Loeb's Third Point Has $1 Billion Stake in SoftBank

Third Point LLC has a $1 billion position in SoftBank Corp.(9984.TO), according to a firm spokeswoman, who confirmed remarks made by the firm's Chief Executive Daniel Loeb on Thursday.

Mr. Loeb's detailed the position at an investor conference in New York.

Third Point has recently been investing in Japan and Mr. Loeb has publicly declared support for the monetary policy of Prime Minister Shinzo Abe.

Sony Corp. is among his other investments in Japan. Mr. Loeb hand delivered a letter to the head of the electronics and technology giant and pushed for Sony to separate its film business.

While the company rebuffed that idea, Mr. Loeb said recently that he feels the company has taken positive steps and he has continued to meet with management.

Earlier at the same conference, David Einhorn of Greenlight Capital Inc. said his firm has a long position in Micron Technologies(MU), according to people familiar with the matter.

Micron shares were up 5.4% in midday trade, at $19.79.

3 Mortgage Stocks to Buy Now

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The grades of three Mortgage stocks are better this week, according to the Portfolio Grader database. Every one of these stocks has an “A” (“strong buy”) or “B” overall (“buy”) rating.

Radian Group (NYSE:) is bumping up its rating from a C (“hold”) to a B (“buy”) this week. Radian Group operates as a credit enhancement company in the United States. In Portfolio Grader’s specific subcategory of Earnings Revisions, RDN also gets an A. .

This week, Home Bancorp, Inc. (NASDAQ:) pushes up from a C to a B rating. Home Bancorp is a federally chartered mutual savings bank. .

WSFS Financial Corporation’s (NASDAQ:) ratings are looking better this week, moving up to a B from last week’s C. WSFS Financial is a savings and loan holding company, which provides residential and commercial real estate, commercial and consumer lending services, as well as retail deposit and cash management services. Shares of WSFS have increased 10.6% over the past month, better than the 1.3% decrease the Nasdaq has seen over the same period of time. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

JC Penney: Fitch Rating Sees “Highly Ambitious” Scenario

Poor J.C. Penney (JCP). The struggling retailer started off the day in positive territory. Then word spread of an Fitch Ratings report on its finances pegged to signs of stress in J.C. Penney’s credit-default swaps, sending shares tumbling.

REUTERS

Here’s what Fitch had to say:

JCP CDS spiked more than 300 basis points over the course of the last week and are now trading at record wide levels, according to Fitch Solutions. The sharp rise in cost to protect JCP’s five-year senior bonds indicates that investors suspect a higher risk of default…

Fitch now projects cash burn of $2.8 billion-$3.0 billion in 2013, a billion dollars higher than its mid May projections. This reflects EBITDA of negative $1.0 billion-$1.2 billion (versus prior projections of negative $0.5 billion) and higher than expected working capital use in excess of $0.5 billion.

Beyond 2013, Fitch estimates that the company will have to generate a minimum of $750 million-$875 million in EBITDA to fund ongoing capex in the $400 million-$500 million range and cash interest expense of $360 million-$375 million. This would require the company to return sales to about $13.4 billion-$13.6 billion — 14%-16% above 2013 projected levels — and realize gross margins in the 39%-40% range, assuming a relatively flat cost structure.

This scenario appears highly ambitious, given the significant execution risk. While the reintroduction of coupons and critical private brands such as St. John’s Bay in major categories should stem the significant pace of decline in the business that occurred in 2012 and 1H13 (top-line decline of 24.8% and 14.2%, respectively), the upfront investments in inventory, capex, and promotional activity are significant and we have yet to see positive traction.

A negative rating action could occur if comps and margin trends continue to erode, indicating that J.C Penney is not stabilizing its core business, leading to concerns around the company’s liquidity position.

A positive rating action could occur if the company generates sufficient EBITDA to cover its projected capex and cash interest expense.

On a relatively quiet day for retailer, shares of J.C. Penney have fallen 3.8% to $6.77, but are still above their recent lows. Kohl's (KSS), meanwhile, has edged up 0.1% to $54.93, Macy's (M) has risen 0.4% to $44.72 and Sears Holdings (SHLD) has gained 0.6% to $55.97.

Correction: In the headline to this post I originally wrote “Ambiguous” instead of “Ambitious.” It’s since been corrected.

What the FOMC Meeting Means for Currency Traders

While last week certainly had its share of risk events that helped move currencies, the major theme in currency trading was continued weakening/consolidation for the U.S. dollar.

This week, the weakening will be a key focus for us. We have some very weighty top-tier data events occurring in the next few days.

The key event on the economic calendar is the Federal Open Market Committee (FOMC) meeting and rate announcement today (Wednesday). No one is considering there will be an actual rate change, but what traders and speculators are looking for is the U.S. Federal Reserve comments related to the much dreaded taper of economic stimulus.

This presents an opportunity for profits from currency trading...

Currency Trading on the Fed

When the Fed first discussed tapering quantitative easing in June of this year, it sent markets into a tailspin.

From June 18 to June 24, the S&P dropped its biggest consecutive-day loss on the year, from 1,651 to 1,573.

At that point Ben Bernanke came out to reassure the markets that all was well, and there was no need to worry. The S&P happily resumed its record-setting climb.

There were rumors that the Fed could announce a taper in September, although we knew that was highly unlikely... If indeed the Fed was going to be data dependent on their decision (as opposed to simply following a timing schedule), there was no way that the economy was ripe for any kind of stimulus reduction as the fall quarter began.

And as expected, such was the case, there was no taper and the U.S. dollar sold off, as you can see in this 4H Chart of the EUR/USD. The red vertical line represents the start of the week when the FOMC met. We had a gap open on Sunday, and the real move began on Wednesday.

It has continued unabated, as the euro has beaten the stuffing out of the dollar over the last month with a move up of 350 pips.

