Smart Savings Tips for New Grads

A new bevy of graduates has burst out of the college cocoon. But how prepared are they to face financial challenges in the cold, cruel -- and expensive -- world outside? CNN recently interviewed me on the subject, and my answers reflect the advice that Kiplinger gives in our special Starting Out Guide for Millennials. Here's a sampling:

See Also: Our Starting Out Columns for Young Adults

Q. Many young people look at you as if you're crazy if you suggest laying the groundwork for home buying and retirement when they've just graduated. How crucial is it to start financial planning right off the bat?

You really don't have much choice. Assuming you're fortunate enough to get a job soon after graduating, one of the first things you'll likely be called upon to do is sign up for your employer's retirement plan (if you're not automatically enrolled) and decide how much to contribute and where to invest the money (see Free Money for Retirement). You may not have any immediate plans to purchase a home, but it's critical to begin building a solid credit history so you can qualify for an attractive interest rate when you're ready to buy (see How to Get Your First Credit Card and Save for a House).

Q. What are some of the basic financial and investment concepts young people should grasp in the one or two years following graduation?

Most important is the time value of money, for a number of reasons. At this stage of your life, time is arguably your biggest asset. That means that thanks to the magic of compounding, small amounts set aside now can grow into big piles of cash later (see Start Saving Now). Also, when you're investing for the long haul -- for example, a retirement that is 40-plus years away -- you can afford to take reasonable risks in pursuit of higher returns by investing in the stock market (see Start Investing Wisely).

Q. We've heard so much about student-loan debt and the tough job market. How do new grads navigate those economic factors and still get their personal finances off to a good start?

The best way to handle student loans is to set up a manageable repayment plan that fits your finances; if your circumstances change, you can always change the plan (see Don't Stress Over Student Loans).

As for the job market, be proactive about your search (see Job-Hunting Tips for New Grads and How Students Can Improve Their Chances of Getting a Job). Do an honest assessment of your skills to see if you have what it takes to qualify for jobs that are in demand. If you need to acquire additional knowledge, be a strategic student. Don't head back to grad school (and potentially acquire more debt) unless you're in a field that will pay off (see Advanced Degrees Worth the Debt). You may be able to acquire skills free by taking a massive open online course (MOOC), such as those offered by Khan Academy, Udacity or Coursera (see 6 Things You Must Know About E-Courses).

Q. A lot of new grads are going to ask, "How can I save for the future when I'm broke now?" What practical advice can you give them?

Many new grads make the mistake of thinking, I'm living paycheck to paycheck. I don't have money to put aside. Or they think they need to make more money before they have enough to start saving. But that never works; the more you make, the more you tend to spend. The best way to save is to have someone else do it for you: Contribute automatically to your retirement plan at work, or have your bank deposit a portion of each paycheck into your vacation account. You'll never miss the money if you don't see it, and even small amounts will add up (see How to Stretch Your Money).

3 Ways to Play the Rental Housing Boom

Popular Posts: Auto Parts Stocks: 2 to Drive, 2 to Ditch3 Ways to Play the Rental Housing Boom13.8 Million Cars (And Counting) – A Look at All 29 GM Recalls Recent Posts: 3 Ways to Play the Rental Housing Boom DSW Stock – How a 27% Plunge Isn’t as Bad as It Seems Auto Parts Stocks: 2 to Drive, 2 to Ditch View All Posts

Housing stocks have always been an essential part of a well-diversified portfolio, and recent trends confirm that the rental housing market is heating up faster than single-family homes. But let’s face it: Few of us have the stomach for midnight maintenance calls and rowdy tenants, so thankfully there's another way to play this market: stocks, real estate investment trusts (REITs) and exchange traded funds (ETFs) that focus on the rental market.

The trends are compelling: Construction of rental housing showed positive growth in the first quarter of 2014, according to the National Association of Home Builders’ new Multifamily Production Index (MPI) released last week. The index increased three points to 53, which is the ninth consecutive quarter with a reading of 50 or above.

That’s in line with recent federal government data showing that multifamily rental housing starts rose a whopping 39.6% in April, while single-family housing starts inched up 0.8%. In short, while the housing market is recovering, tight credit and a volatile job market are motivating more people to rent rather than buy.

So what does that mean for investors? If you’re looking to cash in on the rental housing boom, look for housing stocks that directly benefits from the trend. Another option: real estate investment trusts (REITs), which are exempt from corporate taxes and are required to pay out 90% of their annual earnings to investors. REITs tend to have extremely attractive dividend yields — great news for income investors. The steady rent payments also tend to deliver more stable cash flows.

The easiest ways to play the market are with multifamily residential construction stocks, multifamily-focused mortgage REITs (mREITs), which invest in residential mortgages; and exchange-traded funds (ETFs) that hold shares in multiple REITs and trade over an exchange like stocks.

Here’s your best bet for each investment type:

Stock: Lennar (LEN)

Analysts are expecting strong earnings for Lennar (LEN), one of the largest homebuilders in the U.S., when it reports on June 25 — and with good reason.

A rebounding construction market drove rival Toll Brothers (TOL), which reported earnings last Wednesday, to double its quarterly profit. The same trends should positively impact LEN stock, but with a bonus: Last year, LEN revealed it was allocating $1 billion to building apartments in high-growth — and high rent — areas.  Many of the new communities offer luxury amenities such as stainless steel appliances, granite countertops and resort-style pools and fitness centers – directly catering to the new generation of renters.

LEN stock is only up about 3% in 2014, but it’s clearly a growth play. With a price-to-earnings-growth (PEG) ratio of just 0.6 and a forward P/E of a little more than 12, LEN stock looks undervalued now. LEN pays a nominal dividend with a 0.4% current yield, but the company knows its market and is positioning its new properties well, so LEN promises to be a solid buy-and-hold stock.

REIT: New York Mortgage (NYMT)

There are two basic types of REITs – those that hold real property and those that hold mortgages on property (mortgage or mREITs). Among mREITs, New York Mortgage (NYMT) is a so-called "hybrid mREIT", meaning that it holds a combination of federally guaranteed (agency) and non-agency debt, like commercial mortgage-backed securities (CMBS).

If your eyes are glazing over with that explanation here are two factors about NYMT that will lift the fog: First, a significant share of NYMT's capital is invested in multifamily housing. And secondly, NYMT has a monster current dividend yield of 13.8%. While it's common for mREITs to have higher dividends than their property-based cousins because they take advantage of interest rate spreads, NYMT's yield is eye-popping.

