Market Week Wrap-up

– Leading global equity indices continued floating upwards this week while the inflation drumbeat just kept getting louder. In the US, the January y/y CPI figure hit +1.6%, its highest level since last spring, and some analysts were alarmed by higher food prices creeping into CPI data sooner than expected. China’s January CPI report was lower than expected at +4.9% y/y, but markets panned the figures as heavily massaged by basket revisions. In the UK, the BoE said CPI would likely continue growing at a 4-5% clip over the short term. The World Bank released a report indicating that food prices were up 15% since October 2010 and are now only 3% away from record highs hit in 2008. Commodities moves complicated the story somewhat. While silver has pushed out to 30-year highs, there were signs that inflated soft commodity prices were beginning to unwind, with cotton and grain prices both below recent highs. Crude and gold prices have been impacted by reports that Iran is sending warships through the Suez Canal and bloody protests in Bahrain (next door to Saudi Arabia), although WTI futures were well below recent highs seen in early February. The Obama Administration unveiled its $3.73T budget proposal for 2012, including an all-time high deficit of $1.65T, reflecting the tax-cut agreement reached with Republicans in December. For 2012, the administration sees the imbalance declining to $1.1T, giving the country a record four straight years of one trillion-plus deficits. Bond prices held steady after the details were released, and Congress sharpened its knives for a budget fight. The Feb Empire Manufacturing survey hit its highest level since last June, indicating that the US manufacturing expansion seen over the last several months is continuing. On Friday there was plenty of commentary out of the G20 conference, where leaders tried mightily to achieve some concrete steps in reforming the global monetary system. Fed Chairman Bernanke took a swipe at the Chinese in his policy address to the G20, warning that nations which keep currency values low create imbalances, while the PBoC’s Zhou continued to push for a higher profile for the IMF’s Special Drawing Rights (SDRs). For the week, the DJIA rose 1.0%, the Nasdaq gained 0.9% and the S&P500 was up 1.0%. – John Deere crushed earnings and revenue targets in its Q1 report and nearly doubled its guidance for FY11 equipment sales. The firm hiked its sales guidance for its key agriculture and construction units as well, and said its Q2 revenue would blow out consensus estimates. Later in the week Caterpillar released very favorable dealer metrics for the month of January, with North America machinery sales up a whopping 58% y/y in the month. – Iron ore miner Cliffs Natural Resources reported very strong Q4 profits on a big y/y gain in iron ore pricing. The company expects global steel production to continue to grow in 2011, although it warned that spot iron ore prices are unsustainably high. Reliance Steel also blew out earnings estimates, and said pricing would remain strong at least through the first quarter of 2011. – In tech, Dell’s profit was way ahead of the consensus in its Q4 report, thanks to a big improvement in margins. The company said it believes the corporate IT…

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Market Wrap-Up for Jan.18 (CMA, PNC, MCD, CAT, DE, QCOM, LMT, more)

Filed in Apple, Debt, deere, dividend, earnings, Gold Investment, lead, o, shares, upgrade by on January 18, 2011 0 Comments

I was reading an interesting article on that listed some common money excuses people use. Let’s go over some of them each day this week. Excuse #1 – “If I earn interest, I have to pay more taxes.” My Answer: Don’t get preoccupied with taxes when it comes to investment returns. For many of us, making more money with our investments should be the goal, not avoiding paying more in taxes by possibly foregoing better investment opportunities. Excuse #2 – “At my age, it’s too late anyway.” My Answer: Don’t ever start thinking in this negative way. Remember my dad’s barber friend who bought his first house at age 77. That’s the right mentality! Compound interest from dividend stocks kicks in sooner than you think, so don’t ever tap out. Excuse #3 – “Why save money? You can’t take it with you when you die!” My Answer: This is normally the rationale for those around us that have racked up the most debt. I personally would rather create a positive legacy rather than one where you burden your loved ones with all your poor financial habits. Excuse #4 – “We’re only young once!” My Answer: I never stop believing I’m young, and there’s no reason to waste money just because you want to stand by an “only young once” mantra. Ask anyone that is in their 30′s and 40′s and they will tell you about being a bit too foolish with money in their early earning days. Excuse #5 – “But it’s only zero percent interest!” My Answer: Yes, the “free money” myth is super popular when it comes to borrowing these days. But what about the obligation of making monthly payments once you make a big purchase you likely don’t need? There’s no such thing as free money, regardless of interest rates. We’ll do more of these as the week rolls on. Getting back to the markets, Apple ( AAPL ) shares opened about $20 lower this morning on the Steve Jobs health concerns (as we discussed in yesterday’s e…

