Larry Summers withdraws name for Fed chair job

Former Treasury Secretary Larry Summers pulled his name from consideration to succeed Ben Bernanke as the next Federal Reserve chairman.

NEW YORK (CNNMoney) After months of contentious public debate, Larry Summers has withdrawn his name from consideration to become the next chairman of the Federal Reserve.

President Obama said he spoke with Summers earlier Sunday and accepted his decision.

"I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future," the president said in a statement.

Current Fed Chairman Ben Bernanke's term is set to end in January. Before the appointment can be made official, the Senate is tasked with holding confirmation hearings and voting on the nomination.

While Summers is no stranger to high-profile roles and has a close relationship with Obama, forged in the depths of the financial crisis, he would have been a controversial pick.

During his time as Treasury Secretary in the Clinton administration, Summers earned his reputation as a deregulator. Summers urged Congress to repeal parts of a Depression-era rule called Glass-Steagall, which prevented financial institutions from simultaneously acting as investment banks, commercial banks and insurance companies. This move paved the way for banks to become larger than ever.

Also in the late '90s, Summers pushed back against a movement to regulate complex derivatives. Some say, both those decisions played a role in precipitating the 2008 financial crisis.

If Obama had picked Summers, one of his economic mentors, the confirmation hearings could have been dicey. In July, a group of Democratic Senators sent a letter to Obama urging him to choose top contender Janet Yellen, who! currently serves as vice chair at the Fed.

"Our nation badly needs a chairman with a solid record as a bank regulator," the letter said.

In his letter to the president announcing his withdrawal, Summers wrote that he "reluctantly concluded" that the confirmation process would be "acrimonious and not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation's ongoing economic recovery."

Summers served as President of Harvard, and more recently, headed Obama's National Economic Council. But he lacked monetary policy experience in comparison with Yellen. According to CNNMoney surveys, Yellen is by far the preferred candidate among economists due to her years of Fed experience. If appointed, she would be the first woman to lead the organization in its 100-year history.

  Yellen vs. Summers in Fed Chief face-off

Summers' withdrawal is expected to delay the president from announcing a nominee at least for another week.

The Fed leadership transition comes at a critical time.

The U.S. central bank has indicated it is ready to wind down its economic stimulus, via its $85-billion-a-month bond-buying program.

Further down the road, the new Fed chairman will also have to grapple with the complicated task of unwinding five years of monetary stimulus. Since late 2008, the Fed has accumulated more than $3 trillion in Treasuries and mortgage-backed securities, in its bid to support the U.S. economy.

Outgoing chairman Bernanke leaves behind a legacy of bank bailouts and unprecedented monetary stimulus that some economists argue prevented a total collapse of the U.S. economy.

He also leaves the Fed a more transparent institution. Under his leadership, the central b! ank began! holding press conferences to explain its policies to the public. It also adopted a policy known as "forward guidance," in which the Fed alerts the public of its expectation for future interest rates.

The Fed has recently said it expects its key interest rate to remain near zero until 2015.

-- CNN's Dana Bash, Jim Acosta, Jessica Yellin and Gloria Borger contributed reporting.

Largest Semi-Annual Increase In Home Prices On Record

This morning, the Mortgage Bankers Association reported mortgage application activity fell 13.5% (includes purchase and refinance activity) for the week ended Sept. 6, with the refinancing index declining 20.2%. The rapid spike in mortgage interest rates has certainly played a significant part in the slowdown in mortgage activity. One follow-on question is whether the improvement seen in real estate prices is sustainable in the face of these higher mortgage rates and the anticipated tapering by the Fed. A recent report from Chart of the Day highlights the sharp increase in median home prices, as noted below:

The U.S. real estate market continues to surge. For some perspective, today's top chart illustrates the U.S. median price (adjusted for inflation) of a single-family home over the past 43 years while today's bottom chart presents the semi-annual percent change in home prices (also adjusted for inflation). Today's chart illustrates that the inflation-adjusted median home price has rarely increased more than 10% in six months (gray shading). When inflation-adjusted home prices did increase more than 10% in six months, it was often soon followed by a period of stagnant or declining prices. It is worth noting that over the past six months, the median price for a single-family home has shot up at the fastest pace on record.

From The Blog of HORAN Capital Advisors.

Source: Largest Semi-Annual Increase In Home Prices On Record

Bracing for Japanese fiscal crisis

Takeshi Fujimaki, a former adviser to billionaire George Soros and now a member of Japan's upper house of parliament, said a fiscal crisis in Asia's second- biggest economy is inevitable and neither a higher sales tax nor the 2020 Olympics will be able to stop it.

“I decided to become a politician because I think financial crisis will come sooner or later,” Fujimaki said in a Sept. 24 interview in Tokyo. “This total debt will continue to increase. I don't think Japan can survive until 2020.”

Yields on 10-year Japanese government bonds may jump to 70% based on what happened in Russia when it defaulted in 1998, Fujimaki said. The benchmark yield is now the lowest in the world at 0.68% and the cost to protect the sovereign debt from default is near a four-month low at 62 basis points.

Before sweeping to power in December elections, Prime Minister Shinzo Abe's Liberal Democratic Party outlined in 2011 a plan known as the X-day project to fend off a potential bond crash. Public debt totaled 924.4 trillion yen ($9.37 trillion) that year and has ballooned to more than one quadrillion yen, more than twice Japan's gross domestic product, the highest ratio globally. Abe is set to decide on Oct. 1 whether to raise the 5% consumption levy.

“It's inevitable we will see a very big mess and the LDP has to step down,” said Fujimaki, who won his upper house seat on a Japan Restoration Party ticket in the July 21 ballot.

The Bank of Japan is aiming to stoke 2% inflation in two years by buying more than 7 trillion yen of JGBs a month. Consumer prices excluding fresh food rose 0.8% in August from a year earlier, the fastest increase since 2008, as energy costs climbed, the statistics bureau said today.

“Because the BOJ is buying huge amounts of JGBs, market principles in this country do not work,” Fujimaki, who served as managing director and treasurer in Tokyo at Morgan Guarantee Trust Co., which later merged into JPMorgan Chase & Co. “Monetary easing is creating a JGB bubble. Sooner or later the market will reflect credit risk.”

The core inflation gauge will climb 1.3% in the year starting April 2014 and 1.9% in fiscal 2015, BOJ board members forecast in July, excluding the effects of a planned sales-tax increase to 8% in April and 10 percent in 2015.Captive Audience

The International Monetary Fund estimates Japan's debt will grow to 245% of GDP this year. The nation will spend 22.2 trillion yen servicing its debt in the fiscal year begun in April, accounting for more than half of total tax revenue and occupying about 24% of the government's budget, according to Finance Ministry estimates in January.

Japan will implement more than 5 trillion yen of stimulus measures in the year starting April 2014 and tax breaks of as much as 500 billion yen for companies making capital investments, Asahi newspaper said on Sept. 21, without citing anyone. In a reform plan known as Abenomics, the prime minister has pledged to defeat 15 years of deflation using the so-called three arrows of fiscal stimulus, monetary easing and a package of growth-oriented initiatives.

“Institutional investors in Japan are a captive domestic audience,” Ryutaro Kono, the chief Japan economist in Tokyo at BNP Paribas SA, said on Sept. 25. “The gist of Abenomics is monetization,” he said referring to the practice of central banks financing government deficits.

Abe will announce his decision on the sales tax on Oct. 1 after the release of the BOJ's Tankan survey of business sentiment.

“We will not be able to avoid a crisis with a consumption tax increase, but it is our responsibility as politicians to raise it,” according to Fujimaki, who says the levy needs to be 35 percent to 40 percent. “Corporate tax should be cut so Japanese companies can be competitive globally. We need to make our best effort to improve the economy to delay this coming crisis.”

Takatoshi Ito, the dean of Tokyo University's Graduate School of Public Policy, said earlier this week Japan can avert disaster by raising the tax to at least 20 percent by 2020.

“There is a narrow path to escape from the disaster,” Ito, who leads an investment panel for the 121 trillion yen Government Pension Investment Fund, said in an interview on Sept. 24.

