US investors who had invested into stocks in Europe and Asia may soon find the best times are over. Two-thirds of the 116% return that investors got from the Dow Jones Stoxx 600 Index since January 2002 has come from the decline of the dollar against the euro. The dollar reached a 20-month low against the euro and a 14-year low versus the British pound in the week ending December 1.

Now investors are facing a potential double whammy. The dollar’s weakness may restrain exports to the US, stocks around the world and hurting economies. And the currency’s slide might finish, eliminating the added kick for American investors.

Lincoln Anderson, chief investment office at Boston-based LPL Financial Services says, “If you are a US investor who invested in Europe, you’ve had tremendous outperformance since early 2002.” According to him, now such investors should “start cutting back on their overseas investments”.

The Stoxx 600’s 116% return in dollars since early 2002 contrasts with 39% in euros. In 2006, Germany’s Dax Index is up 30% in dollars and 15% in euros. The France’s CAC 40 Index is up 25% in dollars and 11% in euros. In Spain, the IBEX 35 Index has risen 43% in dollars and 27% in euros. Outside of the euro region, the FTSE 100 Index in the UK has climbed 7.2% in pounds and 23% in dollars.

US investors have also done better in Asia. Japan’s Nikkei 225 Stock Average has gained 3.7% in dollars and 1.3% in yen. In many cases, Americans’ dollar-based gains outside the US outpace their earnings at home. In 2006, The Standard & Poor’s 500 Index has risen 12%. US investors have invested $106 billion into mutual funds that invest in stocks outside the US. This is up 40% from the same period in 2005.

According to Michael Metcalfe, a senior strategist at State Street Global Markets in London, at the moment, the windfall effect of dollar weakness would encourage US investors to continue to lose their home-market bias. A weaker dollar would make imports into the US more expensive, hurting exporters around the world and thus depressing international stock markets.

Well, everyone. My name is Brett. I am 23 years old and going to chiropractic school. I was thinking about taking my loan money and putting it in to the market but my parents would kill me. I have been doing this for a couple years now and have improved 10 fold. Out of my last 50 transactions, only 8 were losers. Some of my great picks that i got into were NTRI @14, Grow @ 23.50, Hans @ 50 (before spilt) But unfortuanley i sold wayyy too earley on all three of those. I hope I can keep this up and improve. I swtiched my trading style and now try to find charts that are similar to other charts that went up. This change of trading has been more lucrative for me. I shall share this with you guys as well. So lets make money!

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The pressure on Pfizer to improve its financial performance intensified after the announcement that the company has ended development of a key drug Torcetrapib. Now Pfizer, the world’s largest drug maker, is likely to slash staff and accelerate merger and licensing deals. Pfizer took the decision after an advice from independent board monitoring a study for cholesterol treatment Torcetrapib that work be ended because of unexpected number of deaths.

Analyst differed on how much Pfizer stock would fall. According to Barbara Ryan, an analyst at Deutche Bank, the dividend yield of around 4% would keep shares from a free fall. However, some analyst estimated the stock could plunge to $20 a share.

Pfizer had been counting on the drug to revitalize stagnant sales that have been hurt by a number of patent expirations on key products. Pfizer was spending around $800 million to develop Torcetrapib, which was supposed to fill the void when its best-selling drug, Lipitor, is going to lose patent protection in either 2010 or 2011. “This is obviously unfortunate because this was the biggest opportunity in their pipeline,” said Barbara Ryan.

Two months ago, Pfizer announced it would detail plans in January to change the company into a more nimble organization and would go beyond the program announced in 2005 to cut $3 billion in expenses by 2008. Patent expirations are expected to cost the company $14 billion annually between 2005 and 2007.

Pfizer CEO Jeff Kindler said the company’s speed of transformation would accelerate because of the loss of Torcetrapib although he didn’t give any details. Last week, Pfizer announced to cut 2200 jobs of US sales force. Pfizer employs roughly 1,00,000 people.
According to Ryan, Pfizer may lay off as many as 10,000 people in near future. She expects Pfizer to increase its annual dividend from 96 cents to $1.10 per share in the next few weeks in the hopes of putting a floor on the stock.