Riding the growth in multifamily homes, NYMT is up 13% this year. Because mREITs use leverage to invest in mortgage debt, they tend to be riskier than property-based REITs – they’re more vulnerable to interest rate fluctuations. A rising rate environment is anathema to mREITs, and NYMT is no exception … but I think the growth in the multifamily sector plus the hefty dividend will provide solid rewards for investors willing to stomach a little more risk.

REIT ETF: FTSE NAREIT Residential Index Fund (REZ)

If you're looking for exposure to the multifamily rental housing boom, but want to diversify beyond either single housing stocks or REITs, an ETF like FTSE NAREIT Residential Index Fund (REZ) might be just what you're looking for.

Like all ETFs, REZ offers the diversification of a mutual fund, with low expenses and the advantages of trading on a major exchange just like a stock. REZ's top holdings include multifamily REITs like AvalonBay (AVB), Equity Residential (EQR), Essex Property Trust (ESS) as well as Public Storage (PSA) common stock, which also benefits from the rental housing boom.

REZ has a modest 3.5% current dividend yield, but it has gained more than 18% this year. I think REZ is will continue to gain ground as the low-vacancy trends in multifamily housing spur higher rents and stronger profit margins. With those growth prospects and a decent dividend, REZ is a good ETF to buy and hold now.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.

Fast-food worker strike about to go global

The fast-food worker movement for higher pay is about to go global.

Workers from dozens of countries on six continents are joining the push for higher pay and worker rights, it was announced Wednesday at a press conference outside a McDonald's restaurant in Midtown Manhattan by Fast Food Forward, which represents U.S. fast-food workers.

The group announced nationwide strike plans for May 15 -- a date which mirrors the $15 per hour pay they are demanding. On that same date, workers from dozens of countries on six continents will hold protests at McDonald's, Burger King and KFC outlets. It is not known how many workers will strike, but thousands of the nation's estimated 4 million fast-food workers are expected to take part in the one-day strike.

"We've gone global," said Ashley Cathey, a McDonald's worker from Memphis, Tenn., who makes $7.75 an hour after six years on the job. "Our fight has inspired workers around the world to come together."

For the fast-food industry, this seems to be the issue that just won't go away. It's expected to be front-and-center later this month when McDonald's hosts it annual shareholders meeting on May 22, in Oak Brook, Ill. McDonald's did not immediately respond for comment. Its stock was up about slightly under 1% in late-day trading at 101.80.

While not specifically addressing fast-food workers, President Obama has called on Congress to raise the national minimum wage from $7.25 to $10.10 an hour, and earlier this year signed an executive order to raise the minimum wage to $10.10 for individuals working on new federal service contracts.

Earlier this week, workers and union leaders from dozens of countries met for the first global meeting of fast-food workers, organized by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations, a federation comprised of 396 trade union in 126 countries representing 12 million workers.

In the U.S. strikes are expected to include th! e first walkouts in Philadelphia, Sacramento, Miami and Orlando. Outside the U.S., the protests are expected to include protests in Africa, Asia, Australia, Europe, South America and Central America.

Some of the foreign protesters say they are taking action specifically in sympathy with U.S. workers. Louise Marie Rantzau, who is a McDonald's worker in Denmark, says she makes $21 an hour. She says she was surprised to hear U.S. workers have to fight so hard to make $15 an hour, and she says is "committed" to supporting their cause.

DECEMBER STRIKE: Fast-food workers strike, protest for higher pay

A protester in New York holds up a placard as fast-food workers and union members call for an increase in the minimum hourly wage to $15 and the right of workers to join unions.  (Photo: Peter Foley, epa)View Fullscreen Demonstrators in Chicago.  (Photo: Paul Beaty, AP)View Fullscreen Fast-food workers demonstrate outside a McDonald's restaurant near New York's Times Square as part of a nationwide protest Dec. 5.  (Photo: Stan Honda, AFP/Getty Images)View Fullscreen Selma Aly, of Chicago, protests wages outside a McDonald's in Chicago on Dec. 5.  (Photo: Paul Beaty, AP)View Fullscreen Fast-food workers planned one-day strikes in 100 cities and protest activities in 100 more cities on Dec. 5 to demand McDonald's, Burger King, Taco Bell, Wendy's and other restaurants pay a $15-an-hour wage.  (Photo: Stan Honda, AFP/Getty Images)View Fullscreen Demonstrators rally for better wages outside a McDonald's in Chicago.  (Photo: Paul Beaty, AP)View Fullscreen Demonstrators outside a McDonald's restaurant near New York's Times Square as part of a nationwide protest.  (Photo: Stan Honda, AFP/Getty Images)View Fullscreen Kendall Fells, organizing director of the Fast Food Forward campaign in New York, demonstrates with fast-food workers and union members calling for an increase in the minimum hourly wage.  (Photo: Peter Foley, European Pressphoto Agency)View Fullscreen An immigrant from Guyana takes part in a demonstration at McDonald's in Midtown, New York City.  (Photo: John Moore, Getty Images)View Fullscreen Protesters rally outside a McDonald's restaurant in New York City.  (Photo: Peter Foley, epa)View FullscreenLike this topic? You may also like these photo galleries:ReplayAutoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

Families put human face on massive GM recall

WASHINGTON — Laura Christian's daughter was 16 years old in 2005 when the Chevy Cobalt she was driving hit a tree. The airbag didn't deploy, and Amber Marie Rose was killed.

In the last two months, General Motors has recalled more than 2.5 million vehicles worldwide after linking defective ignition switches in similar cars to airbag failures — and to 13 deaths and 31 crashes. And there are indications GM approved the switches in 2002 even though it knew they did not meet specifications.

Family members who lost loved ones in those crashes, including Christian, turned a spotlight Tuesday on the human side of GM's deadly mistake. They held a press conference at the U.S. Capitol in advance of a House subcommittee hearing on what high-ranking GM officials knew and when they knew it.

The family members, many holding photos of their loved ones, said they were concerned about other families who may be harmed while driving GM cars that have not been recalled. And they pressed Congress to tighten rules to ensure that flawed vehicles are quickly recalled.

Christian used her time at the microphone to press Congress for legislation that would compel car companies to be more transparent about problems with their vehicles.

STORY: Questions stalk GM chief

STORY: GM takes case to Capitol Hill

STORY: Victims speak

"Corporate executives made a decision that fighting the problem was cheaper and easier than fixing the problem," said Christian, who is among those who say GM had plenty of warning over the years to recall the vehicles and fix the switches.