The yen rose 0.3 per! cent to 98.67 per dollar as of 3:53 p.m. in Tokyo, and has lost about 12 percent in 2013. It touched a 4 1/2 year low of 103.74 on May 22. The currency will end the year at 102 and will slide to 110 in 2014, according to median estimates of economists.120 Yen

“If the yen goes up to 120 per dollar, Mr. Abe doesn't need a third arrow,” according to Fujimaki, who expects the currency to dr

Facebook runs at $50 as analysts turn into fans

Facebook stock is setting record highs as Wall Street analysts keep rushing to slap "buy" ratings on the stock and boost price targets.

Shares of Facebook jumped $1.01 to close at $49.46 Wednesday as another Wall Street analyst put out bullish notes on the largest social-networking company.

Canaccord Genuity started covering Facebook stock with a buy rating with a price target of $60 a share, pointing to the company's advertising strength.

But Canaccord is just the latest in what's been a powerful pileup of bullish analyst notes. On Tuesday, shares of Facebook jumped after Citigroup upgraded the stock to a buy, saying that the company's momentum is sustainable.

Now, the chorus of Wall Street analysts is largely bullish, with an average "outperform" rating on Facebook shares, says S&P Capital IQ. The median price target from the 39 analysts covering the stock is $47 a share, with the upper part of the range at $60 a share.

The rush of support from Wall Street analysts is a remarkable shift from the days after the initial public offering in May 2012. Shares wound up losing about half their value from the $38-a-share offering price, as Wall Street analysts and investors turned sour on the company's prospects with mobile ads.

TWITTER IPO: Facebook's Zuckerberg offers IPO advice toTwitter

But following Facebook's strong growth in the second quarter, powered largely by mobile ads, investors have been rushing into the shares, pushing them up more than 85% this year.

Top 10 Wall Street Crooks: Insider Trading

Insider trading cases have grabbed the headlines over the last few years, shaking hedge funds, the financial world and even celebrities.

In fact, in the last five years, there have been more than 70 convictions for insider trading in the U.S. The list of individuals and companies caught up in the crackdown by the SEC and the Justice Department seems almost endless, from SAC Capital to Raj Rajaratnam.

Is it any wonder that 70% of Americans think those who work on Wall Street would break the law just to earn a lot money, Knut Rostad writes in his blog on ThinkAdvisor: 5 Years On, Americans See Wall St. as “Foreign ... a Culture Apart”.

Of course, the urge to use a little secret info to make a mint is nothing new. When ThinkAdvisor went to compile a who’s who of insider trading miscreants, it wasn’t hard to find cases from the 1990s, the 1980s and one we couldn’t resist from way back in the Roaring ’20s, though he wasn’t convicted.

Check out our Top 11 Wall St. Crooks: Insider Trading. We’ve counted them down from the lowest to highest amount stolen in terms of 2013 dollars.

(Honorable Mention, since everything he did was legal, but he had a law named after him--in a bad way)

Albert H. Wiggin: $4 million ($54.7 million today) in 1929

Kind of like the modern godfather/figurehead of insider trading, Wiggin is the one man on our list who got away with his “crime.” Still, his misdeeds created such public outrage that the practice of shorting your own company’s stock provoked the passage of a namesake law outlawing it, thw Wiggins Act. Wiggin, the head of Chase National Bank, shorted 40,000 shares in the company, giving him every reason to see the bank fail. October 1929 might have been a black month for most investors, but Wiggin made out like, well, a bandit. Looking for a place to vent its anger, the public settled on Wiggin. Although, at the time what he did wasn’t illegal, public pressure forced Wiggin to forgo his $100,000 ($1.3 million today) annual pension. And his name does live on in the law books.

10. Marilyn Star, $88,135 ($128,000 today) in 1997-98

She might be at No. 10 on our list, but Marilyn Star is our favorite insider trader. After all, she is the only porn star we’ve come across who was convicted of illicit stock trading. Star, who was born Kathryn Gannon, first came to public notice in a series of X-rated films in the early ’90s. That work led to high-end strip club appearances. After a divorce she started “dating” James McDermott, a banking exec with Keefe, Bruyette & Woods. A little pillow talk later and Star had some insider information about bank mergers with which to purchase stocks. In 2002, she pleaded guilty to insider trading charges and served three months in prison. She has been quoted as saying she was a naive young woman who listened to an older man. McDermott pleaded guilty to stock fraud, served five months in jail and agreed to pay $230,000 to victims of the scheme.

9. Martha Stewart: $280,000 ($360,000 today) in 2004

No list of insider trading cases would be complete without the queen of baking, home decorating and crafts products. Stewart created a cottage industry around her television show and magazine that seemed unstoppable. Unstoppable until she was charged with insider trading in 2004. The amount involved might be chump change – $280,000 worth of ImClone stock – but the media attention on the case was around the clock. Stewart spent five months in prison and agreed to a ban on serving on the boards of public companies in 2006 and paid $195,000 ($226,000 today) in fines and penalties. The ban ended in 2011 and she returned to the head of her namesake company. After her stint in the big house, Stewart maintained her sense of humor, exchanging barbs with David Letterman about her time away.

8. Donald Johnson: $755,000 ($846,000 today) in 2007

Being an executive of a stock exchange ought to fund a very nice lifestyle, but that apparently wasn’t enough for the Nasdaq’s chief, Donald Johnson. Johnson was convicted in 2011 of using insider information to trade shares of United Therapeutics, Honda and other companies from 2006 to 2009. Johnson’s job on the market intelligence desk made him privy to all kinds of secrets that could move markets. He used the info to hi advantage and, ultimately, to his detriment. He pleaded guilty to one count of insider trading and was sentenced to three and a half years in prison and ordered to make restitution. The Wall Street Journal reported that after his arrest Johnson said he was gratified by support he received from colleagues and would not ask them to write letters to the court on his behalf. What a guy.

7. Doug Whitman, $935,000 ($1 million today) from 2006-09

Whitman managed more than $100 million through his Whitman Capital hedge fund. Whatever his reasons, and in two days of sometimes emotional testimony he denied any wrongdoing, Whitman walked a path that led him to two years in prison. He was convicted in August 2012 of insider trading charges involving stocks of Google, Polycom and Marvell Technology Group. In January, he was sentenced two years in the big house and fined $250,000.

6. Raj Rajaratnam, $53.8 million ($56 million today) in 2011

Some have reported that the man who received the longest insider trading sentence in history is living like a king in prison. The truth seems more nuanced. Sure, the former head of Galleon Capital lives on the best floor in his prison, but according to CNBC, the entire prison is a hospital and Rajaratnam is quite ill with Type II diabetes that is under “poor control.” In any case, the convicted trader received 11 years in prison for securities fraud and five counts of conspiracy. He was also ordered to pay back the $53.8 million plus a $10 million fine. His convictions were upheld earlier this year. Rajaratnam is scheduled to be released when he is 65. Others from Galleon, once among the largest hedge funds in the world, have also been convicted. They include Zvi Goffer who received a 10-year sentence and Rajat Gupta, convicted of leaking info to Rajaratnam, who was sent up the river for two years.

5. & 4. Garrett Bauer and Matthew Kluger, $37 million (about $45 million today) from 1994-2011

It sounds like something only Hollywood could make up. Bauer, Kluger and a middleman, Kenneth Robinson, used burner phones to discuss insider tips gleaned by Kluger from law firms for which he worked. Over 17 years, authorities said the pair turned a tidy profit of $37 million (Bauer estimated the take at $23 million) by trading shares in Sun Microsystems, 3Com and others. For his part, Bauer hit the lecture after he was nabbed in 2011, urging students not to follow his crooked path. Alas, U.S. District Judge Katharine Hayden didn’t buy his contrition and sentenced Bauer to nine year in prison. Kluger got a dozen years. So much for the fancy Manhattan apartment and other luxuries purchased with the illicit profits.

3. Joe Nacchio: $52 million ($68.7 million today) in 2001

Qwest Communications grew by leaps and bounds after its 1996 founding. Through mergers and acquisitions it provided services to 14 states west of the Mississippi, including its home state of Colorado. Sure, there were bumps along the way. But why would anyone have been worried about a $250 million SEC fine because of accounting irregularities, including a deal with Enron that may haled that company hides its own fraud? Then, in 2007, CEO Nacchio was convicted of insider trading relating to the sale in 2001of company stock based on non-public knowledge. He served 70 months in a federal prison camp and in home detention before being released on Sept. 21, 2013, according to the Denver Post. The newspaper reported that Nacchio has not divulged his plans.

