How to Make the Most Money in the Stock Market

On today's "Insight & Action," Adam Johnson looks at how to make the most amount of money in the stock market on Bloomberg Television's "Street Smart."

Barclays, Next lift FTSE for fifth straight day

 

The U.K.'s benchmark stock index inched higher on Wednesday for a fifth straight day of gains, as well-received earnings updates from Barclays PLC (BCS.NaE) and Next PLC (NXGPF.NaE) stoked momentum.

The FTSE 100 index rose 2.97 points, or 0.04%, to end at 6,777.70, marking the highest closing level since May.

Barclays (BCS.NaE) rose 0.9% after a well-received earnings report. The bank posted a decline in underlying third-quarter profit, but Chief Executive Antony Jenkins said the firm has made good progress on the restructuring program and has moved faster than expected in getting rid of loan portfolios earmarked for sale. Investec Securities analyst Ian Gordon kept a buy rating on the bank and said in a note that Barclays (BCS.NaE) remains their preferred U.K. domestic bank.

Next rallied 4.7% after the clothing retailer raised its full-year profit guidance as it reported a 4.3% rise in third-quarter brand sales.

Petrofac Ltd (POFCF.NaE) added 0.7% after the gas and oil-services provider was awarded a $650-million project in Algeria with Italian lump-sum contractor Bonatti.

BP PLC (BP.NaE) gained 0.9% after Soci?t? G?n?rale lifted the oil major to buy from hold. The company on Tuesday posted its biggest percentage gain since January 2011, after saying it would sell $10 billion in assets by the end of 2015 and use the proceeds for 'additional distributions to shareholders.'

On a more downbeat note in London, shares of Standard Life PLC (SLFPF.NaE) dropped 4% after reporting quarterly inflows and assets under administration slightly below expectations.

Pearson PLC (PSO.NaE) shares lost 3.6% after the publisher warned that full-year operating profit is expected to be lower than in 2012 due to the accounting impact of the Penguin Random House transaction and weak market conditions for college textbooks in North American Education.

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Asia stocks mostly lower after Fed statement

Asian markets were mostly lower Thursday as disappointing earnings combined with steady Federal Reserve policy to bring the region down.

The Fed met expectations by leaving its stimulus program unchanged at its policy meeting, though it did surprise with its upbeat assessment of the economy. This raised fears that a change in policy could come sooner than expected, weighing on regional sentiment.

Some investors were looking for the central bank to downgrade its economic outlook after the government shutdown and budget impasse earlier this month.

In fact, the government shutdown was a major focus for global markets in the first half of October. Asian stocks proved resilient through the drama, and most markets in the region look set to post respectable gains for the month.

The Philippines' PSE Composite is up 6.4% for the month, while Australia recorded a 4% gain. China has been a laggard in October, as a rise in local interbank lending rates resulted in the Shanghai Composite giving back some of its gains from earlier in the month and was 1.5% lower for the month.

On Thursday, the Nikkei Average was one of the region's worst performers, with the index down 1.2%, as a series of disappointing earnings results helped bring down the market.

Honda Motor Co. (HMC.NaE) fell 1.3% after it announced net profit for the quarter ended September, which came in below expectations. Battery-maker GS Yuasa Corp. (GYUAF.NaE) sank 6.1% after posting a first-half operating profit that was below guidance.

In Tokyo, ANA Holdings (ALNPF.NaE) declined 4.7% after the airline lowered its 2013 fiscal-year net profit forecast by 65% on higher fuel costs and slow service expansion because of delays in Boeing 787 Dreamliner deliveries.

Investors were also reacting negatively to earnings from Chinese firms in the financial sector. Hong Kong's Hang Seng Index fell 0.4%, and the Shanghai Composite lost 0.9% on the mainland.

Lenders in China were in focus after several of the country's largest banks reported their third-quarter earnings, with profit growth continuing to decline as the sector faced a maturing economy and interest-rate pressure.