Currency Trading Ahead of the Fed

Here's what you should understand about currency trading on Fed meetings...

The QE taper won't be any time soon.

The U.S. economy data has failed to improve substantially - or consistently; we now have shutdown-related losses that aren't known, and September's nonfarm payroll report was abysmally poorer than forecast. Currently, Bloomberg economists seem to have their eyes set on a taper beginning March 2014.

However, we don't need an actual QE taper, as the market is inclined to price in certain volatile actions in advance.

So we have to begin thinking in terms of expectations for that event and not simply wait for its
arrival to see what may happen.

So as we look to the Fed speak out of this week's meeting, we are looking to see if there is any reason to consider a March date for the timing of the taper beginning. Such an acknowledgment will likely send the market reeling again.

This is what that would mean for currency trading:

A strong dollar trade would likely be hitting the markets.

Since we would be looking for the dollar to gain strength, we want to be in the right arena to make the trade. That means the currency trading opportunities appear to be with EUR/USD or the GBP/USD (British pound/U.S. dollar).

Against all the major currencies, this is where we find the dollar to be the cheapest; we'll get the most bang for our buck with these pairs should the dollar start to strengthen.

But what if the FOMC is not all that interested in talking about the future of stimulus? What if they are concerned with the falling jobs numbers and the impact of government shutdown, which is only delayed, rather than resolved, by the recent congressional action. We'll see this this again before the end of the year.

What if the Fed hands us a forecast that implies they will have to maintain (or even increase) stimulus going forward? In that case, we want to be trading where the dollar is already very expensive...where it is already strong against the counter currency in the pair. That means the USD/JPY (Japanese yen).

As you can see from this weekly chart of the USD/JPY, we have been rising strongly in this pair, as the dollar has been beating the yen since January of last year. But we have been recently working into a consolidation triangle that is begging for a break out.

Should the Fed hand us any information that would look like a weakening dollar might be in the forecast, I would be looking to trade the USD/JPY to the downside, as it has so much potential room to run, nearly 2,000 pips from its current price of 97.67 to the recent swing low at 78.00.

Today's top story: New Rental Securitization Deal Likely Heralds Double Dip in Housing

Leading Indicators Signal More Growth for Rest of 2013

The Conference Board has released its index of leading economic indicators (LEI). While the name sounds like much a of a preview, it is a July number and we would caution that many of the components inside the total tally are already known and visible before this was released. July’s leading indicators were up by 0.6%, and Bloomberg was calling for a consensus reading of 0.5%, from a range of 0.2% to 0.7%. June’s reading was flat at 0.0% after May was up 0.2% and April was up 0.8%. The overall tone is very positive with widespread gains.

The Conference Board indicated that this is now pointing to a gradually strengthening expansion through the end of the year. Ken Goldstein, economist at the Conference Board, said:

The improvement in the LEI, and pick up in the six-month growth rate, suggest better economic and job growth in the second half of 2013. However, the biggest uncertainties remain the pace of business spending and the impact of slower global growth on U.S. exports.

The Coincident Economic Index increased 0.2% in July to 106.3, after a 0.1% increase in June and a 0.3% increase in May. The Lagging Economic Index fell by 0.2% in July to 118.2 after a 0.2% gain in June and a 0.3% gain in May.

Again, much of the data making up the “leading indicators” is known ahead of time, which is why we often say that leading indicators are not exactly all that leading. Here are the indicators used for the reading:

Average weekly hours, manufacturing Average weekly initial claims for unemployment insurance Manufacturers’ new orders, consumer goods and materials ISM Index of New Orders Manufacturers’ new orders, nondefense capital goods excluding aircraft orders Building permits, new private housing units Stock prices, 500 common stocks Leading Credit Index Interest rate spread, 10-year Treasury bonds less federal funds Average consumer expectations for business conditions

Schwab CEO Shows Some Love for RIAs: Weekend Interview

It’s not every day that the CEO of Charles Schwab & Co. (SCHW) speaks to the advisor press, though in previous interviews Walt Bettinger has said that he regularly does talk to advisors who custody with Schwab or are considering doing so.

In a telephone interview on June 20, during Schwab’s invitation-only Explore event for its RIAs in Tucson, Ariz., Bettinger (at left in photo) and Bernie Clark (right), who runs Schwab Advisor Services (SAS), spoke of the opportunities for RIAs and some initiatives that SAS was rolling out. However, Bettinger also spoke of some other topics dear to his heart, and reiterated that “advisors are core to our overall corporate strategy; they’re not a sideline business.” Advisors in Schwab Advisor Services, he said, “are our primary strategy in the high-net-worth” space.

When asked about Schwab’s relationship with RIAs who custody with SAS, Bettinger characterized it as “so much deeper, so much richer” than mere custody, despite that role’s importance, and said advisors were looking for Schwab to help them in many areas.

“Advisors recognize the importance of the coming intergenerational wealth transfer,” he said, saying they “need to align with the children of their existing clients.”

Helping advisors take a broader view of who their clients are and could be—including a view that includes an ethnicity, race or gender different than the advisors’—"is good for investors, for advisors, and for Schwab,” Bettinger said. Helping them find those new clients is a “natural extension” of what Schwab provides to advisors.

“We couldn’t have [that kind of deeper relationship with advisors],” Bettinger said, “if we were competing with them."

As another example of Schwab's commitment to independent RIAs, he mentioned what he has previously called a "misstep" when Schwab acquired U.S. Trust in 2000 and its decision to sell U.S. Trust in 2007.

What about the aging of the advisor workforce, and the still relatively paltry number of female advisors? Bettinger said he had gone through the attendee list for Explore, and reported that about 20% of the advisors were women. “The people here,” he said, referring to Explore attendees, “got started 15, 20, 30 years ago” in building their now successful advisory firms.

