Entrepreneurs, give thanks for lessons learned

This is my favorite time of the year. It's that time when I break out the music, decorate the house and pull out all of the DVDs to usher in the holidays. Thanksgiving and the preparations around getting ready for that big day of feasting is how it all begins. It opens the season of giving thanks for the good things in life.

It's not always easy charting the entrepreneurial waters and some days are better than others. But in spite of any difficulty, every day new folks get started in business and existing small business owners continue to push forward to higher levels.

But no matter where we fit on the business ownership ladder, we have learned a few lessons and applied them. Lessons learned allow us to grow into our highest potential. And, I like to take the Thanksgiving season to review a few things that I am thankful for, maybe there's a thing or two in my list that fits you:

Purpose. I am eternally grateful for maintaining a sense of purpose that serves as a guiding light and keeps me motivated to keep on keeping on no matter how tough things seem to be.

Set reachable goals. I am grateful I learned early that in order to reach my larger goals I needed to set smaller goals that I could more easily manage.

Avoiding negative thoughts. This one is not easy but has been an important step for me. Realizing the difference between what is a fact and what is an opinion (fact: it's raining: opinion: it's a nasty day) has helped me a lot. Remember opinions are many and facts are few. Don't be swayed by the opinions of other.

Holding on to self-confidence. I'm grateful for recognizing that self-confidence like self-esteem is not a steady state; it comes and goes depending on the situation I find myself in. But I can summon it to center stage whenever needed, by mentally recalling one of the many tiny successes in my life.

Balance. I am grateful to be able to recognize the telltale signs of imbalance – lack of energy, irritability, over or under eating just t! o name a few. And I'm even more grateful for being able to realize that scheduled quiet time is needed to evaluate situations and what is necessary to get back into balance.

Learning. I'm grateful to be able to recognize that success depends on consistent learning. And if I stop learning, I stop living.

Support. I am grateful for the ability to bring people into my life that can help me to have a more successful life: mentors, advocates, coaches when needed, good employees and of course the necessary subcontractors that helps me to have more time for myself.

I once read somewhere that courage is the willingness to take risks. It has been the people who have crossed my path that have either cheered me on to have courage or forced me to have the courage to make the tough decisions I've faced. Some of these folks have been friends, some have been foes, but all have been beneficial. And I'm grateful for all of them.

No matter where you are in the scheme of things -- new startup entrepreneur, well-established small business owner, or a team player in the business world -- I believe that there have to be at least one or two of the above listed things that you can relate to.

And finally, I am most grateful to have the opportunity to come into your life each week through this column and share my ideas, feelings and life's experiences. And I appreciate the many e-mails, phone calls and letters that you share with me.

May your holiday season be filled with joy, laughter and prosperity.

Happy Thanksgiving!

Gladys Edmunds, founder of Edmunds Travel Consultants in Pittsburgh, is an author and coach/consultant in business development. Her column appears Wednesdays. E-mail her at gladys@gladysedmunds.com. An archive of her columns is here. Her website is gladysedmunds.com.

5 Stocks Ready to Break Out

 DELAFIELD, Wis. (Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high, or takes out a prior overhead resistance point, then it's free to find new buyers and momentum players that can ultimately push the stock significantly higher.

One example of a successful breakout trade I flagged recently was games and toy maker Jakks Pacific (JAKK), which I featured in Sept. 19's "5 Stocks Under $10 Set to Soar" at around $4.95 a share. I mentioned in that piece that shares of JAKK had been downtrending badly for the last two months, with the stock plunging from its high of $11.75 to its low of $4.82 a share. Following that downtrend, shares of JAKK had started to move sideways and trend within range of a triggering a major breakout trade above $5.08 to $5.27 a share. This sideways pattern was signaling that the downside volatility for JAKK was potentially over.

Guess what happened? Shares of JAKK triggered that breakout earlier this week with massive upside volume, after the company released its earnings report. This stock tagged an intraday high of $7.24 a share on Thursday, which represents a gain of close to 50% for anyone who bought this stock under $5 a share prior to this monster move.

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels, and hold above those breakout prices, then it can easily trend significantly higher.

With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.

Kythera Biopharmaceuticals

One stock that's quickly moving within range of triggering a major breakout trade is Kythera Biopharmaceuticals (KYTH), which is focused on the discovery, development and commercialization of novel prescription products for the aesthetic medicine market. This stock has been on a bullish run in 2013, with shares up by 48%.

If you take a look at the chart for Kythera Biopharmaceuticals, you'll notice that this stock has been trending sideways and consolidating for the last month, with shares moving between $40.55 on the downside and $47.85 on the upside. Shares of KYTH are now starting to spike higher off some near-term support at $42.54 a share. That move is quickly pushing KYTH within range of triggering a major breakout trade above the upper-end of its recent range.

Traders should now look for long-biased trades in KYTH if it manages to break out above some near-term overhead resistance at $47.50 to its all-time high of $47.85 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 199,029 shares. If that breakout hits soon, then KYTH will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $57, or even $60 a share.

Traders can look to buy KYTH off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $42.54 a share, or at $40.55 a share. One can also buy KYTH off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

GSE Holdings

Another environmental services player that looks ready to trigger a near-term breakout trade is GSE Holdings (GSE), which provides geosynthetic containment solutions for environmental protection and confinement applications. This stock has been hammered by the bears so far in 2013, with shares down big by 55%.

If you take a look at the chart for GSE Holdings, you'll notice that this stock recently ripped sharply higher back above its 50-day moving average of $2.32 a share with heavy upside volume. Following that move, shares of GSE have started to trend sideways between $2.60 on the downside and $2.95 on the upside. Shares of GSE are now starting to move within range of triggering a near-term breakout trade above the upper-end of its recent range.

Traders should now look for long-biased trades in GSE if it manages to break out above some near-term overhead resistance levels at $2.79 to $2.95 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 221,545 shares. If that breakout hits soon, then GSE will set up to re-test or possibly take out its next major overhead resistance levels at $3.50 to $4 a share.

Traders can look to buy GSE off any weakness to anticipate that breakout and simply use a stop that sits right below support at $2.60 or below its 50-day moving average at $2.32 a share. One could also buy GSE off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Xerium Technologies

One cyclical consumer goods player that's starting to trend within range of triggering a near-term breakout trade is Xerium Technologies (XRM), a manufacturer and supplier of two types of consumable products, clothing and roll covers, used mainly in the production of paper. This stock has been on fire so far in 2013, with shares up sharply by 313%.

If you take a look at the chart for Xerium Technologies, you'll notice that this stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $9.94 to its recent high of $12.97 a share. During that uptrend, shares of XRM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of XRM within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in XRM if it manages to break out above some near-term overhead resistance at $12.97 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 100,685 shares. If that breakout triggers soon, then XRM will set up to re-test or possibly take out its 52-week high at $14.04 a share. Any high-volume move above that level will then give XRM a chance to tag its next major overhead resistance levels at $18 to $20 a share.

Traders can look to buy XRM off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $12.28, or near its 50-day at $11.35 a share. One can also buy XRM off strength once it takes out $12.97 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Key Energy Services

Another energy player that's starting to move within range of triggering a big breakout trade is Key Energy Services (KEG), which provides well services to oil companies, foreign national oil companies and independent oil and natural gas production companies. This stock is off to a modest start in 2013, with shares up by just 7.9%.

If you look at the chart for Key Energy Services, you'll notice that this stock has recently spiked higher back above both its 200-day moving average at $7.16 a share and its 50-day moving average of $7.28 a share. That move is quickly pushing shares of KEG within range of triggering a big breakout trade.

Traders should now look for long-biased trades in KEG if it manages to break out above some near-term overhead resistance levels at $7.75 to $7.96 a share and then once it take out more resistance at $8.04 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.03 million shares. If that breakout triggers soon, then KEG will set up to re-test or possibly take out its 52-week high at $9.55 a share. Any high-volume move above that level will then give KEG a chance to tag its next major overhead resistance levels at $10 to $11 a share.

Traders can look to buy KEG off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $7.14 a share or $6.83 a share. One can also buy KEG off strength once it takes out that breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Bluelinx

My final breakout trading prospect is Bluelinx (BXC), a distributor of building products including lumber, structural panels, hardwood plywood, roofing, insulation, metal products, vinyl siding and particleboard. This stock has been hit hard by the bears so far in 2013, with shares off by 31%.

