India's Internet Prominence Increases

With its 277 million users,India has surged past the US to become the world's second biggest Internet user market behind China.Global Internet usage expanded 9% this year to reach 42% of the world's population,or 3 billion users,said Mary Meeker,partner at Kleiner Perkins,at the Code Conference in Rancho Mirage,California.
As developed markets become well-penetrated,it becomes more difficult to locate new Internet users and the emerging markets become more critical for growth of the medium.

The Energy Investment Picture

We say oil prices will be lower for longer,said Fadel Gheit,senior energy analyst at Oppenheimer&Co.Fundamentally,supply is still ample and exceeds the demand.The demand picture is weak.I actually say,sell oil stocks on a spike;buy them on dips.*
On the good side,you've got the industry bellwether Schlumberger,adds Ken Sill,managing director and senior oilfield services analyst of Global Hunter Securities.Halliburton is doing well.Superior Energy has good balance sheets and is growing internationally.*
Chevron,the second largest US oil company,is laying off 1500 workers,or 2% of its workforce,as part of an effort to cut costs by a billion dollars to offset the decline in the price of oil.Prices have sunk about 55% in the past year on oversupply.Most of the layoffs will be in Texas,where Chevron has holdings in the Permian Basin shale formation,and California,where its headquarters are located.
In light of the current market environment,Chevron is taking action to reduce internal costs in multiple operating units and the corporate centre,Chevron spokeswoman Melissa Ritchie stated.These initiatives,which are currently underway,are focused on increasing efficiency,reducing costs and focusing on work that directly supports business priorities.*
The Chevron layoffs include 50 international staff;600 contractor positions;500 positions from the San Ramon,California headquarters;and 270 open positions that won't be filled.
The consensus seems to be that now is a good time to buy the stocks of these basically sound companies that are going at bargain rates.
Chevron (CVX);Halliburton (HAL);Schlumberger (SCHL);Superior Energy (SPN)

Bond Market Impact:The Implications of Rising Rates

The recent bond sell-off and concomittant rise in interest rates present both challenges and opportunities.
I think we're gonna see a slowing in housing,said Bliss Morris,CEO of First Financial Network.Rising rates could certainly affect newer borrowers.Those still involved in renting could have some trouble buying a home.
California is doing better,the sand states of Arizona,Florida and Nevada,but secondary and tertiary markets could be in trouble.Our community banks are suffering from regulations and have not totally sold off their non-performing assests.
The next opportunities could be in the Euro-zone,with its many foreclosed properties.I don't think they've totally stabilised.They face some challenges with cultural and linguistic differences.
We do think the Treasury market offers value here,said Mark Kiesel,managing director and portfolio manager at PIMCO.We see a much weaker economy,and so we see value.We just don't see the economy generating jobs growth.There's a lot of consumer debt and unemployment is structurally high.
We're going through an unwinding of risk,creating volatility,but over time,the Fed will take another point of view and rates will go back down,Mr.Kiesel projected.
Mark Kiesel was Morningstar Associate's 2012 Fixed Income Manager of the Year.

Cramer,China and the End of the World

I think it's gotten ahead of the Fed,said CNBC's Jim Cramer.The ten year Treasury continues to go up in rates.There are people who are making a very big end of the world case.The world is fretting about this.We just have to let it happen and let the end of the worlders play out.
The wheels are coming off China.Wages are going up.You're gonna hear the Communists talking about workers' rights.Workers' rights in Communist China?
People are saying this is the big unraveling.I respect the macro,but in the end,I am stuck with the micro,what with GM doing better than expected,as well as General Mills and PepsiCo.
They were looking at the big things at the US-China talks in California over the weekend,according to Pauline Loong,Managing Director at Asia Analytica.The good news is,there was no news.It was not an official summit.It was about what was on the chairs,not what was on the table.It was off the record.President Xi Jinping speaks English.
Right now,it seems the two big economies have decided it's in their interests to get along.Asian countries aren't in the untenable position of having to choose between them.
The eight hours of talks between President Barack Obama and Mr.Xi were described as having been historic and constructive.They took place at the Sunnylands Estate in Rancho Mirage,California.
The success of the talks was in spite of the fact that US defence contractor Northrop Grumman said hacking attempts are increasing at an alarming rate.Chinese hackers have breached defence contractors' systems or observed their activities with orbiting telescopes.
China has reportedly hacked into major projects such as the Advanced Patriot Missile;Aegis;V-22 Osprey;and Global Hawk.More than two dozen weapon systems have been compromised,but China has consistently denied it is responsible for such hacking.
Northrop Grumman(NOC),General Motors(GM),General Mills(GIS),PepsiCo(PEP)                                                            

Cosmetics and the Luxury Retail Market

Spain,Italy and Greece are not in any healthy condition,according to William Lauder,Executive Chairman of cosmetics titan the Estee Lauder Companies.Central Europe is OK,not bad.Eastern Europe is better still.Germany,France and the Benelux are pretty solid.
Asia's our fastest growing market;China is the fastest in Asia.Chinese consumers are shopping both at home and abroad.There's still an awful lot of growth going on there.We're building for the long term.
The female consumer's behaviour is influenced by her employment;her spouse's employment;and the housing market.
Most of our competitors are European or Asian-based,such as LVMH and L'Oreal.According to the comparables,we are the world's leading prestige market for beauty.A customer will spend 35-50 dollars for our products,versus 500 for a handbag or 50,000 for a necklace.
In California,there is strong Australian buying within a 20 mile radius of LAX airport.It is the major gateway of the Australians to the US;20-30% of area retailers' business is from Australians,given the strong Australian dollar.
Estee Lauder(EL)

