Starbucks stock retreated in heavy volume after a report suggested the coffee chain's growth may be losing some steam.» Read More
Maria Bartiromo discusses Monday's top business and financial stories, and looks ahead to tomorrow's events. (Watch her live on CNBC TV's Closing Bell.)
Topics discussed in video above:
Oil prices : crude jumped $16.37 -- or nearly 16 percent -- to close Nymex trade at $120.92. That's the largest one-day dollar or percentage gain ever.
Lennar earnings Tuesday. What will the homebuilder report?
The U.S. dollar/euro : its worst 1-day decline in seven years .
Goldman Sachs and Morgan Stanley convert to bank holding companies .
Microsoft , Hewlett-Packard sink cash into huge stock buybacks .
Nike has a $5 billion buyback plan of its own.
And AIG shares climb 23 percent Monday; Bartiromo interviews new CEO Ed Liddy. (Click for Liddy interview.)
Robert Napoli, managing director at Piper Jaffray, has found a calm corner in the stormy financial sector.
"We've been pointing clients away from the volatility of the credit risk and troubled assets to an area where we call 'financial technology,'" Napoli told CNBC. "These are names that are generally global in nature, but payment-processing oriented."
At the top of his list is Western Union.
"It's number one by far in the money-transfer area," he noted.
He also likes Nasdaq OMX.
"It's down 35 percent from its highs...doesn't have credit risk; it's a long-term play on global trading," he said. "Their technology is powering over 60 exchanges; we think they have big fixed-cost leverage over the long term."
- Here Come The Tech Stock Buybacks
Also on his list are American Express and Wright Express.
In an environment where consumer discretionary businesses are getting squeezed, Mark Travis might seem to have come up with a counter-intuitive stock pick. But to the CEO of Intrepid Capital Funds, Starbucks makes perfect sense.
"We're very valuation-sensitive in acquiring equity or debt," Travis told CNBC. "With Howard Schultz back at the helm at Starbucks, the private market value of those shares is a good bit higher than where they trade for today."
He also likes book publisher John Wiley & Sons.
"They acquired Blackwell of Great Britain last year," he noted. "They've repaid that debt relatively quickly."
Also on his list are Oil Dri, Applied Signal Technology and Mocon.
Treasury Secretary Henry Paulson said he wants a stronger dollar.
But the financial rescue plan he's backing will drag down the U.S. dollar -- according to Sean Callow, senior currency strategist at Westpac Bank, and Bill Smith from SAM Advisors.
They joined Stephen Roach of Morgan Stanley Asia to offer their currencies outlook to CNBC.
What's the best approach to investing in these volatile times? Top-down, or bottom-up? How about both? That's the approach taken by Highmark Capital's chief investment officer, David Goerz.
His five-star Highmark Value Fund is up an average of 7.37 percent per year over the last five years.
"We do think that some of the measures that have been put in place are going to be positive," Goerz said of the current, top-down, environment. "In that kind of world, where we think that cyclical growth will be accelerating, we want to think about being invested in more cyclically-oriented sectors."
Goerz's list includes Home Depot, Alcoa, Boeing, Intel, and Intersil.
"These are sectors where you're going to see accelerating earnings," he told CNBC.
The Dow, Nasdaq and S&P 500 are down (as of this writing); gasoline, natural gas and oil prices are up. The U.S. dollar is down against the euro and the British pound.
So where is gold headed?
Up, says BlackRock's Evy Hambro. He told CNBC why the precious metal is set to climb over the long term.
Click on tickers for info/headlines:
- SPDR Gold Shares
- Market Vectors Gold Miners ETF
- iShares COMEX Gold Trust
- Newmont Mining
- Coeur D Alene Mines _______________________________
Some traders think this might be a good day to spend on the sidelines. Not Scott Black. He says investors should get to work right away, snapping up value stocks.
"Most of the systemic risk has been taken care of by the Federal Reserve...but I would stick to what you do normally, which is to buy high-return-on-equity stocks," the president of Delphi Management told CNBC. "At this point, I don't think the underpinnings of the market are such that we're going to see major downdraft from here."
Although he believes it's safe to go into the water again, he sees some rip currents to beware: "[Investors] probably shouldn't be buying financial-service stocks," he said.
So what looks good to him?
"You can go to things like oil-service companies, that have good contracts into next year," he said. "You can buy companies like Noble and Ensco, at 6 P/Es, ROEs over 25 percent, and virtually debt-free balance sheets.
"You can buy an Oracle, which has demonstrated sustainable earning power, more cash than debt...these aren't speculations; these are good businesses, and you should be buying good businesses at cheap prices."
FBR's David Ellison is putting money into financials -- solid, insured, American banks.
"I'm primarily investing in the American insured depository institutions," he told CNBC. "Those are going to be the big winners here."
So who's on his list?
"You look at a Wells Fargo, you look at US B (US Bancorp) , you look at Wachovia, you look at Hudson City (Bancorp), you look at Astoria (Financial)," he said.
As details of the government's belated "Federal Toxic Landfill Act" emerge -- that is, the rescue plan put forth by Treasury Secretary Hank Paulson -- many thoughts come to mind but none more often than how ticked-off the troops at the Thundering Herd must be that their chief raised the white flag 3 1/2 days too early.
Had John Thain and the board of Merrill Lynch just hunkered down for a few more days, then their famous white-shirted army of advisors would not be POWs under a new general in Charlotte.*
What also strikes me is that the Merrill management ignored the very advice that their brokers were espousing these past few days -- be calm, stay the course, don't panic, don't do anything rash, this too shall pass, etc., etc.
I don't know about you, but it's clear to me that Merrill panicked and sold at the bottom.
Time will tell whether Merrill's shotgun wedding works out in the long run (my bet is that it will, largely because a $50 billion investment is "too big to fail") but no matter what the outcome, legions of Wall Streeters, especially those with ties to Bear Stearns, Lehman, AIG and Merrill, will forever wonder: What if..?
-What if only we had fought just a little longer..?
-What if there was that Toxic Landfill Act when we needed it?
*(headquarters of Merrill acquiror Bank of America.)
This is the full body of the post.
Stock-market investors like the sound of bulls, but is it time to get back in now?
Harbor Advisory's chief investment officer Jack DeGan suggests that value investors take half a position in some stocks now, and wait to invest the rest.
"Be careful of falling into a value trap, which is where share prices fall more quickly than earnings estimates and book value get marked down, which creates the illusion of value," he cautioned CNBC. "Value investors have to be patient."
He has two areas of special interest:
"The stocks that are levered to the international infrastructure build-out have been crushed in the last two months," he said. (See Part 1 for DeGan's global infrastructure stock picks .)
His second area of interest is energy.
"Energy stocks, too, have been crushed in the last couple of months, and we believe that a year from now, energy prices will be higher," he said. "Some of these stocks, ExxonMobil , Anadarko Petroleum, Suncor Energy, Petrobras, these are companies that have most of their assets in politically safe places, and they're trading at very, very low valuations, and will do extremely well if energy reflates."