He pointed to the high proportion of young women among the interns that Schwab is training for eventual placement in advisory firms as a cause for hope, and suggested that “20 years from now” the ratio of female to male advisors “will be much more balanced.”

As for Schwab’s corporate HR focus, Bettinger said “we want our employee base to reflect the clients we serve.”

What about restoring clients' trust in the financial system and financial institutions like Charles Schwab? “Trust is a big-picture issue,” he replied, saying it was understandable that distrust will linger due, for example, to the perception that high-frequency traders have an inordinate amount of control over the markets. “The average consumer doesn’t understand the difference between the fiduciary standard and the suitability standard,” he said, so the “industry has to help consumers understand” that difference. Bettinger argues that while it’s not necessary to “force fiduciary on everyone,” he also “believes that what wins is what is in the best interests of the consumer; we’ve done that for 40 years.”

Is he worried about investors who seem to always be moving into sectors at the wrong time, for example moving from equities into bonds just as the stock market started soaring?

“There are self-directed, highly sophisticated investors who do a good job” investing on their own, he said, but also pointed out that “two-thirds of people are more confident with their investing decisions” when they get some advice from others. “We see that on the retail side,” Bettinger said, “where we do it in a fiduciary way.”

However, he is worried about “self-directed investors without that sophisticated knowledge,” which is part of why Schwab retail offers a range of educational tools and capabilities, along with the ability to “refer to an advisor” when appropriate.

On the same track, Bettinger also said he was worried about investors’ use of target-date funds for retirement purposes. “I cringe at the growth rate of target-date funds,” he said, because so many investors simply allocate their retirement dollars to those funds.

Target date funds take into account “only one factor—your age” rather than the multiple factors necessary to invest for a long-term goal like retirement.

“I worry,” he said again, that for too many self-directed investors, “near-term economics takes precedence over long-term” planning.

Returning to Schwab's corporate strategies, Bettinger spoke about the company's new advertising campaign, ”Own Your Tomorrow,” which launched in June in TV, print, online and mobile and replaces the longrunning “Talk to Chuck” campaign. Bettinger said the goal of the new campaign was to “re-establish Schwab as a challenger brand” and that it will be “more inclusive of all the company’s” offerings, including its advisor channel.

Additional ads in the campaign will roll out over the coming months, he promised, all of which are designed to “resonate with driven investors,” who he defined as people who are “involved with their communities and their money.”

---

Check out Schwab’s Leaders Talk of ‘Never Greater’ Opportunities for RIAs on AdvisorOne.

What's Your Biggest Fear? The Answer Might Scare You!

With all of the factors we have to worry about in our everyday lives, it is somewhat a wonder that we're not only able to survive, but thrive, as a society. Between our personal health, financial health, and various external factors that are well beyond our control, there are an immeasurable amount of worries that plague us each and every day.

Source: Victor Bezrukov, commons.wikimedia.org.

In 2010, a survey commissioned by Cancer Research UK in Britain questioned 2,070 adults on what their biggest fears were in an attempt to help quantify and properly understand these worries. The thought process here was simple: Knowing what concerns citizens the most will allow government agencies to focus on solutions to make people worry less, live happier lives, and likely be more productive.

The survey asked respondents to list their greatest fear from the following list of possible fears:

Being in debt Developing Alzheimer's Old age Being the victim of a knife crime (only in Britain, right?) Cancer Being in a plane crash Having a heart attack Being in a car accident Losing your job Losing your home Motor neurone disease

Think, for a moment, which one, were you asked, would you choose as your biggest fear.

Got it?

Would it shock you to know that more than 20% of respondents given those choices selected cancer as their biggest fear? Coming in a distant second was Alzheimer's disease, which garnered 16% of the votes but was a considerably bigger fear for those aged 65 and older compared with younger respondents.

A worrisome development
Looking at this list I, too, would choose cancer as my biggest fear -- and ultimately there's nothing wrong with that. Genetics have been shown to play a role in whether a person develops cancer in his or her lifetime, and having lost my mother to lung cancer, and my grandfather to kidney cancer, it's a somewhat justified fear that I have a higher genetic predisposition to developing certain cancer types.

What isn't OK is that 34% of respondents who selected cancer believed that a cancer diagnosis was up to fate and that there was nothing they could do about it. Herein lies an opportunity to educate the U.K.'s citizens, point out methods that could help reduce their cancer risks, and, as an investor, potentially invest in the companies that can help reduce risk factors for cancer.

Had this survey been conducted in the U.S., I would suspect the results would be strikingly similar. Yet what people often overlook, according to Cancer Research UK, is that half of all people diagnosed with cancer will still be alive five years from now and 40% will be alive 10 years from now. In short, a cancer diagnosis is no longer the death sentence that it once was, thanks to better risk factor education and more effective medication.

The biggest risk factors for cancer don't involve "fate"
One major risk factor that's been identified is obesity. Cancer is actually the fifth most common disease caused by obesity, with it elevating people's chance of developing breast, colorectal, endometrial, and kidney cancers, just to name a few.

One easy way to educate the public and reduce obesity levels is to encourage physical activity and proper diet. When that's not enough, chronic weight management drug developers Arena Pharmaceuticals (NASDAQ: ARNA  ) with Belviq and VIVUS (NASDAQ: VVUS  ) with Qsymia may be called upon to step in.

Although neither Belviq nor Qsymia proved initially safe enough to be approved in the EU, both anti-obesity drugs are approved in the U.S. and, assuming they get a decent amount of coverage from insurance companies, could make a huge impact on the nearly 36% of the U.S. population that's considered obese. It's a tough call trying to figure out which pill may come out on top, given that Belviq has the better safety profile and VIVUS delivered better weight loss in trials; however, the target audience is large enough that it may not matter.