Apple Versus Samsung:Tech Heavyweights Slug It Out In Court

A San Jose,California court room has been the stage for an epic legal drama acted out by two bitter rivals of the tech universe,Apple Computer and Samsung.Judge Lucy Koh of the U.S. District Court Northern District of California told the two sides it's time for peace on Wednesday,urging Apple CEO Tim Cook and Samsung CEO Choi Gee-Sung to at least talk on the phone before the case goes to the jury-probably next Wednesday.
The trial is now in its third week,with both sides calling witnesses to support their cases.
Apple seeks 2.5 billion dollars in damages,plus an injunction to halt sales of what it deems are the offending Samsung devices,saying the products were slavishly copied from its own iPhone and iPad.For its part,Samsung denies the allegations and insists Apple was in fact infringing Samsung patents.
The two CEOs had met before the trial began on a court order to seek to resolve the conflict,but were unsuccessful.Legal experts expressed scepticism that,having gone so far,the sides will be willing to turn away from the legal process at this late stage.Their lawyers told Judge Koh,however,that the two men would comply with her last ditch request that they communicate again.
In the course of presenting its case,the normally secretive Apple has revealed both source code and design methodology.Their integration and execution are just a lot better,according to Erin-Michael Gill,Managing Director and Chief Intellectual Property Officer at MBD Capital Group.I don't think it's just a little old man behind the curtain.The execution and ideas generated are universally accepted as being pretty innovative.
In every large company,when you're developing innovation,it takes a lot of confidence to allow design to lead.It's pretty clear that it does at Apple.When you look at Apple,it doesn't look and feel like other consumer electronics companies.It's more like a drug company,with a couple of core inventions that are critical.There are core elements in their process and products they are gonna defend fiercely,Mr.Gill explained.

Shortfall of Rare Earth Elements Persists

Molycorp is the sole producer of rare earth oxides in the Western Hemisphere.The Mountain Pass,California company has reached profitability,and CEO Mark Smith indicates that the condition out of China is driving his company.The supply side is not nearly strong enough to meet the demand both in and outside of China.
We're seeing not just price realisation,but a volume increase as well.We see the demand continuing to climb very rapidly.China cannot produce enough for their own in country needs.
A 30-35,000 ton supply of rare earth is needed per year.Molycorp puts out 5-6,000 tons for its customers.We are fully funded to close the Sumitomo deal,under which Sumitomo Corporation of Japan will provide Molycorp with financing in exchange for a seven year supply of rare earth products.We certainly would like to enter into contracts.
We have to stay focused on our 781 million dollar expansion project.It is the number one priority for every employee in the company.We have to bring that project in on time and within budget.That's what people invested in Molycorp for.
We don't foresee any let up in demand for rare earth elements,Mark Smith noted.The oxides,considered critical by industries such as aerospace and defence,are utilised in diverse applications such as lasers;computer memory;aerospace components;magnets;batteries;and PET Scan detectors,as well as X-ray components.
Molycorp(MCP)

Qualcomm Posts Global Profits

One of the biggest success stories in the telecom space,Qualcomm has added 38 billion dollars in market value,posting 5.6 billion dollars in profits in the last year.Its vision is to power mobile phones and tablets with Qualcomm chips.The company is spending much on innovation.
CEO Paul Jacobs says Qualcomm's customers want micrographics technology.They want a lot of bandwidth.Qualcomm is getting to innovate in a lot of different areas for them.
Qualcomm is the single chip supplier to Windows mobile phones.The sales of its Snapdragon chip set have really taken off.Microsoft will use the Snapdragon chips in devices running its new Windows 8 platform.
Windows 8 is to be compatible with tablet PCs.It is the biggest upgrade since Windows 95,Qualcomm's partner Microsoft announced.
Based in San Diego,California,Qualcomm has 159 offices worldwide,including a major commitment in Asia.From Manila to Mexico,the company strives to assist the underserved wherever it does business,improving lives through connectivity.
Founded in 1985,Qualcomm is one of Fortune magazine's 100 Best Companies To Work For.
Qualcomm(QCOM)

Brazil Still A Force

U.S. equities will be higher.We think the markets are still gonna rally,says Michael Yoshikami of YCMNET Advisors,and the emerging markets are gonna continue to do well with their commodities.Singapore is the Switzerland of Asia.
We think Brazil is still an impact story.There is enough appetite for Latin America from U.S. companies.You can't put everything in Asia.Brazil is gonna continue to be a major trading partner with China,and that's gonna drive that economy.U.S. companies see a slow GDP story in the U.S.
Gold will reach 2,000 dollars an ounce.You buy gold for scepticism about the markets and as an inflation hedge.Food is going to be huge in demand.Commodities need to be part of an investor's portfolio,in Mr.Yoshikami's opinion.
YCMNET Advisors is a wealth management firm located in Walnut Creek,California.It was named one of Barron's Top 100 Independent Advisors for 2010.
iShares MSCI Brazil Index Fund(EWZ)

Nature Note:Fox Sparrow

A fox sparrow has been visiting the property lately,scratching for seed.This bird is a boreal breeder,a native of the Great North Woods,which has come south for the winter.It is most likely from Northern Quebec or New Brunswick.They also breed from Alaska to Southern California-presumably in the mountains.Fox sparrows are heavily streaked with reddish brown and gray.At up to 7.5 inches,or 19.05 centimeters,it is one of the largest of sparrows.The dark-eyed juncos,or snowbirds,have also checked in.They could be from any of a number of places above the Mason-Dixon Line.These birds herald the arrival of markedly colder weather this weekend.