2. Jeff Skilling, $60 million ($79.2 million today) in 2001

Enron jumped on the energy trading market and was riding high. The ink that was spilled writing about the company would have to be measured by the barrel. The ink flowed faster as the truth about company’s finances became public. In 2004 Skilling was charged with 35 counts of insider trading, fraud and other crimes, including selling more than $60 million in company stock based on insider knowledge of the company’s faltering position, which resulted in a bankruptcy filing shortly afterward. In 2006, Skilling was found guilty on 19 counts and sentenced to 24 years and four months in prison. He was ordered to pay a $45 million fine. In June of this year, a judge cut his sentence to 14 years. He agreed to pay $41 million in restitution.

1. Ivan Boesky, $200 million ($1.6 billion today) in the early ’80s

The early 1980s were rife with cases. None was more spectacular than that of Boesky who used information from Wall Street insiders to time his trades and manipulate markets. Prosecutors said he received $3 billion in leverage from junk bond king Michael Milken. The scheme worked until the feds caught up with Boesky who gave up his pals, even recording conversations with Milken in 1986. Boesky’s profits came from trades from deals including Philip Morris’ acquisition of General Foods and Chevron’s purchase of Gulf. Boesky served 22 months in prison and paid a $100 million fine. Half went to his victims and the rest to the U.S. Treasury. As of last year, Boesky had a new wife and was living in San Diego.

Check out these related stories on ThinkAdvisor:

Famous Products Invented for the Military

While most people think private enterprise is responsible for innovation, a great deal of the technology Americans rely on comes from another well-known source: the U.S. military.

Over the years, the military, and the private enterprises developing products for the military, have created some of the most important products we use today. Some of the inventions have been less groundbreaking than others, such as Silly Putty and Aviator sunglasses. But some military research also directly led to significant innovations such as the microwave oven and the GPS.

Click here to see the eight famous products

The military contracted out most of these inventions to private companies. One exception is the modern GPS network. It was designed in the 1970s by researchers in both the Navy and Air Force and was built in the late ’70s and ’80s. The technology, initially designed as a guidance and tracking system for planes, boats and missiles, is today used in everything from commercial aircraft to personal navigation systems.

Private companies developed most of the products on this list, often answering the military’s call during wartime. During World War II, a Johnson & Johnson division created what would eventually become duct tape, originally to seal containers and quickly repair equipment in the field. The Jeep was an all-terrain scout vehicle built by a company called Willy's-Overland. The Jeep was widely used by the military in World War II and the Korean War and eventually also became a very popular domestic auto brand.

In many cases, the final use of the product completely differs from its intended military function. What eventually became feminine hygiene products under the Kotex brand was originally medical gauze developed for the military during World War I. Silly Putty was invented as a possible substitute for rubber. While it failed in this regard, it became a popular toy.

The military also played a part in developing even greater technologies. ARPANET, considered by many to be a precursor to the modern Internet, was a military program designed to share documents securely between facilities. In the 1940s and ’50s, the military even played a role in the development of the modern computer.

24/7 Wall St. reviewed products that were either developed for military use by the military or contractors, or those which were created as the result of military research. We excluded products where the military or contractors only played a part in the development of the product, as was the case with the computer.

These are the famous products invented for the military.

5 Hated Earnings Stocks You Should Love

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

>>5 Rocket Stocks to Buy for September Gains

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

>>5 Stocks Ready to Break Out

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

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With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

Ascena Retail Group

My first earnings short-squeeze trade idea is Ascena Retail Group (ASNA), a specialty retailer of apparel for women and tween girls, which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Ascena Retail Group to report revenue of $1.17 billion on earnings of 21 cents per share.

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The current short interest as a percentage of the float Ascena Retail Group is notable at 5.4%. That means that out of the 126.24 million shares in the tradable float, 6.87 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.4%, or by 349,000 shares. If the bears are caught pressing their bets into a bullish quarter, then shares of ASNA could soar sharply higher post-earnings as the shorts rush to cover some of their bets.

From a technical perspective, ASNA is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending modestly for the last month, with shares moving higher from its low of $16.15 to its intraday high of $17.48 a share. During that uptrend, shares of ASNA have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ASNA within range of triggering a near-term breakout trade post earnings.

If you're bullish on ASNA, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average at $17.51 a share to its 200-day moving average at $18.02 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.17 million shares. If that breakout hits, then ASNA will set up to re-test or possibly take out is next major overhead resistance levels at $19.33 to $20.50 a share. Any high-volume move above those levels will then give ASNA a chance to tag $22 to $23 a share.

I would simply avoid ASNA or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $16.40 to its 52-week low at $15.95 a share with high volume. If we get that move, then ASNA will set up to enter new 52-week-low territory, which is bearish technical price action. Some possible downside targets off that move are $14 to $13 a share.

Synnex

Another potential earnings short-squeeze play is technology services provider Synnex (SNX), which is set to release its numbers on Wednesday after the market close. Wall Street analysts, on average, expect Synnex to report revenue of $2.72 billion on earnings of 95 cents per share.

>>4 Tech Stocks Triggering Breakout Trades

The current short interest as a percentage of the float for Synnex stands at 4.3%. That means that out of the 26.20 million shares in the tradable float, 1.14 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low tradable float. Any bullish earnings news could easily spark a large short-squeeze for SNX post-earnings.

From a technical perspective, SNX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last month, with shares moving higher from its low of $46.87 to its intraday high of $64.50 a share. During that move, shares of SNX have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're in the bull camp on SNX, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $64.50 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 232,502 shares. If that breakout triggers, then SNX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $70 to $75 a share.

I would simply avoid SNX or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support at $60 a share with high volume. If we get that move, then SNX will set up to re-test or possibly take out its next major support levels at $52 a share to its 50-day moving average at $51.12 a share.

Carnival

One potential earnings short-squeeze candidate is cruise line operator Carnival (CCL), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Carnival to report revenue of $4.65 billion on earnings of $1.30 per share.

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The current short interest as a percentage of the float for Carnival stands at 4.3%. That means that out of the 563.25 million shares in the tradable float, 17.72 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 13.4%, or by 2.09 million shares. If the bears are caught pressing their bets into a strong quarter, then shares of CCL could jump sharply higher post-earnings.

From a technical perspective, CCL is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending sideways for the last two months, with shares moving between $35.11 on the downside and $37.96 on the upside. A high-volume move above the upper-end of its recent range could trigger a big breakout trade for shares of CCL post-earnings.

If you're bullish on CCL, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $37.96 a share to its 52-week high at $39.95 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.46 million shares. If that breakout triggers, then CCL will set up enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $48 a share.

I would avoid CCL or look for short-biased trades if after earnings it fails to trigger that move and then drops back below its 50-day moving average of $36.67 a share with high volume. If we get that move, then CCL will set up to re-test or possibly take out its next major support levels at its 200-day moving average of $35.38 a share to more support at $35.11 a share. Any high-volume move below those levels will then give CCL a chance to tag $33 to $32 a share.

CarMax

Another earnings short-squeeze prospect is used cars retailer CarMax (KMX), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect CarMax to report revenue of $3.16 billion on earnings of 57 cents per share.

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Just recently, Oppenheimer increased its price target on CarMax to $61 from $52 as the firm thinks the company's used car comps are strengthening as macro pressures and supply constraints ease and internal initiatives take hold. The firm expects the company's sales recovery to continue for some time.

The current short interest as a percentage of the float for CarMax sits at 2.6%. That means that out of the 222.25 million shares in the tradable float, 5.88 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of KMX could spike notably higher post-earnings

From a technical perspective, KMX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $40.34 to its recent high of $52.27 a share. During that uptrend, shares of KMX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of KMX within range of triggering a near-term breakout trade.

If you're bullish on KMX, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $52 to its 52-week high at $52.27 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.13 million shares. If that breakout triggers, then KMX will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that move are $60 to $65 a share.

I would simply avoid KMX or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day at $49.07 a share with high volume. If we get that move, then KMX will set up to re-test or possibly take out its next major support levels at $47 to $45 a share. Any high-volume move below those levels will then give KMX a chance to tag its 200-day moving average at $43.86 a share.