The butt of the problem
Smoking is another huge factor that has been decisively linked to increasing your risk of developing cancer. In my Tackling Cancer series, smoking was practically a universal risk factor for the 12 most commonly diagnosed cancer types, and cigarette smoking was directly responsible for 37% of all cancer deaths in the U.S. between 2000 and 2004.

Source: Jo Naylor, Flickr.

Unfortunately, many cancers caused by smoking tend to be some of the most aggressive and virulent types, such as lung and pancreatic cancer. While medications do exist to treat lung cancer, the five-year prognosis is fairly grim, with a five-year survival rate of just 17%. This could be where Merck (NYSE: MRK  ) or Bristol-Myers Squibb (NYSE: BMY  ) swoops in to save the day.

Both companies are currently working on a new class of drug in the U.S. known as PD-1 inhibitors, which are suspected to enhance the body's own immune response to attack cancer cells. Merck's lambrolizumab has already received the rare breakthrough therapy designation from the FDA and delivered an overall response rate of 38% in multiple myeloma studies. The response rate was slightly higher, 40%, for Bristol-Myers Squibb's nivolumab, which was combined with its FDA-approved therapy Yervoy to treat multiple myeloma. It's expected that PD-1 inhibitors could have success in treating the most common form of lung cancer, non-small-cell lung cancer, and their development should be closely monitored. 

Overexposure
A third common form of cancer that's under our control is melanoma, a type of skin cancer that isn't often as deadly as some of the aforementioned cancers but is caused from overexposure to the sun over the course our lives. There's nothing wrong with spending some time in the sun, but like everything in life it should be done with some moderation.

While this may not be a huge problem for those polled in the U.K. (or for me in the Seattle suburbs), it is still a big problem at least in the U.S., with nearly 77,000 estimated diagnoses in the U.S. this year alone.

The best and most obvious solution here is to wear protective sunscreen and reduce your exposure to the sun to a moderate level. If a person is already well beyond that stage, two newly approved melanoma drugs from GlaxoSmithKline (NYSE: GSK  ) may ultimately be called upon to do the trick. The drugs, Tafinlar and Mekinist, target the most common type of skin cancer that expresses the BRAF mutation. In trials, progression-free survival of the combo improved to 9.4 months, compared with 5.8 months for those taking Tafinlar by itself, with a whopping 41% of patients not exhibiting any signs of disease progression at 12 months!

Live long and conquer
There's nothing wrong with having fears, but we also have to understand that many of the tools capable of reducing those fears are within our grasp. Cancer is certainly a scary six-letter word, but we have rapidly improving medicines capable of extended patients' quality of life, and a better understanding of the risk factors that can lead to an elevated risk of developing cancer.

In addition, not only do we have the tools necessary to reduce our cancer risk, but we also have a pathway to potentially increase our wealth in the process. The aforementioned companies are literally but a handful of those that stand to benefit from treating cancer patients. As research dollars and education progresses, it's only logical to expect the quality of cancer treatments to improve as well.

As we've seen, your financial health is just as important as your personal health. The Motley Fool's special free report "3 Stocks That Will Help You Retire Rich" names specific investment opportunities that could help you build long-term wealth and help you retire well. The Fool also outlines critical wealth-building strategies that every investor should know. Click here to keep reading.

Week Ahead: Let's Hope Churchill Was Wrong About Americans

As global financial markets head into a second week of a partial U.S. Government shutdown, with a debt default still a technical possibility, investors have to hope that Winston Churchill was wrong about Americans.

If Churchill was correct, and Americans have to exhaust all the alternatives before they eventually do the right thing, markets are in big trouble

"We can always count on the Americans to do the right thing — after they have exhausted all the other possibilities," is a famous quote from the great British leader. Churchill's mother came from Brooklyn, New York, so he had some insight.

Well, the global securities markets really don't have the time for politicians in Washington to exhaust all the alternatives before reaching a budget deal to re-open Government and an agreement to raise the $16.7 trillion debt ceiling that would be breached around October 17.

Exhausting the alternatives could cause mayhem in the world's financial system. Global securities markets are so interconnected that they need Americans to do the right thing as soon as possible.

There were already signs at the weekend that Republicans were softening in their demands for a bargain, so let's trust that Churchill was ultimately wrong on this one.

This coming week brings the world's economic power brokers to the United States, with the International Monetary Fund and the World Bank holding their annual meetings in Washington.

The U.S. Government crisis is sure to be high on their agendas and any public statements they make on the global economy or the impact of the U.S. stalemate could move markets.

In Indonesia, the Asia-Pacific Economic Cooperation leaders will hold their annual summit and may have something to say about the U.S. crisis. Given that Asia-Pacific holds a large chunk of U.S. debt, it might not be nice.

Investors will also watch like hawks as the U.S. Treasury sets about selling roughly $64 billion in debt — bonds and notes — this coming week. Amid the jitters, will the demand for U.S. Government debt still be in the market?

So far, demand for U.S. debt has remained strong, but some pessimists fear that institutional and international investors may start at some stage to question the wisdom of lending savers' money to a Government that is $16.7 trillion in debt, can't keep its doors open and can't balance its books often enough.

Investors in U.S. stocks have all of the above to watch and then some big company news in the course of the week.

Alcoa Alcoa, JPMorgan Chase JPMorgan ChaseWells Fargo, Costco Wholesale, Family Dollar Stores and Yum! Brands will be among the first big companies to report quarterly earnings.

Hewlett-Packard will give an update on its turnaround business strategy on Wednesday.

The shutdown means that regular U.S. economic indicators and data reports may be delayed, meaning many investors are "flying blind" to some extent on the state of the economy as they make their bets.

U.S. economic data scheduled for the coming week include consumer credit figures on Monday, trade balance news on Tuesday, wholesale inventories on Wednesday and initial jobless claims on Thursday. On Friday, consumer sentiment news, retail sales numbers, producer price index updates, and business inventories are scheduled.

