Longtime Progressive CEO Peter Lewis dies

MAYFIELD VILLAGE, Ohio (AP) — Peter Lewis, who shepherded Progressive from a small-time operation to one of the largest auto insurers in the country and later became the billionaire backer of marijuana legalization, died Saturday. He was 80.

Philanthropic adviser Jennifer Frutchy said Lewis died at his home in Coconut Grove, Fla.

Progressive President and CEO Glenn Renwick said the company owes its growth and its culture of openness to Lewis. He said Lewis' caring and honesty are "bedrock" values of the company.

"The history of Progressive is very much the history that Peter Lewis laid down," Renwick said. A willingness to take risks and constantly learn and grow are principles that can be traced to Lewis, he added.

"He really was a special person, there's no doubt about that," Renwick said.

Lewis became chief executive officer of Progressive in 1965, built from the company his father co-founded in 1937. Lewis held the leadership post for 35 years, during which Progressive — and Lewis' fortune — steadily grew. In 2006, Forbes calculated his net worth at $1.4 billion.

Lewis turned his wealth into support for a number of progressive causes, including strong support for marijuana law reform that began after he used it following a leg amputation. Lewis helped bankroll marijuana-related causes in Ohio, Washington and Massachusetts.

In a 2011 interview with Forbes magazine, Lewis said he first tried marijuana at age 39. He said he found it to be "better than scotch" and later relied on it for pain management.

"I don't believe that laws against things that people do regularly, like safe and responsible use of marijuana, make any sense," he told Forbes. "Everything that has been done to enforce these laws has had a negative effect, with no results."

Lewis also spent time as a trustee of the Guggenheim Museum and stepped down in 2005, saying he saying disagreed with the institution's focus on international expansion. He had been a leading benefactor of t! he museum, donating tens of millions of dollars.

For a time Lewis largely stopped giving to local Cleveland-area concerns, saying there was little cooperation among civic leaders or public development. Last year, however, he donated $5 million to the Cleveland Institute of Art, the Plain Dealer reported. At the time, he said he made the donation because a development plan that impressed him in 2004 had met his expectations.

Lewis also gave generously to his alma mater, Princeton University. He donated more than $220 million to the school, where he also served as a trustee.

Are Stocks In For A Sea Change?

Things couldn't have been rosier for equities in 2013. As I write this, stocks are up 187% from the depths of the crisis-panicked stock market of March 2009, and this year stocks are already up 24%. It's been a banner year except for those holding bonds. The 30-year Treasury, by contrast, is down 11% from January 2013.

Is this finally the end of the great bond bull market? The Fed, along with almost all industrial nations, has printed enormous amounts of currency to finance deficits. Our deficit has risen 67% in the past five years to almost $17 trillion. And this doesn't consider the Fed's quantitative easing programs, which put us in an even deeper hole.

I won't bash Bernanke or his easy-money legacy. His money flood helped save our financial system. But the Fed has been easing far too long, and millions of retired investors are paying a frightful price in paltry returns on their savings. Moreover, millions of employees now have their retirement accounts badly underfunded.

Even though the Fed has not cut back on its purchases of Treasury and mortgage bonds, many folks fear that a tapering-down policy will cause the economy to slide back into a downturn. Both the Fed and major central banks appear to be trapped.

So where to now? If rates move up over time, as appears likely, holding mid- or long-term bonds will be calamitous. As the economy improves in the next few years, yields will begin to rise at a faster rate, destroying bond values. This could bring on a nasty bear market. In a worst-case scenario I see inflation climbing to 10%, as it did from 1978 to 1982. Back then long bonds yielded as much as 15%, while short Treasurys reached almost 20%.

Why are big institutional investors and bond experts ignoring this enormous danger? It's textbook investor psychology. Investors tend to fixate on the present and recent past, and time and time again extrapolate these trends well into the future.

Don't despair: After the initial shock of rising inflation and interest rates, the market will resume its climb. That's precisely what happened from 1978 to 1982 when stocks climbed 14% annually, beating the rate of inflation by four percentage points. If I'm right on inflation and rates, we're on the cusp of a major bull market move.

Like Warren Buffett, I'm not a goldbug and prefer real estate and equities as inflation plays. Here are some good stocks for the next market wave:

ConocoPhillips (COP, 74) is one of the world's largest independent oil-and-gas exploration companies. It's in a transition period, selling assets with so-so returns and putting the proceeds into other projects. Earnings are expected to be up almost 10% this year and again in 2014. The stock trades at a P/E of 14 and has a dividend of 3.8%.

Freeport-McMoRan Copper Freeport-McMoRan Copper & Gold has been badly hit, dropping over 10% from its 2012 high. It trades at a discount of 10% to its global mining peers because of its large stakes in copper and gold. Now that it's made several acquisitions in oil and gas, earnings are expected to rebound by 21% for 2014. FCX has a P/E of 13 and yields 3.4%.

The worst is behind global banking giant JPMorgan Chase JPMorgan Chase. I think it will show a 13% increase in earnings in 2014, despite slow loan growth and some near-term pressure on margins. Its P/E is 12, it yields 2.9% and it's trading at a 60% discount to the book value of the S&P 500.

Office supply giant Staples (SPLS, 16) has gone through a rough patch trying to downsize U.S. stores while at the same time taking its model to Europe. I expect earnings to rebound strongly. Staples has a forward multiple of 11 and yields 3%.

Larry Ellison's software company Oracle (ORCL, 34) has had an impressive growth rate for several decades. It could get even better with its aggressive new stock buyback program. Oracle provides good value at an estimated 2014 P/E of 11 and a yield of 1.4%.

—

David Dreman is chairman and chief investment officer of Dreman Value Management. Visit his home page at www.forbes.com/dreman.

Dollar in holding pattern ahead of Fed statement

LOS ANGELES (MarketWatch) — The forex market came to a virtual standstill early Wednesday, with the major currency pairs moving sideways ahead of the release of the Federal Reserve's latest policy statement, due later in the day.

After seeing a modest increase in Tuesday trading, the ICE dollar index (DXY)  , which tracks the greenback against a basket of six rivals, turned flat, quoted at 79.645, compared to 79.644 late Tuesday in North America.

The WSJ Dollar Index (XX:BUXX)  , an alternate measure of the U.S. unit, was unchanged at 72.24.

Economists widely expect the Fed to delay its "taper" — the slowing of its current pace of stimulative asset purchases — due to a recent slowdown in the U.S. recovery, with the market's main focus now on clues as to when the taper will in fact begin.

AFP/Getty Images

"The only way that the Fed could catch the market by surprise is if they brush off the recent data deterioration and appear less dovish. The chance of this happening is very slim but not out of the question because the recovery is widely expected to regain momentum in November after slowing in October," wrote BK Asset Management managing director Kathy Lien.

With the Fed expected to keep its easing at current levels and the outlook for the U.S. economy uncertain, Crédit Agricole said the dollar was unlikely to see a sharp rally in the near future. However, they said more limited gains were possible, as "the dollar index appears to have settled at a relatively low level."

They specifically pointed to scope for gains against the euro, which they said could suffer from upcoming European bank stress tests.

Click to Play Japan's Abe on economic, foreign policy

Japanese Prime Minister Abe discusses Abenomics and where Japan's relationship with both the U.S. and China is headed.

Likewise, "the relative outlook for monetary policy is likely to move in the dollar's favor. That is, we suspect there is more room for the [European Central Bank] to surprise on the dovish side as the market gets more comfortable with a 2014 taper from the Fed," Crédit Agricole said.

They also cited "likely upside risk to U.S. growth surprises, given the recent deterioration in U.S. forecasts."

As the lack of movement in dollar index suggested, the top currency pairs sat little changed from their late-Tuesday levels.

The euro (EURUSD)  bought $1.3738, negligibly down from $1.3743, while the British pound (GBPUSD)  was quoted at $1.6038, compared to $1.6035.

The Japanese yen (USDJPY)  also stood still, with the dollar at ¥98.17, versus ¥98.19 late Tuesday, while the Australian dollar (AUDUSD)  was unchanged at 94.77 U.S. cents.

The Only Number You Need to Time – and Beat – the Market

It certainly seems as though the political gamesmanship that rules Washington, D.C., also rules the markets. But this isn't really the case.

In fact, there's one single "magic" number that far outweighs everything else when it comes to long-term influence.

This number's predictive power has saved me from some of the steepest market drops of the century, and it's given me everything I need to position myself for maximum gains in bull markets.

