Stocks, Gold slump on Global Economic Concerns
|
The Federal Reserve kept its key interest rate near 0% and it looks like that won’t change, at least in the near future, as signs of economic improvement seem weaker than originally thought. Thursday the markets fell as concerns over this week's unemployment numbers bothered investors. There were 480,000 initial job claims filed in the week ended Dec. 12, up 7,000 from the previous week's revised 473,000, the Labor Department said. This is the second consecutive week that claims have climbed. The stock slump came as the dollar rebounded against the euro to levels not seen since September.
|
|
Another volatile week on Wall Street has many investors nervous about a drop in the markets after a 40% increase since last March. So, we decided to look at some companies that should maintain their value in the event of such a drop. Our Bullish recommendation is one of the world’s most recognized brands, a strong company that pays a nice dividend and just keeps posting profits and growth year after year, a true blue chip. Our Bearish pick has been down enough that investors are lining up for a nice jump, thinking there is nowhere to go but up, but as the Wall St Journal reports this week, bankruptcy is a further drop that has become a reality to this once market leader. |
 The Coca Cola Company (KO) - With so many questions about the economy, it is time to return to solid companies like Coca-Cola. The company is retooled and a "weakening" dollar is likely to benefit in terms of glabal sales. The company has promising products such as VitaminWater, taking hold of the health drink market, while Coca Cola still shows growth in their top products Coke and Sprite in the global market. The company also pays a nice dividend of 2.8%, making this a solid long term play that will certainly outperform the markets in the event of a downturn.
|
 Blockbuster, Inc (BBI) - Blockbuster has already closed down many of its unprofitable stores and cut inventory but is still struggling to turn a profit. In three of the last four quarters, Blockbuster has posted losses and got unfavorable reports from auditors in April. Although it may have become a popular pick as a come back stock, the truth is even its best remarketing strategy will take years to show results. Their digital delivery system which will allows customers to order directly over their DVD player is something that Netflix is already offering. The stock is down and for good reason, but an investment in this possible bankruptcy candidate is too risky for smart investors.
Full Story
|
|
|
|
|