Why Citigroup Is Surging Today

Citigroup (NYSE: C  ) is on another run this morning as more positive legal news gives investors another sense of relief. In the wake of the financial crisis, Citi and other banks have been struggling to shed their legacy issues, many of which have turned into legal battles. With Citi taking one step further away from the crisis, investors are rewarding it this morning with a 1.28% gain as of 10:30 a.m. EDT.

Legal recap
Just two days ago, investors got the news that Citi had settled its case with the Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, over allegations that the bank mislead the two GSEs into buying $3.5 billion in mortgage-backed securities. Though the terms of the settlement have not been disclosed, investors took this as a positive move for the bank, lifting its stock 2.35%.

Another one bites the dust
This morning, news of another settlement is hitting the market, with enough force to send the bank higher still. Citi has reached yet another settlement over mortgage-backed securities with Allstate (NYSE: ALL  ) . This is settlement follows the newer trend of banks settling with insurers over MBSes. Allstate also filed a similar suit against Bank of America (NYSE: BAC  ) , which recently settled a contentious legal battle with insurer MBIA (NYSE: MBI  ) . The Allstate-B of A suit is still unresolved, though the bank unsuccessfully tried to have the entire suit dismissed back in March.

The Allstate suit, which was considerably smaller than the FHFA suit, with only $200 million of MBSs in question, will leave a smaller dent in Citigroup, but investors still have no details on the terms of either settlement. Yet the prospect of clearing off the bank's legal docket seems to be the most important detail to investors so far, leaving worries about payouts until a later date.

Looking ahead
Citi's recent clearing of some of its legal issues is certainly a relief for investors, as uncertainty surrounding court battles can weigh heavily on banks. But this mornings bump from one case points out the come-and-go nature of any stock's daily moves. As noted above, no details of either the FHFA or Allstate settlement have been released yet, and if investors find the terms unfavorable, the gains made today and earlier in the week could be quickly reversed. As a long-term investor, you should understand the importance of these settlements, but don't let the quick, exciting climbs get to you. Understanding that the legal matters don't effect the fundamentals of Citigroup's operations will keep you level-headed though the ups and (eventual) downs.

Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and CEO Michael Corbat still needs to prove himself. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot in your portfolio, I invite you to read our premium research report on the bank today. We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas Citigroup investors need to watch going forward. Click here now for instant access to our best expert's take on Citigroup.

Tackling Cancer: Thyroid Cancer's Biggest Current and Upcoming Players

As I noted eight weeks ago, cancer statistics are both staggering and disappointing. Although cancer deaths per 100,000 people have been on the downswing since 1991 thanks to access to more effective medications and better awareness about the negative health effects of smoking, there is still a lot of research and progress yet to achieve. My focus in this 12-week series is to bring to light both the need for continued research in these fields, as well as highlight ways you can profit from the biggest current and upcoming players in each area.

Over the past seven weeks, we've looked at the seven cancer types most expected to be diagnosed this year:

Prostate cancer Breast cancer Lung cancer Colorectal cancer Melanoma Bladder cancer Non-Hodgkin's lymphoma

Today, we'll turn our attention to the projected eighth-most diagnosed cancer: thyroid cancer.

The skinny on thyroid cancer
There certainly is a give and a take to thyroid cancer. On one hand, thyroid cancer is the fastest growing cancer for both sexes. It afflicts women in nearly three out of every four cases, and incidence rates have been going up at a rate of 5.6% per year for men and 7% per year for women between 2005 and 2009. Worse yet, it's one of the few cancers whose risk doesn't seem to increase with age. A shocking 80% of newly diagnosed cases are people under age 65 according, to the American Cancer Society (links opens a PDF file).

Sources: Surveillance, Epidemiology, and End Results Program, and National Center for Health Statistics. 

On the other hand, with 60,220 cases of thyroid cancer forecast to be diagnosed this year, only 1,850 deaths are projected to be as a result of thyroid cancer. This means if it's caught early enough, it's a very preventable, even curable, cancer. In 1975-1977, five-year survival rates for thyroid cancer tallied an already impressive 92%. By 2002-2008, that figure has climbed to 98%, with local and regional thyroid cancers demonstrating 100% and 97% five-year survival rates.

Amazingly, there aren't any diagnostic tests for thyroid cancer, so patients really need to keep their eyes open for lumps in their throat, or stiffness in their neck. Being female, having a history of goiter, or having been exposed to radiation are the most likely risk factors that could contribute to a thyroid cancer diagnosis.

Where investment dollars are headed
Thyroid cancer is treated in nearly every case with a full or partial thyroid removal since the majority of thyroid cancers aren't aggressive. However, in those rare cases where surgery isn't an option or the disease has metastasized to other parts of the body, there are two drugs approved by the Food and Drug Administration to choose from.

Caprelsa: AstraZeneca's (NYSE: AZN  ) Caprelsa was approved to treat unresectable, locally advanced, or metastatic medullary thyroid cancer in April 2011. In trials, AstraZeneca's pill increased progression-free survival over the placebo and delivered an overall response rate of 44%, compared with just 1% for the placebo -- although it should be noted that all responses were partial. However, Caprelsa also comes with a laundry list of side effects that range from something as simple as rash, nausea, and hypertension, to having resulted in death from respiratory arrest and cardiac failure with arrhythmia.  Cometriq: Exelixis' (NASDAQ: EXEL  ) Cometriq was approved last November to treat progressive metastatic medullary thyroid cancer. The capsules work by inhibiting multiple tyrosine kinases, which are crucial to blood vessel growth in solid and metastasizing tumors. In late-stage trials, patients receiving Cometriq demonstrated an astounding 11.2 months of progression-free survival compared with just four months for the placebo. Further, the objective response rate was 27% in the Cometriq arm and a goose egg for the placebo arm. Similar to AstraZeneca's Caprelsa, severe adverse reactions tended to increase for Cometriq users relative to the placebo.