"Please help us pass legislation to make sure that this never happens again," Christian said.

Kelly Erin Ruddy was 21 when she burned alive in a car crash in 2010. Her mother, Mary Ruddy, said Kelly knew something was wrong with the car. Three months after the crash, the car was recalled for a power steering issue. She said GM "dismissed us."

"I kept thinking that my heart is so broken, but the one thing I! will see to is that this will never happen to another family," Ruddy said. "That's why we are here. It's the final thing we can do for Kelly."

Ken Rimer, whose stepdaughter, 18-year-old Natasha Weigel, died after a 2006 Cobalt crash, said GM knew years ago that it had made a big mistake. "Rather than fixing the problem, they chose to keep producing the Cobalt, with the ill-fated ignition switch, and selling it to an unsuspecting public," Rimer said.

Samantha Denti, of Toms River, N.J., survived the problems that plagued her 2005 Chevy Cobalt.

"I was your typical 20-year-old," she said, talking about how much she loved her car and the freedom it signified. But she said that one day she was driving and "all of the sudden my car went from 45 miles per hour to zero." Months later that same thing happened again.

With just a single ignition key and a house key on the key chain, it happened again.

"This car was surely a death trap," Denti says. "Driving this car was like playing a game of Russian roulette."

MORE: GM recalls 1.3M vehicles to fix power steering

Some members of Congress also took part in the press conference.

"Two dollars. That's how little this ignition switch could have cost to repair," said Sen. Ed Markey, D-Mass. "Two dollars that could have saved priceless lives. That was apparently $2 too much for General Motors.

"This recall is a decade late and dozens of lives and injuries short," he said. Markey joined Christian and others in urging Congress to pass a bill to require more transparency from car manufacturers and the traffic and safety departments.

On Monday night, General Motors CEO Mary Barra met with the families of several people who died in crashes involving the recalled vehicles. According to people there, she cried at one point, as families showed her pictures of the victims and told their stories.

Christian said she wanted to meet with Barra, "so she could not turn away from the human side of this." She said Barra ! said she ! was sorry many times during the meeting at GM's Washington offices.

Renee Trautwein was unimpressed. Trautwein's daughter Sarah was killed in 2009 after losing control of her 2005 Chevy Cobalt.

"It was a waste of time," Trautwein said of the meeting with Barra. "I think she was doing it for PR. Nothing came out of it."

The family only learned of the recall a few weeks ago.

"People are not aware," Trautwein said. "How many recalls do we hear of every day? No one takes it seriously."

She said her daughter loved the University of South Carolina, her cats and her dogs. "She left me with a grand pup," Trautwein said. "Sarah was the love of my life. She was bubbly and happy and beautiful.

"Since we found out about the recall, we are all in a whole new mourning process. "

In her testimony filed in advance of Tuesday's hearing, Barra promises the U.S. House Energy and Commerce Committee's Subcommittee on Oversight, "When we have answers, we will be fully transparent with you, with our regulators and with our customers."

The fault that triggered the recall allows the ignition switch to slip unexpectedly from the normal "run" position into "accessory." That shuts off the engine and kills power to a number of systems, usually including airbags.

GM's own chronology says the problem first was noticed at GM in 2001.The recall has emerged in three stages:

• Feb. 7, GM recalled 778,562 of its 2005-2007 Chevrolet Cobalts and 2007 Pontiac G5s, 619,122 in the U.S. to replace the switches.

• Feb. 25, it expanded that by another 842,103, to include 2003-2007 Saturn Ion, 2006-2007 Chevy HHR, 2006 Pontiac Solstice, 2007 Saturn Sky. Of those, 748,024 are U.S.-market vehicles.

• March 28, it again expanded the universe of recalled cars, this time by 873,288 U.S. models, to include newer versions of the already recalled vehicles that had the redesigned – safer – switches from the factory, but might have gotten a faulty switch during repairs. Only a! bout 5,00! 0 of those are likely to have gotten a bad switch, but GM can't tell which 5,000 because some old and new switches have the same part number.

According to a timeline the automaker has filed with the National Highway Traffic Safety Administration in connection with the recall, GM first noted a problem with the ignition switch moving out of "run" in 2001, during development of the 2003 Saturn Ion.

An unidentified mechanic reported the problem in 2003 on a customer's car. And in 2004 a GM engineer finalizing the new 2005 Chevy Cobalt experienced the switch problem.

A new switch design was approved in 2006, the timeline says, but without a new part number. If that was done to fix a safety problem, but federal safety officials weren't told, it could be a violation of federal law. GM did not recall the cars in 2006 to install the redesigned part.

On March 18, in her first interview since taking over as CEO in January, Barra acknowledged, "Clearly, this took too long." Pledging to ensure there's never a repeat, Barra said, "We will fix our process."

She hired a global safety chief with access to her and other top executives, a first for GM and rare in the car business. And the automaker began to accelerate its own product and safety reviews.

Since then, GM has recalled:

• Full-size GMC and Chevrolet full-size commercial vans because they don't provide a front passenger enough protection from head injuries.

• An array of crossover SUVs because seat-mounted side airbags might fail.

• Cadillac XTS sedans because an obscure brake system flaw ignited two of them at dealerships.

• A number of small and mid-size cars – including some that were recalled for switch problems -- because they also could have faulty steering. That recall also includes some cars previously repaired, but possibly with faulty parts.

• Its Cruze sedan -- its best-selling car -- for axles that can break.

• All its newest pickup trucks and full-size SUVs for a! n oil lin! e that can leak and create a fire risk.