If you look at the chart for Bluelinx, you'll notice that this stock has been trending sideways and consolidating for the last two months, with shares moving between $1.78 on the downside and $2.06 on the upside. Shares of BXC have now started to spike higher right off its 50-day moving average of $1.84 a share. That move is quickly pushing shares of BXC within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern.

Traders should now look for long-biased trades in BXC if it manages to break out above some near-term overhead resistance levels at $1.93 to $2 a share, and then once it takes out more resistance at $2.06 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 103,903 shares. If that breakout triggers soon, then BXC will set up to re-test or possibly take out its next major overhead resistance levels at $2.29 to its 200-day moving average at $2.39 a share. Any high-volume move above those levels will then give BXC a chance to tag $2.60 to $3 a share.

Traders can look to buy BXC off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.80 to $1.78 a share. One could also buy BXC off strength once it clears those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Are investors giving up on Apple?

Apple shares have tumbled since the company reported disappointing quarterly iPhone sales earlier this week.

NEW YORK (CNNMoney) Billionaire investor Carl Icahn keeps boosting his stake in Apple, but average investors may be starting to give up on the iPhone and iPad maker.

In the two days leading up to Apple's earnings report Monday, selling in Apple (AAPL, Fortune 500) spiked among investors with accounts on SigFig, a financial advisory start-up that tracks over $100 billion in assets among its users. The dollar amount of Apple shares sold on those two days was nearly two-thirds higher than the amount of money that went into the stock. (SigFig is a partner in CNNMoney's Portfolio tracking feature.)

It looks like those investors were on to something. While transaction data from SigFig for this week is not yet available, it's clear that the selling has continued.

Apple shares tumbled 8% Tuesday after the company said that iPhone sales in its most recent quarter fell short of Wall Street's expectations. Though Apple sold a record 51 million iPhones during the last three months of 2013, analysts were looking for sales closer to 57 million.

Apple's stock's slide steepened Wednesday, with shares briefly slipping below $500 a piece for the first time since October. That puts Apple shares down more than 10% in 2014 and makes it the fifth-worst performing stock in CNNMoney's Tech 30 index this year.

The recent pullback is a troubling sign because many individual investors have been betting on an Apple comeback. In fact, SigFig said that 50% more of its users have bought Apple for their portfolios so far this year than sold it. So the tide may be beginning to shift.

Once a darling on Wall Street, Apple's stock has lost considerable luster over the last year and a half as investors worry about the fact that Apple hasn't released a groundbreaking product in a while. The company is also facing increased competition from rivals like Samsung, which sell smartphones and tablets running on Google's (GOOG, Fortune 500) Android operating system.

Despite the disappointing iPhone sales last quarter, Wall Street analysts mostly remain optimistic. More than 70% have a 'buy" rating on the stock, with an average price target just below $600 per share.

While UBS analyst Steven Milunovich lowered his target on Apple to $625 from $650 on Tuesday, he encouraged clients to "have a little faith" in Apple and CEO Tim Cook.

"Cook said Apple has plenty of disruptive ideas but needs to concentrate resources on the best opportunities," wrote Milunovich in a note to clients. "This approach has worked historically and fits with our belief in focus—we are w! illing to give Apple the benefit of the doubt."

  Watch Steve Jobs unveil the Mac

Icahn seems to agree. The activist investor announced he bought another $500 million worth of Apple shares Wednesday, bringing his total Apple holdings to roughly $4.1 billion.

Other hedge fund managers also remain fans of the company. Apple was the most widely held stock among the top hedge funds at the end of the third quarter of 2013, the most recent data available research firm FactSet.

Is Facebook an Attractive Investment?

With shares of Facebook (NASDAQ:FB) trading around $53, is FB an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Facebook is engaged in building social products in order to create utility for users, developers, and advertisers. People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them with the people they care about. Developers can use the Facebook platform to build applications and websites that integrate with Facebook to reach its global network of users, building personalized and social products. Advertisers can engage with more than 900 million monthly active users on Facebook — or subsets of its users — based on information they have chosen to share.

Last week, Princeton released a widely-cited but pretty flawed study saying that Facebook will lose 80 percent of its users between 2015 and 2017. On Thursday, Facebook responded by using Princeton's methodology to prove that Princeton will lose all of its students by 2021, and the Earth will in fact run out of air by 2060. In a Facebook post titled "Debunking Princeton," Facebook used Princeton's "correlation equals causation" idea on the university itself to show that just because Princeton says it, doesn't mean it's true. The Princeton study is flawed for several reasons. It uses a strange epidemiology metaphor likening Facebook to a virus that Facebook users will eventually "recover" from. Just because Facebook can be addicting and takes up more of our time than many people are proud of, it doesn't mean the social media site actually operates like a sickness.

T = Technicals on the Stock Chart Are Mixed

Facebook stock has been exploding to the upside in recent years. However, the stock is currently pulling back and may need time to consolidate before heading higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Facebook is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Facebook options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Facebook options	60.84%	93%	90%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
February Options	Flat	Average
March Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Facebook’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Facebook look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	108.33%	58.33%	0.00%	-89.46%
Revenue Growth (Y-O-Y)	59.75%	53.13%	37.81%	40.14%
Earnings Reaction	2.44%	29.61%	5.61%	-0.83%

Facebook has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been pleased with Facebook’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Facebook stock done relative to its peers, Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), LinkedIn (NASDAQ:LNKD), and sector?

	Facebook	Microsoft	Google	LinkedIn	Sector
Year-to-Date Return	-3.62%	-3.37%	-2.15%	-4.10%	-2.31%

Facebook has been an average relative performer, year-to-date.

Conclusion

Facebook looks to provide a valuable social networking experience to its users, developers, and advertisers. Last week, Princeton released a widely-cited but pretty flawed study saying that Facebook will lose 80 percent of its users between 2015 and 2017. The stock has been exploding to the upside, but is now pulling back. Over the last four quarters, earnings and revenues have been increasing, which has left investors pleased about recent earnings announcements. Relative to its peers and sector, Facebook has been an average year-to-date performer. Look for Facebook to continue to OUTPERFORM.

4 Stocks Spiking on Unusual Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Stocks Insiders Love Right Now

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Trades to Take for October Gains

With that in mind, let's take a look at several stocks rising on unusual volume today.

Mazor Robotics

Mazor Robotics (MZOR) develops and markets surgical robots and complementing products for patients, surgeons, and OR staff. This stock closed up 6.9% to $18.99 in Wednesday's trading session.

Wednesday's Volume: 319,000

Three-Month Average Volume: 84,827

Volume % Change: 283%

>>5 Short-Squeeze Stocks Ready to Pop in October

From a technical perspective, MZOR soared higher here with heavy upside volume. This move pushed shares of MZOR into breakout and new all-time high territory, since the stock took out its previous high at $17.99. This stock has been uptrending strong for the last three months, with shares moving higher from its low of $11.67 to its intraday high of $19.48. During that move, shares of MZOR have been consistently making higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in MZOR as long as it's trending above Wednesday's low of $17.81 or above $17 and then once it sustains a move or close above its new all-time high at $19.48 with volume that hits near or above 84,827 shares. If we get that move soon, then MZOR will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $23 to $25.

Beacon Roofing Supply

Beacon Roofing Supply (BECN) is a distributor of residential and non-residential roofing materials in the U.S. and Canada. This stock closed up 1.8% at $34.89 in Wednesday's trading session.

Wednesday's Volume: 1.45 million

Three-Month Average Volume: 469,545

Volume % Change: 186%

>>5 Stocks Set to Soar on Bullish Earnings

From a technical perspective, BECN trended modestly higher here right above its recent low of $32.97 with above-average volume. This stock recently gapped down sharply from $37 to that low of $32.97 with heavy downside volume. Shares of BECN have now started to rebound off that low and move within range of triggering a near-term breakout trade. That trade will hit if BECN manages to take out its gap down day high of $35.34 with high volume.