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Deere (NYSE:DE), AGCO (Nasdaq:AGCO) Look Strong on Ag Secular Growth Trends

Filed in agco, barclays, deere, Gold Bullion prices, Gold Prices, o by on January 10, 2011 0 Comments

Citing a continuous solid secular growth trend in agriculture, Barclays (NYSE:BCS) sees Deere (NYSE:DE) and AGCO (Nasdaq:AGCO) doing well in 2011 as machinery spend accelerates.Barclays said, “On Friday, we attended AgConnect in Atlanta, GA and came away with increased conviction around the outlook for North American ag equipment spend, which we think could be up MSD in FY11, possibly better.

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Market Wrap-Up for Dec.21 (TD, CCL, DRI, DE, CAT, more)

Gloomy economic headlines continue to come at us every day, and they will likely not stop. At the same time,the market continues to climb higher, leaving many investors to watch on the sidelines. You should check out the video Tom and I put up today about focusing your worries elsewhere, preferably on what you are doing with your investment portfolio, including maximizing retirement accounts among other tax-advantaged accounts. Of course, it does make sense to watch the economy, but so many investors have been paralyzed with fear that the 80% plus rally off the March 2009 lows continues to be among the most hated rallies from a retail investor standpoint. Huge cash piles for corporations will only lead to further M&A, increased dividend payouts, and stock buybacks in 2011. Are you ready to put money to work when the eventual pullbacks happen? Good markets will always have pullbacks, I just wish we can get even more now, so that the entry levels can improve for investors. We’ll continue to absorb the data that comes at us, and will be sure to pass on the anecdotes that could matter when corrections come. The one area that worries me a lot continues to be gold, despite the big run it has had. I worry about it mostly from a crowded trade standpoint. This is not a new worry, but is one that I have had the last couple of months. During that time, gold prices have remained stuck in a tight range, with the inability to hit new highs. Take notice and be ready to act if you have been adding to exposure to the yellow metal (through miners, gold etfs, etc.) Looking at today’s action, TD Bank ( TD ) saw a nice bump higher on news it is acquiring Chrysler Financial, the former financing arm of Chrysler Group, which is now being sold by Cerberus Capital Management. This is another example of deals where a corporation is betting big on economic stability and

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Trade The News Weekly Market Update