Wal-Mart is planning for an entry in Indian retail market and has initiated an agreement with Bharti Enterprises, an India-based company, for a retail venture on a wholesale cash?and?carry basis. According to Sunil Mittal, Bharti Enterprises Chairman, this will be a partnership of equals (50:50). While Wal-Mart will provide backend logistics support involving sourcing, Bharti will handle the front-end retail aspect and set up “several hundred” stores across India, the first of which is scheduled to open next year. The initial investment will be of over $100 million, a figure that is expected to grow manifold in the future. Bharti Enterprises will open the retail shops under Wal-Mart’s franchise. The venture would mainly source products from India and adopt all retail formats, including hyper markets and super markets.

Wal-Mart’s entry into India with the Bharti group will be a first-of-its-kind for the US retailing giant. Wal-Mart has always preferred to enter a new market on its own. But government regulations in India (which only allow foreign direct investment of 51% in cash-and-carry and single brand retail) coupled with Wal-Mart’s earlier experiences in other markets prompted it to tie-up with a local partner.

Wal-Mart first forayed outside the United States in 1991 with a Sam’s Club outlet (cash?and?carry format) store in Mexico and is at present the biggest retailer in the country. However, the experience of the retailer hasn’t been smooth in other markets. Wal-Mart exited its business in South Korea in May this year and sold its 16 stores to a local company Shinsegae for $860 million.

In earlier days, Wal-Mart made the mistake of taking its structure, product mix and corporate culture to other countries like Indonesia and Germany where it did not work too well. Now the retailer has learnt from its experience and localized products form a significant part of its product mix in different countries.

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Amazon.com went public almost 10 years ago and online holiday sales are still less than one-tenth of the total. It is highly expected that Web shopping won’t ever eclipse the fun shoppers going to the malls to see and touch their products before buying them.

A prediction from Jupiter Research in New York says online shopping will eventually peak at between 10% and 15% of the total annual retail sales. Online sales will break the $100 billion mark for the first time this year. According to ComScore Networks, a Reston, Virginia research firm, cyber-sales during the holiday season will climb 24% to $24.3 billion this year. According to Washington-based National Retail Federation, total seasonal sales, excluding online shopping, will increase 5% to $457.4 billion. Thank goodness for cd rates.

Many shoppers search the Web to do research, and then go to stores to see the products. Only some trust they could get a good fit of jeans and shoes online. Retailers are increasingly using their websites to drive store traffic. According to some analysts there is a social aspect of shopping and for some shoppers it is an actual activity they’ll plan on.

Coach, a New York-based company and the largest US luxury leather goods maker, this holiday season is providing facility to shoppers to view handbags from multiple angles on its website. The company is also promoting its store-return policy and flat $8.50 shipping rate for online purchases. The company CEO, Lew Frankfort views the Internet as the Coach flagship store that anyone can visit at home or from the office. “I saw it as a marketing vehicle,” he said in an interview. According to Coach spokeswoman, Andrea Shaw Resnick, online sales, while the fastest growing, represent only about 3% of Coach’s total sales. More than 70% of shoppers who visit Coach’s Web site say it spurs them to buy in stores.

The data published on November 25 showed that eBay was the online winner this “Black Friday”. However, overall Internet traffic growth was well below last year’s, even as bargain?hunters tracked down much-adored toys and electronics on the Web before “Cyber Monday.”

According to the online audience measurement firm, overall traffic to the Nielsen/Net Ratings Holiday eShopping Index rose 12% on November 24 after Thanksgiving over the same day last year. That is drastically below the 29% growth in the overall traffic to the index from 2004 to 2005 but in accordance with 11% growth seen from 2003 to 2004.

The data shows that eBay had the most Web traffic on “Black Friday” with 7.5 million unique visitors. Amazon.com grabbed the second place with 3.4 million unique visitors, followed by Wal-Mart Stores with 3.2 million visitors. Much of that online traffic in advance of “Cyber Monday” was dedicated to the search for Mattel’s T.M.X. Elmo, the most popular and hard-to?find toy of this season. The eBay reported sale of 2,537 T.M.X. Elmos on November 24 for an average price of $70.10. The toy retails at Wal-Mart for $39.97 and as much as $150 on Shopping.com.

