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• Surprising stocks top best of 2008 list

  Posted Jun 26 2008, 01:18 AM by Jon Markman
  Filed under: Investing, Merrill Lynch, Investment Banking, Motorola, Morgan Stanley, Lehman Bros, Valero, stocks, economy, Jon Markman
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  It’s easy to imagine that the 25 best-performing stocks in the S&P 500 Index this year are all oil and gas producers, and the 25 worst-performing stocks are all banks and brokers. Yet as we near the halfway mark in 2008, it turns out that there are quite a few surprises in the mix of best and worst.

  For instance, the No. 1 stock in the benchmark index this year isn’t an oil producer, but a coal miner, Massey Energy.  It’s up 155% so far, rising to $89 from $35 as coal prices have soared in the wake of booming demand in China and India. The No. 2 stock is actually a discount retailer, Big Lots. It’s up 100%, from $15 to $30, as investors speculate it will get a big share of tax-rebate money from low-income Americans.

  Most of the rest of the next best 15 gainers   Read More...

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• Why hedge funds are in the hole

  Posted Apr 25 2008, 01:46 AM by Jon Markman
  Filed under: Investing, Investment Banking, Trading, Jon Markman
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  Every frat house manager knows that if you want to end a party, you take away the keg. And that’s pretty much all you need to know about why the stock market is so sluggish this year.

  The banks have sharply cut back on the credit they’ve allocated to hedge funds, making less money available to purchase stocks and bonds of all stripes. Less borrowing = less buying power. It's pretty simple.
  
  The latest evidence of this action has come from reporters at the Financial Times, who say they’ve discovered that the most leveraged funds are now borrowing no more than five times their asset base -- down from at least 10 times their base six months ago. That means a $100 million hedge fund that was buying up to $1 billion worth of stocks a year ago now can only buy less than $500 million worth. That's a big difference.   Read More...

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• Stock rally buzzkill: No rate cut in April?

  Posted Apr 21 2008, 01:25 AM by Jon Markman
  Filed under: Investing, Investment Banking, Housing, Disney, Interest rates, Jon Markman
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  Last week’s stunning 5% advance in the stock market is likely to have one consequence that credit-starved sensitive businesses won’t like: It has eroded the likelihood of further cuts in interest rates by the Federal Reserve when its Open Market Committee meets next week.

  Despite a rise in joblessness, decline in housing activity and spate of bankruptcies, the futures markets and even dovish Fed governors are now expecting the central bank to stand pat for the first time in six months.

  This is something of a shocker when you consider that the odds of a cut of a half percentage point were extremely high just two weeks ago. Now traders who bet on the likelihood of cuts don’t even consider it likely that the Fed will cut by a quarter of a percentage point. If the economy really is on solid ground now, just because stocks are up, it sure will be a surprise to businesses who are seeing more dramatic sales and profit declines than they can recall in years. We’ll learn more on Tuesday and Thursday mornings when existing and new-home sales data is released, and on Thursday afternoon when continuing jobless claims for April are released, but already the news from corporate America is grim.   Read More...

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