Spangler writes for the Detroit Free Press. Contributing: John Bacon

Wall Street This Week: Time for Window Dressing

Richard Drew/AP From Wall Street hoping to close out 2014 with a bang to the top dog in video streaming needing to prove that it's still magnetic to new subscribers, here are some of the things that will help shape the week that lies ahead on Wall Street. Monday -- Let the Sun Shine In The final trading week of the year is always the quietest, and that leaves China Sunergy (CSUN) as one of the few companies that will be making waves. The Chinese maker of solar cells and modules will host its annual shareholder meeting on Tuesday morning in its home market of Nanjing, but that translates into Monday night for stateside investors. There's plenty riding on the meeting. China Sunergy will discuss proposed board changes. Given the steep losses that it's been reporting, it's not a surprise that the stock has cratered in 2014. It will have to restore confidence at its meeting. Tuesday -- The Clock Is Ticking The next-to-last trading day of 2014 will find money managers scrambling to pick up some of the year's biggest winners. It's an unfortunate practice called "window dressing" as fund managers try to make it seem as if they owned the top performers in their year-end reports. It's a silly practice. After all, investors know that performance is everything. Dolling up a list of top portfolio holdings doesn't change where a fund ranks relative to its peers. Investors are smart enough to know that. Wednesday -- Last Call for Subs Wednesday will be a big day for Netflix (NFLX). The leading premium video service tumbled in October after falling short of its forecast for total streaming subscribers at the end of the third quarter. It can't afford to blow it again. Netflix expects to tack on 4 million net new accounts during the final three months of the year, so it had better hope that it winds up with more than 57 million subscribers on its rolls by the end of Wednesday. Thursday -- Auld Lang Syne The market's closed in observance of New Year's Day on Thursday. It will be a clean slate for some of the stocks that were hit hard in 2014, but they will have to wait until Friday to begin trading on the road to redemption in 2015. Friday -- "Black" Friday The big movie opening this weekend will be "The Woman in Black 2: Angel of Death." The original film raked in more than $54 million in domestic ticket sales two years ago. It will be a challenge to top that, especially since the sequel lacks the star power that Daniel Radcliffe brought on the original. More from Rick Aristotle Munarriz
•Last Week's Biggest Stock Movers: GoPro Soars, Ocwen Sinks •Customized Burgers Won't Save McDonald's and Wendy's •5 Tech Trends to Watch in 2015

Cars So Hot They Are Out Of Stock

U.S. vehicle sales reached a six-year high in 2013, with 15.6 million units sold, up from 14.5 million in 2012. Demand for some of the top-selling cars was so high that dealers had trouble keeping them in stock.

While sales is an obvious measure of a car’s demand, another industry measure called days supply can also shed light on a model’s popularity. Days supply approximates the amount of time it takes to sell a vehicle from the moment it leaves the manufacturing plant until a customer buys it at a dealership. Car data site TrueCar.com provided 24/7 Wall St. with a list of the models that sold at least 100,000 units through the first 11 months of 2013 and had the lowest days supply in the U.S in November. At the top of the list was the Subaru Forester, which had an average days supply of just 26.7 days.

Click here to see the most popular cars in America

One factor that can drive the popularity of a car is a recent redesign. The majority of the cars with the shortest days supply have been redesigned recently. Among these was the Subaru Forester, which launched its latest redesign in 2013 to immense acclaim. The Forester had the lowest average days supply of any car in the U.S. last year. Toyota's RAV4 (NYSE: TM) was also updated, and the average days supply fell 30.3%. Eric Lyman, vice president of Editorial and Consulting at TrueCar agreed that a brand new look for a model is "definitely is a factor" in reducing the days supply.

Not surprisingly, sales of many of these hot-selling vehicles have increased significantly in the last few years as demand has risen. Sales of the Toyota RAV4 jumped from 171,875 in 2012 to 218,249 in 2013. The Toyota Tacoma, Ford (NYSE: F) Explorer, and Nissan Sentra all clocked in double-digit sales growth as well, while the Forester’s sales soared by more than 60%.

While days supply is indicative of demand, Lyman explained, it is not necessarily the only reason a car model would have low days supply. "The other variable here is incentives. If you lower the price, you can obviously sell more cars. And that doesn't necessarily mean you have higher demand." Lyman noted that the Ford Explorer may be the best example of this. In 2012, Ford offered buyers an average discount of $1,972 per unit. In 2013, Ford increased the value of the offered incentives on the vehicle to an average of $3,283. This was more than $300 higher than the segment average incentive for the year.

To determine the eight cars so hot they're out of stock, 24/7 Wall St. reviewed days supply figures provided by TrueCar, an information and technology platform targeting car buyers. This figure measures the amount of cars in inventory, divided by the daily selling rate, or the number of cars sold in a day. We only used the list of the models that sold at least 100,000 units through the first 11 months of 2013 and had the lowest days supply in the U.S in November. Additionally, TrueCar provided figures on annual sales by model and values for incentives offered by dealers. We also reviewed monthly sales reports released by each carmaker.

Stocks Going Ex-Dividend on Thursday, January 2 (TD, JPM, More)

Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates.

Below are six stocks going ex-dividend on Thursday, January 2:

Toronto-Dominion Bank
Toronto-Dominion Bank (TD) offers a dividend yield of 1.83% based on Monday's closing price of $93.99 and the company's quarterly dividend payout of 43 cents. The stock is up 11% year-to-date. Dividend.com currently rates TD as “Recommended” with a DARS™ rating of 3.5 stars out of 5 stars.

JPMorgan Chase
JPMorgan Chase & Co. (JPM) offers a dividend yield of 2.62% based on Monday's closing price of $57.95 and the company's quarterly dividend payout of 38 cents. The stock is up 32% year-to-date. Dividend.com currently rates JPM as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

Did Microsoft Just Buy Another Tablet Launch?

Nokia's (NYSE: NOK  ) rumored "Sirius" tablet was expected to launch as early as this month, just as Microsoft  (NASDAQ: MSFT  ) is likely preparing to launch two new Surface models in the near term. That would potentially mean Microsoft effectively has three tablets about to be launched.

Meanwhile, Microsoft runs a big risk of alienating other OEMs that it now competes with directly. This risk could even potentially bleed into other markets that matter more to Microsoft, since many of these manufacturers also make PCs and other Windows devices.

In the following video, Erin Kennedy discusses the implications of Microsoft's deal with Nokia with Evan Niu, CFA, and Eric Bleeker, CFA.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate, and we'll give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

Why Cubs, Incapital Chairman Tom Ricketts Really Likes ‘Sustainable Investing’

What's more fun—bonds or professional baseball? When asked about the amount of time spent running the day-to-day operations of his Chicago-based investment firm, Incapital, Tom Ricketts doesn't hesitate.

“I’m actually pretty busy with that baseball team over your shoulder,” Ricketts quips, pointing to a television screen running a highlight reel.

The chairman of both Incapital and the Chicago Cubs (after leading his family’s acquisition in 2009), nonetheless still has a strong hand in the firm, and begins by noting its role as “a pioneer in offering corporate bonds through brokerage firms to investors.”

“We’ve now moved on to distribute additional products such as brokered deposits and UITs,” he adds.

