No Worries: Dow Shrugs Off Taper Terror, Jumps on Confidence Data

Confidence trumps unexciting economic data and fears of further Fed tapering.

Jan 28, 2014 at 12:03PM

The Dow Jones Industrial Average (DJINDICES:^DJI) is looking sprightly today, as the Federal Open Market Committee meeting begins, featuring outgoing Chairman Ben Bernanke and (probably) more quantitative easing tapering for February.

If the market is afraid of what the Fed has in store for the economy, it isn't showing at the moment. Though seesawing a bit, the Dow remains firmly in the green, having gained 0.27% by late morning.

Economic data: pretty drab
The U.S. Census Bureau started off the economic calendar today, revealing that durable goods orders dropped by a precipitous 4.3% in December, compared with a gain of 2.6% for November. Experts had expected an increase of 1.6%. Not surprisingly, inventories of such goods expanded, with the 0.8% rise to $387.8 billion reflecting the highest level since the index began.

This disappointing nugget of news was followed by the S&P/Case-Shiller Home Price Indices, which showed that housing price increases are indeed slowing. November price gains were down 0.1% from the previous month, the first drop since November 2012. The 20-city composite price index posted a gain year over year, however, of 13.7%.

Everybody's happy
Confidence measures were snappy this morning, as both consumers and investors look ahead with their rose-colored glasses firmly in place. The Conference Board reported that its Consumer Confidence Index jumped again in January. Consumer confidence now sits at 80.7, versus December's 77.5, and the Present Situation Index rose to 79.1 from a prior 75.3. This marked the second month in a row that overall confidence increased on both indices.

State Street released its gauge of investor confidence, showing a hike to 114.4 in January, up 18.6 points from December. This represents the biggest jump in four years, with the North American confidence index leading the way by increasing to 113.6 from the prior 92.1.

Happiness extends to financials
With lots of green on tap today, Visa (NYSE:V) was up 1.7% by noon EST, very possibly enjoying a couple of pre-earnings reviews by analysts. Sandler O'Neill has labeled the credit card giant a buy, putting a price target of $250 on the company's stock. The Street reiterated its own buy rating this morning, noting that revenue growth exceeds the industry average and that Visa sports very little debt. The company reports earnings bright and early on Thursday.

American Express (NYSE:AXP) has gained nearly 1.3% this morning. The company announced the launch of a new business product this morning, which may be helping the stock climb. The Enhanced SimplyCash Business Credit Card  will allow small businesses to annually change the categories in which they can choose their cash-back rewards. The company claims that its card is the only one to offer business owners this benefit.

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Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends American Express and Visa. The Motley Fool owns shares of Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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