Traders should now look for long-biased trades in BECN as long as it's trending above Wednesday's low of $33.82 or above that gap low of $32.97 and then once it sustains a move or close above $35.34 with volume that's near or above 469,545 shares. If that breakout hits soon, then BECN will set up to re-fill some of its previous gap down zone that started at $37. Any high-volume move above $37.50 to its 200-day at $37.78 will then give BECN a chance to tag $39 to $40.

Bitauto

Bitauto (BITA) is a provider of Internet content and marketing services for China's automotive industry. This stock closed up 7% at $19.22 in Wednesday's trading session.

Wednesday's Volume: 1.38 million

Three-Month Average Volume: 369,677

Volume % Change: 376%

>>4 Stocks Under $10 to Watch for Breakouts

From a technical perspective, BITA soared sharply higher here into new all-time high territory with monster upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $12.85 to its intraday high of $19.60. During that uptrend, shares of BITA have been consistently making higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in BITA as long as it's trending above Wednesday's low of $17.67 or above $17 and then once it sustains a move or close above its new all-time high at $19.60 with volume that's near or above 369,677 shares. If that breakout hits soon, then BITA will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $25 to $27.

Pandora Media

Pandora Media (P) provides internet radio services in USA. It has 175 million registered users. This stock closed up 5.3% at $26.89 in Wednesday's trading session.

Wednesday's Volume: 20 million

Three-Month Average Volume: 9.58 million

Volume % Change: 250%

>>5 Stocks Poised for Breakouts

From a technical perspective, P ripped sharply higher here right off some near-term support at $25 with monster upside volume. This move pushed shares of P into breakout territory, since the stock took out some near-term overhead resistance at $25.85. Shares of P are now quickly moving within range of triggering another big breakout trade. That trade will hit if P manages to take out its all-time high at $27.50 with high volume.

Traders should now look for long-biased trades in P as long as it's trending above $25 and then once it sustains a move or close above $27.50 with volume that's near or above 9.58 million shares. If that breakout hits soon, then P will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $33.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Moving Higher

>>5 Rocket Stocks Worth Buying This Week

>>5 Hated Earnings Stocks You Should Love

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Swiss Stocks Little Changed Amid U.S. Budget-Deal Concern

Swiss stocks were little changed, following a two-day decline, as investors assessed the likelihood that U.S. politicians will fail to approve a federal budget for the new financial year.

Swissquote Group Holding SA (SQN) surged 13 percent after agreeing to buy MIG Bank for an undisclosed price. Clariant AG lost 1.6 percent after UBS AG removed the maker of specialty chemicals from the list of its most preferred shares.

The Swiss Market Index (SMI) rose 0.1 percent to 8,055.23 at the close in Zurich. The equity benchmark has climbed 4 percent this month, extending its gain this quarter to 4.8 percent, as the Federal Reserve refrained from reducing its monthly bond purchases. The gauge has rallied 18 percent so far in 2013, the third-best performance by a European developed market. The Swiss Performance Index gained less than 0.1 percent today.

"The markets have much to pause and ponder over," Daniel Weston, a portfolio manager at Aimed Capital GmbH in Munich, wrote in an e-mail. "Taper or not to taper and the debt-ceiling debate will come to the fore soon, but for now it is a good reason to wait and take count of a strong year for stocks."

The volume of shares changing hands in SMI-listed companies today was 13 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.

U.S. Treasury Secretary Jacob J. Lew said that investors should take more seriously the risk that politicians may fail to pass a new budget. "I think that if you look at the calm out there, which I think is a bit greater than it should be, there's a sense that 2011 was a terrible experience, and nobody would do that again," he said.

Lew's Warning

Lew, who spoke at the Bloomberg Markets 50 Summit in New York yesterday, repeated that Obama won't negotiate with congressional Republicans on increasing the $16.7 trillion limit on the nation's borrowing authority and said the government will probably have less than $50 billion in cash by mid-October.

In the U.S., a Commerce Department report showed that durable-goods orders, excluding the volatile transportation category, fell 0.1 percent in August. The median economist forecast had called for bookings to climb 1 percent.

A separate release showed that new house sales increased 7.9 percent to a 421,000 annualized pace last month. The median forecast of 77 economists surveyed by Bloomberg News had called for 420,000 sales of new residential properties.

Swissquote Rallies

Swissquote surged 13 percent to 33.60 Swiss francs, its biggest gain in two years. The provider of online trading and banking services said its acquisition of MIG will expand its foreign-exchange operations. Currency activities accounted for about a quarter of net revenue in the first half of the year, the company said in a statement.

Transocean Ltd (RIG), the world's largest supplier of offshore oil rigs, posted the biggest gain on the SMI, rising 1.4 percent to 41.26 francs.

Clariant slid 1.6 percent to 15.57 francs, dropping for a seventh day. UBS removed the company from its most preferred list because of the shares' recent rally. Clariant (CLN) has surged 26 percent this year, while the SPI has gained 21 percent.

Woes Continue for Chinese Internet Stocks

Whatever the cause of last Tuesday’s disruption of Internet access in China, the effects continue to be felt early Friday morning as stock prices in the country’s largest Internet stocks continue to slip. The government has set the blame for the massive disruption on unspecified hackers. China Internet watchdog Greatfire.org says that it has conclusive evidence that the outage was caused by the “Great Firewall.”

Late Wednesday a U.S. Securities and Exchange Commission (SEC) administrative trial judge ruled that the Big Four U.S. accounting firms with joint ventures in China should be barred from working for any U.S.-listed Chinese company for six months. That probably caused more selling of the stocks on Thursday and remained a factor Friday.

Friday’s big loser shortly after the opening bell appears to be Qihoo 360 Technology Co. Ltd. (NYSE: QIHU), down about 6.4% to $87.30, in a 52-week range of $27.76 to $96.74. At least part of the drop is due to an announcement that Alibaba has denied rumors that it will be taking a stake in the company. Daily average share volume was about 2.9 million and nearly 600,000 shares traded in the first 20 minutes or so of the session.

Baidu Inc. (NASDAQ: BIDU), the Google of China, has dropped nearly $10 in the past two days. Shares were trading at $165.61 early Friday, and the 52-week range is $82.98 to $185.50. Early volume was already about one-third of the daily average of 3.7 million shares.

E-Commerce China Dangdang Inc. (NYSE: DANG), a smaller version of Amazon, is down 11% for the past two days. The 52-week range is $3.70 to $12.19. Trading was not particularly heavy Friday morning, but the shares were down another 3.2% at $9.57 after closing at $9.89 on Thursday.

SINA Corp. (NASDAQ: SINA) closed the past two days down 6% at $72.51 on Thursday. The stock traded as high as $89 just two weeks ago, and the 52-week range is $45.54 to $92.83. Early volume was fairly heavy, with about one-sixth of the daily average of nearly 3 million shares already changing hands.

500.com Ltd. (NYSE: WBAI) is the Chinese lotto play. Trading Friday morning at $37.68, the stock was down from $43.81 just two days earlier. The post-IPO range is $18.14 to $44.80. Volume was roughly one-third of the daily average of around 700,000 shares.

U.S. Stock Values Have Analysts Worried

Corporate-earnings reports are trickling in, and they aren't great. J.P. Morgan Chase & Co. was a little better than anticipated; General Electric Co.(GE) was as expected; Best Buy Co.(BBY) was terrible.

Money managers are wondering whether soft earnings will justify more stock gains, given the Dow Jones Industrial Average's 26.5% rise last year. That helps explain why the Dow is down 118 points to start the year.

Among their biggest questions: Just how expensive are stocks, anyway? Are they overpriced compared with likely earnings gains? What do stocks typically do when they get this pricey? What should investors do?

The answer: By a variety of measures the market is frothy. Some measures, but not all, are close to 2007 and 2008 extremes. They are far from most extremes of 2000, however. So while many investors are turning cautious, few are pulling back wholesale.

"This market isn't bubble-level by any stretch of the imagination," says Scott Clemons, chief investment strategist at Brown Brothers Harriman Wealth Management, which oversees $23 billion.

His worry is that with the earnings outlook tepid, the risk of a pullback is rising. Many of his clients are risk-averse, so his firm has trimmed stockholdings just in case. That kind of defensive thinking is affecting stock prices.