Today, Incapital underwrites and distributes fixed income securities and structured notes through more than 700 broker-dealers, institutions, advisors and wealth managers.

When asked about the firm’s legacy of innovation and how it’s sidestepped the regulatory issues so many other firms have experienced when introducing “great, new products” to the market, only to subsequently go bust, Ricketts simply claims that “Each and every product we’ve offered has been thoroughly thought through from the standpoint of the investor at every level.”

That simplicity translates to everything the firm does.

“We’re very consistent in our messaging; we tell investors not to time the market or put all their eggs in one basket, rather, follow a roadmap and don’t overact to market events.”

Sounds basic enough, but coming from a major league baseball owner seems to give it added heft.

His latest passion are community investment notes, a form of SRI that doesn’t tangle with screens, arguments over sacrificed returns and opportunity costs like equity-based socially responsible investing.

“For everyone looking for SRI, here it is,” he emphatically states (for Ricketts anyway). “It’s like buying a bank CD or as simple as buying any other financial instrument. It’s not luck, but rather by design that they’re safe, have low transaction costs and low friction.”

Arguing that there are no “real, tangible opportunity costs, “it’s a way to do social good and enjoy returns.”

When asked about his “skin in the game” with the product he is promoting, he says his broker calls when the notes mature and he simply rolls them over.

“It’s very direct, and with none of the complaints heard on the equity SRI side. The notes are used for affordable housing, to help start businesses and for micro lending in other countries. They have extremely low default rates.”

As to his other love, the Cubs, and the renovations currently happening at famed Wrigley Field, he mentions the intricacies (delicately put) of dealing with Chicago politics—and waiting for the right opportunities to move the renovation process ahead.

Speaking of waiting, he concludes it’s something fixed income investors can’t afford to do.

“Sure, in the current environment, you might want to shorten your ladder, but the key is to not just do nothing. You can’t park it somewhere and get zero percent.”

4 Stocks Fueling Huge Gains In The 'Las Vegas Of China'

Las Vegas is one of the all-time great boom towns in U.S. history.

Nothing more than a forgotten Dust Bowl in the 1940s, Vegas grew into one of the hottest tourist destinations in the world by the late '50s and early '60s. Tourists, vacationers, celebrities and gamblers from across the world flocked to Vegas, producing an economic boom that continues to produce huge gains for investors.

But now, 50 years later, that same incredible growth story is repeating itself in another part of the world. In fact, this Far East gambling destination is growing so fast that its annual revenue last year was more than six times that of Vegas.

I'm talking about Macau, the undisputed leader in the global entertainment and gambling industry.

 

Along with Hong Kong, Macau is one of two special administrative regions of China. Under the principle of "one country, two systems," Macau enjoys a high degree of autonomy, governed by its own legal system, police force, monetary system and immigration policy.

The region has been quick to capitalize on that independence, giving birth to a booming tourist industry that isn't just threatening Vegas, but dethroning the incumbent as the premier entertainment and gambling destination in the world.

Last year was stellar for Macau and its booming tourist industry, with its 33 casinos booking a record $38 billion in revenue. That bullish growth has continued into 2013, with revenue of $3.9 billion in March, a new monthly record.

This incredible growth is attracting capital from all over the world, particularly from leading U.S. entertainment and gambling companies. As they seek new markets for expansion, U.S. gambling companies have been making big investments in Macau. And that is creating big opportunities for investors to cash in on the second coming of Vegas and the new king of the global entertainment and gambling scene.

But revenue growth isn't the only reason companies and investors are cashing in on Macau.

Although casino stocks are sensitive to discretionary spending, they also operate in a highly insulated and regulated industry. It's capital-intensive to build a resort and casino, and even if a company is prepared to make a multibillion-dollar investment in one, it can be difficult to get a permit because gambling is one of the most regulated industries in the world.

Here are four companies making big investments in Macau.

From this list, I have chosen to highlight Wynn Resorts (Nasdaq: WYNN) because of its upward momentum and dividend and Las Vegas Sands (NYSE: LVS) because of its dominant presence in Macau.

Wynn Resorts
Wynn Resorts has been a leader in Macau, making early investments in the "Vegas of China" that are now paying big dividends.

Its flagship operation is the Wynn Macau, a luxury resort and casino that feature 600 hotel rooms, 212 gambling tables and 375 slot machines in about 205,000 square feet. Wynn Macau is now Wynn's highest-revenue and fastest-growing segment, with first-quarter revenue of $998 million up 6% from the same period last year and accounting for 78% of total company sales.

Looking forward, analysts are calling for earnings growth of 24% in 2013 and another 10% in 2014. But in spite of those bullish projections, Wynn still looks undervalued, trading with a forward P/E (price-to-earnings) ratio of 20, a sharp discount to its 10-year average of 37. And with a dividend of 2.9%, Wynn is a nice combination of growth, value and income.

Las Vegas Sands
Las Vegas Sands is one of the largest entertainment and gambling companies in the world, valued at more than $37 billion. That scale made Sands a great candidate for aggressive international expansion into Asia and Macau. Through the company's majority-owned Sands China, Las Vegas Sands owns a number of properties in Macau.

The company's flagship offering is the Sands Macau, a 229,000-square-foot resort with 289 hotel suites. Opened in 2004 at a cost of $240 million, Sands Macau has been a huge moneymaker for Las Vegas Sands. With first-quarter revenue up 39% from last year, to $2 billion, Sands China accounted for 70% of total revenue of $3.3 billion. Not only is Sands China Las Vegas Sands' biggest moneymaker, it's also its fastest-growing property.

Risks to Consider: The huge boom in Macau has been driven by explosive growth in Asia, particularly China. Although high-end consumers are less vulnerable to economic weakness, Chinese economic growth continues to slow, which could be a drag on total discretionary spending.
 
Action to Take --> Macau is producing huge gains for the entertainment and gambling industry, and that is creating an opportunity for investors as well. These four companies have been leading the charge in Macau, seeing big gains from early investments in the region. But looking forward, analysts still see plenty of growth. From the group, consider Wynn Resorts for its upward momentum and dividend and Las Vegas Sands for its dominant presence in Macau.

P.S. -- Our in-house poker player Amy Calistri keeps her eyes on these types of stocks and many others. Her simple investing strategy has found recent big winners like Yahoo and Starbucks. To find out how she does it, click here.