Bank stocks fell in Hong Kong after a sharp increase during the previous session. Bank of Communications (BKFCF.NaE) dropped 1.1%, while Agricultural Bank of China (ACGBF.NaE) managed a 1.1% gain.

China Minsheng Banking Corp. (CGMBF.NaE) , a stock that came under pressure during China's liquidity crisis in the summer, fell 2.4% in Hong Kong. The country's eighth-largest lender reported its interest income rose by just 3%.

Chinese brokerages posted strong profit growth for the nine months that ended in September, as the industry benefited from increased trading volumes and higher investment returns. The market didn't welcome the news: Citic Securities (CIIHF.NaE) was down 2.1% in Shanghai, and Haitong Securities was 1.3% lower.

Australia's S&P/ASX 200 rose 0.2%, and South Korea's Kospi dropped 1.4%.

National Australia Bank (NAUBF.NaE) fell 2.5% in Sydney after the lender posted full-year earnings in line with market forecasts, though costs were ahead of expectations.

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Stock futures point lower; claims, PMI ahead

 U.S. stock futures pointed to a lower open on Wall Street on Thursday, set to extend losses sparked by a less-dovish-than-expected statement from the Federal Reserve a day earlier.

Investors also will eye earnings from Exxon Mobil Corp. (XOM.NaE) and ConocoPhillips (COP.NaE) as well as latest report on jobless claims and Chicago PMI.

Futures for the Dow Jones Industrial Average dropped 28 points, or 0.2%, to 15,525, while those for the S&P 500 index fell 4.90 points, or 0.3%, to 1,755.70. Futures for the Nasdaq 100 index gave up 15.25 points, 0.5%, to 3,377.00.

The losses built on weakness seen on Wednesday, when U.S. stocks retreated from record levels as investors assessed the Fed's statement after its two-day policy meeting. As expected, the central bank made no changes to interest rates or asset-purchases program, but the accompanying statement left some Fed observers worried the tapering process could come sooner than expected. The bank was not as uncertain on the economy -- thus more dovish on monetary policy -- as some had expected, given the recent string of weak data and the government shutdown earlier in the month.

The Wall Street Journal's Jon Hilsenrath, an influential Fed watcher, suggested that the Fed 'isn't taking a December adjustment to the bond-buying program off the table.' Ahead of the meeting this week, several analysts saw March tapering as more likely.

Analysts at Deutsche Bank said in a note on Thursday that 'the market had perhaps hit a near-term complacency peak on the timing of the taper and maybe yesterday's statement should be a reminder that the Fed probably does want to taper soon even if it might actually struggle to do so in reality. Sounds like a recipe for a bit of volatility in a generally high-liquidity environment.'

Data out on Thursday will give further hints to the health of the economy. At 8:30 a.m. Eastern Time, data are expected to show that jobless claims fell to 335,000 in the week ended Oct. 26 from 350,000 in the prior week, according to economists polled by MarketWatch.

But lately the report has not been very reliable as an indicator of labor-market trends, partly due to processing delays in California and private-sector layoffs related to the government shutdown.

There is also Chicago PMI data for October out at 9:45 a.m., expected to show a drop to 54.5 from 55.7 in September.

On the earnings calendar, Exxon Mobil (XOM.NaE) , ConocoPhillips (COP.NaE) and American International Group Inc. (AIG.NaE) were among the highlights.

For Exxon, analysts polled by FactSet expect third-quarter earnings of $1.77 a share. The company's board on Wednesday declared a fourth-quarter dividend of 63 cents a share, unchanged from the third quarter.

ConocoPhillips (COP.NaE) is likely to post third-quarter earnings of $1.46 a share.

After the closing bell, AIG is projected to report third-quarter earnings of 96 cents a share. Analysts at Keefe, Bruyette & Woods recently said insurers like AIG are likely to post strong underwriting results in the third quarter due to mostly favorable global weather.

