Don’t Get Fooled by S&P’s Dark Secret about Technology (Reuters)
Sure, the Dow closed above 15,000 for the first time ever, Germany posted a 2.2 percent gain in industrial orders and the S&P 500 flirted with its own historic high… But one key sector of the S&P 500’s has lost ground: technology (S&P 500 Tech. Index down .2 percent for the year. As you might have guessed, a big chunk of the blame can be placed on rotten fruit — Apple. The company’s shares closed yesterday below $460, down more than 33 percent from last year’s highs. As we wade through May, and investors become more tempted to sell “and go away,” bears may not have another way to play until the world returns to the markets in September.
Is European Telecommunications Getting Cut off? (YahooFinance)
As European markets continue to shrink, competition for dwindling investment dollars is heating up. And right now, you couldn’t find a more overt example of this than in the telecommunications sector. Spain’s Telefonica SA and Germany’s Deutsche Telecom AG both reported lower revenues due to the lagging European economy and increased regulation in the industry. Both groups claim onerous regulation and a European recession are prohibiting them from upgrading networks and effectively stopping growth. These conditions are expected to spread through other European countries. When combined with a flagging euro, a sector contraction may be in the air. For investors, though, this situation could mark the beginning a price war — one which would create better value investments — but fewer choices in the long run. We’ll just have to “stay tuned” to see how it all shakes out.
Six States Eye Gold as Currency (Bloomberg)
Even as gold has lost 13 percent of its value so far this year, that dip hasn’t stopped six states from pursuing “gold-as-currency” (GAC) efforts. The fundamental position taken by the states battling for GAC is that despite the recent correction in price, gold still offers the safest, most stable form of wealth in the world today. There also is the traditional financial doomsday scenario of economist and writer Gary North, who predicts fiat currencies, such as the dollar, will not be worth the paper they’re printed on. To date, GAC bills have been passed through lower legislative levels in Missouri, South Carolina and Kansas, while similar initiatives are under way in Indiana, Oklahoma and Louisiana. Should gold-as-currency bills pass in these states, it would set up an interesting battle in the remaining 42 – but how will the federal government respond?