisis

Another cloud swept over the economy: the poverty rate for 2009 rose to 14.3% (up from 13.2% in 2008), according to a Census Bureau report. That means that 43.6 million Americans (or 1 in 7) lived below the poverty level last year…the largest number in the 51 years for which poverty data is available. And what’s really disturbing: this marks the highest one-year increase in the poverty rate since 1965, when President Johnson began the war on poverty. And to put it in perspective: the poverty threshold for a family of four is an income of $21,954. That equals $5,488.50 for each family member to survive on for a year.

click to enlarge

Source: U.S. Census Bureau

Yet, in the midst of that bad news, interestingly enough, the recession has had a positive effect: global hunger has fallen for the first time in 15 years. And it didn’t just fall a little…hunger is down 9.6%. According to the United Nations Food and Agricultural Organization, an estimated 925 million people are undernourished this year, compared to 1.023 billion in 2009.

Source: Food and Agricultural Organization of the United Nations

The decline in the hunger number is the result of a decline in food prices from the peak of 2008. Another factor: economic growth in developing countries has improved access to food: the International Monetary Fund estimates that the global economy will expand 4.2% this year, with income growth primarily in emerging and developing economies. But that good news is threatened by a recent uptick in food prices, and the fact that developing/emerging countries (where most of the world’s hungry are found) are extremely vulnerable to shifts in the global economy.

Source: Food and Agricultural Organization of the United Nations

The global economy still faces some serious headwinds. And the world’s hungry still number far too many. According to the United Nations report, “The fact that nearly a billion people remain hungry…indicates a deeper structural problem that gravely threatens the ability to achieve internationally agreed goals on hunger reduction”. Still…that 98 million fewer people are hungry is the silver lining of this global recession.

Disclosure: No positions

Are Preferred Shares a Better Choice for 2012?

With 2012 just beginning, now's a smart time to gauge how the stocks you're interested in are likely to do this year and beyond. By knowing what stock analysts and fellow investors expect from a stock, you'll be smarter about whether you should buy it for your portfolio -- or sell it if you already own it.

Today, let's take a look at the iShares S&P U.S. Preferred Stock ETF (NYSE: PFF  ) . As I discussed last month, preferred shares actually did much better than the common shares of the companies that this ETF owned. But will that trend hold in 2012, or will the ETF lag behind traditional investments? Below, I'll take a closer look at what people expect from the iShares preferred ETF.

Information on iShares S&P U.S. Preferred

Dividend Yield	7%
Dividend Yield for Financial Stocks (common)	1.7%
CAPS Rating (out of 5)	***

Sources: Yahoo! Finance and Motley Fool CAPS.

Will preferred stocks keep outperforming in 2012?
To understand the iShares preferred ETF, you have to recognize that the ETF is highly focused in banks and other finance-related companies. You'll find preferred shares of a few other companies, including General Motors and Apache. But for the most part, as goes finance, so goes this ETF.

As for financials, many expect a rebound from the major stocks in the industry. Bank of America (NYSE: BAC  ) still faces many threats, but analysts estimate its 2012 earnings will be 13 times what it eventually posts for 2011. Wells Fargo (NYSE: WFC  ) and Citigroup (NYSE: C  ) avoided the big earnings drops that B of A suffered in 2011, but they're also seen having reasonable earnings jumps for 2012 as well. Revenue growth will be hard to come by, but more efficient operations should filter down to the bottom line.

Meanwhile, insurance stocks also can expect better days in 2012. Barring a repeat of the cataclysmic events that produced catastrophic losses last year, insurers should benefit from stronger pricing. MetLife (NYSE: MET  ) expects modestly stronger earnings on a small jump in sales, matching what many other industry peers are seeing.

What all that means for the iShares preferred ETF is that with slow and steady growth, common shares of financial stocks aren't as likely to post the huge gains they did in the market rebound in late 2009. Because preferred shares typically don't give much upside growth potential anyway, their higher dividends should prove the deciding factor. That could make 2012 another smart year to own preferreds over common stock in the sector.

Still, if you have your heart set on bank stocks, we won't stop you -- but make sure you pick the right ones. Join the thousands who've already read The Motley Fool's latest special report on the financial industry to find out which banks the smartest investors are buying now. The report is free, but it won't be there forever, so check it out today.

Click here to add iShares S&P U.S. Preferred ETF to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.