ExxonMobil: All Good But the Refining; Credit Suisse Upgrades Hess

Shares of ExxonMobile (XOM) have gained 1.8% to $90.41 today after the energy behemoth reported better-than-expected earnings.

Agence France-Presse/Getty Images

Reuters has the details on Exxon’s numbers:

Third-quarter oil and natural gas output rose 1.5 percent from a year earlier to 4 million barrels oil equivalent per day, helped by the start-up of new projects, the Irving, Texas, company said.

Natural gas from Australia’s Kipper Tuna Turrum project and accelerated output from projects in Nigeria and Canada also contributed to the higher production.

Profit in the third quarter was $7.87 billion, or $1.79 per share, compared with $9.57 billion, or $2.09 per share, a year earlier.

Analysts on average had expected $1.77 per share, according to Thomson Reuters I/B/E/S.

“Weaker margins, mainly in refining, decreased earnings by $2.4 billion,” Exxon said in a statement.

S&P Caiptal IQ’s Michael Kay says not to worry about refining:

Q3 EPS of $1.79, vs. $2.09, falls $0.08 short of our view, on upstream price realizations. Downstream and chemicals were better than we projected. Overall oil and gas production met forecasts and the mix was more favorable, as oil volumes (up 3%) beat and natural gas (down 1%) fell. XOM highlights its 41-rig onshore U.S. program, noting production of 65 MBOE/day at Bakken and over 90 MBOE/d from Permian. The Kearl project (58% complete) is producing 100 MBOE/d. We see onshore liquids growth and several expected project start-ups driving production gains between ’14-’17.

Kay maintained his buy rating on Exxon.

Exxon’s not the only strong energy stock today. Hess (HES) has gained 1.7% to $81.784 after it was upgraded by Credit Suisse, while ConocoPhillips (COP) has risen 1.1% to $74.07 after beating earnings estimates.

Credit Suisse explains why it raised Hess to Outperform from Neutral:

 

We are raising our NAV to $112/sh for HES on the basis of (1) better Bakken Well costs; (2) higher Bakken drilling activity; and (3) more credit for the Utica. With disposal proceeds still to come, the balance sheet is being derisked and growth through 2018 looks assured. The pro forma EV/CF multiple in 2014 looks too low. HES should outperform the Majors. While HES is not a pure play shale company and the returns on the Bakken are not as good as other plays, supporting a lower overall multiple, we see 25% upside through the next 6 months. Our $100/sh target represents a 12% discount to NAV, the typical point at which SOTP stories run out of steam.

Today’s After Hours Earnings: Metlife Inc, The Allstate Corporation, Hanesbrands Inc., More (ALL, MET, MAR, More)

After the closing bell on Wednesday, many big name dividend-paying companies announced their quarterly earnings. Below, we break down all of the earnings information that dividend investors need to know.

Allstate Insurance Beats EPS Views, Misses on Revenue

Allstate (ALL) announced Q3 consolidated revenues of $8.47 billion, which were up 4.1% from last year’s Q3 revenues. The company posted net income for the quarter of $713 million, or $1.53 per share, compared to last year’s Q3 net income of $717 million, or $1.46 per share. Allstate beat analysts’ $1.44 EPS

5 Best Stocks To Buy Right Now

NEW YORK (TheStreet) -- The broader market closed near the highs of the day ahead of the statement from the Federal Reserve at the end of the FOMC meeting Wednesday.

On CNBC's "Fast Money" TV show, Guy Adami said the Fed has to do something at this point. He is expecting $10 billion to $15 billion in bond tapering. He added that Caterpillar (CAT) looks like a good short.

Brian Kelly concurred on Caterpillar and added that the risk-to-reward for holding large positions into Wednesday's FOMC meeting are not favorable.

Jim Lebenthal is a Caterpillar bull, but said he wouldn't be surprised to see some profit-taking. Karen Finerman said she's not trying to trade around the Fed since it is too hard. She added that what she owns now she'll likely want to own in a month from now, regardless of the Fed. Mike Khouw said that with Fed Chairman Ben Bernanke stepping down soon, he would be surprised if some sort of tapering was not initiated. However, he did say the economic numbers have not been that good and inflation hasn't moved much. Jon Hilsenrath of the Wall Street Journal was a guest on the show and said the Fed is in a pickle because of its forecasts of both lower unemployment and low interest rates. In a healthy economy, the two do not typically coexist, he suggested. He added that the Fed doesn't want to upset the market, which may or may not cause the central bank to taper, since the market seems to expect about $10 billion per month in tapering efforts. Many Fed officials are on the fence. Adobe (ADBE) reported earnings and Adami said he would rather be taking profits than buying the stock. Even though Qualcomm (QCOM) is near a 52-week high, Adami said he still considers the stock a buy. Lebenthal called it a cash machine and thinks it will rip right through $70 to the upside. Kelly added that if that happens, $100 per share is not out of the question. General Motors (GM) announced it was working on a long-range electric car that is $50,000 less than Tesla Motors' (TSLA) Model S, making the former stock an ideal fit for the show's "Street Fight" segment.