Red Hat

My final earnings short-squeeze play is global provider of open source software solutions Red Hat (RHT), which is set to release numbers on Monday after the market close. Wall Street analysts, on average, expect Red Hat to report revenue of $372.07 million on earnings of 33 cents per share.

The current short interest as a percentage of the float for Red Hat sits at 2.4%. That means that out of the 188.21 million shares in the tradable float, 4.58 million shares are sold short by the bears. Any bullish earnings news could easily spark a decent short-covering rally for shares of RHT post-earnings.

From a technical perspective, RHT is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last four months, with shares moving higher from its low of $44.95 to its recent high of $54.38 a share. During that move, shares of RHT have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RHT within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on RHT, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $54.38 to $55.59 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.24 million shares. If that breakout triggers, then RHT will set up to re-test or possibly take out its next major resistance levels $57 to $60 a share. Any high-volume move above those levels will then put $63 to $65 into range for shares of RHT.

I would avoid RHT or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below both its 50-day moving average at $51.54 and its 200-day moving average at $50.98 a share with high volume. If we get that move, then RHT will set up to re-test or possibly take out its next major support levels at $50 to $48 a share. Any high-volume move below those levels will then put $47 to $45 into range for shares of RHT.

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Rising on Unusual Volume

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>>5 Stocks Under $10 Poised for Big Moves

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Microsoft Pops on Dividend Hike, Buyback Announcement

NEW YORK (TheStreet) -- Microsoft (MSFT) shares jumped 1.8% after the company announced a 22% increase to its dividend and a replacement to its $40 billion buyback program.

Microsoft's quarterly dividend is now 28 cents per share, up from a prior 23 cents per share. The dividend is payable Dec. 12, 2013, to shareholders of record on Nov. 21, 2013. Shares will trade ex-dividend date Nov. 19, 2013.

In addition to the dividend hike, Microsoft's board of directors also approved a new $40 billion buyback program, with no expiration date. It replaces the previous $40 billion share repurchase program, which was set to expire at the end of this month.

"These actions reflect a continued commitment to returning cash to our shareholders," said Amy Hood, chief financial officer of Microsoft, in a press release. Microsoft has come under pressure to shake up its business and return more cash to shareholders in an effort to boost its lagging stock price. The company recently announced that CEO Steve Ballmer will be ending his run at the top of Microsoft, with the company searching for a replacement. In addition to Ballmer's pending departure, Microsoft purchased Nokia's (NOK) devices and services division and licensed some of Nokia's patents for $7.17 billion. One of Microsoft's largest shareholders, ValueAct Capital, recently signed a cooperation agreement with the company that allows ValueAct Capital President Mason Morfit to meet with selected Microsoft directors and company management "to discuss a range of significant business issues." In addition to the meetings, the agreement also lets ValueAct's Mortfit join the board at the first quarterly board meeting after the 2013 annual shareholders meeting on Nov. 19. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia

Top 10 China Companies To Invest In Right Now

On Thursday, SINA (NASDAQ: SINA  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise.

SINA has been a big part of the Internet revolution in China and has benefited greatly from the upsurge in interest in online commerce and advertising in recent years. As competition increases, the company has come out with some interesting new strategic moves to retain its leadership role in the industry. Let's take an early look at what's been happening with SINA over the past quarter and what we're likely to see in its report.