And the best part is, it's widely available - access to it costs nothing.

It's how you use this simple number that counts...

Add This Link to Your "Favorites" Tab

Earnings season is the key to it all. That's when over half of all public companies report the revenue and earnings results for the previous three-month period.

Here's where the number comes in. You can track these earnings with a metric called the trailing 12-month earnings per share (EPS).

You can always find it right here, over at Barron's.

At a single glance, it tells you whether earnings are trending higher or lower. Staying ahead of that trend is the key to beating the markets.

The number, the current aggregate EPS of the S&P 500, is $90.95.

This metric is incredibly accurate, and historically speaking, when earnings increase in the aggregate, stocks tend to go up in the aggregate. Of course, you might see an individual stock sell off after it reports rising earnings, and conversely, you might see an individual stock rise on downbeat earnings. Yet, by and large, when corporate earnings are rising, stock values also rise. The reverse is also true: When earnings are in decline, stock prices also decline.

But when you have the aggregate EPS in hand, you can prepare for these declines.

Get Ahead of Bear Markets

This happens rarely, but when the aggregate measure of earnings on the S&P 500 declines for two consecutive quarters, the market is telling us to sell. This has only happened twice this century - so far - once in January 2001 and again in October 2007.

In 2007, earnings began to decline in the second quarter, as many companies - primarily financial - began booking losses due to the subprime loan crisis. By the end of October 2007, S&P 500 earnings had once again declined sharply because of the huge third-quarter losses booked by many of those same financial firms.

Given that the S&P 500 was trading near its all-time highs midway through 2007, it was easy to see that earnings were not keeping up with stock prices and that this situation was about to right itself via a sharp market correction. As we all know, that's precisely what happened in the fall of that year, after earnings showed they had declined for the second consecutive quarter.

Like an "all-clear" siren, the aggregate EPS will also tell you when the worst is over... and when it's time to go pick up shares.

When to Go Shopping

This "two consecutive quarters" of directional earnings signal also works as a buy signal, particularly after a big downturn.

For example, two consecutive quarters of positive earnings on the S&P 500 in 2009 served as the green light I had been waiting for to get back into stocks after the 2007 meltdown. And that is precisely what happened in July 2009, after I saw that the S&P 500 had logged its second consecutive quarter of earnings growth.

I know this may seem relatively simple, but if you would have followed this "two consecutive quarters" metric, you would have been on the right side of the market during two of the largest market declines in this century.

This indicator got me out of U.S. stocks in October 2007, and I stayed that way until July 2009.

It saved me from the near-40% plunge in the U.S. stock market during the crisis years. The same indicator also kept me out of stocks between January of 2001 and July of 2002, avoiding the worst declines of the tech stock bust.

So, it really is as easy as this: When earnings decline for two quarters, that's your signal to exit stocks. And when earnings rebound for two quarters, it's time to get back in.

Investor Beat, Jan. 28, 2014

In this video from Tuesday's Investor Beat, host Chris Hill and Motley Fool analyst Jason Moser dig through the biggest stories for investors from the market today.

Though Apple sold a record-breaking 51 million iPhones as well as 26 million iPads in its most recent quarter, Wall Street was looking for even stronger sales growth, and shares were down on the news. In the lead segment on today's Investor Beat, the guys discuss the similarities between Apple today and Microsoft circa 2004, and talk about why Apple may need a new product fast if it wants to hold on to its pricing power. Jason also discusses whether Apple looks like a buy to him at today's price.

Then, the guys look at three stocks making moves on the market today. Shares of Ford fell somewhat, despite the company's report of a solid quarter, with sales up, overall profit at just over $3 billion, and seemingly strong profit margins. Cliffs Natural Resources popped after hedge fund Casablanca Capital took a 5% stake and called for Cliffs to spin off its international assets to create value for shareholders. The stock was the worst performer of the year in the S&P 500 last year. And, Corning's Q4 profits came in higher than expected, but shares were down after the company warned that LCD glass prices would decline in the current quarter.

And finally, Jason discusses Facebook's upcoming earnings tomorrow, and what the most important things for investors to watch for are over the next 24 hours.

So if not Apple, where should investors look for growth these days?
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Japan stocks rise, but Advantest falls on outlook

LOS ANGELES (MarketWatch) -- Japanese stocks rose as trading began Wednesday, with the Nikkei Stock Average (JP:NIK) climbing 1.7% to 15,234.83, a strong advance after four days of declines. Aiding the export-heavy market was a rise in the U.S. dollar against the yen above the ¥103 level as the yen's safe-haven appeal waned alongside worries about emerging markets. Among exporters, Honda Motor Co. (JP:7267) (HMC) and Toyota Motor Corp. (JP:7203) (TM) shares tacked on 2.4% and 1.5%, respectively, and Hitachi Ltd. (JP:6501) (HTHIF) shot higher by 4.8%. But shares of Advantest Corp. (JP:6857) (ADTTF) dropped 9.3% after the electronics maker widened its full-year forecast. It now expects a net loss of 35.9 billion yen ($347.19 million), compared with a previous forecast for a loss of 2.5 billion yen.

Can Citigroup Stock Rebound?

With shares of Citigroup (NYSE:C) trading around $49, is C 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

Citigroup is a global diversified financial services holding company providing consumers, corporations, governments, and institutions with a broad range of financial products and services. It operates in two segments: Citicorp and Citi Holdings. The company's products and services are: consumer banking and credit, corporate and investment banking, securities brokerage, wealth management, and transaction services to consumers, corporations, governments, and institutions worldwide.

Citigroup is preparing to trim branches in South Korea outside big urban areas this year to concentrate on more affluent customers, its chief financial officer said. Citigroup will disclose costs tied to the strategy later this year, CFO John Gerspach said yesterday during a conference call with analysts. The New York-based lender has been revising its Korea plans for 18 months, with early efforts focused on changing the mix of its loans, he said.

Chief Executive Officer Michael Corbat has scaled back consumer operations in some nations and targeted wealthier clients in the largest global cities to improve returns. Korea's slowing growth and government efforts to curb household debt led to writedowns for at least one competitor, and Citigroup has said operations there will be a drag on Asian revenues in 2014. "It's inevitable that banks in Korea will trim branches amid stalling profit," said Michael Na, a Seoul-based analyst at Nomura Holdings Inc. Without strong revenue growth, "lenders can only seek cost efficiency by doing things like closing outlets and shifting toward micro branches and smart banking."

T = Technicals on the Stock Chart Are Weak

Citigroup stock has been trading sideways over the last couple of months. The stock is currently pulling back and may need time to consolidate. 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, Citigroup is trading below its rising key averages which signal neutral to bearish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Citigroup options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Citigroup options	26.14%	76%	74%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
February Options	Steep	Average
March Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bearish 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 Citigroup’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Citigroup look like and more importantly, how did the markets like these numbers?

	2013 Q4	2013 Q3	2013 Q2	2013 Q1
Earnings Growth (Y-O-Y)	123.68%	589.53%	41.05%	29.47%
Revenue Growth (Y-O-Y)	-0.56%	30.48%	11.38%	5.59%
Earnings Reaction	-4.34%	-1.49%	1.96%	0.20%

Citigroup has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Citigroup’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has Citigroup stock done relative to its peers, JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and sector?

	Citigroup	JPMorgan Chase	Bank of America	Wells Fargo	Sector
Year-to-Date Return	-5.70%	-5.16%	6.13%	1.01%	-1.93%

Citigroup has been a poor relative performer, year-to-date.

Conclusion

Citigroup is a bellwether that offers essential financial products and services to consumers and companies worldwide. The company is preparing to trim branches in South Korea outside big urban areas this year to concentrate on more affluent customers. The stock has been trading sideways over the last couple of months and is currently pulling back. Over the last four quarters, earnings and revenues have been rising. However, investors have mixed feelings about recent earnings announcements. Relative to its peers and sector, Citigroup has been a poor year-to-date performer. WAIT AND SEE what Citigroup does this quarter.

LIVE FROM FPA EXPERENCE: Tech integration adds ROI

Financial advisers who integrate technologies will pay more than those who buy separate software solutions, but they stand to gain in annual income as well as future positioning.

"You're going to pay more for integration because you get more," said Cameron Sheehan, director of adviser services for Tamarac AdvisorServices, at the Financial Planning Association's national conference in Orlando on Saturday. "All changes are synchronized among all the systems when they are integrated."