Other popular items on eBay included Sony’s PlayStation 3 and Nintendo (7974.OS) Wii. About 14,675 Sony PlayStation 3 have been sold on eBay for an average price of $1,186.39 from November 17 to November 24. Nintendo was introduced on November 19, and since then, 26,708 have been sold for an average price of $412.53.

Shopping.com and PriceGrabber.com, which allow consumers to compare deals from a variety of retailers, have witnessed year-over-year jumps of 40% and 45% respectively in the volume of traffic on their sites. However, traffic does not necessarily means higher sales. As shipping becomes faster and more reliable, more Internet shoppers are waiting for December to make purchases, and are browsing the Web for good deals.

US Airways Group Inc offered an $8-billion takeover of bankrupt Delta Air Lines Inc on November 15 in an attempt to restructure costs and get the most out of a sector showing signs of recovery. Delta is the No. 3 US airline. According to US Airways, the deal would create the No. 1 trans?Atlantic carrier. The deal is the latest move by US Air CEO Doug Parker, who planned the May 2005 takeover of the then-bankrupt US Air by financially-healthier America West. Parker has proposed becoming the CEO of a merged airline.

A spokeswoman of Delta said that Delta intends to emerge from bankruptcy as a stand?alone carrier. “Maybe US Airways did a pre-emptive strike here,” Calyon Securities’ Ray Neidl said. “The big concern is government regulators, if they give the green light. And if they do, it will probably set off a series of potential M&A activity in the industry.”

Delta creditors would get $4 billion in cash and 78.5 million shares of US Air stock with an aggregate value of $4 billion based on closing stock price on November 14. CreditSights analyst Roger King said, “This appears to be sort of a hostile takeover. Delta CEO Grinstein has made it clear that he doesn’t want to merge. But US Airways is appealing directly to the creditors.” Industry leaders such as UAL Corp CEO Glenn Tilton and Parker have been outspoken proponents of consolidation. They both have approached Delta in the past for a merger.

US Air announced its offer represented a 25% premium over the current trading price of Delta’s pre-petition unsecured claims as of November 14. The offer also represented 40% premium over the average trading price for Delta unsecured claims over the last 30 days.
While Delta stock is considered of modest value, creditors claims have monetary value and can be traded by investors. US Air thinks the combination will generate at least $1.65 billion in annual synergies.

The modern mutual fund investor, these days, has become a model of play-it-by-the-book moderation. No frills or fads satisfy the great majority of this multitude, 96m strong in the US alone. According to the latest tallies by the Investment Company Institute, people nowadays have close to $10 trillion riding on their US fund investments and almost $20 trillion worldwide.

In times of yore like the 1960s and 1990s, fund shares buyers went on flings with go-go aggressive growth funds and Internet funds. Those high-risk, high-cost escapades are all in the past. The evidence to support these assertions comes from the latest data published by the Boston consulting firm of Financial Research on money moving into and out of mutual funds. The five largest selling categories of funds in September were large value, foreign large blend, intermediate term bond, world allocation and world stock. None of these in the group is a gimmick. You can also look at some of the names represented on the list of best-selling individual funds for September: the American Funds’ Capital Income Builder and Capital World Growth & Income; the Dodge& Cox International Stock Fund, and the Franklin Income Fund. The common themes in both lists are revealed in words such as large, value and income. You can just observe the money feeding gradually in 401 (k) and other long-term saving vehicles.

This might have been evidence of a performance-chasing fever 10 or 15 years ago. Today, by most analysts’ account, it represents that the economy’s future is a global story. To suggest that fund investors have mature enough to make another mistake is taking it way too far. Instances of speculative enthusiasm were displayed in 2006.

It is not the case that every dollar should be put in a conservative type of fund. To a contrarian, the lack of the words “aggressive growth” on current fund bestseller lists suggests there is room for a new outburst of high spirits in the market.

The picture of fund investors that comes out from their current actions is a very healthy-looking one. It suggests they have recognized themselves as long-term investors with long-term objectives and have chosen long-term investments well suited to pursuing those goals. It also suggests if stock market runs into a bad patch, fund investors are more likely to serve as stabilizers than contributors to the problem.