Stats on SINA

Analyst EPS Estimate Top 10 China Companies To Invest In Right Now: CNinsure Inc.(CISG) CNinsure Inc., together with its subsidiaries, provides insurance brokerage and agency services, and insurance claims adjusting services in the People?s Republic of China. The company offers property, casualty, and life insurance products underwritten by domestic and foreign insurance companies operating in China. Its property and casualty insurance products include automobile, individual accident, commercial property, homeowner, cargo, hull, liability, and construction insurance; and life insurance products comprise individual whole life insurance, term life insurance, education annuity, and health insurance, as well as universal insurance and group life insurance. The company also offers insurance claims adjusting services, which include pre-underwriting survey, claims adjusting, disposal of residual value, loading and unloading supervision, and consulting services, as well as damage assessment, survey, authentication, and loss estimation to insurance companies and the i nsured; and value-added services to its customers in conjunction with distributing automobile insurance products. As of April 15, 2010, its distribution and service network consisted of 49 insurance agencies, 3 insurance brokerages, and 4 claims adjusting firms, with 571 sales and service outlets. The company was founded in 1998 and is headquartered in Guangzhou, the People?s Republic of China. Top 10 China Companies To Invest In Right Now: China Mobile(Hong Kong) China Mobile Limited, an investment holding company, provides mobile telecommunications and related services primarily in the Mainland China. It offers various services comprising local calls, domestic long distance calls, international long distance calls, domestic roaming, and international roaming. The company also provides voice value-added services, including caller identity display, caller restrictions, call waiting, call forwarding, call holding, voice mail, and conference calls; customer-to-customer messages and corporate short message services; and mobile Internet access services. In addition, it engages in other data businesses, which primarily include multimedia messaging services; color ring services that enable users to customize the answer ring tone from various selection of songs, melodies, sound effects, or voice recordings; and mobile reading, mobile gaming, mobile video, mobile payment/wallet, mobile TV, mobile market, and Internet data center services. F urther, the company offers telecommunications network planning, design, and consulting services; roaming clearance services; technology platform development and maintenance services; and mobile data solutions, and system integration and development services, as well as operates a network and business coordination center. Additionally, China Mobile Limited sells mobile phone handsets and devices. As of March 31, 2011, it served approximately 600.8 million customers. The company was formerly known as China Mobile (Hong Kong) Limited and changed its name to China Mobile Limited in May 2006. China Mobile was founded in 1997. The company is based in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Mobile Limited is a subsidiary of China Mobile Hong Kong (BVI) Limited. Best Dividend Companies To Invest In 2014: Clean Diesel Technologies Inc.(CDTI) Clean Diesel Technologies, Inc. engages in the manufacture and distribution of emissions control systems and products for heavy duty diesel and light duty vehicle markets. The company operates in two divisions, Heavy Duty Diesel Systems and Catalyst. The Heavy Duty Diesel Systems division designs and manufactures verified exhaust emissions control solutions that are used to reduce exhaust emissions created by on-road, off-road, and stationary diesel and alternative fuel engines, including propane and natural gas. Its products include closed crankcase ventilation systems, diesel oxidation catalysts, diesel particulate filters, Platinum Plus fuel-borne catalysts, ARIS selective catalytic reduction reagents, catalyzed wire mesh diesel particulate filters, alternative fuel products, and exhaust accessories. This division offers its products for original equipment manufacturers of heavy duty diesel equipment, such as mining equipment, vehicles, generator sets, and construction equipment, as well as retrofit customers consisting of school districts, municipalities, and other fleet operators. The Catalyst division produces catalyst formulations using its proprietary MPC technology for gasoline, diesel, and natural gas induced emissions. Its products comprise catalysts for gasoline engines, diesel engines, and energy applications. This division supplies its catalysts to automotive manufacturers and large heavy duty diesel engine manufacturers. The company sells its products through a network of distributors and dealers, and its direct sales force worldwide. Clean Diesel Technologies, Inc. is based in Ventura, California. Top 10 China Companies To Invest In Right Now: Qihoo 360 Technology Co. Ltd.(QIHU) Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products in the People's Republic of China. Its principal products include 360 Safe Guard, an Internet security product for Internet security and system optimization; 360 Anti-Virus, an anti-virus application to protect users? computers against trojan horses, viruses, worms, adware, and other forms of malware; and 360 Mobile Safe, a security program for the Google Android, Apple iOS, and Nokia Symbian smartphone operating systems. The company?s platform products comprise 360 Safe Browser, a Web browser; 360 Personal Start-up Page, a default homepage of 360 Safe Browser and a key access point to popular and preferred information and applications; 360 Application Store, a key access point to securely obtain and manage software and applications; and 360 Safebox, a solution that protects users against thefts of personal account information. It also provides online advertising services, including online marketi ng services and search referral services; and Internet value-added services comprising the operation of Web games developed by third-parties, remote technical support, and cloud-based services. The company was formerly known as Qihoo Technology Company Limited and changed its name to Qihoo 360 Technology Co. Ltd. in December 2010. Qihoo 360 Technology Co. was founded in 2005 and is based in Beijing, the People?s Republic of China. Top 10 China Companies To Invest In Right Now: China Life Insurance Company Limited(LFC) China Life Insurance Company Limited provides life, annuities, accident, and health insurance products in China. Its individual life insurance and annuity products consist of whole life and term life insurance, endowment insurance, and annuities. The company also engages in the writing of life insurance business. In addition, it offers group life insurance products, including group annuity products, and group whole life and term life insurance products to enterprises and institutions, as well as universal life products. Further, the company provides short-term insurance products comprising short-term accident insurance and short-term health insurance products; accident insurance products, such as individual accident insurance and group accident insurance; and health insurance products, including defined health benefit plans, medical expense reimbursement plans, and disease specific plans. It distributes its products through its direct sales representatives and exclusive ag ents, as well as through intermediaries comprising insurance agencies and insurance brokerage companies, non-dedicated agencies, bancassurance arrangements, travel agencies, and hotels and airline sales counters. The company was founded in 1949 and is based in Beijing, China. China Life Insurance Company Limited is a subsidiary of China Life Insurance (Group) Company. Top 10 China Companies To Invest In Right Now: ChinaEdu Corporation(CEDU) ChinaEdu Corporation, together with its subsidiaries, provides educational services to the online degree programs of universities in the People?s Republic of China. It also offers online tutoring services to primary and secondary school students; operates primary and secondary schools; and markets international English language curriculum programs to established learning institutions, as well as international polytechnic programs to vocational schools in China. The company?s online degree programs offer associate and bachelor?s degree programs, including accounting, marketing, finance, business administration, international business, law, civil engineering, education, computer science, literature, project management, marketing, and administrative management. These online degree programs primarily target working adults. Its services also include academic program development, technology services, enrollment marketing, recruiting, student support services, and finance operati ons. The company provides technical, recruiting, and other services for the online degree programs of 27 universities; and technology support services to 7 additional universities that are awaiting regulatory approval to launch their online degree programs. As of December 31, 2010, it served approximately 311,000 online degree programs students, as well as approximately 51,450 students in other businesses. ChinaEdu Corporation was founded in 1999 and is based in Beijing, the People?s Republic of China. Top 10 China Companies To Invest In Right Now: General Steel Holdings Inc. (GSI) General Steel Holdings, Inc., through its subsidiaries, engages in the manufacture and sale of steel products in the People's Republic of China. It offers hot-rolled carbon and silicon steel sheets primarily for use in the production of small agricultural vehicles and other specialty markets; spiral-weld pipes for the energy sector primarily to transport oil and steam; and high-speed wire and reinforced bar products for the construction industry. The company sells its products primarily to distributors. General Steel Holdings, Inc. was founded in 1988 and is headquartered in Beijing, the People?s Republic of China. Top 10 China Companies To Invest In Right Now: Hampton Roads Bankshares Inc(HMPR) Hampton Roads Bankshares, Inc. operates as the bank holding company for Bank of Hampton Roads (BOHR) and Shore Bank that provide community and commercial banking services primarily to individuals and small to medium-sized businesses. It offers traditional loan and deposit banking services, as well as telephone banking, Internet banking, remote deposit capture, and debit cards. The company also accepts commercial and consumer deposits that consist of various forms of demand and time accounts, including checking accounts, interest checking, money market accounts, savings accounts, certificates of deposit, and IRA accounts. In addition, it provides a range of commercial, real estate, and consumer lending products and services; commercial and industrial loans; construction loans; real estate-commercial mortgage; real estate-residential mortgage; and installment loans to individuals. Further, the company offers travelers? checks, coin counters, wire services, and safe deposit b ox services. Additionally, it provides letters of credit and standby letters of credit, and cash management products to commercial customers. The company also offers insurance products to businesses and individuals; securities, brokerage, and investment advisory services; and non-deposit investment products, including stocks, bonds, mutual funds, and insurance products, as well as engages in originating and processing mortgage loans. As of June 2, 2011, the company operates 48 banking offices in Virginia and North Carolina; and 8 banking offices in the eastern shore of Maryland and Virginia. It operates a network of sixty-seven ATM machines. The company was founded in 1961 and is headquartered in Norfolk, Virginia. Top 10 China Companies To Invest In Right Now: Renesola Ltd.