Spring Thaw Could Boost Markets

The Dow Jones Industrial Average is up today after retail sales posted a strong gain in March. That's also helped drive Visa and Wal-Mart higher.

Apr 14, 2014 at 3:30PM

For most of the last three months there's been a weather-related asterisk next to nearly every economic and company data point given to the market. Employment, GDP, retail sales, earnings, and just about anything else either was or could have been affected by the winter freeze that hit the East Coast, which created a cloud around the numbers.

Now that most of the snow is gone, data will start reflecting a more normalized economic picture, which investors hope was the case today when the Commerce Department said retail sales were up 1.1% in March on a month-over-month basis. That's the best reading since September 2012 and may show that consumers are stronger than we thought.  

The strong numbers were enough to finally get investors in a buying mood, and the Dow Jones Industrial Average (DJINDICES:^DJI) was up 0.34% on widespread gains across the index. The index's daylong rally had slipped modestly in late trading.

Visa Image Tmf

When retail sales rise Visa is there to capitalize.

Jumping on higher retail sales
Two stocks that have done well on the Dow today are Wal-Mart (NYSE:WMT) and Visa (NYSE:V), which were up 0.84% and 1.3%, respectively.

Visa has the benefit of making money on payment processing whether sales happen at high-end retailers or dollar stores, so the jump there isn't shocking. It also has the tailwind of an upgrade from neutral to outperform at Baird, which also has a $245 price target on the stock. 

The story at Wal-Mart is much more complex. The big-box retailer has been smacked by four straight quarters of declining same-store sales in the U.S., and certainly the dangers have not evaporated.

Family Dollar recently said earnings were down by a third from the year-ago quarter as competition and lower spending from consumers hit sales. It's reasonable to assume that Wal-Mart will run into similar challenges, exacerbated by the weather in the first quarter.

It may seem counterintuitive, but Visa could actually be the better play on retail today because it has broad exposure and less competition than Wal-Mart, which must deal with dollar stores, online retailers, and low-end consumers who don't have disposable income to spend it its stores these days.

Another take on the future of plastic
Not everyone is so bullish on Visa. The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Travis Hoium manages an account that owns shares of Visa. The Motley Fool recommends 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." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information