Just as we've witnessed with every previous cancer in this series, not every drug trial proves successful. Pfizer's (NYSE: PFE  ) Sutent, for instance, is a very successful treatment for kidney cancer, gastrointestinal stromal tumors, and pancreatic endocrine tumors, but it didn't fare as well when it came to thyroid cancer. In a midstage trial targeting locally advanced or metastatic anaplastic differentiated thyroid cancer, Sutent was linked to two serious cardiac side effects that an independent monitoring committee felt required a close follow-up. This may not preclude Sutent from an eventual approval in helping advanced cases of thyroid cancer, but its side effects were enough to curb most of the enthusiasm investors had for the adding another indication.

What's coming down the pipeline
With surgery and/or radioactive iodine therapy being such an effective tool in treating the majority of thyroid cancer cases, outside of early stage trials and preclinical studies there isn't much going on in the thyroid cancer pipeline. There is one late-stage treatment in development that could provide a better outlook for those suffering with a more aggressive form of the disease: Nexavar.

Bayer and Onyx Pharmaceuticals' (NASDAQ: ONXX  ) anti-cancer agent Nexavar could be well on its way to receiving FDA approval for patients with locally advanced or metastatic radioactive iodine-refractory differentiated thyroid cancer. Announced in early January, results from the late-stage trial demonstrated improved progression-free survival relative to the placebo. Nexavar, which is given in a tablet form twice daily, works by blocking receptors responsible for blood vessel growth, thereby starving the tumor, or tumors, of nutrients and oxygen needed to grow.

Your best investment
The good news with thyroid cancer is that a diagnosis isn't a death sentence and that it's curable if caught early enough. On the other hand, thyroid cancer also isn't an area of intense research, since surgery and radioactive iodine treatments seem to cure a vast majority of the population, even if thyroid cases are on the rise.

Normally I would break this section into a riskier and safer investment option, but in this case I think both Exelixis and Onyx Pharmaceuticals represent one and the same. Nexavar is already approved to treat unresectable hepatocellular carcinoma and renal cell carcinoma and looks poised to gain the indication to treat an advanced form of thyroid cancer as well.

Likewise, Exelixis is the pure play on metastatic medullary thyroid cancer. The fact that Cometriq nearly tripled PFS in trials compared to the placebo makes it the clear choice over AstraZeneca's Caprelsa, and its efficacy in bone metastases in trials has thus far been very impressive. Exelixis will need additional indications for Cometriq to become profitable, but it appears to have the highest risk-versus-reward ratio here, depending on Cometriq's success moving forward.

Stay tuned next week, when we tackle the current and upcoming therapies for the treatment of kidney cancer in this "Tackling Cancer" series.

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Newmont Mining: Wait, I Thought It Was Good News

Sometimes a beat just isn’t enough, as investors in Newmont Mining (NEM) found out today.

Zuma Press

Newmont reported a profit of 50 cents excluding items, beating forecasts for 16 cents, pm revenue of $1.75 billion. The numbers weren’t nearly that straightforward, however–or that good. The folks at Deustche Bank explain:

Newmont reported a wide EBITDA miss, posting $378m (~=depreciation+ depletion) vs DBe of $524m and consensus of $465m, on l-t-e copper contribution. A complex reported EPS of 42c was driven fully by the sharing of minority interest losses, a negative tax rate and other gains and we put adj EPS closer to 2c/sh and basically in-line with the company's 2.5c quarterly dividend (Newmont's published adj EPS was 50c) and compare with DBe adj EPS of 22c and Thomson One consensus of 19c. With capex spend projected to rise ~$350m in 2015, free cash flow outlook is turning negative on weaker-than-expected operational results. We cut our Price Target to $20/sh which is now based on 0.9x revised NAV of $22.50 (versus 1x prior NAV of $25) on rising likelihood of financial stress in a declining gold price environment.

Shares of Newmont Mining have dropped 8.3% to $18.65 at 3:04 p.m. today, twice as much as Barrick Gold’s (ABX) 4% decline to $11.81 and the Market Vectors Gold Miners ETF’s (GDX) 4% slide to $17.47.

5 Dividend Stocks That Are About to Hike Payments to Shareholders

BALTIMORE (Stockpickr) -- Every correction in this market rally is sending an important message to investors: Don't ignore the dividend stocks.

Even in bull markets, dividends are make-or-break for your portfolio. For instance, just year-to-date, dividends have actually contributed more to the total returns in the Dow Jones Industrial Average than capital gains have. And it's not just the stodgy Dow.

Must Read: Must-See Charts: Trade These Big Stocks for Big Gains

In fact, even among the faster-moving S&P 500, dividend-paying stocks have contributed nearly a third of total returns this year. Put simply, if you don't own dividend stocks in this market, you're getting owned performance-wise.

But to find the biggest benefit from dividends, it's not enough to simply buy names with big payouts today. You've got to think about what they'll be paying tomorrow, too. So instead of chasing yield, we'll try to step in front of the next round of stock payout hikes.

For our purposes, that "crystal ball" is composed of a few factors: namely a solid balance sheet, low payout ratio, and a history of dividend hikes. While those items don't guarantee dividend announcements in the next month or three, they do dramatically increase the odds that management will hike their cash payouts to shareholders. And they've helped us grab onto dividend hikes with a high success rate in the past.

Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.

Must Read: 4 Bargain Bin Stocks to Pad Your Portfolio

AT&T

First up is AT&T (T), the company that has the distinction of being the highest-yielding stock in the Dow -- and not by a little, either. AT&T pays out a 5.23% dividend yield at currently price levels, a huge payout considering the fact that we're in a record-low interest rate environment. For income investors, it's hard to ignore the draw of that big 46-cent quarterly payout. Thing is, it looks ready to get even bigger.