JPMorgan Continues Its Rise in Spite of Itself

Big bank JPMorgan Chase  (NYSE: JPM  ) is on the rise once again this morning, with a 0.9% rise just after trading began. Not to mention the bank's stock is up 1.99% so far this week. JPM has been enjoying some much needed gains in the market despite more than one piece of negative news for its operations in the past week.

Quick rundown
Just to highlight the headwinds that JPMorgan faces, here are the latest headlines that may have investors concerned:

Another top executive left the bank last week, bringing the total to eight over the past few years. This gives rise to questions about succession plans and "deep benches." Energy rigging in California and Michigan -- not something you would normally think of for a bank's operations, but at least one executive has been called out as lying while under oath about the matter. Oversight. After the London Whale debacle, many investors cried out for more oversight (as did some regulators), and now they have their chance to demand it once again. Later this month a non-binding vote at the annual shareholders meeting will allow investors to speak up on whether Jamie Dimon's dual role as CEO and Chairman should be split up.

So with more and more pressure building on Dimon and the bank, how can it be making such a huge run this week?

Outside influences
Half of a week has already gone by and the market is still basking in the afterglow of the Berkshire Hathaway (NYSE: BRK-B  ) shareholder-palooza. While generally this would lead to boosts in other bank stocks, JPMorgan and more specifically Jamie Dimon, got a big plug from the Great One himself. When asked about the upcoming vote to split Dimon's role, Buffett gave the CEO his total support, saying that the bank will be run better with Dimon in both roles. He also said that he couldn't think of a better Chairman and that splitting the two posts would allow the CEO to be replaced much more easily, something that might not be a good thing for the bank.

Elsewhere in the banking sphere, competitor Bank of America's (NYSE: BAC  ) settlement with MBIA (NYSE: MBI  ) may also have something to do with JPM's continued rise.Since most of the banks continue to be plagued by lawsuits stemming from the financial crisis, when one is able to settle or dismiss a case, the others are looked at favorably as well. In the case of B of A, the bank made a big offer to the insurer MBIA and ducked some much larger payouts than it may have been forced to make had the case gone to trial.

Old hat
So none of this is new to the markets besides the B of A settlement, which just happened on Monday. But in stock market time, that's eons ago, right? If you're watching your stocks on a daily basis, you're doing yourself and your portfolio a disservice. Even if you don't trade daily, watching your stocks fall for no apparent reason will still hurt twice as much as if they rise for no reason. After time, that stress and pain from daily ups and downs will influence your decision to sell, possibly leaving you out in the cold as the long-term investors continue to profit. 

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!

Why Shutterstock Is Poised to Plunge

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online imagery marketplace operator Shutterstock (NYSE: SSTK  ) has received an alarming one-star ranking.

With that in mind, let's take a closer look at Shutterstock and see what CAPS investors are saying about the stock right now.

Shutterstock facts

Headquarters (founded)	New York (2003)
Market Cap	$1.3 billion
Industry	Publishing
Trailing-12-Month Revenue	$169.6 million
Management	Founder/Chairman/CEO Jonathan Oringer President/COO Thilo Semmelbauer
Trailing-12-Month Return on Capital	62.7%
Cash/Debt	$102.1 million / $6.0 million
Competitors	Facebook Google

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 33% of the 12 members who have rated Shutterstock believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, OklaBoston, succinctly summed up the Shutterstock bear case for our community:

High insider ownership indicates this recent IPO has a good chance of staying above book value, but even allowing for that I wouldn't pay more than $7 for it. Current [price-to-book value] is an absurd 18. Can't green thumb that even with the insider support.

While you can certainly make huge gains in exciting young tech stocks, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

3 Biotech Stocks to Watch in November

Investing in biotech companies can be tricky, especially for investors who don't have a scientific background or who don't completely understand the process of bringing new drugs to the marketplace.

Fortunately, the Fool is here to help. We asked three of our top biotech analysts which company they're keeping a close eye on as we head into November, and this is what they had to say.

Brian Orelli: With the American Society of Hematology meeting happening in early December, November is a good month to catch up on drugs that treat blood cancers and other blood diseases.

We'll actually get a bit of a catalyst before the meeting: On Nov. 6, abstracts for the presentations at the meeting are released, and on Nov. 17, late-breaking abstracts for clinical trials are published.

The late-breaking submissions tend to be the most interesting, but they usually have the least amount of data since the clinical trials are often still in process. The abstracts are sometimes just placeholders, and you have to wait for the meeting to get any meaningful data.

Whether it's in the abstract or at the meeting, I'm looking forward to seeing Seattle Genetics' (NASDAQ: SGEN  ) data from its Aethera trial, testing Adcetris immediately following an autologous stem cell transplantation in patients with Hodgkin lymphoma. The biotech already reported a 75% improvement in progression-free survival -- living without the disease progressing -- but the details of how the patients are responding are more important than the top-line data.

Autologous stem cell transplants are basically the last chance at a cure for patients with Hodgkin lymphoma. If patients fail the transplant, the subsequent treatments -- including Adcetris, which is currently approved for patients that failed a transplant -- can extend survival, but don't typically cure the patient. If using Adcetris directly after a transplant can increase the transplant's cure rate, use of Adcetris should go up substantially.

George Budwell: The biotech stock that has my interest this month is Gilead Sciences (NASDAQ: GILD  ) . Even though shares have already risen by 52% this year, Gilead still offers tremendous value at current levels for a number of reasons.

First off, we have the company's next-generation hepatitis C treatment, Harvoni. With about 40% of patients eligible to receive the shorter treatment duration with this fixed combination pill (eight weeks compared to 12 weeks) and most patient sub-types reporting 99% functional cure rates in clinical trials, this drug looks like it has what it takes to dominate the hepatitis C market. The only serious risk to Harvoni's utter domination is if AbbVie (NYSE: ABBV  ) prices its hepatitis C offering in a manner that allows it to gain favor on the formulary. Even then, AbbVie's experimental treatment will still need to be deemed "clinically equivalent" in order to displace Harvoni on the formulary.

Gilead, though, has a lot more to offer than AbbVie. For example, the company is in the process of launching its new blood cancer drug Zydelig, and its HIV medicine, Stribild, has seen sales more than double in the past year. All positive signs for Gilead's future.

Todd Campbell: Avanir (NASDAQ: AVNR  ) already sells one commercial drug, Nuedexta, but it hopes to win FDA approval for a second treatment on Nov. 26, when the FDA is slated to issue its decision on AVP-825 as a treatment for migraines.