Among notable movers ahead of the open, shares of Facebook Inc. (FB.NaE) climbed 3.5% after the social-media firm late Wednesday said it earned 25 cents a share on an adjusted basis in the third quarter, beating the average consensus of 19 cents a share.

Expedia Inc. (EXPE.NaE) soared 19% premarket after late Wednesday reporting an 8% rise in adjusted earnings per share to $1.43, above Wall Street's forecast of $1.36 share.

Starbucks Corp. (SBUX.NaE) slipped 1.7% in premarket trade, even as the company on Wednesday said its fourth-quarter profit came in at 63 cents a share, beating the consensus estimate of 60 cents a share.

In other financial markets, both Asian and European markets were mostly higher, while the dollar rose. Metals dropped across the board, while oil prices inched higher.


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European stocks fall after Fed update

European stock markets declined on Thursday, as investors digested the latest statement from the U.S. Federal Reserve, which some analysts found less dovish than expected.

The Stoxx Europe 600 index dropped 0.1% to 320.36, trimming its monthly gain to 3.2%.

Shares of Alcatel-Lucent SA jumped 15% after the telecom-equipment maker posted a narrower loss in the third quarter, helped by a rise in revenue.

Novo Nordisk AS slid 4.1% after the insulin maker reported third-quarter earnings slightly below expectations, and made downgrades to its guidance for sales and operating profit.

Shares of Technip SA (TNHPF.NaE) slumped 7% after the oil-services group amended its full-year revenue targets to reflect lower expectations for revenue from subsea activities, while revenue from onshore and offshore businesses is forecast to rise at a faster pace.

More broadly, investors looked to the U.S., where the Federal Reserve concluded a two-day meeting on Wednesday by making no changes to its interest rates or quantitative-easing program. The statement out after the meeting showed few changes from the September statement, but market participants had expected the Fed to be more bearish on the economy, and thus more dovish on monetary policy, given recent weak data.

'A run of weak economic data and the fallout from the U.S. shutdown had markets cemented to the view that tapering wouldn't begin until March next year at the earliest,' said Jonathan Sudaria, dealer at London Capital Group, in a note.

'The lack of symmetry between how the Fed sees the economy and how markets have interpreted the data has traders concerned that they've pushed out the timeline for tapering too far. With the foundations of the recent rally built on the idea that tapering was continually being kicked further and further down the road, bulls could be in for a rude awakening,' he added.

U.S. stock futures pointed to a lower open on Wall Street. Asia markets closed mostly lower.

In Europe, the U.K.'s FTSE 100 index was on track to break a five-day winning streak, down 0.4% at 6,751.60.

France's CAC 40 index dropped 0.2% to 4,263.23, while Germany's DAX 30 index fell 0.2% to 8,994.03.

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Car makers weigh on Europe stocks after downgrade

After a string of three weekly gains, European stock markets pulled lower on Monday, with car makers posting some of the biggest losses after a broker downgrade.

The Stoxx Europe 600 index dropped 0.3% to 319.11, adding to a small loss on Friday. The benchmark, however, closed out last week 0.5% higher, for the largest three-week gain since Sept. 20.

Auto makers were among top decliners after J.P. Morgan Cazenove cut the sector to neutral from overweight and instead moved funds to utilities, raising them to neutral from underweight.

'Autos are the best performing sector year-to-date in Europe, up 31%, more than double the performance of the overall market,' Mislav Matejka, its chief European equity strategist, wrote in a note. He cautioned that the sector could be vulnerable to some profit-taking in the near term.

'We think that their earnings momentum could be stalling in the near term as PMIs have stopped moving higher,' he added.

Shares of Peugeot SA (PEUGF.NaE) skidded 6.8% and Renault SA (RNSDF.NaE) fell 3.8% in Paris, Fiat SpA (FIADF.NaE) dropped 4.1% in Milan and BMW AG and Daimler AG (DDAIF.NaE) both lost more than 1.5% in Frankfurt.

