Interest Rates Will Rise Again, But When?

Seems the stock market is waiting forever for the Fed to raise interest rates. This uncertainty is leading investors to take a "risk off" approach, and thus we have the 10% correction we've lived through the past few months.

Thomas H. Kee Jr. speculated on Marketwatch today that if Fed Chair Janet Yellen raises rates, it could lead to a market crash, because the Fed's curtailing of its economic stimulus plan has amounted to a tightening monetary policy, and any further tightening (by raising interest rates) would be a problem. Especially for those owning stocks.

I tend to think the market has priced in a rise in interest rates, and the market may rise when it finally happens, assuming the Fed is transparent about being willing to loosen monetary policy in the future if the economy starts to stumble. According to most metrics -- employment, corporate earnings -- the American economy is booming, and I continue to see it doing so.

Stocks to watch:

Schlumberger (SLB), the oil services equipment provider, and Chevron (CVX) may recover if Saudi Arabia succumbs to pressure from less well-heeled members of OPEC and is forced to stop flooding the market with oil.

SLB is trading at 72.69; our 6-month target is 85 by March, 2016
CVX is trading at 75.78; target is 90 by March, 2016

Disney (DIS) should benefit when the latest Star Wars sequel is released in December.

DIS is trading at 103.75; our target is 125 by March, 2016

Apple Inc. (AAPL) is rumored to be working on a TV streaming service that will cost $40 a month. If that comes true -- as J.P. Morgan said it will in a note today -- then apple should rise nicely.

AAPL is trading at 115.33; our 6-month target is 130 by March, 2016


Disclaimer: As always this blog is my opinion only. We do not give tax or investment advice or advocate the purchase or sale of any security or investment. You should always seek the assistance of a professional for tax and investment advice. 

Where's That Correction?

Dow up 200+ points today. Everyone's nervous about a pullback. We got a scare last week. Now, will we dip a bit tomorrow and finish strong Thursday and Friday? Who knows. Consumer and Producer Prices are on the docket. Perhaps investors will be spooked when high gas prices skew the results. Then again, there's a chance that's already priced in, and the sky is the limit. Here we go? CVX hitting new all-time high today. Coke trading ex-dividend and over $70. Wal-Mart back over $60. Disney sloughing off mediocre sales of its new blockbuster, "John Carter." Hold onto your hats!

Commodities still rising

After OPEC's failure to meet a consensus on raising output this week, it looks like oil prices will continue to rise. We think this means continued growth for Chevron. It's been a tough couple of months but the stock closed at $101.23 today after bottoming out in the $98-99 range. Credit Suisse, S&P and others have a target of $118 to 120; I think CVX will reach that by August.

Looking for Coke to rise above $70 by August. It's trading around $65 right now.

Summer's here; the next 3 months are looking up!

S&P Outlook Downgrade Degrades Stocks

The stock market took it on the chin today, after Standard & Poor's downgraded the credit rating outlook of the U.S. Meanwhile the CBOE's VIX volatility rating has been very low, indicating investors have become complacent and are ignoring bad news. That's not necessarily a good thing for the stock market. This kind of attitude usually appears toward market tops. I'm looking for some better earnings this week and next to propel the market and keep the bull going for another few months. Hopefully, that will happen.

Pre-Easter Week, Will Earnings Earn Us Cash?

The markets are closed Friday, so there will be 4 days of trading, and what will the week hold? The watchword is "Earnings!" What will they do to the markets? Chevron's earnings will be announced the week after Easter; we're looking for a gradual rise and then a pop to the upside. Also an increase in dividends to $3.20 a year, 80 cents a quarter. It's the least they can do for their shareholders; they're making so much money.

Weather is getting better here in Chicago; almost time to plant the garden. Hopefully everything will rise in the spring!

Let the Geyser Blow!

Okay, the oil stocks have had a couple of rough weeks, but now it's time to start the spike. Chevron is around $105, down from $110. Up over a buck today, we expect CVX to surge when earnings are reported near the end of the month. We may be wrong, but would you bet against $105+ oil?

Coke continues to impress, but we're excited about Wal-Mart. Looking for WMT to push the $60 mark this summer, which would be an all-time high.

Anecdotal evidence seems to support a strong recovery. Are you experiencing the same thing? Have you tried to book a brunch for Easter? The restaurants are all full! My Serbian neighbor's mother is a maid at the local Hyatt hotel here in the Northwest suburbs of Chicago, it's fully booked through the month of April! All right, maybe that just proves the rich are doing okay in this economy, but I don't know -- I think things are looking up all around. And is anybody you know decreasing their spending because of the price of gas? Do you know any of these people who are supposedly going into hunker-down mode? Me neither! That's why I'm so bullish on Wal-Mart.

Okay, Happy Investing. Remember, the best things in life are free, but the next best things cost a lot of money!

Exxon, Chevron: The cure for your gas pump blues

If you're like me, you don't like paying north of $3 bucks a gallon for gas. What's a driver to do? Buy energy company stocks, like Exxon or Chevron! Both pay a decent dividend, and Exxon reported big earnings today, as did Chevron Friday. Exxon was up $1.69 to $80.68 today, and Chevron was up $1.56 to $94.93 after a bit of profit-taking Friday. They were the #2 & 4 rising stocks in the Dow Jones Industrial Average today (Alcoa and IBM were #1 & 3, respectively).

When you curse the extra $5 bucks it takes to fill your tank, just think of the $72 dividend Chevron is going to give you in a couple of months, and all your troubles will go away....

Now, it's time for me to enjoy the cure for sitting at the computer all day; I'm getting a massage. Ciao!