If Avanir wins the FDA go-ahead for AVP-825 it could win away share from oral sumatriptan tablets, which are the most commonly prescribed medicine for acute migraines. Prior to losing patent protection, sumatriptan, sold as Imitrex by GlaxoSmithKline (NYSE: GSK  ) , had sales of more than $1 billion annually.

AVP-825 is a new low-dose formulation of sumatriptan that is taken intra-nasally, rather than swallowed. During clinical trials, AVP-825 and outperformed oral sumatriptan with AVP-825 patients reporting greater pain relief within 30 minutes than patients taking sumatriptan tablets.

The CDC estimates there are 37 million migraine sufferers in the U.S. and Avanir reports that roughly 13 million scripts are written for triptan medicines every year; about half of which are for sumatriptan. As many as 66% of migraine sufferers remain dissatisfied with their treatment options, so they may find a willing audience. Industry watchers project AVP-825's peak sales could be between $125 million and $200 million and while that wouldn't move the needle for a big drugmaker, it should go a long way toward turning Avanir profitable while also providing cash for the company's promising Alzheimer drug trials.

This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

Benzinga Weekly Preview: Drugstore Chain, Economic Calendar In Focus During Quiet Week

Related WAG Walgreens Announces Intention to List Walgreens Boots Alliance Shares on Nasdaq Following Completion of Holding Company Reorganization Walgreen To Post Q1 Ahead Of Alliance Boots Merger Making Money With Charles Payne: 10/22/14 (Fox Business)

This week will be relatively quiet as the Christmas holiday will close markets on Wednesday afternoon and Thursday. The economic calendar will be the main focus as GDP figures will be released from Europe and the US. Oil prices will remain a worry as markets continue to search for the commodity’s bottom.

Without any real catalyst for demand growth, most analysts are expecting to see prices continue on their downward trajectory through the remainder of the year.

Key Earnings Reports

With the curtained week due to the Christmas holiday, next week’s earnings calendar will be thin. Walgreen Company (NYSE: WAG) will be the only major earnings release next week.

Walgreen

Walgreen is expected to report first quarter EPS of $0.75 on revenue of $19.49 billion, compared to last year’s EPS of $0.72 on revenue of $18.33 billion.

On December 10, Citi gave Walgreen a Buy rating with an $80.00 price target, cautioning that a CEO retirement may create some concern among investors:

“The company announced Mr. Wasson will retire shortly after the close of the Alliance Boots transaction (likely calendar 1Q15). Stefano Pessina, the Executive Chairman of Alliance Boots will serve as acting CEO. We view this as a positive announcement. Confidence in the management team was shaken after their downward revision of guidance in August, and news of Mr. Pessina taking on the role may relieve some investor uncertainty and concern about who will lead the strategic direction of the company.

"Importantly, we spoke with the company and they mentioned that the move was not at all prompted by financial matters or the lawsuit with the former CFO. The timing of the announcement now vs. after 12/23 earnings was to provide more transparency to shareholders ahead of the vote on 12/29. Therefore our confidence that the company will be able to achieve our FY16 estimate is unchanged, and we still view the growth story as under-appreciated. Shares are indicating up ~3% in the after-market.”

On December 10, Deutsche Bank gave Walgreen a Buy rating with a $69.00 price target, saying that the departure of the company’s CEO may be received as a positive:

“We suspect the news of Wasson's departure will be viewed as a modest positive by investors. Wasson presided over several high-profile controversies during his tenure, including the dispute with Express Scripts, the chronic underperformance of the retail business relative to CVS, and the recent miscommunication of underlying business performance as it related to the merger with AllianceBoots.

"While we do not believe that Wasson's departure is tied to another negative earnings revision, the circumstances have a timing and feel similar to the departure of former CFO Wade Miquelon prior to the August 6 preannouncement. Thus, some investor caution is warranted.”

On December 9, Mizuho downgraded its rating for Walgreen from Buy to Neutral with a $72.00 price target citing an unfavorable risk reward for the stock:

“We think the risk reward is unfavorable for WAG over the next 12 months and, as a result, are downgrading our rating from Buy to Neutral. Our Neutral rating is based on 1) limited upside to adjusted EPS, 2) sub-par organic growth in both base businesses, 3) high execution risk integrating Step 2 of Alliance Boots due to management turnover, increased international exposure and currency risk, and 4) valuation. Our new price target of $72 is based on a P/E of 16.4x applied to our FY16E adjusted EPS of $4.39E.”

Economic Releases

While next week’s economic calendar will be thin, some key reports are due out. GDP releases will be closely watched as investors look for a better picture of US and Eurozone performance in 2014.

US oil inventory data will also be in the spotlight as investors keep an eye on the growing global supply glut.

Daily Schedule

Monday

Earnings Releases Expected: Steelcase (NYSE: SCS), Bioanalytical Systems (NASDAQ: BASI) Economic Releases Expected: Italian trade balance, Greek current account, US existing home sales

Tuesday

Earnings Releases Expected: Walgreen (NYSE: WAG), Cal-Main Foods (NASDAQ: CALM) Economic Releases Expected: French GDP, French PPI, French consumer spending, Italian retail sales, British GDP, US GDP,  US consumer sentiment, US new home sales

Wednesday

Earnings Releases Expected:  Markets Close Early  Economic Releases Expected: US oil inventory data

Thursday

Markets Closed For Christmas Holiday

Friday

Earnings Releases Expected : No notable earnings releases expected Economic Releases Expected: No notable economic releases expected

Posted-In: Earnings News Guidance Previews Pre-Market Outlook Markets Trading Ideas Best of Benzinga

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Related Articles (BASI + CALM) Around the Web, We're Loving... World Cup Championship of Binary Options! Huanity's Last Great Hope: Venture Capitalists Don't Miss The Next Webinar to Advance your Trading

Does This New Computer Chip from IBM Really Function Like a Brain?

Source: IBM.

While consumer tech devices often focus on incremental changes -- think Apple's upcoming larger iPhone -- IBM  (NYSE: IBM  )  has been busy working on a new chip that processes information like a human brain.

The TrueNorth chip has the potential to vastly change how future computers work, how much energy they use, and what type of tasks they can handle. However, more than a few skeptics question whether IBM has created the most advanced neurosynaptic computer chip, so let's look at exactly what it is and why it's important.

How it works
Here are the specs for the TrueNorth chip:

Non-von Neumann computer architecture 5.4 billion transistors 4,096 neurosynaptic cores One million neurons and 256 million synapses Built on Samsung's 28nm process technology Consumes 70mW during operation

Really exciting stuff, right?