Advisers who integrated technology, or linked their software to communiate with each other, earned an extra 20% in income per adviser, about $181,000 compared to $151,000 for those with standalone systems, Mr. Sheehan said, quoting an April study by Aite Group.

The systems that advisers increasingly are connecting include portfolio accounting, customer relationship management systems and most recently a client portal for investors can see their aggregated accounts, Mr. Sheehan said.

This type of client portal is the industry's answer to clients who want the functionality that some online financial advisers offer, a sort of Mint.com, he said. About 60% to 70% of employees with access to such a client portal log in at least once in the months following its availability.

With integrated technologies, clients can see dynamic reports, not just static performance PDFs that advisers prepare. Clients increasingly want such real time reports.

"Things are moving away from what did I have last month to what do I have now," Mr. Sheehan said.

Full integration and training for these different systems takes about a year, he told advisers at the conference.

Integrating these systems, as well as automating workflow and efficient and electronic document manaagement adds to the annual bottom line and leads to greater value when it becomes time to consider a business sale or other succession plan, said Tim Welsh, founder of Nexus Strategy LLC, at the FPA conference on Sunday morning.

"Look at technology as an investment, as opposed to an expense," Mr. Welsh said.

Automating workflow has been shown to save about 5% on back office costs and document mangement systems can save advisers about 9% in overhead, he said.

5 Best Fracking Stocks for Double-Digit Growth

Now that it's freezing cold in the East and natural gas prices are rising, it's time to look at potential energy plays.

Investors should take a close look at core infrastructure plays on fracking – not the drillers or oil companies or refiners, and there are five outfits standing to benefit supplying goods and services to companies exploiting shale formations.

Fracking – the cracking open of shale formations to yield high quality oil, natural gas and natural gas liquids – is boosting domestic energy production to the point where the U.S. is now the world's largest producer of natural gas and is a next exporter of refined petroleum products.

Simply put, this is the hottest growth area in the U.S. – not tech, not organic foods – and to invest in fracking is to invest in double-digit growth.

That approach paid off. Here is how the five stocks have performed since July 15:

And now the key question for investors: Are they still good investments?

Read the outlook for these key 5 fracking stocks:

Suburban Propane

Suburban Propane (SPH) does one thing – it distributes propane – and while the stock is down because sales are booming and profits are not. Revenue in 2012 was up almost 65% I 2012 (in part due to an acquisition), and will be up another 10% or more in 2013 despite the fall in most prices. I expect this to turn around this year, in part because of increased supplies of propane from shale fields.

The second part of the equation is in a refinery outside of Philadelphia opening this year or next that will refine natural gas liquids, (NGL), reducing some of SPH's costs. A third factor is the current shortages of propane in many parts of the USA. SPH sports a 7.8% dividend and is worth a look right now.

US Silica Holdings

You need sand to frack and US Silica Holdings (SLCA) sells sand, within the industry known as commercial silica.

US Silica Holdings sales were up 50% in 2012, they should be up another 20% or so in 2013 when fourth-quarter results are available. And unlike many other super growth companies in the fracking space, SLCA makes money. It earned $79 million in the third quarter on $441 million in sales, terrific margins for what is essentially a commodity mining company.

The P/E is modest for this kind of growth at 20-21. The stock has put in a near-term bottom and may be ready to run. It is definitely worth a look.

Nuverra Environmental Services

Nuverra Environmental Services (NES) revenue more than doubled to $351 million in 2012 and will come close to doubling again in 2013 once earnings are reported. Nuverra trucks water and provides water-related services to clean up after a shale field is fracked. That said, Nuverra is over-leveraged and while this was acceptable as it was growing and growing, it is beginning to feel competitive pressure from pipelines and other water trucking companies.

The stock has more than quadrupled since I wrote about it six months ago. If you own it, it may be time to take profits. If you don't own it, look at other fracking plays.

USA Compression Partners

For USA Compression Partners (USAC), it is all in the name – the company provides natural gas compression services to the extraction industry.

This is a volume-dependent business and volume is booming. USA Compression Partners' revenue was up 20% in 2012 and will be up that much or more when final numbers from 2014 come in. Third=quarter results were terrific: revenue was up almost 24% year over year and adjusted cash flow, the basis of the dividend, was up more than 29% year over year. The yield is currently 6.7% and will probably go higher. Ignore the P/E. This is a growth and dividend story. Take a look.

C&J Energy Services

C&J Energy Services (CJES) grew more than 25% in 2012, after tripling in 2011, but has stalled in 2013 and will come in with near-zero growth. Part of the reason is the softening of oil prices and the shuttering marginal fields – C&J Energy Services provides fracking-related oil field services on a spot basis with prices defined under long-term contracts.

It is a well-managed company with a solid future – but investing in fracking should be about finding double-digit growth. It is hard to see this happening for CJES in 2014 without a sharp spike in oil prices that is not on the horizon. Keep it on your radar, but there are better places to invest in growth right now.

Hewlett-Packard (HPQ) Finally Finding a Groove

There's no denying that the Hewlett-Packard Company (NYSE:HPQ) - largely under the initially-shaky guidance of CEO Meg Whitman, though former CEO's Leo Apotheker and Mark Hurd didn't exactly help - has been a train wreck of a company of late. What was once the world's second-most popular name in the personal computer industry completely whiffed when it tried to throw its hat into the smartphone and tablet ring, then decided to get out of the PC business and focus on more lucrative cloud industries, and then just a few months later decided to stay in the personal computer business after all. As it turns out, HP did neither very well in the meantime. Hewlett-Packard investors have watched revenue fall from 2011's peak of $126.8 billion to what will likely be a top line of $108.9 billion next year, and worse, shareholders have watched HPQ shares tumble from a price of $54 in early 2010 to a low of $11.35 late last year. There's no way of sugar-coating it: That's an investment disaster. Yet...

Not that Hewlett-Packard Company is completely out of the woods yet, but as is all too often the case, the sellers assumed a worst-case scenario that never materialized, beating down a stock that didn't deserve a beating (at least not the one it got).

To give credit where it's due, the market knew Hewlett-Packard was going to hit earnings turbulence by 2012 as early as 2010; that's when HPQ shares started a major slide. Eventually the earnings implosion pulled the company into the red, during the last two quarters of 2012, booking a per-share loss of $4.49 in Q3 and a loss of $3.49 for Q4.

How'd it happen? The losses in Q3 and Q4 partially stemmed from one-time writedowns, but sales declines didn't help. Though operating income was still positive, it was also still weaker on a year-over-year basis. Between a waning PC market, Hewlett-Packard's clear lack of commitment to doing it well (they're getting out of the biz, but two months later decide to stay in?), not putting a viable tablet computer into that race (we'll give HPQ a break on not coming up with a hot smartphone - that's a different ball of wax), and the fact that the cloud solutions opportunity hasn't been anywhere near as fruitful as it was supposed to be, earnings never stood a chance.

As they say, though, that was then and this is now.

The challenges still await, but now with almost two years of company experience under her belt, the oft-criticized CEO Meg Whitman seems to be finding a groove. The company's products also seem to be finding grooves in their respective lanes. In other words, the Whitman turnaround plans for HPQ are working... they're just taking time.

As (partial) evidence of that idea, look at last quarter's earnings from other PC makers. Dell fell short of estimates, and even the hyper-reliable IBM missed analysts' forecasts. Hewlett-Packard, however, beat its estimates. They weren't low-ball outlooks either. Though analysts expected less on a year-over-year basis, the outlooks only gave Hewlett-Packard room to let per-share profits fall from $0.98 a year earlier to $0.80 this time around. The company posted a per-share profit of $0.87, on the heels of measurable - albeit relative - success in the enterprise-level market.

One of the Whitman initiatives, called Moonshot, won't start to achieve material results until later this year after launching last quarter, and really won't hit its full stride until 2014. Moonshot is a project that should finally give the Hewlett-Packard Company a major weapon in the cloud services industry. At the same time, the Slate 7 (Android-powered) tablet for consumers as well as the business-oriented Elitepad tablet in the queue for the second half of 2013, getting HP deeper into that game than it's been able to get thus far. The tablets may well get traction too, as the tablet arena is actually getting more and more fragmented rather than less and less... opening the door to names other than Apple, Samsung, and Barnes & Noble's Nook. More traditional enterprise products and services are also getting traction. That sliver of the market can be slow to move, so the work Whitman was doing two years ago there is only just now starting to bear fruit.