(SOL) ReneSola Ltd, together with its subsidiaries, engages in the manufacture and sale of solar wafers and solar power products. It offers virgin polysilicons, monocrystalline and multicrystalline solar wafers, and photovoltaic cells and modules. The company also provides cell and module processing services. Its products are used in a range of residential, commercial, industrial, and other solar power generation systems. The company sells its solar wafers primarily to solar cell and module manufacturers. It principally operates in Mainland China, Singapore, Taiwan, Hong Kong, Korea, India, Australia, Germany, Italy, Spain, Belgium, France, the Czech Republic, and the United States. The company was founded in 2003 and is based in Jiashan, the People?s Republic of China. Top 10 China Companies To Invest In Right Now: China Telecom Corp Ltd (CHA) China Telecom Corporation Limited, together with its subsidiaries, provides wireline and mobile telecommunications services in the People's Republic of China. The company?s services include wireline voice, mobile voice, Internet, managed data and leased line, value-added services, integrated information application services, and other related services, as well as prepaid calling cards. Its wireline voice services include local wireline services, domestic long distance wireline services, and international long distance wireline services. The company's mobile voice services comprise local calls, domestic long distance calls, international long distance calls, intra-provincial roaming, inter-provincial roaming, and international roaming. Its Internet access services consist of wireline Internet access services, including dial-up and broadband services, and wireless Internet access services. The company's integrated information application services include Best Tone services, which provide customers with phone number storage, enquiry, and call transfer services; and information technology-based integrated solutions, such as system integration, outsourcing, special advisory, information application, knowledge services, and software development. Its managed data and leased line services consist of services relating to optic fiber and circuits, such as optic fiber and circuit leasing, virtual private network, and bandwidth leasing. The company also offers other services, such as sales, rental, repairs, and maintenance of equipment; and provides consulting services, and e-commerce and booking services, as well as in the sale of telecommunications terminals. It serves government, enterprise, and residential customers. The company was founded in 2002 and is based in Beijing, the People's Republic of China. China Telecom Corporation Limited is a subsidiary of China Telecommunications Corporation. Wednesday, September 18, 2013 Football Teams with the Most Expensive Tickets Tickets to a New York Giants 2013 home game are the most expensive in the NFL. The Chicago Bears and the New England Patriots have the second and third most expensive tickets. While teams sell tickets directly, there is a thriving secondary market of tickets. Sources such as Stubhub, eBay and TicketNetwork.com SeatGeek, and many others provide a marketplace for fans to buy and sell tickets. The secondary market is more reflective of current demand. Event ticket search engine SeatGeek provided 24/7 Wall St. with the current average secondary-market ticket prices for each team for the 2013 NFL season. Based on the data, the average 2013 game for several teams costs more than $200. Home games for the New York Giants cost $292.36 Most of the teams with the most expensive tickets have been successful in their recent seasons. Winning teams attract more people to the games and drive up ticket prices. Teams that make this list, including the New England Patriots, the Green Bay Packers and the Baltimore Ravens, are playoff contenders nearly every year. Of the 10 most recent Super Bowl champions, only one is not on this list of teams with the most expensive tickets. According to SeatGeek representative Will Flaherty, the other teams to make this list, like the Seattle Seahawks and the Denver Broncos, have had recent surges in success and popularity, which have clearly driven up prices. The average secondary-market ticket for a Seahawks game in 2011 was $93.91. In 2012, the Seahawks displayed a dominant defense and were led by exciting rookie quarterback Russell Wilson. The average ticket price for the 2013 Seahawk season is $220.64, more than double the 2011 season ticket price. The cost of secondary-market tickets is determined also by their original, primary market price. This, explained Flaherty, can be affected by the costs of living in the different cities. New York, Boston and Seattle, home to three of the most expensive teams, have among the highest costs of living in the country. In comparison, cities with the cheapest average football tickets — Cleveland, Jacksonville and St. Louis — have much lower costs of living. Still, cost of living is not everything, Flaherty noted. Green Bay is not a particularly expensive market, but the waiting list for tickets is in the hundreds of thousands. "The Packers have insatiable demand, with a ticket waiting list of over 100,00 fans." This more than makes up for the less expensive market. At the same time, New York Jets games are among the cheapest tickets. This is despite the fact that Jets home games are held in MetLife stadium, the same stadium that the team with the most expensive ticket, the New York Giants, also calls home. In order to identify the NFL teams with the most expensive tickets, event ticket search engine SeatGeek provided 24/7 Wall St. with the current average secondary-market ticket prices for each team for the 2013 NFL season. 24/7 Wall St. reviewed team record and attendance data from ESPN. We also reviewed city cost of living data as of the first quarter of 2013 from the Council for Community and Economic Research. All ticket prices listed are secondary-market ticket averages, provided by SeatGeek. These are the NFL teams with the most expensive tickets. Tuesday, September 17, 2013 Does Goldman Sachs Support Higher Prices? With shares of Goldman Sachs (NYSE:GS) trading around $167, is GS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework: T = Trends for a Stock’s Movement Goldman Sachs is engaged in investment banking, securities, and investment management. It provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments, and high net worth individuals. The company operates in four segments: investment banking, institutional client services, investing and lending, and investment management. Through its segments, Goldman Sachs provides invaluable investment services to consumers and companies worldwide. Recently, Goldman Sachs’ offices in Zürich had a visit by regional labor department inspectors regarding a complaint about overtime hours. Spokeswoman Irene Tschopp for Zürich canton's labor department said that, “There was a complaint from the bank employees union and we're obligated to investigate complaints,” by phone Thursday, confirming a previous report in the Swiss newspaper Tages-Anzeiger. Tschopp declined to divulge the contents of the complaint or the inspectors' findings, due to data protection rules, while Goldman Sachs spokeswoman Monika Schaller would not comment. It is alleged that the bank failed to record employees' working hours or compensate them for overtime, a violation of Swiss law, Tages-Anzeiger reported. T = Technicals on the Stock Chart Are Strong Goldman Sachs stock has been working its way towards higher prices in recent times. The stock is currently trading slightly below highs for the year so it may need some time here. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Goldman Sachs is trading slightly above its rising key averages, which signal neutral to bullish price action in the near-term. (Source: Thinkorswim) Taking a look at the implied volatility (red) and implied volatility skew levels of Goldman Sachs options may help determine if investors are bullish, neutral, or bearish. Implied Volatility (IV) 30-Day IV Percentile 90-Day IV Percentile Goldman Sachs Options 25.59% 43% 41% What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts as compared to the last 30 and 90 trading days. Put IV Skew Call IV Skew October Options Flat Average November Options Flat Average As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bullish over the next two months. On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion. E = Earnings Are Increasing Quarter-Over-Quarter Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Goldman Sachs’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Goldman Sachs look like and more importantly, how did the markets like these numbers? 2013 Q2 2013 Q1 2012 Q4 2012 Q3 Earnings Growth (Y-O-Y) 107.87% 9.44% 203.29% 439.29% Revenue Growth (Y-O-Y) 0.21% 1.42% 52.69% 132.80% Earnings Reaction -1.69% -1.61% 4.05% -1.02% Goldman Sachs has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have expected a little more from Goldman Sachs’s recent earnings announcements. P = Excellent Relative Performance Versus Peers and Sector How has Goldman Sachs stock done relative to its peers, JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), and sector? Goldman Sachs JPMorgan Chase Citigroup Morgan Stanley Sector Year-to-Date Return 31.16% 21.02% 29.20% 50.44% 27.42% Goldman Sachs has been a relative performance leader, year-to-date. Conclusion Goldman Sachs is a bellwether in the financial sector that strives to provide valuable financial products and services to consumers and businesses around the world. It is being reported that the company is currently undergoing investigations in Switzerland over overtime hours. The stock has been moving higher in recent times and is currently trading slightly below highs for the year. Over the last four quarters, earnings and revenues have been rising, however, investors have expected a little more from the company. Relative to its peers and sector, Goldman Sachs has been a year-to-date performance leader. Look for Goldman Sachs to OUTPERFORM. Monday, September 16, 2013 As War Risk Spreads, Syria’s Economy by the Numbers The United Kingdom has decided to refrain from an attack on Syria, although the United States may go it alone. The American decision could blunt the use of chemical weapons. Additionally, it could add to the violence and instability in the entire region. Whether or not Syria’s government is affected, its economy is bound to worsen, probably faster than the turmoil so far has caused already. From the standpoint of these economic consequences, Syria’s gross domestic product (GDP) and imports and exports will have no effect on the economy in the rest of the world. It is too small. On the basis of nominal GDP, Syria ranks 63rd among all countries, according to the International Monetary Fund (IMF). The nation’s GDP last year was a mere $74 billion, making it smaller on that basis than Ecuador and Morocco. The country’s population is just above 22 million. Syria has walled off access to its data, as far as the IMF is concerned, which means little can be determined about how badly it has been damaged recently. The IMF reported on August 2: On July 26, 2013 the Executive Board of the International Monetary Fund (IMF) was informed that there could not be a briefing to the Board with an assessment of economic developments and policies in Syria, whose Article IV consultation is delayed by 26 months, due to a lack of adequate information that would allow staff to make such an assessment. The World Bank has had slightly more success, as it reported in April: The impact of the crisis on the economy is significant, which may, according to unconfirmed estimates have contracted 3 percent in 2011 and about 20 percent in 2012. Most affected by the conflict, as well as by the subsequent international sanctions, were tourism, retail trade, transportation, communications, mining and manufacturing. The agency added: Declining oil