Investors face two problems: The first is earnings. Of the 52 companies in the S&P 500 index that have reported fourth-quarter results, 52% beat expectations according to S&P Capital IQ, below the average 67% of the past four quarters. Moreover, revenue gains have been weak. Earnings season has just begun and money managers will be watching coming reports closely, including from International Business Machines Corp.(IBM), Verizon Communications Inc.(VZ) and McDonald's Corp. this week.

A second, deeper question is whether future earnings will push stocks much higher, even if they meet analysts' expectations.

Goldman Sachs(GS) investment strategist David Kostin startled investors a week ago by warning that prices are high compared to analysts' forecasts. The chances are two out of three that the S&P will fall at least 10% sometime this year, before finishing with an overall yearly gain of around 3%, he said.

Mr. Kostin measured stocks many ways; against sales, book value, cash flow, inflation, interest rates and other items. He looked in particular at prices compared with analysts' earnings forecasts for the next 12 months.

The S&P 500 trades at 16 times forecast earnings, he calculates, well above 13, the average going back to the 1970s. Since 1976, it has hardly ever surpassed 17 times forecast earnings. The main exception came during the stock bubble of the late 1990s and early 2000s.

So he figures it will be hard for price/earnings ratios to rise much. That would limit stock gains to the rate of earnings gains, which have been slowing.

Ned Davis Research in Venice, Fla., has reached similar conclusions. Ned Davis, the firm's founder, published two reports titled "Overweighted, Over-Believed and Overvalued." He looked at an array of measures including the percentage of U.S. financial assets held in stocks, margin-debt levels and how much money managers and mutual funds have allocated to stocks.

His conclusion: Investors are overexposed to stocks, but they haven't gone to bubblelike extremes.

Vincent Deluard, a Ned Davis investment strategist, agrees that the P/E based on forecast earnings is above average. Because forecasts are unreliable, he also tracks earnings for the past 12 months, adjusted for inflation, interest rates and economic growth. All these measures yield a similar conclusion.

"We have a market that is getting a little frothy," Mr. Deluard says. His team expects a pullback of 10% to 20% in the next six months, but perhaps not right away. Then they expect stocks to rise, maybe for years.

"This is not 2008. This is not 2000. This is more like 1998, where you have some of the signs that you see at tops, but not at extremes," he says.

Mr. Clemons's firm, Brown Brothers Harriman, has gradually boosted cash in a typical portfolio to a range of 15% to 20%, far above the normal 3% to 5%. Since stocks have kept rising, clients have endured subpar returns.

A short-term trader would hate that strategy, but Mr. Clemons says his conservative clients welcome it. They miss gains at the top but avoid losses during declines.

"It reflects our client base and the need for the preservation of wealth," he says.

This view is spreading. When Northern Trust(NTRS) surveyed 100 outside investment managers at the end of last year, 34% called themselves more risk averse, up from 20% in the third quarter. Only 36% said U.S. stocks are undervalued.

But some people disagree. James Paulsen, chief investment strategist at Wells Capital Management, which oversees $340 billion, notes that P/E ratios in the past have moved even higher than they are today before running into real trouble.

As long as inflation stays moderate and the Federal Reserve doesn't raise interest rates sharply, he says, the P/E ratio on earnings for the past 12 months can hit the 20s from its current level of around 16 or 17.

Yet Mr. Paulsen, too, is worried that 2014 could be a volatile year and that stocks could finish with little or no gain. His concern isn't valuation; It is that the economy could warm up. Inflation fears could spread, he says, even if actual inflation stays modest. The worries could limit stock gains.

These things are so hard to predict that he and many other money managers are urging clients not to change their holdings or try to time the market.

Still, his concerns show that even people who aren't worried about valuations are still worrying. Little wonder that stocks are having trouble moving higher.

Should Costco Be in Your Portfolio?

With shares of Costco (NASDAQ:COST) trading around $114, is COST an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Costco is engaged in the operation of membership warehouses in the United States and Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Australia, and through majority-owned subsidiaries in Taiwan and Korea. The company's depots receive container-based shipments from manufacturers and reallocate these goods for shipment to its individual warehouses, generally in less than 24 hours. Costco's typical warehouse format averages approximately 143,000 square feet, where many products are offered for sale in case, carton, or multiple-pack quantities only.

Earlier this quarter, Sinegal James D, who is Director at Costco, sold 8,000 shares at $115.92 per share for a total value of $927,360. The shares recently traded near $115 per share.

T = Technicals on the Stock Chart Are Strong

Costco stock has been exploding higher over the last few years. The stock is currently trading below all-time high prices so it may need time before it gets going once again. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Costco is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Costco options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Costco Options	19.43%	76%	75%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
September Options	Flat	Average
October Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Rising Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Costco’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Costco look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	18.18%	37.78%	30.14%	29.13%
Revenue Growth (Y-O-Y)	4.86%	8.29%	9.65%	14.34%
Earnings Reaction	-0.94%	1.27%	-0.60%	1.92%

Costco has seen rising earnings and revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Costco’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Costco stock done relative to its peers Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Pricesmart (NASDAQ:PSMT), and sector?

	Costco	Wal-Mart	Target	Pricesmart	Sector
Year-to-Date Return	16.01%	7.09%	7.52%	11.53%	9.43%

Costco has been a relative performance leader, year-to-date.

Conclusion

Costco is a warehouse chain that sells large and bulk items to consumers looking to save an extra few bucks. A recent insider sale seems to not be having a significant effect on the company. The stock has been exploding higher and is now trading slightly below highs for the year. Over the last four quarters, earnings and revenues have been rising, however, investors in the company have had mixed feelings about these announcements. Relative to its peers and sector, Costco has been a year-to-date performance leader. Look for Costco to OUTPERFORM.

5 Best Bank Stocks To Watch Right Now

LONDON -- While crippling austerity in Europe has put the brake on growth rates in Europe, a backdrop of accommodative central bank action, elevated commodity prices, and rising personal affluence levels has created an exceptional investing opportunity in developing countries.

The divergence between traditional and emerging markets is borne out by latest International Monetary Fund projections, which puts U.S. growth at 1.9% in 2013, while eurozone GDP is set to dip 0.3%. Conversely, emerging markets are anticipated to expand 5.3% this year.

Bubbly activity in developing geographies can create large opportunities for many London-listed firms. Today, I am looking at�Lloyds Banking Group� (LSE: LLOY  ) (NYSE: LYG  ) and assessing whether its operations in these regions are likely to underpin solid earnings growth.

Bank stepping up withdrawal from foreign territories
Lloyds announced at the end of April that pre-tax profit leapt to 2 billion pounds in the initial three months of 2013, up substantially from a profit of 280 million pounds�in the same period last year. Total underlying income rose 3% to 2.4 billion pounds, helped by the sale of its 20% stake in�St James's Place�for 394 million pounds�in March.

5 Best Bank Stocks To Watch Right Now: Northern Trust Corporation(NTRS)

Northern Trust Corporation, through its subsidiaries, provides asset servicing, fund administration, asset management, and fiduciary and banking solutions for corporations, institutions, families, and individuals worldwide. The company offers corporate and institutional services, including global master trust and custody, trade settlement, and reporting; fund administration; cash management; investment risk and performance analytical services; investment operations outsourcing; and transition management and commission recapture services. It also provides personal financial services, such as personal trust, investment management, custody, and philanthropic services; financial consulting; guardianship and estate administration; brokerage services; and private and business banking services, as well as customized products and services. In addition, the company offers active and passive equity and fixed income portfolio management, as well as alternative asset classes comprisin g private equity and hedge funds of funds, and multi-manager products and advisory services. Further, it engages in fund administration, investment operations outsourcing, and custody business that provides specialized services to a range of funds, which include money-market, multi-manager, exchange-traded funds, and property funds for on-shore and off-shore markets. Additionally, the company provides administrative and middle-office services consisting of trade processing, valuation, real-time reporting, accounting, collateral management, and investor servicing. Northern Trust Corporation was founded in 1889 and is based in Chicago, Illinois.

Advisors' Opinion:

• [By Holly LaFon]

  In the fourth quarter, Yacktman�� biggest additions to his holdings were Research In Motion (RIMM) and Avon Products (AVP). He also surprised followers by venturing into financials, with new positions in Goldman Sachs (GS), Bank of America (BAC), State Street Corp. (STT) and Northern Trust Corp. (NTRS).