These initiatives have given the Hewlett-Packard Company the kind of powerful weapons it hasn't had in years, making HPQ a turnaround stock worth a closer look. That forward-looking P/E of 7.04 isn't a pipedream; HP's got the tools and momentum it needs to book that projected profit of $3.68 in fiscal 2014. Based on the stock's bounce back to $26.00, some investors see the rebound that's coming. Most investors don't see it yet, though... which is where the opportunity presents itself.

If you'd like to get more trading ideas and insights like this one, sign up for the free daily SmallCap Network newsletter. You'll get picks, market calls, and more. Subscribe today!

US Airways Cuts Planned Phoenix-Maui Flight Due to Merger Delay

CHARLOTTE, N.C. (TheStreet) -- As its planned merger with American (AAMRQ) sits and waits, US Airways (LCC) is cutting back on a planned service increase.

Anticipating the merger's approval, the carrier had loaded a planned Phoenix-Maui flight into its reservations system, but removed it following the Justice Department's decision to oppose the combination in court. Barring a settlement, the trial is set to begin Nov. 25 in U.S. District Court in Washington. [Read: 10 Best Cars On The Market]

"Following a previously anticipated third quarter close for the merger, we intended to operate a third Phoenix-Maui flight for the holiday peak period," wrote Glenn Martin, director of future schedules, in an employee newsletter. The flight would have been enabled by a change in the airline's pilot contract, which was set to take effect once the merger was approved. The new contract would have broken the logjam that prohibits cross-use of crews and aircraft associated with the two pilot groups, east and west, following the 2005 merger of US Airways and America West.

The carrier intended "to use an east aircraft with PHX-based crews, which would have been allowed under the combined pilot contract effective on merger close," Martin said. "It would not be effective to crew this flight out of Charlotte or Philadelphia," the sites of pilot domiciles for east pilots. "Because we are already flying eight frequencies to Hawaii," the carrier does not have sufficient Phoenix-based aircraft to add another Maui-flight, he added. US Airways spokeswoman Michelle Mohr said the planned flight "illustrates some of the benefits to customers that the merger would provide." [Read: Fall of the Bank Titans] On Thursday, U.S. Bankruptcy Court Judge Sean Lane confirmed American's plan to merge with US Airways, which theoretically marks the end of the bankruptcy court reorganization that began in November 2011. This week, employees of the two carriers will travel to Washington to lobby members of Congress to support the merger, although it is unclear how much ability Congress has to impact the Justice Department. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed

Post-Lehman Crash, Altegris’ Jon Sundt Defends Alternatives as Hedge Against Volatility

“Celebration” is not the word that comes to mind as market players observe the fifth-year anniversary of the Lehman Brothers crash.

Rather, what now inspires investors to remember the crash is the cautionary tale it offers of the terrible things that can happen when the financial world spins out of control. Indeed, “caution” is a better word to describe why anybody should mark the date of Sept. 15, 2008, when Lehman filed for bankruptcy, according to Jon Sundt, president and chief executive of alternative investment firm Altegris.

“I think 2008 crystallized this idea that you need to be diversified,” Sundt (left) said in a recent interview with ThinkAdvisor. “The people who didn’t have diversified portfolios to this day are still suffering. It’s a stark reminder that you had better build a portfolio that can survive bad unforeseen outcomes.”

Sundt remembered that he was sitting at his desk in Altegris’ headquarters in La Jolla, Calif., the day that Lehman crashed.

“It was a bit of ‘shock and awe,” he recalled. “We had dozens of managers that we allocate to and thousands and thousands of investors. My biggest concern at the time was: Do we have any counterparty risk? We quickly determined that we had no direct exposure to Lehman. Some of our managers didn’t do so well, but those in the managed futures space did well, and so did people with hedges.”

Sundt’s own firm has gone through transmutations since the Lehman crash. After he founded Altegris in 2002, Genworth Financial bought his firm in 2010 for approximately $35 million, and earlier this year Genworth sold its wealth management unit, including Altegris, for $412.5 million to a partnership of two private equity firms, Genstar Capital and Aquiline Capital. Altegris currently has more than $4 billion in assets under management and employs 120 individuals.

Today, Sundt focuses much of his energy on promoting the idea of using equity and fixed income long/short strategies as core allocations. To be sure, that focus stems from Altegris’ relatively recent launches of the Altegris Fixed Income Long Short (FXDAX, FXDIX, FXDNX), on Feb. 28 this year, and the Altegris Equity Long Short Fund (ELSAX, ELSIX, ELSNX), on April 30, 2012.

Year to date, according to Morningstar, FXDIX has outperformed its benchmark, the Barclays U.S. Aggregate Bond Index (which tracks the broader debt market in the same way that the S&P 500 follows stocks), with a $10,000 investment in FXDIX currently yielding $10,090 versus the Barclays index’s $9,686. The growth of $10,000 for ELSIX currently comes to $10,915, underperforming the benchmark S&P 500 index’s $12,018 by a wide margin.

“This is a prudent approach,” Sundt said in defense of ELSIX’S underperformance. “You want to participate in this party, but you don’t want to drink too much. You want to participate in a way to preserve capital. A great way to do that is equity long/short. Our managers have exposure to the market for the upside but short positions in case the market corrects. If you’re 100% net long, you can get hurt.”

Similarly, Sundt noted, FXDIX offers a smoother ride for fixed income investors during an extremely volatile period for bonds. “If you have a portfolio with a lot of holdings, it may be a good idea to get into a long/short fixed-income fund, which is a corollary to long/short equities,” he said.

More thoughts from Jon Sundt on why fixed income long/short is a good idea:

---

Read 5 Years After Lehman Crash: ‘Dark Times’ Ahead at ThinkAdvisor.

5 Best Solar Stocks To Own Right Now

When it comes to checks and balances, carbon emissions could do without. Despite massive gains in growth for both solar and wind in 2012, emissions per unit of energy remain nearly at the same level as 15 years ago. Let's take a closer look at who's polluting, who's greening, and if there are profits in store for your portfolio picks.

Black versus green
In the push to curb carbon emissions, coal is the yin to renewables' yang. Coal-fired generation increased 6% from 2010 to 2013 at a rate that continues to outstrip non-fossil-fuel growth�on an absolute basis. Despite gains we've seen in carbon capture technology and production efficiency, approximately 50% of all coal-fired plants built in 2011 used inefficient technologies.

For once, it seems, the United States is not to blame. Duke Energy (NYSE: DUK  ) is well on its way to shutting down 6,800 MW of inefficient plants as part of a $12.5 billion modernization project, while Southern Company (NYSE: SO  ) recently celebrated the first time in its history that the company has generated more electricity from gas than coal. In the next two years, Southern has slotted $3.6 billion toward "environmental spending," a large portion of which will be allocated to "clean coal" generation facilities.

5 Best Solar Stocks To Own 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.

Advisors' Opinion:

• [By Gary Bourgeault]

  Other companies of note that will be hurt will be LDK Solar (LDK), Suntech Power (STP), JA Solar Holdings Co., Ltd. (JASO) and Renesola (SOL) among others. Some these are already hanging on by a thread because of taking on too much debt and defaulting on bonds.

• [By Roberto Pedone]

  
  

  One under-$10 name that's starting to move within range of triggering a big breakout trade is ReneSola (SOL), a manufacturer of solar wafers and producer of solar power products based in China. This stock has been on fire so far in 2013, with shares up sharply by 183%.

  If you take a look at the chart for ReneSola, you'll notice that this stock has been uptrending very strong for the last four months and change, with shares soaring higher from its low of $1.25 to its recent high of $4.85 a share. During that uptrend, shares of SOL have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of SOL have pulled back a bit during the last few weeks, with the stock coming off that high of $4.85 to its recent low of $3.52 a share. This stock has now started to bounce off that $3.52 low and it's quickly moving within range of triggering a big breakout trade.

  Traders should now look for long-biased trades in SOL if it manages to break out above some near-term overhead resistance levels at $4.25 to $4.50 a share and then once it clears its 52-week high at $4.85 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.09 million shares. If that breakout triggers soon, then SOL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $7 to $8 a share.