Bankaholic has the Highest CD Rate comparision of certificate of deposit accounts from online banks across America.

With the elections over and the year quickly moving towards its end, investors have turned their attention to capital returns rather than Capitol Hill. Money managers and hedge funds are buying riskier assets such as small cap stocks, emerging market debt and high?yield junk bonds as those sectors have continued to post solid returns.

“What we are seeing is a flight to risk,” said Stephanie Pomboy, an economist at MacroMavens in New York. “With only 33 trading days left, and the rush to generate double-digit returns now begun, the appetite for risk-taking is not surprising,” she said.

To date this year, junk bonds have returned 9.5%, emerging markets over 8%, and small cap equities 13.6%. Investors are still moving into these sectors in hope of more returns. “A lot of investors are chasing yield and a lot will regret what they’ve bought when all is said and done,” said Bob MacIntosh, a portfolio manager at Eaton Vance Management in Boston. MacIntosh thinks the junk market is pricing in too low a premium for both economic and geopolitical risks. Hedge funds emerge as the major buyers in these sectors.

According to Morningstar, an investment research company based in Chicago, the average equity mutual fund has averaged a total return of 11.16 for the same period. Investors have shown a desire for more speculative and volatile assets as the Federal Reserve is unlikely to increase rates soon. Most of the investors think the central bank will cut rates in 2007. In addition, any doubt about the outcome of the elections is now out of the way. The sentiment has helped push the Dow Jones industrial average’s performance, which has returned about 15% year-to-date.

On November 9, investors gorged on $5.7bn of debt issued by HCA in the second-largest junk bond sale ever to help finance its leveraged buyout by a private equity group. HCA offered yields as high as 9.6% given that many Treasury yields are paying less than 5%. The sale came after investors bought $1.1bn in bonds issued by NRG Energy on November 8 and a concurrent $1bn offering by Dutch company Bank Nederlandse.

The rally lifting Asia-Pacific stock indexes to records during the second week of November may just be getting started. In 2005, Asian shares outside Japan had their biggest two-month advance in November and December. Anticipation of US consumers buying more holiday gifts and international funds flowing into the region has lifted prices this year.

Indexes in Australia, India, Singapore, Indonesia, and Sri Lanka reached all-time highs in second week of November. After rising 0.9% for the week, a Morgan Stanley Capital International Asia?Pacific stock index that excludes Japan is 0.3% away from its record set in May.

According to the Chong Sze King, trading manager at Asian Genesis Asset Management, the US outlook has set the stage for a Santa Claus rally in Asia. “Investors are buying in anticipation the markets this year will perform as they have historically,” he said.

Many Asian companies are benefiting from growing demand in the US, the largest buyer of Asian exports. Data compiled by Bloomberg shows that international investors have bought a net $117.8m of stocks so far in November in six emerging markets in the region. According to Citigroup, investors purchased more shares in Asian markets outside of Japan than they sold in November and December for the past four years.

Economic data released in November shows growth in the US is weathering a housing slump. The unemployment rate declined to a five-year low in October. The University of Michigan’s index of consumer confidence was at 92.3 in November after rising to 93.6 in October.

A National Retail Federation forecast says sales at US stores will rise 5% in November and December. While the estimate is below last year’s 6.1% growth, it is higher than the 10-year average of 4%. Data shows that the holiday period accounts for a fifth of US retailers’ sales and new products, especially in the technology sector, are likely to spur consumers spending globally.

Web search leader Google Inc. (GOOG) is hiring radio sales people for its US radio venture. The company is spending a lot in a bid to expand its position in the $20-billion radio industry. According to Michael Mayzel, Google spokesperson, the company will begin a public test of Google Audio Ads by the end of the year. Advertisers will be able to go online and sign up for targeted radio ads by using the same AdWords system that they use to buy Web search ads.

Google is testing its capability to move into offline media, saying it would help customers buy advertisements in 50 US newspapers. It made an apparent move into radio in January by paying more than $1 billion for dMarc Broadcasting, which connects advertisers to radio stations through an automated advertising system. Google CEO Eric Schmidt said that investment in radio advertising could grow over time to include up to 1,000 Google employees. The company had 9,378 employees in September.