5 Best Stocks To Buy Right Now: Pansoft Company Limited(PSOF)

Pansoft Company Limited engages in the development and marketing of accounting and enterprise resource planning software primarily for the oil and gas industry in the People?s Republic of China. It offers software solutions in various business operations, including accounting, order processing, shipping, invoicing, inventory control, and customer relationship management. The company?s products comprise PanBI, a platform for business data analysis, model building, statements processing, and data storage building; PanXI, a database management platform, which converts business operational data into accounting systems and used in generating financial documents; PanMM, a supply chain management software for large enterprises; and PanSchema, a development platform that focuses on management information products. It also provides various services, including software systems development, software integration, software compatibility enhancement, functionality expansion, and busin ess process reengineering, as well as support, training, maintenance, and execution client services. The company was formerly known as Time Maker Limited and changed its name to Pansoft Company Limited in March 2006. Pansoft Company Limited was founded in 2001 and is headquartered in Jinan, China. Pansoft Company Limited operates as a subsidairy of Timesway Group, Ltd.

5 Best Stocks To Buy Right Now: Boston Scientific Corp (BSX)

Boston Scientific Corporation is a developer, manufacturer and marketer of medical devices that are used in a range of interventional medical specialties. During the year ended December 31, 2011, its products were offered for sale by seven core businesses: Interventional Cardiology, CRM, Endoscopy, Peripheral Interventions, Urology/Women�� Health, Neuromodulation, and Electrophysiology. In January 2011, it completed the acquisition of Intelect Medical, Inc. In January 2011, it completed the acquisition of Sadra Medical, Inc. In March 2011, the Company completed the acquisition of Atritech, Inc. In February 2011, it announced the acquisitions of S.I. Therapies and ReVascular Therapeutics, Inc. In January 2011, the Company sold its Neurovascular business to Stryker Corporation. In June 2012, the Company acquired Cameron Health, Inc. of San Clemente, California and, as a result, added to its product portfolio subcutaneous implantable cardioverter defibrillator, called the S-ICD System.

Interventional Cardiology

The Company offers coronary stent product. Coronary stents are tiny, mesh tubes used in the treatment of coronary artery disease, which are implanted in patients to prop open arteries and facilitate blood flow to and from the heart. The Company offers a two-drug platform strategy with its paclitaxel-eluting and everolimus-eluting stent system offerings, and it offers a range of stent sizes. The Company markets its next-generation internally-developed and self-manufactured PROMUS Element stent system in the United States, its Europe/Middle East/Africa (EMEA) region and certain Inter-Continental countries, including China and India. It markets the PROMUS everolimus-eluting stent system, supplied to the Company by Abbott Laboratories, in Japan. It also markets its TAXUS paclitaxel-eluting stent line, including its third-generation TAXUS Element paclitaxel-eluting stent system in the U.nited States, Japan, EMEA and certain Inter-Continental countries.

The Compa! ny markets a line of products used to treat patients with atherosclerosis, a principal cause of coronary artery obstructive disease. Its product offerings include balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices, and diagnostic catheters used in percutaneous transluminal coronary angioplasty (PTCA). The Company markets a family of intraluminal catheter-directed ultrasound imaging catheters and systems for use in coronary arteries and heart chambers, as well as certain peripheral vessels. The iLab Ultrasound Imaging System continues as its flagship console and is compatible with its line of imaging catheters. The system is designed to enhance the diagnosis and treatment of blocked vessels and heart disorders. Sadra is developing a repositionable and retrievable device for transcatheter aortic valve replacement (TAVR) to treat patients with severe aortic stenosis. The Lotus Valve System consists of a stent-mounted tissue valve prosthesis and catheter delivery system for guidance and placement of the valve. Atritech has developed a device designed to close the left atrial appendage in patients with atrial fibrillation who are at risk for ischemic stroke. The WATCHMAN Left Atrial Appendage Closure Technology, developed by Atritech, is the first device proven in a randomized clinical trial to offer an alternative to anticoagulant drugs, and is approved for use in CE Mark countries.