– Volatile trading has been the rule during the Thanksgiving-shortened week. In weekend negotiations with the ECB and the IMF, Dublin dropped its initial reluctance to a bailout and agreed to accept funds. Having evidently learned a lesson from the painfully drawn-out Greek crisis earlier in the year, European partners are rushing to finalize details of a rescue package, which will apparently amount to €85-100B, and will include funding from the ECB, the IMF and the UK. Meanwhile, contagion from the sell-off in Irish bonds has already driven risk spreads in Portugal and Spain to record levels, as S&P exerted additional pressure by cutting Ireland’s sovereign rating two notches. On Tuesday North Korea shelled a South Korean island in one of the most dramatic attacks on the nation since the end of the Korean War. The attack sent US and European equity indices tumbling and completely sidelined the relatively strong second reading of US Q3 GDP. Key economic data in the US was also in play this week. After growing in September, existing and new home sales returned to declines in October; sky-high inventories helped push median new home prices to lows last seen in 2003, raising concerns about a double dip in housing prices. The October durables data was also cause for concern, as the nondefense capital goods figure (ex aircraft) was down 4.5%, missing nearly all estimates, though it was cushioned by an upward revision in the prior month. Hope was seen in the weekly initial jobless claims, which fell to their lowest level since July 2008, possibly portending sunnier results in the November payrolls report next week. For the week the DJIA fell 1%, the S&P500 dipped 0.9%, and the Nasdaq gained 0.7%. – It was a big week for private equity deals. An investment group struck a deal to buy software developer Novell for $6.10/share in cash, in a deal valued at $2.2B. The acquiring firm Attachmate, a provider of technology services, is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thomas Bravo. Takeover chatter starting last week materialized in a private equity deal for Del Monte Foods, as a group led by KKR announced it would buy the foods company for $19.00/share. Clothier J. Crew confirmed it would be acquired by TPG and Leonard Green for $43.50/share. Blackstone lost its $602M bid to buy power producer Dynegy after failing to win shareholder support, likely forcing the company to find another buyer, sell assets or restructure. Blackstone met strong resistance from Dynegy’s two largest shareholders, Carl Icahn and hedge fund Seneca Capital. Elsewhere, German fertilizer giant K+S said it would acquire Canada’s Potash…

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Deere Shares Upgraded After Earnings Beat (DE)

Argus Research has boosted his price target on shares of Deere ( DE ) from $76 to $88 and has reiterated its buy rating. The firm said Deere’s quarterly report was “much better than we expected and sees continued strong results in fiscal 2011.” Argus moved its 2011 earnings estimates from $4.85 to $4.95 and set a 2012 estimate of $5.30. The Bottom Line Shares of Deere & Co. (DE) have a 1.57% dividend yield, based on Wednesday’s closing stock price of $76.23. The stock has technical support in the $69-$70 price area. If the shares can firm up, we see overhead resistance around the $79-$81 price levels. Deere & Company (DE) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Deere Swings to Q4 Profit, but Forecast Falls Short (DE)

Filed in deere, dividend, Gold Investing, o, shares by on November 24, 2010 0 Comments

Farm and construction equipment maker Deere & Company ( DE ) said Wednesday that it swung to a fourth quarter profit, beating analyst estimates, but a muted full-year outlook sent its shares lower in premarket trading. The Moline, IL-based company reported fourth quarter net income of $457 million, or $1.07 per share, compared with a net loss of $223 million, or 53 cents per share, in the year-ago period. Sales surged 35% from last year to $7.2 billion. On average, Wall Street analysts expected a smaller profit of 95 cents per share, on much lower sales of $6.3 billion. Looking ahead, the company forecast full-year fiscal 2011 profits of $2.10 billion, which falls well short of analysts’ estimate of $2.30 billion. Deere shares fell 95 cents, or -1.2%, in premarket trading Wednesday. The Bottom Line Shares of Deere & Co. ( DE ) have a 1.57% dividend yield, based on last night’s closing stock price of $76.34. The stock has technical support in the $69-$70 price area. If the shares can firm up, we see overhead resistance around the $79-$81 price levels. Deere & Company ( DE ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Deere (NYSE:DE), AGCO (NYSE:AGCO), CNH (NYSE:CNH) Up on Bullish Farm Equipment Outlook

Filed in agco, CNH Global, deere, earnings, Gold Prices, o, price-target, revenue, ubs, upgrade by on November 19, 2010 0 Comments

With the price of crops pushing revenue and earnings up for farmers, farm equipment producers like Deere & Company (NYSE:DE), AGCO (NYSE:AGCO) and CNH Global NV (NYSE:CNH) are in favor with analysts, and UBS (NYSE:UBS) raised their ratings and/or price target on the companies. This is centered around the probably assumption farmers will add newer equipment over the next year because of more cash

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