5 Best Bank Stocks To Watch Right Now: Banco Santander Brasil SA (BSBR)

Banco Santander (Brasil) S.A. (Santander Brasil), incorporated on August 9, 1985, is a full-service bank in Brazil. The Bank operates its business along three segments: Commercial Banking, Global Wholesale Banking and Asset Management and Insurance. Through its Commercial Banking segment, the Bank offers traditional banking services, including checking and savings accounts, home and automobile financing, unsecured consumer financing, checking account overdraft loans, credit cards and payroll loans to mid- and high-income individuals and corporations (other than to its Global Banking and Markets clients). Its Global Wholesale Banking segment provides financial services and solutions to a group of approximately 700 local and multinational conglomerates, offering such products as global transaction banking, syndicated lending, corporate finance, equity and treasury. Through its Asset Management and Insurance segment, the Company manages fixed income, money market, equity and multi-market funds and offers insurance products complementary to its core banking business to its retail and small- and medium-sized corporate customers.

Lending Activities

As of December 31, 2010, the Bank�� total loans and advances to customers equaled R$160.6 billion (42.9% of its total assets). Net of allowances for credit losses, loans and advances to customers equaled R$151.4 billion as of December 31, 2010 (40.4% of its total assets). In addition to loans, it had outstanding R$93.5 billion as of December 31, 2010.

Substantially all of its loans are to borrowers domiciled in Brazil and are denominated in reais. Its commercial, financial and industrial loans include primarily loans to small and medium-sized enterprises (SMEs) in its Commercial Banking segment, and to Global Banking and Markets corporate and business enterprise customers in its Wholesale Global Banking segment. The principal products offered to SMEs in this category include revolving loans, overdraft facilities, installme! nt loans, working capital and equipment finance loans. Credit approval for SMEs is based on customer income, business activity, collateral coverage and internal and external credit scoring tools. Collateral on commercial, financial and industrial lending to SMEs generally includes receivables, liens, pledges, guarantees and mortgages, with coverage generally ranging from 100% to 150% of the loan value depending on the risk profile of the loan. Its Wholesale Global Banking customers are offered a range of loan products ranging from typical corporate banking products (installment loans, working capital and equipment finance loans) to more sophisticated products (derivative and capital markets transactions).

The Bank�� Real estate-construction loans include construction loans made principally to real estate developers that are SMEs and corporate customers in its Wholesale Global Banking Segment. Loans in this category are generally secured by mortgages and receivables, though guarantees may also be provided as additional security. Real estate-mortgage loans include loans on residential real estate to individuals. All loans granted under this category are secured by the financed real estate. Installment loans to individuals consist primarily of unsecured personal installment loans (including loans whose payments are automatically deducted from a customer�� payroll), revolving loans, overdraft facilities, consumer finance facilities and credit cards. Lease financing includes primarily automobile leases and loans to individuals. The vehicle financed acts as collateral for the particular loan granted.

Investment Activities

The Bank�� investments include Government securities-Brazil, Government securities-other countries and other debt securities. As of December 31, 2010, the book value of the investment securities was R$84.7 billion (representing 22.6% of its total assets). Brazilian government securities totaled R$55.8 billion, or 65.9% of the Bank�� investment! securiti! es as of December 31, 2010. As of December 31, 2010, the Bank held no securities of single issuers or related group of companies whose aggregate book or market value exceed 10% of stockholders��equity, other than Brazilian government securities, which represented 76.9% of its stockholders��equity.

Sources of Funds

The Bank offers its customers a variety of deposit products, such as current accounts (also referred to as demand deposits), which do not bear interest; traditional savings accounts, which earn the Brazilian reference rate for savings accounts (taxa referencial) plus 0.5% per month, as set by the federal government, and time deposits, which are represented by certificates of bank deposits (CDBs), which normally have a maturity of less than 36 months and earn interest at a fixed or floating rate. In addition, it accepts deposits from financial institutions as part of its treasury operations, which are represented by certificates of interbank deposit CDIs, and which earn the interbank deposit rate.

Advisors' Opinion:

• [By Rudy Martin]

  We are buying Banco Santander (Brasil) S.A. (BSBR) to gain broad additional exposure to the Brazilian.

  BSBR offers a full-service range of financial services, including individual and corporate banking. We also hope to benefit from the stock's 7.2% current indicated dividend yield.

Top 5 Warren Buffett Stocks To Invest In Right Now: Federal National Mortgage Association (FNMA.OB)

Federal National Mortgage Association (Fannie Mae) is a government-sponsored enterprise (GSE) chartered by the United States Congress to support liquidity and stability in the secondary mortgage market, where mortgage-related assets are purchased and sold. The Company�� activities include providing market liquidity by securitizing mortgage loans originated by lenders in the primary mortgage market into Fannie Mae mortgage-backed securities (Fannie Mae MBS), and purchasing mortgage loans and mortgage-related securities in the secondary market for its mortgage portfolio. Fannie Mae operates in three business segments: Single-Family business, Multifamily Business (formerly Housing and Community Development (HCD)) and Capital Markets group. Its Single-Family Credit Guaranty and Multifamily businesses work with its lender customers to purchase and securitize mortgage loans customers deliver to the Company into Fannie Mae MBS.

The Company obtains funds to suppo rt its business activities by issuing a variety of debt securities in the domestic and international capital markets. Fannie Mae acquires funds to purchase mortgage-related assets for its mortgage portfolio by issuing a variety of debt securities in the domestic and international capital markets. It also makes other investments. Fannie Mae conducts its business in the United States residential mortgage market and the global securities market. It conducts business in the United States residential mortgage market and the global securities market. During the year ended December 31, 2011, the Company��

Single-Family Business

Single-Family business includes mortgage securitizations, mortgage acquisitions, credit risk management and credit loss management. Single-Family business works with the Company�� lender customers to provide funds to the mortgage market by securitizing single-family mortgage loans into Fannie Mae MBS. Its Single-Family business also works with its Capital Markets group to facilitate th! e! purchase of single-family mortgage loans for the Company�� mortgage portfolio. Fannie Mae�� Single-Family business prices and manages the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Single-Family business and Capital Markets group securitize and purchase primarily single-family fixed-rate or adjustable-rate, first lien mortgage loans, or mortgage-related securities backed by these types of loans.

The Company securitizes or purchases loans insured by Federal Housing Administration (FHA), loans guaranteed by the Department of Veterans Affairs (VA), and loans guaranteed by the Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, reverse mortgage loans, multifamily mortgage loans, subordinate lien mortgage loans and other mortgage-related securities. I ts Single-Family business securitizes single-family mortgage loans and issues single-class Fannie Mae MBS. Fannie Mae�� Single-Family business securitizes loans solely in lender swap transactions, in which lenders deliver pools of mortgage loans to the Company, which are placed immediately in a trust, in exchange for Fannie Mae MBS backed by these loans. Generally, the servicing of the mortgage loans held in its mortgage portfolio or that backs its Fannie Mae MBS is performed by mortgage servicers on the Company�� behalf. Lenders who sell single-family mortgage loans to Fannie Mae service these loans for the Company. For loans it owns or guarantees, the lender or servicer must obtain its approval before selling servicing rights to another servicer.

Fannie Mae�� mortgage servicers collect and deliver principal and interest payments, administer escrow accounts, monitor and report delinquencies, perform default prevention activities, evaluate transfers of own ership interests, respond to requests for partial releas! es o! f s! ecurit! y, and handle proceeds from casualty and condemnation losses. Its mortgage servicers are the primary point of contact for borrowers and perform implementation of its homeownership assistance initiatives, negotiation of workouts of troubled loans, and loss mitigation activities. Mortgage servicers also inspect and preserve properties and process foreclosures and bankruptcies.

Multifamily Mortgage Business

Multifamily business works with the Company�� lender customers to provide funds to the mortgage market by securitizing multifamily mortgage loans into Fannie Mae MBS. Through its Multifamily business, Fannie Mae provides liquidity and support to the United States multifamily housing market principally by purchasing or securitizing loans that finance multifamily rental housing properties. It also provides some limited debt financing for other acquisition, development, construction and rehabilitation activity related to projects that complement this business. Fannie Mae�� Multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae�� portfolio, as well as to facilitate portfolio securitization and resecuritization activities.