revenue following the imposition of sanctions on Syrian oil imports by the European Union as well as a significant economic contraction is also putting government finances under pressure. Latest data released by the International Energy Agency shows that oil output was consistently below 200,000 barrels per day (bpd) in 2012, compared to 400,000 bpd in 2009. Even if the government can support itself by using money from falling sales of oil, the general population does not have any similar recourse to counter the effects of those things that erode consumer spending. The CIA Facebook confirms not only the trouble with the Syrian economy, it also cements the nation as a third-world one that will not emerge from that status under current circumstances. The CIA evaluation also confirms how little Syrian GDP matters to the rest of the world. Despite modest economic growth and reform prior to the outbreak of unrest, Syria’s economy continues to suffer the effects of the ongoing conflict that began in 2011. The economy further contracted in 2012 because of international sanctions and reduced domestic consumption and production, and inflation has risen sharply. The government has struggled to address the effects of economic decline, which include dwindling foreign exchange reserves, rising budget and trade deficits, and the decreasing value of the Syrian pound. Prior to the unrest, Damascus began liberalizing economic policies, including cutting lending interest rates, opening private banks, consolidating multiple exchange rates, raising prices on some subsidized items, and establishing the Damascus Stock Exchange. The economy remains highly regulated by the government. Long-run economic constraints include foreign trade barriers, declining oil production, high unemployment, rising budget deficits, and increasing pressure on water supplies caused by heavy use in agriculture, rapid population growth, industrial expansion, and water pollution. In sum, it is small, troubled and getting worse. Wednesday, September 11, 2013 Cash-strapped postal service to rent mail vans The U.S. Postal Service has posted an advertisement to solicit federal contract bids to lease minivans (like this one) to deliver mail. It's the first time the postal service will rent mail vans. WASHINGTON (CNNMoney) The U.S. Postal Service now can't even afford the vans that deliver your mail. The cash crunch at the postal service is so severe that the agency for the first time is looking to rent mail delivery vans because it can't buy new ones. The postal service has posted an advertisement to solicit federal contract bids to lease minivans and cargo vans. It's no secret that the agency has been in financial turmoil. Last year, losses were so bad the agency twice defaulted on payments owed to the federal government. Much of the problem stems from a congressional mandate to make annual $5 billion payments to for retiree health care benefits. The decline in the volume of mail that most people send is also hurting. The postal service owns one of the largest fleets in the world, with more than 211,000 cars, trucks and vans. But the fleet is growing old and expensive to maintain. About 140,000 of the cars are Grumman Long Life Vehicles, the iconic, custom-made mail trucks, with steering wheels on the right. Those trucks currently range in age from about 18 to 25 years and are "approaching the end of their ... expected lives," according to a 2011 General Accountability Office report. The agency also has about 21,000 custom-made, flex-fuel mail trucks that are around a dozen years old. The GAO report found the postal service was "increasingly incurring costs for unscheduled maintenance because of breakdowns." The cost of replacing 185,000 of its older cars and trucks could near $6 billion, the postal service said in 2011. So leasing has emerged as a short-term fix. Spokeswoman Sue Brennan said leasing was an option only when "resources are not sufficient to meet vehicle requirement." Currently, the agency leases 377 vehicles, but most are cars used for administrative purposes. This would be the first time the agency leases any of the cargo and minivans that carriers use to deliver mail, according to the ad. Of course, not any old minivan will do the job. It must have a wire mesh that separates the cargo area from the driver to "keep parcels from flying forward and hitting the operator or any passenger," accordi! ng to the ad. The spokeswoman insisted that the leasing move doesn't signal a long-term change in strategy. The ad, however, warns that "as the USPS fleet ages, we anticipate that the rental duration and number of leases will increase (in) the next few years." Tuesday, September 10, 2013 What You Absolutely Need to Know About Money (Part 8) It all starts with the Arab oil embargo of 1973-74. The Arab members of OPEC proclaimed an oil embargo to punish the U.S. for aiding Israel. This action quadrupled the price of oil, roiling commodity markets, equities, bonds, and foreign exchange markets. Energy prices soared. Speculation in oil exploration and production became feverish. There was money everywhere. Oil exporters in the Arab states were depositing their windfall "petrodollars" into big U.S. banks, who were in turn lending the money out as fast as they could. By far, the largest recipients of the flood of money looking to be lent out were Latin American and South American countries. Thus, the new tens of billions of dollars banks had to lend were showered on sovereign states with glaring credit quality blemishes. In the meantime, banks were lending hand over fist to the energy patch. Small banks were getting into the oil lending game, too - sometimes in spectacular ways. By 1982, tiny Penn Square Bank, located in the Penn Square Mall in Oklahoma City, Okla., had made over $1 billion dollars of energy loans and resold them to money-center bank Continental Illinois National Bank and Trust Company of Chicago. The loans went bad, quickly. That shouldn't have been a problem for Continental Illinois, which had over $40 billion in "deposits." But it was a monumental problem. That's because only 10% of Continental Illinois' deposits were FDIC insured. In 1982, depositors were insured up to $100,000; so when news got out that Penn Square had failed and the loans it had sold to Continental were defaulting, Continental depositors began to panic. Continental had been playing the "hot money" game, very aggressively. To increase its loan portfolio, it needed more capital, or deposits. It got them by offering high-interest CDs and borrowing in the fed funds market for overnight money and in the money markets by issuing commercial paper. Its deposits weren't "sticky," meaning they weren't going to be left there by folks with savings accounts. They were hot money deposits that were now exiting the bank via electronic transfer at unheard of speeds. The bank became insolvent in a matter of days. Depositors who hadn't gotten their money out would lose untold billions if the bank was shut down. The Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corporation feared a run on other banks, including all the nation's big money-center giants. The panic unfolded at breakneck speed, and it had to be stemmed. So the FDIC effectively nationalized Continental, by taking an 80% ownership position, and declared all deposits insured. In other words, not a single depositor would lose money. The FDIC with the full faith and credit of the government - better known as the American taxpayers - was backstopping the bank. It seemed like it was over before it started. Everything calmed down; there would be no bank runs. All America's big banks were safe, effectively christened... too big to fail. But the hits kept on coming. By September 1982, Mexico had stopped servicing billions in loans it had taken from big New York banks. And Brazil was on the verge of defaulting on its massive borrowings. The big money-center banks with their billions in petrodollar deposits were now all in big trouble. But they were smart. The big banks knew full well that they could never sell bonds on behalf of Latin and South American countries with a history of defaults (the high interest the bonds would have to pay to attract investors would be a dead giveaway). So they made syndicated loans, enticing over 700 smaller banks to join them in fueling the profligate spending habits of socialist and mostly commodity-export-driven southern sovereigns. You see, what the banks had figured out was that their friends in government would never let them fail. They would use the International Monetary Fund as a front to help bail them out. It worked like a charm, and it's still working today. The IMF was originally established to help tide over countries with short-term liquidity problems, by providing short-term loans accompanied by reform demands to fix their economies so they could pay back the IMF loans. But at that point, it would be forever transformed into a U.S. government-backed payment enforcer. The beauty of having a seemingly multi-national enforcer such as the IMF force countries at risk of defaulting on imprudently lent loans to reform their economies to trigger growth again, was that all kick starts would require fuel in the form of IMF loans. Thus the IMF lends to debtor countries so they can pay off the bankers who they owe and are behind to, so the banks don't have to write off their bad loans, and foreign sovereign nations can keep borrowing in capital markets (and from the same banks) to pay off bankers and the IMF. It's called "extend and pretend." Well, it's more formerly known as the Baker Plan, after James Baker III (Ronald Reagan's Chief of Staff and later his Secretary of the Treasury), who originated the game to save the likes of Citibank's then-chairman, Walter Wriston (the co-inventor of CDs and a huge lender to Latin and South America), himself chairman of Reagan's Economic Policy Advisory Board. Whatever it's called, the extend and pretend game is now an institutionalized national treasure. Of course it benefits the TBTF banks in yet another cockamamie scheme to make their lending lives eternal. That's how we got to TBTF and how the TBTF banks get away with piling on more and more debt to borrowers that have no way of ever paying it back. It's how the banks operate. It's the business they've created. Next we'll look at how the capital markets are rigged. We'll see how banks manipulate them for massive profits, basically to offset the tiny spreads they make on the loans they will never be repaid on. Then you'll start to see how the Fed feeds the banks a lifeline to keep their lending going and, as their top regulator, lets them get away with murder in the capital markets, so they can keep on making money (to lend out to consumers and American businesses, of course) to enrich the crony capitalists who suck Americans dry like filthy leeches. Then I'll tell you how to beat them at their own game. But first, you've got to understand who the players are and how the game is really played. Welcome to your life... Related Articles and News: Money Morning: What You Absolutely Need to Know About Money (Part 7) Money Morning: What You Absolutely Need to Know About Money (Part 6) Money Morning: What You Absolutely Need to Know About Money (Part 5) Money Morning: What You Absolutely Need to Know About Money (Part 4) Money Morning: What You Absolutely Need to Know About Money (Part 3) Money Morning: What You Absolutely Need to Know About "Their Paper Money" Money Morning: What Everyone Absolutely Needs to Know About Money Sunday, September 8, 2013 Surprise in Q2 GDP and Jobless Claims The quarter-over-quarter rise in U.S. gross domestic product (GDP) was 2.5% in the second quarter of 2013, according to data released Thursday morning by the U.S. Department of Commerce. The increase is more than double the advance estimate of 1.7% growth released last month, and better than an consensus estimate for growth of 2.2%. Real GDP growth in the first quarter was an anemic 1.1%, so today's