This week offered some terrific news, as two of your Global Stock Investor holdings — Potash (POT) and Millicom International (MICC) — soared to record highs. Potash jumped almost 11% on takeover rumors, and Millicom leapt more than 9% as Wall Street catches on to the global cell phone megatrend.
Global markets were strong in Asia last night, and U.S. stocks headed toward a higher open today on the back of numbers that showed that worker productivity roared ahead at an annual rate of 6.3% in the third quarter, the best showing since the summer of 2003. Meanwhile, wage pressures slowed with unit labor costs dropping at a rate of 2% in the third quarter — the biggest decline in four years. This combination of stronger productivity growth and lower wage pressures should help to clear the way for another Fed interest rate cut next Tuesday. All this will add fuel to the fire of an increasingly likely Santa Claus rally. Your Global Stock Investor portfolio is well positioned to benefit.
Anglo American (AAUK) announced it would invest $1.7 billion to boost copper output at its Los Bronces mine in Chile to 400,000 tons a year by 2011 from 226,000. The stock has rallied since last week and is up 2.7% in today’s London trading. Our global commodities play remains a BUY.
ABB Ltd. (ABB) announced it will invest $100 million in three years to expand its operations in India. ABB expects business volume of the Indian operations to double by 2010 and to propel India into one of ABB’s top three locations in the world by 2010. In three years time, ABB’s workforce in India will exceed that of home countries Sweden and Switzerland. A terrific way to play global growth, ABB is a BUY.
Barrick Gold (ABX) is our promising gold recommendation. Gold use in jewelry in China jumped 24% from a year earlier to 221 metric tons in the first nine months. That compares with 515 tons in India, the world’s biggest consumer, and 165 tons in the United States. Increased jewelry purchases by consumers in China and India will continue to support the price of gold, which reached a 27-year high of $845.84 an ounce on Nov. 7 and is headed for its seventh annual gain. Barrick Gold is my #1 way to play the favorable supply and demand equation in gold. It is a BUY.
America Movil (AMX) said on Tuesday it is actively scouting the world for acquisitions. Chief Financial Officer Carlos Garcia-Moreno said America Movil is keen to expand but will be financially disciplined in any takeover or purchase of spectrum. Panama is at the head of America Movil’s list. Super hedge fund SAC Capital recently added to its positions in America Movil. So should you. America Movil is a BUY.
iShares MSCI Sweden Index ETF (EWD) continues to lag as negative corporate results outweigh the benefits of this Nordic country’s “Reagan Revolution.” Sweden stays a HOLD.
iShares MSCI Brazil Index ETF (EWZ) is our play on the growing Brazilian stock market. This year, 56 companies have issued shares on the Brazilian Stock Exchange — the third-largest number of issues in the world after China and South Korea. This has increased Brazil’s total market cap to $1.28 trillion, or five times its value in 2000. When global markets rally, Brazil will soar. Brazil is a BUY.
Currency Shares Japanese Yen Trust (FXY) is off its highs of two weeks ago, but continues to be the best hedge against downturns in the marketplace. It remains a defensive BUY.
ICICI Bank (IBN) continues to benefit from rising credit demand as Indian companies invest in a booming economy. India’s $906 billion economy will probably post its third year of at least 9% growth when its current fiscal year ends on March 31. ICICI will leap ahead in any Santa Claus rally. “India’s Citibank” is a BUY.
Millicom International (MICC) soared more than 9% this week, before falling back slightly, as Morgan Stanley lifted its share-price estimate for Millicom to $150 from $109. The reason? A “recent more aggressive approach” to growth in Africa. The stock remains among Morgan Stanley’s “top picks.” Wall Street finally is catching on to what we’ve been saying since Day One. Millicom is a BUY.
ArcelorMittal (MT) announced on Tuesday that it had acquired NSD, a U.K. steel distribution company, and it is spending up to $1.8 billion to buy out minority investors in a Brazilian unit. CEO Lakshmi Mittal is also taking on the role of chairman of the company. ArcelorMittal is a BUY.
Potash (POT) soared almost 11% to record highs after an analyst’s report ignited takeover speculation in the stock. Hold on for the ride. Potash remains a BUY.
Tesco (TSCDY) reported third-quarter sales for its core British business up 7.6%, at the top end of market expectations. International sales jumped 25.7%, with Asia and Central Europe among the fastest-growing regions. In addition, it confirmed that the first Fresh & Easy stores in the United States have been very well-received by customers. Although shares have risen by 21% during 2007, Tesco remains a BUY.
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