Eagle Eye Opener: Investors Should Consider Potential of Wal-Mart, Amex Alliance; Trade Tiff Targets Chinese Telecom Companies; Rising Oil Prices Fuel Investor Returns

Eagle Eye Opener

Wal-Mart, Amex take on banks with low-priced debit card (Reuters)

Investors in Wal-Mart Stores Inc (WMT) and American Express Co (AXP) should be encouraged by a new alliance that the companies formed to offer a prepaid debit card called Bluebird to lower-income shoppers — giving both companies entry into a highly desired new market — and a whole new line of profitability.

It’s no secret that Wal-Mart’s leadership has coveted entry into the financial arena for years now. And by combining this American Express deal with Wal-Mart’s recently announced partnership with MetLife, Inc. (MET) to sell insurance products in Georgia and South Carolina, the giant retailer accomplished its goal. And the deal’s just as juicy for AXP -– allowing the company to access a new market segment through 4,000 new point-of-sale locations: the countless millions of lower-income Americans who shop at Wal-Mart. When you throw in the potential for investors to profit with both companies, it is a rare “win-win-win” deal.

Cold War 2.0 — Telecom Companies Could be the Battlefield (Chicago Tribune)

The U.S. government has just blacklisted two Chinese telecom giants due to fears of potential espionage — telling American companies to stop doing business with Huawei and ZTE. The concerns could aid investors in the world’s other telecom giants: Ericsson (ERIC), Alcatel-Lucent (ALU) and Nokia-Siemens (NOK).

Huawei and ZTE are the world’s second-and fifth-largest makers of routers and other telegear. By posting an economic “no-fly” zone around the two Chinese companies, the United States is escalating economic tensions with the world’s second-largest economy — raising the specter of a new Cold War with China. This action comes on the heels series of moves taken against China by President Obama, including banning the Asian nation from entry into the alternative energy and auto-making industries. Charter Equity Research analyst Ed Snyder said that this move could lead to retaliation against U.S. telecoms doing business in China, affecting Cisco (CSCO), Google (GOOG) and Qualcomm (QCOM), to name but a few. For investors already steering clear of investing in China due to the country’s economic slowdown, outright political action restricting trade should certainly reinforce caution.

Exclusive  Daily Data Flow: Stocks Soar; Twinkies Have a Chance; Oil Jumps

Gaspocalypse Strikes California — Are Oil Companies Getting Rich Off of Our Pain (USATODAY.COM)

Oil industry investors should take note of soaring gasoline prices in California, which hit a new record high of $4.66 per gallon — up 50 cents from a month ago and 86 cents from a year ago. Add to that jump a national price per gallon average of $3.81, and investors may be tempted to buy oil company stocks and funds as a way to profit from the price hikes. If you look at the share price of the top publicly traded oil producing companies over the last year, as gas prices have skyrocketed, opportunities to profit have emerged. The following list of giant oil companies and the year-to-date share-price performance of the publicly traded ones is provided by Forbes.com:

  • Saudi Aramco – not a publicly traded company
  • Gazprom (GAZP) – up 12.77%
  • National Iranian Oil, Co. – not a publicly traded company
  • ExxonMobil (XOM) – up 21%
  • PetroChina (PTR) – up 6.7%
  • British Petroleum (BP) – up 10.3%
  • Royal Dutch Shell (RDSA) – up 9.97%

Clearly, they are making money as Americans suffer at the pump… How long it will continue is unclear but these oil industry behemoths are certainly on the rises along with the price at the pump.

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The World Bank announced today that it reduced its growth forecasts for developing countries in East Asia to 7.2% for the year (excluding Japan and India) -- its lowest growth rate in 11 years and down from 8.3% in 2011 and 7.6% in May. Part of the slowdown is due to manufacturing, which contracted in September from Europe to China as the euro area's fiscal crisis hurt investor confidence and dimmed global growth prospects.

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