More broadly, investors were waiting for more signals from the U.S. about when the Federal Reserve could begin tapering its monthly bond purchases before placing any bigger positions.

A U.S. gauge of consumer sentiment fell to the lowest reading in almost a year on Friday, adding to hopes that the Federal Reserve will delay the tapering process until 2014. The Federal Open Market Committee meets on Tuesday and Wednesday this week, and most analysts expect no changes to interest rates or the quantitative-easing program.

U.S. stock futures pointed to a mixed open on Wall Street . Most Asian markets closed higher.

Among country-specific indexes in Europe, the U.K.'s FTSE 100 index fell 0.2% to 6,710.92, while Germany's DAX 30 index gave up 0.2% to 8,969.28. France's CAC 40 index dropped 0.8% to 4,240.36.

Shares of Gemalto NV (GTOFF.NaE) lost 2.2% after Credit Suisse cut the digital-security firm to neutral from outperform and lowed revenue estimates.

On a more upbeat note, shares of TNT Express NV (TNTEF.NaE) climbed 4.1% after the Dutch parcel-delivery firm said it will take further steps to improve its business as market conditions remain challenging.

Shares of Assa Abloy AB (ASAZF.NaE) rose 4.2% after the Swedish lockmaker reported a 5% rise in third-quarter sales.

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Asia stocks higher after recent declines

Asian stocks moved higher on Monday, with Australia hitting a fresh-five year high, as shares bounced back from recent falls.

Regional markets started the week in recovery mode, following a series of declines last week that hit Japan and China especially hard. A pickup in interbank lending rates in China spooked investors and yanked the Shanghai Composite down 2.8% last week, while a strong yen helped the Nikkei Average sink 3.3% over the same period.

A positive lead from Wall Street, where the S&P 500 hit a record high on Friday, and the absence of fresh negative catalysts allowed Asian stocks to bounce back.

The coming week promises to be a busy period in terms of earnings news for the region, while the U.S. Federal Reserve's policy meeting later on in the week will be a focus as investors look for clues on the central bank's stimulus plans.

Looking ahead to November, markets are anticipating an important Communist Party meeting in China, where there are expectations that the country's new government will unveil economic reforms.

Early in Asia, the yen weakened slightly, with the dollar trading at ?97.60, compared with ?97.40 late Friday in New York.

The softer yen allowed the Nikkei Average to climb 1.7%, coming back from a hefty fall on Friday.

Australia's S&P/ASX 200 rose 1%, and South Korea's Kospi was up 0.3%.

China was mixed, with Hong Kong's Hang Seng Index up 0.5%, and the Shanghai Composite 0.3% lower.

China Construction Bank rose 0.9% in Hong Kong after China's second-largest bank by profits posted third-quarter net profit that came out slightly below market expectations.

China Life Insurance Co. (LFC.NaE) rose 2.2% after China's largest life insurer by premiums reported that it had made a 7.5 billion yuan ($1.2 billion) profit in the third quarter, reversing a 2.2 billion yuan loss in the same period last year.

Also in Hong Kong, Chong Hing Bank sank 7.5% after Chinese conglomerate Yuexiu Enterprises said on Friday it will acquire a majority stake in the Hong Kong lender for $1.5 billion -- the first local-bank sale in several years.

In Tokyo, telecoms firm KDDI Corp. (KDDIF.NaE) rose 2.2% after a Nikkei report said that the firm will likely report a record first-half group operating profit, with a 50% on-year increase. TDK Corp. (TTDKF.NaE) , however, dropped 0.5% after a separate Nikkei report said that the electronics-component producer will report an 8% increase in operating profit over the same period.

Also in Japan, Mizuho Financial Group (MFG.NaE) rose 1.5%, after weekend media reports said that its Mizuho Bank unit will reprimand 54 current and former staff for failing to take responsibility for loans to borrowers associated with organized crime.

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