The Company�� multifamily guaranty book of business consists of multifamily mortgage loans underlying Fannie Mae MBS and multifamily loans and securities held in Fannie Mae�� mortgage portfolio. Revenues for Fannie Mae�� Multifamily business are derived from a variety of sources, including guaranty fees received as compensation for assuming the credit risk on the mortgage loans underlying multifamily Fannie Mae MBS and on the multifamily mortgage loans held in its portfolio and on other mortgage-related securities; transaction fees associated with the multifamily business, and other bond credit enhancement related fees. As with the servicing of single-family mortgages, multifamily mortgage servicing is performed by the ! lenders !! who sell ! the mortgages to the Company. Fannie Mae�� Multifamily business is organized and operated as an integrated commercial real estate finance business.

Capital Markets

Capital Markets group's primary business activities include mortgage and other investments, mortgage securitizations, structured mortgage securitizations and other customer services, and interest rate risk management. Capital Markets group manages the Company�� investment activity in mortgage-related assets and other interest-earning, non-mortgage investments. It funds its investments primarily through proceeds the Company receives from the issuance of debt securities in the domestic and international capital markets. Its business activity is focused on making short-term use of its balance sheet rather than long-term investments. Activities Fannie Mae is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment c onduit (REMICs) and other structured securitizations and dollar roll transactions. Whole loan conduit activities include its purchase of both single-family and multifamily loans principally for the purpose of securitizing them. During the year ended December 31, 2010, it was engaged in dollar roll activity. A dollar roll transaction is a commitment to purchase a mortgage-related security with a concurrent agreement to re-sell a similar security at a later date or vice versa.

Fannie Mae�� Capital Markets group is engaged in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third party assets. Its Capital Markets group creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in its mortgage portfolio. Fannie Mae�� Capital Markets group may sell these Fannie Mae MBS into the secondary market or may retain the Fannie Mae MBS in its investment portf olio. The Company�� Capital Markets group cr! eates sin! gle-c! lass and ! multi-class structured Fannie Mae MBS, for its lender customers or securities dealer customers, in exchange for a transaction fee. The Company�� Capital Markets group provides its lender customers and their affiliates with services that include offering to purchase a range of mortgage assets, including non-standard mortgage loan products; segregating customer portfolios to obtain optimal pricing for their mortgage loans, and assisting customers with hedging their mortgage business.

Although the Company�� Capital Markets group�� business activities are focused on short-term financing and investing, revenue from its Capital Markets group is derived primarily from the difference, or spread, between the interests it earns on its mortgage and non-mortgage investments and the interest it incurs on the debt the Company issues to fund these assets. Its Capital Markets revenues are primarily derived from the Company�� mortgage asset portfolio. Capital Markets gro up funds its investments primarily through the issuance of a variety of debt securities in a range of maturities in the domestic and international capital markets. Investors in the Company�� debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks.

The Company competes with Freddie Mac, FHA and Ginnie Mae.

5 Best Bank Stocks To Watch Right Now: Lloyds Banking Group PLC (LYG)

Lloyds Banking Group plc, incorporated on October 21, 1985, is a holding company. The Company is a financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. The Company operates in four segments: Retail, Commercial Banking, Wealth, Asset Finance and International and Insurance. Retail provides banking, mortgages and other financial services to personal customers in the United Kingdom. Commercial Banking provides banking and related services to business clients, from small businesses to large corporate. Wealth, Asset Finance and International provides private banking and asset management and asset finance in the United Kingdom and overseas and operates the Company�� international retail businesses. Insurance provides long term savings, protection and investment products in the United Kingdom and Europe and provides general insurance to personal customers in the United Kingdom.

Retail

The Retail division operates the retail bank in the United Kingdom and is a provider of current accounts, savings, personal loans, credit cards and mortgages. This includes a range of current accounts including packaged accounts and basic banking accounts. It is also the provider of personal loans in the United Kingdom, as well as being the United Kingdom�� credit card issuer. Retail is the private sector savings provider in the United Kingdom. It is also a general insurance and bancassurance distributor, offering a range of long-term savings, investment and general insurance products.

Commercial Banking

The Commercial Banking division supports the Company�� business clients from small businesses to corporate. Commercial Banking provides support to corporate clients through the provision of core banking products, such as lending, deposits and transaction banking services whilst also offering clients expertise in capital markets (private placements, bonds and syndicated loans), ! financial markets (foreign exchange, interest rate management, money market and credit) and private equity.

Wealth, Asset Finance and International

Wealth, Asset Finance and International consists of the Company�� the United Kingdom and international wealth businesses, the Company�� the United Kingdom and international asset finance and online deposit businesses along with its international retail businesses. The Wealth business consists of private banking and asset management. Wealth�� private banking operations cater to the range of wealth clients from affluent to Ultra High Net Worth within the United Kingdom, Channel Islands and Isle of Man, and internationally. Asset Finance consists of a number of leasing and speciality lending businesses in the United Kingdom, including Lex Autolease and Black Horse Motor and Personal Finance along with its leasing and specialty lending businesses in Australia and its European online deposit business. The international business comprises its non-core banking business outside the United Kingdom, with the exception of corporate business written through the Commercial Banking division. This primarily consists of Ireland, Retail Europe and Asia.

Insurance

The Insurance division provides long-term savings, protection and investment products and general insurance products to customers in the United Kingdom and Europe. The United Kingdom Life, Pensions and Investments business provides long-term savings, protection and investment products distributed through the bancassurance, intermediary and direct channels of the Lloyds TSB, Halifax, Bank of Scotland and Scottish Widows brands. The European Life, Pensions and Investments business distributes products primarily in the German market under the Heidelberger Leben and Clerical Medical brands. The General Insurance business is a distributor of home insurance in the United Kingdom, with products sold through the branch network, direct channels and strategic corporate! partners! . It operates primarily under the Lloyds TSB, Halifax and Bank of Scotland brands.

Advisors' Opinion:

• [By David O��ara]

  The sector
  All three have had a great 12 months. In the last year, shares in�Barclays� (LSE: BARC  ) (NYSE: BCS  ) are up 46.2%.�Lloyds Banking Group� (LSE: LLOY  ) (NYSE: LYG  ) is up 80.7%, and�Royal Bank of Scotland� (LSE: RBS  ) is ahead 22.3%.

5 Best Bank Stocks To Watch Right Now: U.S. Bancorp(USB)

U.S. Bancorp, a financial services holding company, provides various banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts. The company originates a portfolio of loans comprising commercial loans and lease financing; commercial real estate; residential mortgage; and retail loans consisting of credit cards, retail leasing, home equity and second mortgages, and other retail loans. It also offers wholesale lending, equipment finance, small-ticket leasing, depository, treasury management, capital markets, foreign exchange, and international trade services to middle market, large corporate, commercial real estate, and public sector clients. In addition, U.S. Bancorp provides telebanking and automated teller machine (ATM) services, as well as cash management services. The company, through other subsidiaries, provides trust, private banking, financial advisory, investment management, retail brokerage services, insurance, and custody and fund services; and payment services, including consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit, and merchant processing. U.S. Bancorp primarily serves individuals, estates, foundations, business corporations, and charitable organizations. It operates a network of approximately 3,031 banking offices and 5,310 ATMs. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota.

Advisors' Opinion:

• [By Amanda Alix]

  Good news may buoy Wells a bit today
  Wells put a nagging mortgage-related issue behind it this week, which think will help send some positive vibrations its way today. While denying culpability, Wells settled a complaint�by the National Fair Housing Alliance regarding a claim that the bank let foreclosed homes in minority areas go to rack and ruin, even as it maintained those in predominately white neighborhoods. Wells has committed a total of $42 million to rectifying the problem, while Bank of America and U.S. Bancorp (NYSE: USB  ) , which face similar complaints, have yet to settle their own issues with the NFHA.

• [By David Hanson and Matt Koppenheffer]

  One day, U.S. Bancorp (NYSE: USB  ) is receiving the Freedom Award, the next, the Consumer Financial Protection Bureau is scolding the Minneapolis-based bank.�

• [By Jay Jenkins]

  If you have a smartphone, odds are you have your financial institution's app installed alongside your music, pictures, and Twitter. From mega banks like Citigroup (NYSE: C  ) to regional players like U.S. Bancorp (NYSE: USB  ) and Regions Financial (NYSE: RF  ) , financial institutions are experimenting with methods to leverage the mobile banking experience into higher profits.