According to Bill Figenshu, chief operating officer of Software Media Exchange, Google is hiring sales people in major markets. “They’re hiring sales people to sell radio and paying about 50% more than a typical radio sales person might make,” he said. Figenshu added three people he had spoken to believe Google was in discussions to buy about $1 billion in radio advertising inventory from Clear Channel Communications. Clear Channel is the biggest radio station operator and controls an estimated 20% of local radio industry revenues. Google’s move into radio comes at a time when Clear Channel is weighing a possible sale of the company. Clear Channel has declined to comment on the reports that Google could take a stake in the radio company, perhaps as part of a buyout led by private equity firms.

RBC Capital Markets analyst David Bank says he is perplexed by Google’s hirings as they are being made before Google has significant radio advertising inventory to sell. “While there are other possibilities, we believe there’s a reasonable chance Google Audio is establishing critical mass in anticipation of a major acquisition of prime inventory”, he said. Bank added Clear Channel’s size and potential sale make it a likely source of inventory for Google. According to him, Google may take a modest investment in a leveraged buyout or take a stake in the company’s current incarnation.

Now that Democrats have control of Congress, Federal Reserve chairman Ben S Bernanke may find it difficult to establish an inflation target. For the first time in 12 years, Democrats have captured the House of Representative and taken control of the Senate. The Democrats sealed their Senate majority when Jim Webb defeated Republican incumbent George Allen.

Massachusetts Representative Barney Frank, Rhode Island Senator Jack Reed, and other Democrats prefer the Fed focusing on promoting growth as well as containing inflation. Some legislators advocate the Fed to adopt a target for employment as well as prices. According to Tom Gallagher, senior managing director at International Strategy & Investment Group in Washington, the Democrats would give Bernanke a tougher time than the Republicans on inflation targets. Bernanke says a target would help cement the Fed’s credibility as an inflation-fighter and make it easier to manage the economy. Supporters think if he is unable to press ahead, those aims might be damaged. According to Adam Posen, a senior fellow at Peterson Institute for International Economics, Washington, the Federal Reserve’s political legitimacy and ability to respond flexibly to shocks to the economy would be impaired.

Bernanke affirmed in his Senate confirmation hearing last year that the independent Fed can adopt a numerical target for inflation on its own. However, he’s unlikely to proceed without at least the implicit support of key policymakers. Under current law, the Fed has a mandate for both price stability and full employment. Bernanke thinks the adoption of an inflation target would boost rather than hamper the Fed’s ability to achieve both goals. Maryland Senator Paul Sarbanes has time and again challenged Bernanke over targets. Sarbanes, who’s retiring, expressed concern that the Fed would become too focused on inflation, to the loss of promoting growth. Reed, another Democratic member of the Banking Committee, has also warned Bernanke against adopting a rigid rule to guide monetary policy.

Software makers Novell and Microsoft have finally signed a deal which says that Novell will allow Microsoft to use its open-source Linux software to work with Windows. In return, Microsoft will make two separate up front payments totaling $348 million to the Novell. In a filing with the US Securities and Exchange Commission on November 7, Novell announced that Microsoft would pay Novell $240 million up front in subscription fees to allow the world’s largest software maker to use its Linux software. Microsoft will also pay an additional $108 million up front for use of patents.

Earlier, Novell and Microsoft took an entry into a broad set of business and technological agreements to make their products work together better to serve corporate customers who use both Linux and Windows computer servers. Linux is the most admired variant of open-source software. Unlike proprietary software, open-source software lets developers to share code and add functions. A user has to only pay for custom features, maintenance, and technical support.

The deal says that Microsoft will not sign a similar agreement with any other Linux distributor for at least three years. According to some analysts, Microsoft’s pact with Novell has dealt a blow to other Linux distributors such as market leader Red Hat. The pact will run until at least 2012. Under the pact, Novell will pay Microsoft at least $40 million over five years for use of Microsoft’s patents based on a percentage of its revenue from open-source products.

Novell said that Microsoft has also agreed to spend $12 million a year to market scenarios where users can virtually run Linux on Windows machines and vice versa. Over the life of the agreement, Microsoft will also spend $34 million to put in place a sales force devoted to the combined offering, Novell said.