  Traders can look to buy SOL off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $3.31 a share. One can also buy SOL off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

• [By Monica Gerson]

  Breaking news

  Vitran Corporation (NASDAQ: VTNC) announced today that it has entered into a definitive arrangement agreement with TransForce pursuant to which TransForce has agreed to acquire all of the outstanding common shares of Vitran not already owned by TransForce for US$6.50 in cash per share, in accordance with TransForce's prior proposal. To read the full news, click here. ReneSola (NYSE: SOL) today announced it signed a Memorandum of Intent (MOI) to sell three utility-scale projects in Western China, with a total capacity of 60MW, to Jiangsu Akcome Solar Science & Technology Co on December 30, 2013. To read the full news, click here. Cooper Tire & Rubber Company (NYSE: CTB) today announced it has terminated the merger agreement with Apollo Tyres (NSE:ApolloTYRE). To read the full news, click here. RedHill Biopharma (NASDAQ: RDHL) today announced that it has entered into a definitive agreement with leading healthcare investor OrbiMed Israel Partners Limited Partnership, an affiliate of OrbiMed Advisors LLC, for the sale of RedHill's American Depository Shares and warrants in a private placement transactionor a total sum of $6.0 million. To read the full news, click here.

  Posted-In: Guggenheim US Stock FuturesNews Eurozone Futures Global Pre-Market Outlook Markets

5 Best Solar Stocks To Own Right Now: Spire Corporation(SPIR)

Spire Corporation develops, manufactures, and markets engineered products and services in the areas of PV solar, biomedical, and optoelectronics. It offers specialized equipment for the production of terrestrial photovoltaic modules from solar cells; and photovoltaic systems for application to powering buildings with connection to the utility grid, as well as supplies photovoltaic materials. It also provides surface treatments to manufacturers of orthopedic, cardiovascular, and other medical devices; and performs sponsored research programs into practical applications of biomedical and biophotonic technologies. In addition, the company offers custom compound semiconductor foundry and fabrication services to customers involved in biomedical/biophotonic instruments, telecommunications, and defense applications. Its services comprise compound semiconductor wafer growth, other thin film processes, and related device processing. Further, the company provides materials testing s ervices; and performs services in support of sponsored research into practical applications of optoelectronic technologies. The company offers its products primarily through its sales personnel in the United States, Europe, Africa, and Asia. Spire Corporation was founded in 1969 and is headquartered in Bedford, Massachusetts.

Hot Financial Stocks For 2015: DayStar Technologies Inc.(DSTI)

DayStar Technologies, Inc., a development stage company, engages in the development, manufacture, and marketing of solar photovoltaic products to the grid-tied and ground-based photovoltaic markets. The company offers solar photovoltaic modules to convert sunlight into electricity. It provides monolithically integrated copper indium gallium selenide modules on glass laminate substrates for centralized utility power plants, commercial building roof tops, and smaller residential roof tops. DayStar Technologies, Inc. was founded in 1997 and is headquartered in Milpitas, California.

5 Best Solar Stocks To Own Right Now: Real Goods Solar Inc.(RSOL)

Real Goods Solar, Inc. operates as a residential and commercial solar energy integrator primarily in California and Colorado. The company provides engineering, procurement, and construction services. It offers various turnkey solar energy services, including design, procurement, permitting, build-out, grid connection, financing referrals, and warranty and customer satisfaction services. The company installs residential and small commercial systems that range between 3 kilowatts and 1 megawatt output. It also engages in the retail sale of renewable energy products. The company was founded in 1978 and is based in Louisville, Colorado.

Advisors' Opinion:

• [By Bryan Murphy]

  If you were lucky enough to be in an American Community (OTCMKTS:ACYD) position anytime before October 8th, then congratulations - you're up big. Now get out. Instead, use freed-up that capital to take on a position in Real Goods Solar, Inc. (NASDAQ:RSOL), which looks like it's at the beginning of a good-sized rally.

5 Best Solar Stocks To Own Right Now: Canadian Solar Inc.(CSIQ)

Canadian Solar Inc. engages in the design, development, manufacture, and sale of solar power products in Canada and internationally. The company offers solar cell and solar module products that convert sunlight into electricity for various uses. Its products include a range of standard solar modules for use in a range of residential, commercial, and industrial solar power generation systems. The company also designs and produces specialty solar modules and products consisting of customized modules that its customers incorporate into their products, such as solar-powered bus stop lighting; and specialty products, such as portable solar home systems and solar-powered car battery chargers. In addition, it sells solar system kits, a package consisting of solar modules produced by it and third party supplied components, such as inverters, racking system, and other accessories, as well as implements solar power development projects. The company sells its products under the Canad ian Solar brand name. Canadian Solar Inc. offers its standard solar modules through a direct sales force and sales agents primarily to distributors, system integrators, and original equipment manufacturer customers, as well as to solar projects; and specialty solar modules and products to the automotive, telecommunications, and light-emitting diode lighting sectors. The company was founded in 2001 and is based in Kitchener, Canada.

Advisors' Opinion:

• [By Wall Street Strategies]

  Naturally the news is a big positive for the industry, with Chinese solar names like Yingli (YGE), Trina (TSL), Canadian Solar (CSIQ) -- which is actually Chinese despite its name -- JinkoSolar (JKS), JA Solar (JASO), and LDK Solar (LDK) each up more than 10% at midday. The Guggenheim Solar ETF (TAN), which tracks several global solar companies, was up 8%, breaking to a new 52-week high.

• [By Michael Cintolo]

  Canadian Solar (CSIQ) is a Chinese solar company that's headquartered in Ontario. The company makes silicon ingots, wafers, solar cells, and modules, and ranks among the largest solar companies in the world.

5 Best Solar Stocks To Own Right Now: LDK Solar Co. Ltd.(LDK)

LDK Solar Co., Ltd., together with its subsidiaries, engages in the design, development, manufacture, and marketing of photovoltaic (PV) products; and development of power plant projects. It offers solar-grade and semiconductor-grade polysilicon; and multicrystalline and monocrystalline solar wafers to the manufacturers of solar cells and solar modules. The company also provides wafer processing services to monocrystalline and multicrystalline solar cell and module manufacturers; and sells silicon materials, such as ingots and polysilicon scraps. In addition, it engages in the production and sale of solar cells and modules to developers, distributors, and system integrators; and design and development of solar power projects in Europe, the United States, and China, as well as provides engineering, procurement, and construction services. LDK Solar Co., Ltd. operates in Europe, the Asia Pacific, and North America. The company was founded in 2005 and is based in Xinyu City, t he People?s Republic of China.

Advisors' Opinion:

• [By Travis Hoium]

  There doesn't seem to be a shortage of bad news for LDK Solar (NYSE: LDK  ) lately. The company defaulted on loans earlier this week, bringing on concerns of a pending insolvency or bankruptcy, and today released some dismal earnings numbers.�

5 Best Solar Stocks To Own Right Now: EMCORE Corporation(EMKR)

EMCORE Corporation, together with its subsidiaries, provides compound semiconductor-based products for the broadband, fiber optics, satellite, and solar power markets. The company operates in two segments, Fiber Optics and Photovoltaics. The Fiber Optics segment offers broadband products, including cable television, fiber-to-the-premises, satellite communication, video transport, and defense and homeland security products; and digital products comprising telecom optical, enterprise, laser/photodetector component, parallel optical transceiver and cable, and fiber channel transceiver products. This segment?s products enable information that is encoded on light signals to be transmitted, routed, and received in communication systems and networks. The Photovoltaics segment provides gallium arsenide (GaAs) multi-junction solar cells, covered interconnected cells, and solar panels for satellite applications; and concentrating photovoltaic (CPV) power systems for commercial and utility scale solar applications, as well as GaAs solar cells and integrated CPV components for use in other solar power concentrator systems. The company markets its products through its direct sales force, external sales representatives and distributors, and application engineers worldwide. EMCORE Corporation was founded in 1984 and is headquartered in Albuquerque, New Mexico.

Advisors' Opinion:

• [By CRWE]

  EMCORE Corporation (Nasdaq:EMKR), a leading provider of compound semiconductor-based components and subsystems for the fiber optic and solar power markets, reported that it is ramping production and shipping the Opticomm-EMCORE NEXTGEN OTP-1DVI2A1SU insert cards for the Optiva platform.