number represents a decent leap over a very low bar. The Department of Labor also reported that new claims for unemployment benefits dropped by 6,000 last week to a seasonally adjusted total of 331,000 from a revised level of 337,000 for the prior week. The consensus estimate from Bloomberg called for a drop to 332,000. The four-week moving average is up slightly from the prior week to 331,250. The army of the unemployed dropped by 14,000 to 2.99 million continuing claims. GDP growth in the second quarter was primarily the result of increases in consumer spending, exports, private inventory investment, nonresidential fixed investment and residential fixed investment. Federal spending cuts and higher imports weighed on GDP growth. The trends in employment continue to show declines in new claims for benefits and employers' intention to increase hiring. The impact of higher taxes that went into effect at the beginning of the year and the cuts in federal jobs are being absorbed and adapted to by employers. There are more headwinds, of course, including the political drama around raising the U.S. debt limit, new health care laws and the Fed's expected tapering of its $85 billion asset purchases. Not Everything That Shines Is Gold After reaching a three-month high, gold prices fell once again following the announcement of a possible strike on Syria. Considering investors are already skeptical when it comes to gold mining firms, due to their cyclical nature, Yamana Gold Inc. (AUY) and Eldorado Gold Corp (EGO) have a lot to prove. A Potential Buy Yamana Gold, founded in 2003, operates gold and silver mines in Brazil, Argentina, Chile and Mexico. The firm also produces copper at its Chapada mine, yet gold is its strong suit, at around 80% of total production. Although Yamana has grown primarily by acquisitions, the strategy has shifted in recent years towards generating more internal growth. It comes as no surprise that Donald Smith & Co. and Ray Dalio from Bridgewater Associates have decided to increase their stake in the company by 70.53% and 380.62%, respectively. Yamana's attractive portfolio of silver and gold mines in the Americas is situated at the low end of the industry cost curve, giving the firm an edge over competitors. In addition, the production of copper makes the firm less vulnerable to sudden drops in gold prices. Looking forward, the firm has several advanced projects in the pipeline, with Pilar, C1 Santa Luz, and Ernesto mines going live by the end of 2013. The acquisition of Cerro Morro in Argentina in June 2012, an exceptional asset with ultrahigh grades and shallow depth gold-silver deposits, will serve as further stimulus. The company´s growth potential is exciting, yet there are certain concerns regarding funding, which could bring about financial risks in the near future. Due to recent acquisitions, Yamana Gold has incurred increasing levels of debt, reducing its financially strength. Nevertheless, revenue continues to soar due to increased production. Yamana is currently trading at 3.9 times its sales, resulting in a 65% price premium to the industry average. In accordance with the firm's great growth potential and the smart acquisitions it has made, I feel optimistic about! this stock. A Low-Cost Producer EIdorado Gold is a global mining company with assets in Turkey, China, Greece and Brazil. By producing over 650,000 ounces of gold in 2012, at a cash cost of $554 per ounce, the firm has achieved one of the lowest production costs amongst its industry peers. Due to low cash cost of its operations, and the long lifetime projected for its mines, Eldorado Gold has a narrow economic moat. Van Eck Associates Corporation seems to have recognized the firm's potential, as it recently purchased over 7 million shares. Eldorado´s expansion plans for its flagship asset, Kisladag in western Turkey, will improve the mine's economics further, bringing its potential future production forward. Also, the Efemcukuru mine will be reaching full capacity over the next year and producing at even lower unit cash costs than Kisladag. In addition, Eldorado obtained further operations in Greece and Romania, through the acquisition of European Goldfields in 2012. These mines, along with the firm's assets in China, will be responsible for increasing gold output even further. However, certain geopolitical risks must also be factored into the equation. Dealing with the Chinese government is not always predictable. Furthermore, declining gold prices could seriously affect Eldorado's finances. In spite of expansion projects and acquisitions, Eldorado has maintained its debt in check and continues to boost its revenue. The financially stable Eldorado is currently trading at 5.1 times its sales, entailing a whopping 112.5% price premium to the industry average. The Canadian gold producer is bound to have a great future, yet due to the high price premium I would hold on this stock for now. It's All About the Long Term Despite the troubles gold mining companies are facing, some firms have managed to bolster their income by producing at low costs and thus staying below current gold prices. Yamana and Eldorado are outperforming their industry peers, as thei! r current! price tag suggests. Hedge funds such as Donald Smith & Co. and Van Eck Associates Corporation seem to have be on the same page, as they both decided the price premium was worth paying, due to the firms' growth potential. Related links:Bridgewater Associates Friday, September 6, 2013 Top 5 Value Companies To Invest In 2014 If activist investor Norman Peltz had his druthers, beverage giant PepsiCo (NYSE: PEP  ) would calve off its drinks business, and focus on just the snack-food portion by buying Mondelez (NASDAQ: MDLZ  ) . While Pepsi management hasn't warmed up to the idea, there is some sense to what Peltz proposes, even if, as a huge shareholder in both Pepsi and Mondelez, it's a bit self-serving. In Peltz's 59-page manifesto, the investor spells out a case of underperformance due to Pepsi's beverages unit. Pepsi, which has suffered from more than five years of negative volume growth, and more than a decade of declining per capita volume, is perennially No. 2 to Coca-Cola, which he says is a more-focused competitor with structural advantages.� Conversely, the snack-food business already comprises two-thirds of its revenues, has the top market share in salty snacks, and is experiencing volume growth across all its business lines. By getting rid of the beverage unit, which includes Pepsi and Gatorade, it could�achieve significant increases in shareholder value worth at least $33 billion by merging the remaining snack foods business with Mondelez, whose stock has languished�since splitting from Kraft Foods Group last year.� Top 5 Value Companies To Invest In 2014: Schlumberger N.V.(SLB) Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas. Advisors' Opinion: [By Kathy Kristof] Headquarters: Houston 52-Week High: $79.38 52-Week Low: $56.86  Annual Sales: $39.5 bill. Projected Earnings Growth: 18% annually over the next five years  Energy-services giant Schlumberger is the prototypical multinational. The company derives roughly 85% of its revenues from overseas, including developing markets in Africa, Brazil and Asia.  With particular expertise in deep-water drilling, Schlumberger is well-positioned to compete in a world where oil is harder to find, says Argus Research analyst Philip Weiss. Admittedly, oil exploration is a cyclical business, driven largely by crude prices. And weak prices for natural gas have hit the company’s stock, Weiss says. But the price of natural gas has little to do with Schlumberger’s profits, so Weiss just sees this as an opportunity to get the shares at a more reasonable price. [By Rebecca Lipman]  Together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. Market cap of $91.49B. EPS growth (5-year CAGR) at 24%. According to Morgan Stanley: "Thanks to an estimated $1 billion investment per year in R&D, Schlumberger has what we consider the most advanced technology portfolio in the industry." [By Robert Holmes]  Schlumberger has the most potential upside of any stock in this group of 50 that also makes the firm's Best Ideas list. Analyst Ole Slorer says Schlumberger has "what we consider the most advanced technology portfolio in the industry." "Its fundamentals are impressive, with what we think are some of the best field personnel, a pristine service and performance reputation, and leading market share in most of its product lines," Slorer writes. Though Slorer's price target is 42% above current levels, his most bullish scenario for Schlumberger over the next year would see shares climb a whopping 116%. On the downside, his most bearish scenario for the company would see shares slide 38% over the next 12 months. Top 5 Value Companies To Invest In 2014: Tupperware Corporation(TUP) Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida. Advisors' Opinion: [By Sam Collins] Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story. S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%. Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained. Top 10 Casino Companies To Own In Right Now: Caterpillar Inc.(CAT) Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois. Advisors' Opinion: [By Roberto Pedone] Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that. CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92. Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first. [By Jim Cramer,TheStreet] Caterpillar (CAT) could be a monster in 2011, especially with the integration of Bucyrus International (BUCY), which I think will turn out to be a fantastic acquisition. Current earnings-per-share estimates of about $6 are, I think, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation? Right now almost all of the growth is overseas. Still a fantastic mineral play and a terrific call on world growth. [By Ben Levisohn] For one day at least, this CAT is not a dog. Caterpillar (CAT) has gained 2% to $86.22 today, its largest gain since in a month and the largest gain among the Dow components. The machinery manufacturer has dropped 11% during the past six months, however, as a slowdown in China and cost-cutting at mining companies have hit its shares. Bloomberg Susquehanna’s Ted Grace offers reasons for optimism, even as he lowers his 12-month price target to $97 from $104: CAT remains Positive rated with 15% upside to our $97 price target and upside-downside of 1.2-to-1 (which, like most of our machinery names, is admittedly shy of the 2-to-1 or better ratio we prefer). Despite our 2014-15 EPS being ~6% below consensus, we view our updated estimates as closer to buyside expectations while noting that consensus appears to embed a low tax rate that explains over half of the variance. While there remains plenty of uncertainty on 2014/15, particularly in mining, we believe CAT shares currently discount reasonable top-line expectations while recent meetings with mgmt suggest potential for structural cost savings that could drive better than expected margins/ incrementals. While difficult to identify discernible catalysts, if CAT’s framework for flat-to-better RI revenue growth in 2014 proves correct (admittedly not assumed in our estimates), this would almost certainly debunk the core of the bear thesis and be meaningfully positive for shares. Investors waiting for the stock to actually, you know, rise can take comfort in Caterpillar’s $2.40 dividend per share and its more than $3 per share in buybacks in 2013, Grace says. Caterpillar’s 2% gain has trumped the Dow Jones Industrial Average’s 0.04% rise, and United Technology’s (UTX) 0.1% drop, while competitor Deere (DE) has gained 1.9% to $83.22. Top 5 Value Companies To Invest In 2014: Dollar Tree Inc.(DLTR) Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia. Advisors' Opinion: [By Sam Collins] Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69. Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72. 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