• [By Matt Koppenheffer]

  I feel very good about our investment in Wells Fargo� (NYSE: WFC  ) , I feel very good about our investment in US Bancorp� (NYSE: USB  ) , I feel very good about our investment in M&T Bank� (NYSE: MTB  ) .

The 2015 Chevy Corvette Z06: GM Unleashes the Beast

New GM product chief Mark Reuss introduces the 2015 Corvette Z06 in Detroit on Monday. Photo credit: General Motors.

General Motors  (NYSE: GM  ) took the wraps off its new "bad boy" 2015 Chevrolet Corvette Z06 at the North American International Auto Show in Detroit on Monday. We -- the Motley Fool's John Rosevear and Rex Moore -- were on the scene as the new Vette rolled out, and we share our first impressions in the video below.

In a nutshell: GM's latest Vette roared onto the stage with a deep, mean exhaust note that sounded track-ready. That's no coincidence: The Z06 builds on last year's acclaimed new Corvette Stingray with a series of enhancements that should raise the new car's performance by a significant margin.

The new Z06 is powered by a new supercharged 6.2-liter V8. It's similar to the engine that powered the last-generation Corvette ZR1, but built on GM's latest V8 architecture, introduced last year. GM didn't release exact power ratings, but new global product chief Mark Reuss told reporters that the Z06's engine would make "at least" 625 horsepower in final tune.

GM revived the "LT4" name for the Z06's supercharged 6.2-liter V8. It'll make at least 625 horsepower in production trim. Photo credit: General Motors.

That's serious power, enough to make the new Z06 a no-excuses supercar -- just as the ZR1 was. Already, Reuss said, the new Z06 has beaten the old ZR1's track times, and the development team continues to fine-tune the new Vette's suspension settings.

We don't yet know how much the Z06 will cost, or what kind of fuel economy to expect. But while we miss the old naturally aspirated 7.0-liter engine that powered the last-generation Z06, we do think that GM has put together a package that should excite track-oriented sports car buyers.

Check out our video report from the show floor in Detroit, and then scroll down to leave a comment with your thoughts. Is the new Z06 a winner, or did GM need to make a bigger leap from the Stingray? Let us know what you think.

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General Electric Sentiment Suggests More Upside for Industry

General Electric (GE) beat the S&P 500 by nearly five percentage points in 2013, but the stock hasn’t been getting much love from investors. Is that good news for General Electric and other industrial stocks?

AFP

Yes, says Deutsche Bank’s John Inch and Karen Lau. They explain:

…our positive calls on GE last year were frequently met with resistance (to be polite). Despite GE's share price appreciation that was driven by earnings beats and new management (CFO) providing a framework for meaningful cost-out runway (for years) and shrinking GE Capital (Retail Finance IPO and subsequent exchange offer), there appears to be little evidence that investors have significantly moved to close their long term GE underweight positions (hence providing future upside). With GE remaining the biggest industrial (by far), it therefore intuitively seems hard to argue the group is over owned (and over loved).

That negative sentiment “flashed as a positive indicator,” Inch and Lau say, and some stocks appear to be “‘locked and loaded’ to meaningfully exceed forecast estimates.” Those include Rockwell Automation (ROK), Eaton (ETN) and Emerson Electric (EMR).

Shares of General Electric have fallen 0.9% to $27.11 today, while Rockwell Automation has risen 0.6% to $119.60, Emerson Electric has advanced 0.2% to $69.91 and Eaton down 0.1% at $76.39.

Intel Earnings Preview: From PCs to Smartphones to Tablets

Semiconductor giant Intel Corp. (NASDAQ: INTC) reports fourth-quarter results after Thursday’s bell, and the question is whether its earnings and its outlook can keep this week’s rally going. Intel is expected to report 52 cents a share in earnings for the fourth quarter, up 8.3 percent from a year ago. Revenue of $13.7 billion would be up 1.8 percent from last year.

The shares were up nearly 5 percent on the week on Wednesday, in part because JPMorgan analyst Christopher Danely upgraded the stock to outperform from neutral. Danely’s upgrade was based on reports from Intel, Hewlett-Packard Co. (NYSE:HPQ), Microsoft Corp. (NASDAQ: MSFT) and others that personal computer demand may be improving.

At the same time, Danely said new CEO Brian Krzanich appears ready to offer “more realistic” guidance and focus on areas where Intel has a clear advantage.

The shares were at $26.84 Wednesday afternoon, up 32 cents or 1.2 percent. They hit a 52-week high of $26.91 earlier on Wednesday.

Intel’s guidance on revenue and gross profit for the first quarter and 2014 will be a key component of its earnings report. The company has said — and analysts expect — flat revenue this year. Analysts currently expect 42 cents a share in first-quarter earnings, down from 46 cents a year ago. Revenue is expected to rise 1.6 percent to $12.8 billion. The gross profit margin should hold around 62 percent.

Intel has seen its growth stall in the emergence of the smart phone and tablet revolution. Its chips are geared toward personal computers and servers, and it has struggled to come up with products for mobile devices that can compete on performance and price with chips based on designs by ARM Holdings PLC (NASDAQ: ARMH), the British tech company.

Intel generates more 60 percent of its revenue from its personal-computer group. Revenue through the third quarter for the group was down 5.6 percent from a year earlier to $24.5 billion. Operating profit declined 17.6 percent to $8.4 billion as average selling prices declined.

The concern about this business is big enough that Intel has held off finishing a $5 billion chip factory in Chandler, Ariz., near Phoenix. The fabrication facility was to produce Intel’s most advanced chips.

Benzinga's Volume Movers

Beam (NYSE: BEAM) shares moved up 24.18% to $83.16. The volume of Beam shares traded was 9117% higher than normal. Beam agreed to be acquired by Suntory Holdings for $83.50 per share in cash.

EnPro Industries (NYSE: NPO) shares rose 25.20% to $74.13. The volume of EnPro Industries shares traded was 2661% higher than normal. EnPro's Garlock won a trial on Asbestos liability. CL King upgraded the stock from Neutral to Buy.

Tekmira Pharmaceuticals (NASDAQ: TKMR) shares climbed 34.11% to $13.25. The volume of Tekmira Pharmaceuticals shares traded was 2187% higher than normal. Tekmira signed a development agreement with Monsanto (NYSE: MON) on delivery technology for agricultural applications.

IXYS (NASDAQ: IXYS) surged 5.70% to $14.66. The volume of IXYS shares traded was 1097% higher than normal. IXYS' PEG ratio is 0.55.

Posted-In: volume moversNews Intraday Update Markets Movers

(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular Earnings Expectations For The Week Of January 13: Big Banks, GE, Intel And More UPDATE: Stifel Downgrades Cree on Recent Performance UPDATE: JMP Securities Reiterates Coverage on ARIAD Pharmaceuticals, Sees Market Share Regain UPDATE: Bank of America Upgrades MGM Resorts International, Has Bullish 2014 Outlook Coming Soon: 3D Printing for Everyone Alcatel-Lucent CEO Says China to Become World's Largest 4G Market Related Articles (IXYS + BEAM) Benzinga's M&A Chatter for Monday January 13, 2014 Market Wrap For January 13: Markets Showing Weakness Ahead Of Major Earning Releases Mid-Afternoon Market Update: Markets Dip Despite Large Amount of M&A Mid-Day Market Update: SodaStream Drops After Weak Outlook; Beam Shares Spike Higher Benzinga's Volume Movers Mid-Morning Market Update: Markets Open Lower; Lululemon Lowers Q4 Outlook Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN? View the discussion thread. Partner Network View upcoming Earnings, Ratings, Dividend and Economic Calendars.

Stocks: Here Comes the Fear Again

The Legend of Hercules hits theaters this week, but don’t expect it to do any heavy-lifting at the box office. Reviewers have hurled insults in its direction, saying it “completely myths the mark,” calling it “a failure,” and “abominable,” and “a hash of beefcake mythology.” In fact, it’s the first time we can remember a film getting no positive reviews–not a one–on Rotten Tomatoes. Hercules will be considered a success if it can make $10 million at the box office, but even that could be a stretch.