5 Best Solar Stocks To Own Right Now: Ascent Solar Technologies Inc.(ASTI)

Ascent Solar Technologies, Inc., a development stage company, focuses on commercializing flexible photovoltaic (PV) modules using its proprietary technology. The company intends to manufacture roll-format PV modules that use copper-indium-gallium-diselenide (CIGS) on a plastic substrate. Its proprietary manufacturing process deposits multiple layers of materials, including a thin-film of CIGS semiconductor material on a plastic substrate and laser patterns the layers to create interconnected PV cells or PV modules through monolithic integration process. The company would serve the building applied photovoltaic (BAPV) and building integrated photovoltaic (BIPV) market, as well as specialty markets, such as defense, portable power, transportation, electronic integrated photovoltaic, and space and near-space. It has a strategic relationship with Norsk Hydro Produksjon AS to access customers in the BIPV/BAPV markets worldwide. Ascent Solar Technologies, Inc. was founded in 200 5 and is based in Thornton, Colorado.

5 Best Solar Stocks To Own Right Now: JinkoSolar Holding Company Limited(JKS)

JinkoSolar Holding Co., Ltd., together with its subsidiaries, engages in the manufacture and sale of solar power products in China and internationally. The company provides solar modules, silicon wafers and ingots, and solar cells, as well as processing services, including silicon wafer tolling services. It sells its products under the JinkoSolar brand name. The company?s customers include distributors, project developers, and system integrators. It trades its products under short-term contracts and by spot market sales. The company also produces accessory materials for solar power products, such as solar aluminum frame, solar junction box, aluminum materials windows, and other metal component parts. JinkoSolar Holding Co., Ltd. was founded in 2006 and is based in Shangrao, the People?s Republic of China.

Advisors' Opinion:

• [By Paul Ausick]

  But the real news is the near vertical trajectory in share prices for the two stocks. This could be another manifestation of the market�� hunger for some momentum plays, as we noted earlier this morning the bump to share prices for both JinkoSolar Holding Co. Ltd. (NYSE: JKS) and Shutterstock Inc. (NASDAQ: SSTK), both of which held secondary share sales this morning.

5 Best Solar Stocks To Own Right Now: Yingli Green Energy Holding Company Limited(YGE)

Yingli Green Energy Holding Company Limited, together with its subsidiaries, engages in the design, development, manufacture, marketing, sale, and installation of photovoltaic (PV) products in the People?s Republic of China and internationally. The company offers PV cells, PV modules, and integrated PV systems, as well as polysilicon ingots, blocks, and wafers. It sells its PV modules to distributors, wholesalers, power plant developers and operators, and PV system integrators in Germany, the United States, Italy, China, Spain, the Netherlands, Greece, the Czech Republic, the United Kingdom, South Korea, and Japan under the Yingli and Yingli Solar brand names. The company also offers its integrated PV systems directly to end-users or to contractors for use in the electricity projects, as well as to mobile communications companies in the People's Republic of China. Yingli Green Energy Holding Company Limited was founded in 1998 and is headquartered in Baoding, the People? s Republic of China.

Advisors' Opinion:

• [By Travis Hoium]

  What: Shares of Chinese solar manufacturers Yingli Green Energy (NYSE: YGE  ) and Trina Solar (NYSE: TSL  ) both jumped 10% after the latter announced a new loan.

• [By Travis Hoium]

  Yingli Green Energy (NYSE: YGE  ) was also the beneficiary of a $165 million loan agreement with the China Development Bank, which is owned by the Chinese government. This includes a one-year, $110 million loan and a three-year, $55 million loan for working capital needs. Yingli is one of the most indebted companies in the industry, but the government doesn't look like it is willing to let it fail. �

• [By Dan Caplinger]

  Despite hopes that Suntech Power's default would spur further consolidation among Chinese solar manufacturers, China hasn't given up on the industry. Just yesterday, Yingli Green Energy (NYSE: YGE  ) was able to borrow $165 million from a state-run Chinese bank, showing the willingness of the government to try to keep even some of its weaker players afloat with easy access to capital. Unless China capitulates, First Solar will continue facing the challenge of competitors using unsustainable business practices.

Gold futures settle at a more than two-month high

SAN FRANCISCO (MarketWatch) — Gold futures rallied on Thursday, snapping a two-day skid with the prospect of India easing curbs on gold imports, a drop in U.S. equities and a weaker dollar lifting prices to their highest close in more than two months.

Gold for February delivery (GCG4)  jumped $23.70, or 1.9%, to settle at $1,262.30 an ounce on the Comex division of the New York Mercantile Exchange. Prices closed at their highest level since Nov. 19, according to FactSet data tracking the most-active contracts.

March silver (SIH4) also climbed 17 cents, or 0.9%, to $20.01 an ounce.

Bloomberg Enlarge Image

Sonia Gandhi, leader of India's Congress party, has reportedly asked the Indian government to relax gold import curbs.

"This is an indication that the government will ease the gold import rule soon," according to Chintan Karnani, chief market analyst at Insignia Consultants based in New Delhi, adding that Indian gold premiums fell as a result of the news. "India allowing gold imports will be bullish for gold and silver in the short term," he said.

The Indian government imposes a hefty import tax on gold in an effort to rein in its rising current account deficit.

"Should restrictions be lifted, then gold demand won't just return to previous levels but there will be an explosion of pent up demand to begin with," said Jan Skoyles, head of research at The Real Asset Co., a precious-metals investment platform provider.

Over in China, however, downbeat economic news dulled some prospects for demand from the world's other big gold buyer. China's manufacturing sector is registering an unexpected contraction in January, albeit a mild one, according to preliminary data out Thursday.

The weak Chinese data contributed to a sharp drop in the U.S. equities market on Thursday, which in turn lured more investors toward gold.

Data deluge

In other economic news, U.S. weekly jobless claims came in slightly better than expectations. Data on U.S. existing-home sales showed a 1% rise in December, while the leading economic index rose 0.1% in December for a sixth gain in a row. An early gauge of U.S. manufacturing dipped, while the manufacturing PMI for the euro area rose to a 32-month high in January.

Against that backdrop, the U.S. dollar fell against the euro. A weaker dollar can boost dollar-denominated commodities like gold, making them cheaper for holders of other currencies.

Overall, "the data from the U.S. was weaker than expected but it wasn't terrible," said Skoyles. Still, given that the Federal Open Market Committee holds its first meeting of 2014 next week, "speculators are on high alert as to anything which might give some hint as to what the [Federal Reserve] will decide in regard to tapering" its bond-buying program.

"Gold will have benefitted if there is a sentiment out there that further tapering is unlikely to be announced," she said.

On Wednesday, gold wilted under the pressure of some bearish investment bank comments, closing lower for the second-straight day after showing some life last week.

Click to Play Forecast: U.S. to add 300,000 jobs a month in 2014

The U.S. economy will surprise many in 2014 and add 300,000 jobs a month on the back of 3% economic growth, says Prof. Barry Eichengreen of UC Berkeley. Photo: Getty Images

Analysts remained bearish on the outlook for gold this year. In a Gold Survey 2013 update released Thursday, Thomson Reuters GFMS said it expects gold prices to average $1,225 an ounce in 2014, which would mark an annual decline of 13%. Read: Gold contrarians say it's time to start buying.

"We remain of the view that there still remain enough macroeconomic threats on the horizon to prevent gold from sinking below the 2013 low of $1,180/oz for any prolonged period this year," Thomson Reuters GFMS said.

Elsewhere in metals trading, platinum for April delivery (PLJ4)  tacked on 80 cents, or 0.1%, to $1,463.20 an ounce after climbing 0.6% a day earlier. Tens of thousands of platinum workers went on strike in South Africa Thursday.

March palladium (PAH4)  lost $2.95, or 0.4%, to $745.90 an ounce. High-grade copper for March (HGH4)  gave up 5 cents, or 1.5%, to $3.286 a pound, extending its 0.4% loss from Wednesday.

Other must-read MarketWatch stories include:

Oil futures mark fourth-straight session climb

Jamie Dimon, Hasan Rouhani, Boris Johnson: Davos live blog

The incredible gold-interest rate correlation

It Was a Great Run for Cadiz, But... (CDZI)

At first glance, today's action from Cadiz Inc. (NASDAQ:CDZI) just looks like a little bad luck, or a well-deserved break following a very strong, uninterrupted runup. The longer one looks at CDZI, however, the more red flags start to wave... red flags suggesting a substantial pullback may have just begun.

For those not familiar with it, CDZI is a for-profit water and land management company. Specifically, Cadiz Inc. owns more than 9000 acres of agricultural land, and also owns land in the Mojave Desert that could supply billions of gallons of renewable groundwater to water-thirsty California. It's not a terribly sexy business. In fact, it's downright simple. What the company is doing is highly marketable and much-needed though, and represents a significant long-term opportunity. In fact, the apparent transition to a net-opportunistic stock from a net-liability situation in the middle of last year is what's driven the 85% rally since the mid-August low.