AT&T is the nation's second-largest wireless carrier, with more than 99 million customers. It's also one of the biggest landline operators in the country, with more than 27 million phone lines and 17 million internet users. With the pending acquisition of DirecTV (DTV), AT&T will dramatically boost its exposure to the pay-TV market, particularly in high-growth Latin America. Ultimately, more services from AT&T means more cross-selling opportunities from its huge customer Rolodex, and that should help drive margins higher in the years to come.

Financially speaking, AT&T looks cheap right now compared to the rich valuations found elsewhere in the market. Besides the hefty dividend yield, shares currently sport a trailing 12-month price-to-earnings ratio of 10, a whopping 52% discount to the rest of the telecom sector. Given the dropping payout ratio at AT&T since 2011, a dividend hike looks in order in the next quarter.

If history is any guide, look for a dividend boost announcement in early November.

Must Read: How to Trade the Market's Most-Active Stocks

CVS Health

Drugstore chain CVS Health (CVS) may not sport the huge payout seen at AT&T -- it currently pays a 27.5-cent dividend that adds up to a 1.4% yield -- but it's another name that's looking primed to boost its payout in the next quarter. CVS has undergone some big changes in recent months. For starters, it changed its name slightly, signaling a new focus on overall consumer health (and ending $2 billion in annual tobacco sales within its stores).

The shift should give extra credibility for CVS, which operates some 7,000 pharmacy locations across the U.S. as well as a pharmacy benefit manager that handles more than a billion prescriptions each year. That integrated drugstore and PBM operation cuts out the middleman and gives CVS access to fatter margins. CVS has been working to recreate that structure elsewhere (particularly in the Latin American market) posting a pending 5 billion real bid for Brazilian drugstore chain Drogarias Pacheco in May, and the acquisition of Miami's Navarro Discount Pharmacies in September.

CVS has some big demographic drivers for growth in the years ahead. An aging population is driving pharmaceutical volumes here at home, and that increased demand should help to fuel profits for CVS. The introduction of MinuteClinic health clinic locations at approximately 500 of CVS' retail locations is another important growth driver it gives customers a cheaper alternative to a doctor's office, and a big incentive to fill prescriptions in-house. Importantly, MinuteClinic also makes CVS completely vertically integrated, driving bigger profit margins.

With profitability climbing, CVS looks due to announce a dividend hike next quarter.

Must Read: Warren Buffett's Top 10 Dividend Stocks

Stryker

Stryker (SYK) is another health care name that looks ready to hike its dividend payouts in the coming quarter. Stryker designs and manufactures medical equipment and instruments ranging from hip and knee implants to operating room equipment. The firm is one of the biggest names in the orthopedic implant space, which should see increasing demand as the average age of the U.S. population increases. SYK still earns 65% of its revenues here at home.

Stryker has upped its exposure to other corners of the medical world in recent years, growing to become the leading provider of operating room equipment as well. That means that Stryker benefits from overall procedure volumes, not just from orthopedic procedures, which are elective and have some correlation to the economy.

Financially speaking, Stryker is in good shape. The firm currently carries $878 million in net cash (that is, cash less debt), a number that's significant because it means that the firm carries zero leverage on its balance sheet. Given the capital-intense nature of the medical device business, that's an important distinction. Right now, SYK pays out a 30.5-cent quarterly dividend that adds up to a 1.5% yield at current price levels, but investors should be on the lookout for a raise in the quarter ahead.

Must Read: 5 Stocks With Big Insider Buying

Aflac

Specialty insurance firm Aflac (AFL) continues to provide an attractive alternative to conventional life insurers -- and shares even look cheap in 2014. Aflac is one of the biggest supplemental insurers in the world, with a lucrative business in the U.S. and Japan. Even though insurance products are largely commoditized these days, Aflac's brand success gives it fatter margins than the norm. Last quarter, net margins came in at a very respectable 13.8%.

Aflac's policies are designed to pay out cash benefits if customers meet a predetermined condition -- normally contracting a disease or being involved in an accident. Because they're loss-of-income policies, Aflac has an easier sale in an environment where everyone remembers the Great Recession from several years ago. Likewise, since they're deducted directly from paychecks in many cases, there's no sticker shock effect from seeing money go out each month.

Japan is, by far, Aflac's biggest market, contributing around 80% of the firm's profits. Japanese Aflac customers are also extremely sticky -- the firm estimates that the average customer stays with Aflac for nearly 20 years. An aging population in Japan (much like here) is more cognizant of the fact that supplemental health or income coverage may be a good idea, and that continues to be a big driver for Aflac.

ALF's payout ratio has been in a steady decline in the last several years, which means that Aflac's dividend isn't keeping up with its income growth. With a payout ratio down around 20%, there's plenty of room for Aflac to boost its 37-cent payout in the next quarter.

Must Read: Buy These 5 Momentum Movers to Stomp the S&P

Williams-Sonoma

Last up is high-end housewares stock Williams-Sonoma (WSM), a name that's been a strong performer so far in 2014: at this point, WSM's 15.6% total return is nearly triple the performance of the S&P once dividends are factored in. A combination of growing luxury segment spending and well-run store chains is the driver for WSM's relative strength in the market right now.

At current levels, the firm pays out a 2% dividend yield.

Williams-Sonoma goes beyond its namesake kitchenware brand. In addition, it owns the Pottery Barn, West Elm, and Rejuvenation marquees, operating nearly 600 stores worldwide in total. As a brand-name housewares retailer, Williams-Sonoma captures thick margins, a trend that's been expanding as it leverages its own valuable brand to offer an increased share of private label merchandise to shoppers.