Let's boil all this down for those who don't know much about neurons or computer architecture.

For the past 70 years or so, computer chips have processed information in basically the same way--they send data back and forth linearly between a memory chip and processor. This system works well when processing calculations, but when things start getting complex -- say, for facial recognition or sounds -- it's not so great. The back and forth between the memory chip and processor can cause the data to bottleneck and slow down the process.

IBM says TrueNorth achieves cognitive computing, in which the chip mimics a brain's ability for perception, cognition, and action. To do this, the chip emulates the brain's neurons and synapses.

Neurons are brain cells that process electrical signals and send them to other parts of the brain. Human brains have about 100 billion of them. Synapses help those signals connect to other neurons, passing along the information, and we have about 100 trillion of these.

IBM says traditional computers focus on language and analytical thinking, while neurosynaptic chips like TrueNorth "address the senses and pattern recognition." The new chip achieves this, in part, by using cores that have memory, computation, and communication built into the same system. 

Here's IBM's description of how it works:

Source: IBM..

Why this is better
The benefit of processing information in this fashion, rather than like traditional computers, is twofold: IBM's TrueNorth can process much more difficult tasks and it uses less energy.

An MIT Technology Review article published earlier this year mentioned Qualcomm's neuromorphic chips, which act in a similar way to TrueNorth. The article said chips like this "encode and transmit data in a way that mimics the electrical spikes generated in the brain as it responds to sensory information." These chips can learn how to recognize an object, like a dog, by seeing one first and then identifying other dogs after that. This comes instead of needing to be programmed and told exactly what a dog is.

The other advantage with TrueNorth is its minimal power consumption. Current computer chips run all the time, whether processing information or not. But IBM's new chip has cores that only run when processing information, then shut off when not being used. The company says TrueNorth uses the same amount of battery power as a hearing aid -- which is just a fraction of the power consumed by today's computer chips.

Source: IBM.

A few skeptics
Not everyone is completely convinced of TrueNorth's capabilities. Yann LeCun, Facebook's director of artificial intelligence research, told The New York Times, "The chip appears to be very limited in many ways, and the performance is not what it seems." He said testing that showed the chip detects pedestrians and cars "won't impress anyone in computer vision or machine learning." He also followed up some of this thoughts in a Facebook post.

Nayaran Srinivasa, a researcher at HRL Laboratories who is working on a similar chip, said in a Wired article, "It's definitely an achievement to make a chip of that scale ... but I think the claims are a bit stretched because there is no learning happening on chip."

But if there's one group that believes in the TrueNorth's potential, it's the U.S. government. The Pentagon's Defense Advanced Research Projects Agency has poured $53 million into the TrueNorth project, run by Cornell University researchers and IBM, since 2008.

IBM's chip is closer to production readiness than others like it, but it's likely years away from any commercial application. The company says TrueNorth could be used for public safety, health monitoring, transportation, and even vision assistance for the blind.

While IBM says TrueNorth processes information like a human brain, and in some respects it does, it appears the chip may have a large learning curve. As it continues to be developed and undergoes more testing, TrueNorth's real-world capabilities should become more apparent.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

 

Ho-Hum, Another Boring Day of Little Volume in the Markets

NEW YORK (TheStreet) -- Another boring trading day in the stock market on Thursday. The S&P 500 Trust Series ETF (SPY) volume did not even trade 60 million shares. The volume came in at 56 million shares.

After being up for most of the day, the DJIA closed lower by 2.83 points at 17083.80 and the Standard & Poor's 500 was up 0.97 at 1987.98. The Nasdaq was lower by 1.59 points at 4472.11 and the Russell 2000 was down 1.85 at 1156.26. All in all, a nothing day.

Read More: Cramer: Every Which Way But Short

Gold, which is up 7% for the year to date, had its fifth consecutive down day. On a down open Friday it will be in oversold territory within a "Trend Bullish" condition. So do not get to excited that Wall Street pundits are starting to become bearish on Gold. It is only a correction. Gold is within a day or two of a move higher. The Select Sector Utilities ETF (XLU) continues its bullish performance, up 12.5% YTD. Again, it continues to signal a growth slowing economy, along with the Barclays 7-10 Year Treasury Bond Fund (IEF), which is up 4.3% YTD. An interesting sector that has been bullish in 2014, the semiconductor sector, may be signaling something negative on the horizon. Broadcom (BRCM), Intel (INTC)  and Maxim Integrated Products (MXIM) have not been able to hold their post earnings gains. MXIM is getting clobbered in after-hours trading Thursday. As we continue to navigate this stock market in the second half of 2014, traders must continue to be cautious. This volatile market is not for anyone who does not have a risk management process. The lack of liquidity will eventually become a major problem for the markets. At this moment in time, the hedge funds are comfortable with shorting at the lows and covering at the highs. That will change. My S&P 500 daily trading range on Thursday was Buy Trade-1962 and Sell Trade-1994. The S&P high for the day was 1991.39. So we are at the top end of the trading range. Traders should not buy up here. That's how the process works. Buy low and sell high.      Read More: Pandora Will Be a Penny Stock Someday Soon as Spotify, iTunes Thrive On Thursday, we sold our long position in Arcos Dorados Holdings (ARCO) for nearly a 2% gain and covered our Microsoft (MSFT) short for a nice gain. We continue to hold Inovio Pharmaceuticals (INO) long. We started a short position in Glu Mobile (GLUU) on an inside upper channel break to the downside and started Under Armour (UA) long on an upper channel break to the upside.  These positions can be found at www.strategicstocktrade.com.   At the time of publication the author was long INO and UA and short GLUU. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Reynolds American, Inc. and Lorillard Inc. Confirm Acquisition Talks (RAI, LO)

On Friday morning, Lorillard Inc. (LO) and Reynolds American (RAI) confirmed that the companies have been discussing Reynolds American’s potential acquisition of Lorillard.

In addition to the possible Lorillard takeover, the two companies also announced that they have been in talks with British American Tobacco (BTI) regarding the sale of brands and assets that are currently owned by LO and RAI. LO and RAI both stated that no official deal has been reached.

RAI stock was up 89 cents, or 1.45%, in pre-market trading. YTD, the company’s stock is up 26.36%.

LO stock was up $2.82, or 4.47%, in pre-market trading. YTD, the stock is up 26.21%.