The compelling story, however, doesn't change the fact that CDZI is overbought right now, and itching for a dip. In fact, the shape of the Cadiz chart today says this major reversal is already underway.

The nearby chart offers a couple of major clues to that end. For starters, notice the volume surge that accompanied yesterday's huge bullish move. This has all the markings of a blowoff top... sort of the "last hurrah" for a rally that burns the last of its fuel up in one amazing burst of buying. The second clue that suggests CDZI has already topped out is today's reversal move, which at one point had nearly erased every bit of yesterday's gain. Although Cadiz Inc. has pushed a little bit off its lows for the day, it's still deep on the hole, and deep in the hole on a day that the stock was already quite vulnerable to some profit-taking. The fact that the majority of traders chose the profit-taking route speaks volumes about the undertow here.

Almost as telling of a reversal effort officially being underway is the sheer height and shape/direction of today's and yesterday's bars. Yesterday's bar was very tall, starting near the bottom of the bar and rallying all the way to the top. Today, traders started at the top of the bar, and the sellers have worked hard to keep Cadiz at the low end of today's range. Sometimes the two-bar effort is called a traintrack reversal, though its official name is a marubozu pattern (even if this isn't a perfect one). Whatever it's called, it all says the point in time between yesterday's close and today's open was the point in time we went from a net-bullish to a net-bearish environment. Let's take the clues at face value.

For more trading ideas and insights like these, be sure to sign up for the free SmallCap Network newsletter. You'll get stock picks, market calls, and more, every day. Here's what you've missed recently.

Syria, a Country Without Oil, Pushes Oil Prices Up

Syria’s oil reserves rank 35th in the world. However, the anxiety index among oil traders ignores that, almost certainly because of worry that the conflict in Syria will spill over to its oil-rich neighbors. However, Syria is not very close to most oil-rich nations geographically, other than Iraq. And Iraq has oil export problems of its own, which makes it an unlikely choice as a major source of supply. Years of war and infrastructure failures have kept Iraq’s capacity at low levels compared to its reserves.

Put another way, the Syrian situation is unlikely to interrupt supply from the largest oil-producing nations. All have governments that are stable and will not be shaken by the Syrian civil war.

The largest exports of oil from the Middle East region have had virtually no unrest among their populations. This includes particularly Saudi Arabia, Qatar, United Arab Emirates and Kuwait.

The supplies from the world’s other largest oil producers continue to be steady. There is no reason to think production in the United States, Mexico, Venezuela, Canada or Brazil will change at all.

October NYMEX crude has reached more than $106 and has made a quick assault on $107. The level is extraordinary, given that less than three months ago the price was just above $90. The war premium, which appears to be the single greatest cause, has pressed the price 17% higher over the period.

Oil prices really ought to be dropping. The economies of Europe remain weak, with the exception of Germany. The Chinese economy has cooled. Oil research firm Platts recently reported:

Despite a new oil product pricing mechanism introduced by the central government in March, China’s state refiners continued to suffer in the downstream in the second quarter because of poor domestic demand, their interim results showed.

Downstream margins have improved considerably since last year, largely due to more timely domestic retail oil product price adjustments by the National Development and Reform Commission that closely track oil price changes, along with relatively lower crude prices. However, poor domestic demand continues to weigh on the companies, analysts said this week.

In particular, gasoil demand, which makes up the largest slate in China’s oil product mix, has been weak.

While demand for oil in the United States has been moderately strong, it has not been remarkably high, which additionally begs the question about price.

Syria’s troubles are unique. There is no evidence they will spread, at least in a fashion that will affect supply. So why an increase in prices?

Why The Skeptics Are Dead Wrong About Intel

Even the best companies have their skeptics.

If you're a regular reader of StreetAuthority, you've probably seen me recommend chip-manufacturer Intel (Nasdaq: INTC) before. In fact, I've even hailed it as one of the "10 Best Stocks to Hold Forever," as the company contains three key market-beating traits and a few future growth catalysts, which I'll show you in a moment.

 

Understandably, many investors are not just skeptical of Intel's prospects -- they are outright bearish on the stock's future prospects. This email from one of my Top 10 Stocks subscribers outlines some of that skepticism:

"I am a new subscriber and novice investor. I appreciate your research, knowledge and acumen in your approach to purchasing equities, but I do have a question regarding your consistent recommendation of Intel.

"Other than the tremendous amount of cash that the company hordes, how can you recommend this purchase when PC sales are down 11% worldwide? I don't see a lot of growth potential with Intel in the foreseeable future. Thank you in advance."

-RDS

Off the bat, Intel's consistent policy of buying back stock and paying a generous dividend are two major reasons for purchasing the stock.

As I explained in a recent essay about "shareholder yield," companies that have a history of buying back stock and paying dividends have outperformed the stocks that don't. 

For example, in Mebane Faber's book on shareholder yield, Mebane cites a study by Dartmouth University Prof. Kenneth French that covers all U.S. stocks from 1927 to 2010. Professor French sorted all U.S. stocks into high, low and zero dividend yield portfolios. He found that the high-yield and low-yield portfolios had an average annualized return of 11.2% and 9.1%, respectively. That's compared to just an 8.4% annualized return for the zero-yield basket of stocks.

And as I wrote in that same essay, companies that buy back their own stock are market beaters as well. 

A study of the top quarter of stocks in the S&P 500 ranked by buyback yield -- the value of net shares repurchased divided by market capitalization -- between 1982 and 2011 shows that the high-buyback firms generated annualized gains of 13.19% compared with 10.96% for the S&P 500. By contrast, stocks with the lowest buyback yield significantly underperformed the index, generating annualized gains of just 9.62% over the same holding period.

I've also explained in the past just how important R&D spending is for a company's future success. In a stock screen dating back to April 1993, I found unequivocally that innovative market leaders with a history of consistent spending on R&D and returning capital to shareholders have outperformed the broader market by a roughly 3-to-1 ratio over the past 20 years.

Just look at how much $10,000 would have grown in companies that have traits similar to these compared to the broad market over that time:

Intel has all three of these market-beating traits with a two-decades-long history of a) repurchasing its own shares, b) paying an ever-growing dividend and c) a history of consistent spending on R&D. And I'm confident it will continue using these practices well into the future. That's why it's on my list of Forever Stocks.

As of today, Intel offers a 4% dividend yield and has $4.2 billion available for future share repurchases which will help support the stock price going forward. And for the record Intel has repurchased about $90 billion of its own stock -- or 4.3 billion shares -- since 1990.

These are big reasons why its stock has returned over 2,590%, including dividends, since 1990.

From a fundamental standpoint, continued weakness in personal computer (PC) sales has been a headwind for Intel over the past year as the company has traditionally dominated the manufacture of processors for PCs. Unfortunately, Intel has not traditionally held a strong position in chips for tablets and smartphones, both markets that have seen extraordinary growth even as PC sales have languished.

But the second half of 2013 holds several upside catalysts for Intel. First, the company plans to launch a new processor that's cheaper to produce and should extend battery life in laptops. This chip could help to revive the ultrabook segment and boost Intel's sales. In addition, the firm's Bay Trail chip will power tablets that run Google's Android operating system, giving the company exposure to a rapidly growing market segment.

Don't underestimate a market dominator, either. Intel retains a more than 90% market share in chips used in servers. Demand for servers has been growing, powered in part by demand for servers at data centers. More data centers will need to be built in coming years to handle the increased Internet traffic caused by new trends such as cloud computing.

Finally, Intel is cheap trading at just over 12 times 2013 earnings forecasts. Expectations aren't high for the stock and analysts have downgraded their forecasts after the company's weak quarterly results released last month. But as a value play, it won't take much of an upside catalyst to send shares of Intel sharply higher. 

P.S. -- As I mentioned before, Intel belongs to a special group of investments I call Forever Stocks. These are world-dominating companies that pay investors a healthy and growing dividend, dig a deep moat around their business to fend off competitors and buy back massive amounts of stock -- which drives up value for the rest of the shares. The idea behind these stocks is simple: buy them and collect the growing value and dividend income they throw off every year. To get my report, "The 10 Best Stocks To Hold Forever," and get access to my Top 10 Stocks newsletter, go here.

Senate Confirms Stein, Piwowar as SEC Commissioners

The full Senate late Thursday confirmed the nominations of Kara Stein and Michael Piwowar as new Securities and Exchange Commission commissioners, replacing Elisse Walter and Troy Paredes. SEC Chairwoman Mary Jo White was also confirmed to a full term, which expires June 5, 2019.