Likewise, the firm's financials look strong. Historically, WSM has avoided turning to debt to grow its store footprint (in fact, it's even opted to franchise stores in some foreign markets), and that means that its balance sheet is squeaky clean. That, in turn, clears the way for a boost to the firm's 33-cent quarterly dividend payout. Instead of paying lenders, WSM is free to pay shareholders. Investors should look out for the possibility of a dividend hike by the end of the year, just be cognizant of the fact that this stock's yield could drop as its price momentum carries shares higher.

Buying WSM here locks in the yield today.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>4 Stocks Under $10 Triggering Breakout Trades

>>5 Stocks Spiking on Unusual Volume

>>QE5 Is Coming -- and Here's How to Profit

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in the names mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

International Game Technology Explores Sale, Pops

International Game Technology (IGT) has popped after Reuters reported that the casino-game maker had begun looking into selling itself. From the Reuters article:

International Game Technology the Las Vegas-based slot machine maker, has hired Morgan Stanley (MS) to explore a sale as the gaming industry pursues consolidation to combat slow growth, people familiar with the matter said on Monday.

IGT, which has a market capitalization of more than $3 billion, has been working on a sale for more than two months and has attracted interest from other gaming companies as well as private equity firms, the people said.

Shares of International Game Technology have gained 11% at 3:34 p.m. today, with most of that coming in the last 35 minutes of trading, or so. Since a picture is worth a thousand words:

Macy’s, Inc. Beats Q1 Earnings Estimates; Boosts Dividend 25% (M)

Before Wednesday’s opening bell, Macy’s, Inc. (M) reported first quarter earnings that came in above analysts’ estimates. The company also announced a 25% dividend increase. 

Macy’s Earning in Brief

M reported earnings of $224 million, or 60 cents per share, up from $217 million, or 55 cents per share, a year ago. Sales dipped to $6.279 billion from $6.387 billion last year. On average, analysts expected M to report earnings of 59 cents per share and $6.46 billion in revenue. Looking forward, M expects FY2014 earnings to be between $4.40 and $4.50 while analysts expect to see earnings of $4.48 per share.

M Raises Dividend and Increases Buy Back Authorization

M reported that it has raised its dividend by 25% from 25 cents to 31.25 cents quarterly. The next dividend will be payable July 1 to shareholders of record on June 13.

The company also reported that its board has approved a $1.5 billion increase to its buy back authorization.

Stock Performance

Macy’s shares were mostly flat during pre-market trading Wednesday. The stock is up 8.31% YTD.

M Dividend Snapshot

As market close on May 13, 2014

Click here to see the complete history of M dividends.

Is Your Cash Trash? Eye-Popping Chart Raises Question

A provocative chart demonstrating a sharp negative correlation between 10-year Treasuries and the dollar appears to suggest the U.S. currency may be losing its safe-haven appeal.

The chart by currency fund manager Axel Merk of Merk Investments shows the 1-year rolling correlation between the U.S. dollar index and 10-year Treasury notes over the past 18 years, revealing a steep plunge from the summer of 2012 until today.

That drop-off means that while U.S. Treasuries are currently viewed as a safe haven, attracting investment, the U.S. dollar is not simultaneously rising but is in fact falling against a basket of currencies.

In other words, there is a flight out of the greenback at the same time as the flight to the safety of Treasuries. It’s not that the two assets are moving out of correlation; rather, the relationship is one of high and rising negative correlation (of close to -0.60).

A variety of conflicting approaches could explain this divergence. For example, Merk entertains the possibility that investors would turn to the dollar in a “real” crisis versus today’s “subtle” crises.

But the veteran currency manager prefers a different explanation. He says the sharp selloff in the dollar began precisely when European Central Bank head Mario Draghi promised to do “whatever it takes” to save the eurozone.

The chart suggests to Merk that, as he puts it, “the euro has become a true competitor to the greenback.”

It remains to be seen whether the declining fortunes of the dollar are a temporary phenomenon or indicative of a loss of safe haven status. Merk clearly favors the latter view, writing “we have long argued that there may not be such a thing anymore as a safe asset and investors may want to take a diversified approach to something as mundane as cash.”

Indeed, just days ago Gluskin Sheff chief economist David Rosenberg, widely followed by financial advisors who read his popular daily economic report, Breakfast with Dave, observed that global investors have been flocking to the Canadian dollar, despite aggressive efforts by Ottawa to talk down the loonie.

Writing in Canada’s Financial Post, Rosenberg writes:

“Net foreign buying of Canadian equities has topped $27 billion over the past six months, which has only happened two other times on record.

“Global investors apparently see what I see: CAD weakness represents massive stimulus.”

Buffett alters yardstick after Berkshire falls short of goal

Bloomberg News

Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., changed the standard by which he measures performance after falling short of his target for the first time in decades.

A gauge of Berkshire’s net worth failed to rise as much as the Standard & Poor’s 500 Index in the five years ended 2013, Berkshire’s annual report showed today. It was the first time that happened since he took control of the company in 1965. Still, Mr. Buffett said that he and Vice Chairman Charles Munger can beat the index over stock cycles, like they did in the six-year period that ended Dec. 31.

“Through full cycles in future years, we expect to do that again,” Mr. Buffett wrote in the report. “If we fail to do so, we will not have earned our pay.”

Mr. Buffett, 83, has long criticized other companies for altering how they evaluate their performance when such changes make managers’ efforts look better. Even as he predicted that Omaha, Neb., Berkshire would fall short of its goal last year, he wrote that he and Munger wouldn’t “change yardsticks.”

Book value, the measure of assets minus liabilities that Mr. Buffett highlights, rose to $134,973 a share at the end of December, 91% more than where it stood five years earlier. The S&P 500 returned about 128% during that period, including dividends, as stocks rallied from their f