AFP

In comparison, the stock market’s tepid week looks pk.  No, the bulls couldn’t muster the herculean effort necessary to lift both major indexes higher this week, but that doesn’t mean much damage was done, either. The S&P 500 rose 0.6% to 1,842.37 this week but still finds itself down 0.3% so far this year. The Dow Jones Industrial Average, meanwhile, dipped 0.2% to 16,437.05 this week but is off 0.8% in 2014.

The big news this week was today’s payrolls number, which showed the U.S. adding just 74,000 jobs in December, well below the 200,000 economists had predicted. Sure, the unemployment rate fell to 6.7%–economists had forecast it come in at 7%–but that was due almost entirely to people leaving the workforce. The Fed’s James Bullard chalked that up to demographics rather than economic weakness, but it’s still got the bulls out there worried that another growth scare could be on its way.

Deutsche Bank’s Alan Ruskin calls it “one of the most confusing unemployment reports in quite a while.” He writes:

The data will make both policymakers and the market take a pause for thought….it is extremely doubtful that the 87K private payrolls number is anywhere close to representing the underlying growth picture, while the 6.7% has again been achieved in the main by a slide in the participation rate and probably overstates strength.  Nonetheless, in coming months, it is the faster unemployment rate downward trend that is likely to be sustained, much more than weak payroll growth.

Don’t expect last month’s payrolls to cause the Fed to slow the pace of its taper, say Capital Economics’ Paul Ashworth and Jessica Hinds. They write:

The weakness of payrolls will inevitably lead to speculation that the Fed will leave its asset purchases unchanged at $75bn per month at the upcoming meeting in late January. However, we still think the Fed will push through a further $10bn reduction.

The central bank is likely to downplay the weakness in payrolls in December given the weather. What's more, following a drop of 0.3pp to 6.7%, the unemployment rate is closing in on the 6.5% threshold that was originally intended to signal that the Fed would at least begin to consider raising the fed funds rate.

The folks at MRB Partners believe the Fed will do what it has to do if stocks start to crumble. They write:

The good news is that the relief valve of lower bond yields and a retreat by the Fed is still likely to operate if equity prices were to start correcting strongly. The Fed is still sensitive to market signals; witness the retreat on tapering last September. Thus, equity setbacks should prove temporary and timing them accurately will remain a challenge.

InvesTech Research’s Jim Stack notes that investors should be nervous entering the fifth year of this bull market. He explains:

Over the past 82 years there have been 15 bull markets…the average duration or life span of these previous bull markets has been 3.8 years, and the vast majority of bull markets have ended between 2-5 years. So not only is the current bull market a full year longer than the norm, it is about to become the fourth longest bull market since 1932. If that doesn't make you nervous, it should.

Investors sure aren’t acting like it, despite the major indexes mixed results. Forest Laboratories (FRX) gained 16% to $69 this week after it purchased another pharmaceutical company, while Constellation Brands (STZ) rose 15% to $80.05 after besting its earnings forecasts. Intuitive Surgical (ISRG) rose after a study found fewer complications from “robotic-assisted” prostate removal surgery.

Not that the market wasn’t without its losers. Bed Bath & Beyond (BBBY) fell after it lowered its earnings forecasts, while JC Penney (JCP) dropped 16% after releasing a statement that praised its holiday sales but offered no numbers to back it up.

As Pulp’s Jarvis Cocker once sang: “…here comes the fear again/ The end is near again…/ Here we go again/ Until the end.”

Is the fear well founded? That remains to be seen.

Invest in Patents With These Small Cap Patent Stocks: SPEX, PDLI & ENIP

Small cap patent stocks Spherix Inc (NASDAQ: SPEX), PDL BioPharma Inc (NASDAQ: PDLI) and Endeavor IP Inc (OTCBB: ENIP) are among the growing number of publicly traded US entities focused on collecting and making money from various types of patents. After all, monetizing patents can lead to incredible returns. For example: Nomura analyst Rick Sherlund wrote in a research note back in November that Microsoft Corporation (NASDAQ: MSFT) is generating $2 billion per year in revenue from Android patent royalties and he estimates that this revenue has a 95% margin. However, there are risks associated with investing in stocks that invest in patents because a bi-partisan bill called the Innovation Act (H.R. 3309) is working its way through Congress to try and reign in the activities of so-called "patent trolls" or rather companies that buy or license patents from others.

With that risk in mind, here is a quick look at a couple of small cap patent stocks focused on making money from patents:

Spherix Inc. Committed to advancing innovation by active participation in all areas of the patent market, Spherix draws on portfolios of pioneering technology patents to partner with and support product innovation. More specifically, Spherix continues to work on life sciences and drug development and is presently exploring opportunities in sports and nutritional supplement products relying on its D-tagatose natural sweetener as a GRAS ingredient plus the recent acquisition of several hundred patents issued to Harris Corporation will allow the company to expand its activities in wireless communications and telecommunication sectors (including antenna technology, Wi-Fi, base station functionality and cellular). Last Monday, Spherix Inc announced that it had entered into a series of agreements with Rockstar Consortium (US) LP to acquire over 100 patents and patent applications with the newly acquired patents covering among other things, numerous aspects of access, switching, routing, optical and voice communication network devices. It should be mentioned that the Rockstar Consortium was a group created by Apple, Microsoft Corp and other technology companies that spent $4.5 billion on a portfolio of 4,000 patents and applications from Nortel Networks Corp. On Thursday, small cap Spherix fell 1.16% to $8.50 (SPEX has a 52 week trading range of $4.07 to $27.86 a share) for a market cap of $20.46 million plus the stock is up 24.3% over the past year and down 11.8% over the past five years.

PDL BioPharma Inc. Formerly known as Protein Design Labs, Inc, PDL BioPharma is involved in the management of antibody humanization patents and royalty assets, which consist of its Queen et al. patents and license agreements with various biotechnology and pharmaceutical companies. PDL had pioneered the humanization of monoclonal antibodies which enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases for which it receives significant royalty revenue. In addition, PDL BioPharma provides non-dilutive growth capital and financing solutions to late stage public and private healthcare companies plus offers immediate financial monetization of royalty streams to companies, academic institutions and inventors. Through the addition of this strategy, PDL BioPharma deployed $368 million in capital in 2013 and $496 million in total to acquire new income generating assets which it uses to pay a forward dividend of $0.60 for a dividend yield of 7% under a 35% payout ratio. On Thursday, small cap PDL BioPharma rose 0.94% to $8.62 (PDLI has a 52 week trading range of $6.50 to $10.20 a share) for a market cap of $1.21 billion plus the stock is up 16.6% over the past year and up 36.8% over the past five years.

Endeavor IP Inc. Offering a portfolio approach to intellectual property investing that mitigates risk and maximizes returns, Endeavor IP is technology agnostic and applies modern investment management techniques to the patent sector to maximize returns and mitigate risk so that intellectual property holders can reap increased value for their patents. Basically, Endeavor IP owns a patent for smart meters – something that's bound to be installed in your home (if its not already installed now) by your utility company because they can eliminate the need for a meter reader plus help to cut power use and electricity bills. Other major participants in the smart meter industry have already entered a licensing agreement for the right to use the invention claimed under Endeavor IP's patent – meaning the company will collect royalties from them. Of course, a portion of these royalties are naturally used for litigation to protect Endeavor IP's patent rights and the company has been filing its share of patent infringement cases to protect its patent rights. Yesterday, Endeavor IP announced that its wholly-owned subsidiary Endeavor Energy, Inc., had filed a patent infringement lawsuit against Tucson Electric Power Company over a patent entitled "Remote Access Energy Meter System and Method." Then back in October, Endeavor IP also announced that its wholly-owned subsidiary, Endeavor MeshTech, Inc., had filed patent infringement lawsuits against two additional defendants (Aclara Technologies, Inc. and Sensus USA) over a patent entitled: "Wireless Communication Enabled Meter and Network." On Thursday, small cap Endeavor IP fell 6.67% to $0.70 (ENIP has a 52 week trading range of $0.20 to $1.28 a share) for a market cap of $29.96 million plus the stock is up 250% over the past year and up 6,900% since December 2011 according to data available on Google Finance.