Industry groups were quick to respond to the confirmations. The Investment Company Institute said that Stein’s experience as legal counsel and policy adviser to Sen. Jack Reed, D-R.I., and her background in financial policy issues make her “well-prepared” to be an SEC commissioner. Piwowar’s work as the chief economist for the Senate Banking Committee Republican staff “will greatly benefit the Commission, particularly in light of the importance of economic analysis in SEC rulemaking,” ICI said.

In addition, ICI continued, both new commissioners’ Capitol Hill experience “gives them an invaluable background for working within the agency’s legislative framework. We look forward to working with them.”

The Investment Adviser Association and the North American Securities Administrators Association both released statements congratulating Stein, Piwowar and White on their confirmations, stating that they looked forward to working with them on key issues affecting advisors and the securities industry.

Stein and Piwowar’s arrival at the agency, however, could stymie progress on several important rules before the commission, namely progress on a rule to put brokers under a fiduciary mandate and further reforms for money market funds.

White told members of the Senate Banking Committee on Tuesday that that the agency is “focused” on completing a fiduciary duty rule proposal and that “it’s important for me to get to wherever we are going on that [rulemaking] as quickly as we can.” However, she conceded that Stein and Piwowar could hinder completion of the agency’s rules on money market funds, which she said could likely be released in a “month or two.”

5 Cheap Ways to Buy Global Growth in 2014

Popular Posts: 10 Cheap Stocks to Buy Under $105 Cheap Tech Stocks to Buy Now5 Simple Ways to Invest $1,000 Now Recent Posts: 5 Cheap Ways to Buy Global Growth in 2014 10 Cheap Stocks to Buy Under $10 5 Simple Ways to Invest $1,000 Now View All Posts

There's a lot of talk about how U.S. stocks have run up a lot in 2013, and that valuations are getting a bit stretched.

Right now the S&P 500 trades for a current P/E of about 19.9 and a forward P/E of 16.3 based on data from Finviz.com. And investors should easily be able to name a few stocks that trade for tremendous earnings multiples — Amazon (AMZN), Twitter (TWTR) and Tesla (TSLA) being the prime examples.

So will the run continue for these stocks? Maybe. After all, multiple expansion is the hallmark of a bull market and its not necessarily a sign of disaster to see high-growth companies trading at big valuations. I mean, AMZN stock is up 44% in the last year and 600% since 2009 with barely a downtick despite trading at a steep premium to earnings.

But if you're an investor who wants to look for some value investments as well as some growth investments, you may have to look overseas for companies trading at deep discounts to earnings, sales or book value.

Here are 5 cheap countries to consider, and the ETFs and stocks that will let you play them — without making a single trade on foreign stock exchanges:

South Africa

Among U.S.-listed stocks that trade as ADRs, South African issues total a market capitalization of a little less than $40 billion. That makes South Africa the 25th most valuable region by assets — straddled by Sweden at No. 24 and Argentina at No. 26.

But South Africa is an interesting play for 2014 in that it is the best way to directly invest in sub-Saharan Africa and all it's growth potential. And with forward P/E of just 9.3, it's also a pretty decent value play at the same time.

Charles Sizemore, editor of Macro Trend Investor, is a massive bull on Africa in general:

"It's the last major investment frontier, and the growth is very real. Per capita GDP has more than doubled in the past decade, and according to Deloitte, seven of the 10 fastest-growing countries in the world are in Africa."

So how can you play this trend if you want to share in the potential of South Africa?

For starters, there's the iShares MSCI South Africa ETF (EZA). The fund is down about 11% in the last year, but remember that emerging markets dramatically underperformed across the board in 2013. And if you believe in value investing, this may be a good opportunity to buy.

If you want to play stocks directly, one great options is telecom play MTN Group (MTNOY). Smartphones can provide even remote villages tremendous communications and commerce power to unlock growth, and MTN is a key part of that narrative across Africa. Chemicals and energy company Sasol (SSL) is more of a cyclical play but also headquartered in South Africa.

South Korea

Though North Korea clearly has its problems under the Kim regime, South Korea is very much an emerging western power with a functional government and economy.

The Korea Stock Exchange, or KOSPI, is valued at roughly $1 trillion — with heavyweight Samsung (SSNLF) representing almost 20% of that total.

Of course, Samsung's massive presence has weighed on the region lately. In the last 12 months, the iShares MSCI South Korea Index Fund (EWY) has declined about 4%, pretty much the same performance as Samsung's stock.

But after the declines, there may be good value to be found. South Korean stocks that trade on U.S. exchanges have an average P/E of around 9.6 according to Finviz, and also trade at about a 40% discount to sales and a 40% discount to book value.

The EWY fund is about 20% allocated in Samsung if you want to play the region broadly instead of simply in the tech and industrial giant itself. After all, Samsung is clearly a global play and not just a Korean one.

Other options include Korean steel giant Posco (PKX), though admittedly this is much more of a global player and subject to commodity trends instead of South Korean growth.

France

Lest you think only emerging markets and frontier markets have value, consider the developed economy of France if you're looking for a bargain buy. The region trades for a forward price-to-earnings ratio of about 10.0 and a 20% discount to sales.

Surprising? Well, you'll probably find this even more interesting: French stocks are up about 20% in the last six months or so to almost double the performance of the S&P 500. So this discount valuation comes even after a decent period of growth.

So how can you play this trend? The iShares MSCI France ETF (EWQ) is one way, via a diversified fund that owns some of the biggest names in France. There's also oil giant Total (TOT), which is headquartered in France but has a global flavor, as well as French healthcare giant Sanofi (SNY)

But if you want a true French investment, consider French financial giant Societe Generale (SCGLY). Soc Gen is a giant in retail and investment banking for the nation, with a market cap of almost $50 billion. And like American banks, SCGLY is a focused play on a cyclical recovery that results in increased business and consumer lending.

China

This is one of my personal favorite regions for investment in 2014.

There’s no doubt that China is evolving from an emerging economy to a developed one, and that evolution is going to come with growing pains.

But China just projected that its GDP likely grew at 7.6% in 2013 — above the 7.5% forecast set in March, and down only 0.1 percentage points from 2012 GDP. And while early last year we saw trouble in manufacturing and exports, those trends have started to stabilize and move in the right direction.

From a valuation perspective, China is cheap compared with future earnings. Chinese stocks have a forward P/E of about 10.6, trading at a price/sales ratio of 0.65 for a 35% discount. Also, The PEG ratio — that is, the price compared with earnings growth — is attractive. Furthermore, Hong-Kong based companies that do a lot of business in China are also looking cheap. The P/E for this neighboring nation is 10.7.

Of course, China stocks got gutted in 2013, so some investors are still leery. Furthermore, risks of opacity or corruption thanks to the command-and-control government in Beijing are very real.

So if you want to play China, I advise a broad play via the SPDR S&P China ETF (GXC). It's reasonably cheap with expenses of 0.59%, or $59 annually for every $10,000 invested. It's also much more diversified with only three stocks allocated at over 3% of the fund and no pick over 7% allocation. That's much safer than the more popular iShares FTSE China Large Cap ETF (FXI), whose top five holdings have a massive 40% allocation collectively.

If you want a direct play on China, one of the few individual equities I feel comfortable owning is oil giant CNOOC (CEO). It's a state-run oil company that is a decent play on the region's growth, and also a decent bargain right now.

Russia

Russia may want to act like the top-down approach of the Soviet-era is a thing of the past, however this nation shares many of the same problems with China in regards to government interference and corruption.

But in contrast to China, the growth isn't as impressive. Russia's economy is projected to grow about 2.6% after a pretty weak 1.5% expansion in GDP for 2013.

So why buy Russia?

Well, because the BRICS have been pretty much left for dead lately. As a result, Russian stocks on U.S. exchanges typically have a forward P/E of about 11.3 and trade at or slightly below book value.

And when you talk about untapped potential, Russia could be one of those regions like China that sees explosive growth once it manages to leverage its massive population and resources in the right way.

This pick is even riskier than China, so your best bet is the diversified Market Vector Russia ETF (RSX).

But if you want to roll the dice on a risky but high-reward play, consider telecom giant Yandex (YNDX). This company is actually based in the Netherlands, but operates the leading Russian web portal, with search and email services. It's essentially the Google (GOOG) of Russia.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.