Cardiac Rhythm Management

The Company develops, manufactures and markets a variety of implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities, including Implantable cardioverter defibrillator (ICD) systems used to detect and treat abnormally fast heart rhythms (tachycardia) that could result in sudden cardiac death, including implantable cardiac resynchronization therapy defibrillator (CRT-D) systems used to treat heart failure, and implantable pacemaker systems used to manage slow or irregular heart rhyth! ms (brady! cardia), including implantable cardiac resynchronization therapy pacemaker (CRT-P) systems used to treat heart failure. Its product offerings include its COGNIS cardiac resynchronization therapy defibrillator (CRT-D), its TELIGEN ICD systems and its ALTRUA family of pacemaker systems. During 2011, it began the United States launch of its next-generation line of defibrillators, INCEPTA, ENERGEN and PUNCTUA.

Endoscopy

The Company markets a range of products to diagnose, treat and ease a variety of digestive diseases, including those affecting the esophagus, stomach, liver, pancreas, duodenum, and colon. Common disease states include esophagitis, portal hypertension, peptic ulcers as well as esophageal, biliary, pancreatic and colonic cancer. The Company offers the Radial Jaw 4 Single-Use Biopsy Forceps, which are designed to enable collection of large high-quality tissue specimens without the need to use large channel therapeutic endoscopes. Its exclusive line of RX Biliary System devices are designed to provide greater access and control for physicians to diagnose and treat challenging conditions of the bile ducts, such as removing gallstones, opening obstructed bile ducts and obtaining biopsies in suspected tumors. The Company also markets the Spyglass Direct Visualization System for direct imaging of the pancreatico-biliary system. The Spyglass System is a single-operator cholangioscopy device that offers clinicians a direct visualization of the pancreatico-biliary system and includes supporting devices for tissue acquisition, stone management and lithotripsy. Its products also include the WallFlex family of stents, in particular, the WallFlex Biliary line and WallFlex Esophageal line; and in 2011, the Company launched its Advanix Biliary Plastic Stent System and the Expect Endoscopic Ultrasound Aspiration Needle in the United States and certain international markets. Its Resolution Clip Device is an endoscopic mechanical clip designed to treat gastrointestinal bleeding.

T! he Company markets devices to diagnose, treat and ease pulmonary disease systems within the airway and lungs. Its products are designed to help perform biopsies, retrieve foreign bodies from the airway, open narrowings of an airway, stop internal bleeding, and ease symptoms of some types of airway cancers. Its product line includes pulmonary biopsy forceps, transbronchial aspiration needles, cytology brushes and tracheobronchial stents used to dilate narrowed airway passages or for tumor management. Asthmatx, Inc. designs, manufactures and markets a less-invasive, catheter-based bronchial thermoplasty procedure for the treatment of severe persistent asthma. The Alair Bronchial Thermoplasty System, developed by Asthmatx, has both CE Mark and Food and Drug Administration (FDA) approval and is the first device-based asthma treatment approved by the FDA.

Peripheral Interventions

The Company sells various products designed to treat patients with peripheral disease, including a line of medical devices used in percutaneous transluminal angioplasty and peripheral vascular stenting. Its peripheral product offerings include stents, balloon catheters, wires, peripheral embolization devices and vena cava filters. In 2010 and 2011, it launched several of its products internationally, including the EPIC self-expanding nitinol stent system in certain international markets, and the Carotid WALLSTENT stent system in Japan. The Company launched three new peripheral angioplasty balloons in 2011, including its next-generation Mustang percutaneous transluminal angioplasty (PTA) balloon, its Coyote balloon catheter, a highly deliverable and ultra-low profile balloon dilatation catheter designed for a range of peripheral angioplasty procedures and its Charger PTA Balloon Catheter, a 0.035 inch percutaneous transluminal angioplasty balloon catheter designed for post-stent dilatation, as well as conventional balloon angioplasty to open blocked peripheral arteries. The Company has commenced a limited ma! rket rele! ase of its OFFROAD re-entry catheter system in certain international markets, and in February 2012, it launched its TRUEPATH intraluminal CTO device in the United States.

The Company sells products designed to treat patients with non-vascular disease. Its non-vascular suite of products include biliary stents, drainage catheters and micro-puncture sets designed to treat, diagnose and ease various forms of benign and malignant tumors. The Company continues to market its extensive line of Interventional Oncology product solutions, including the Renegade HI-FLO Fathom microcatheter and guidewire system and Interlock - 35 Fibered IDC Occlusion System for peripheral embolization. The Company�� FilterWire EZ Embolic Protection System is a filter designed to capture embolic material that may become dislodged during a procedure, which could otherwise travel into the microvasculature where it could cause a heart attack or stroke. It is commercially available in the United States, its EMEA region and certain Inter-Continental countries for multiple indications, including the treatment of disease in peripheral, coronary and carotid vessels. It is also available in the United States for the treatment of saphenous vein grafts and carotid artery stenting procedures.

Urology/Women�� Health

The Company�� Urology/Women�� Health division develops, manufactures and sells devices to treat various urological and gynecological disorders. The Company sells a variety of products designed to treat patients with urinary stone disease, stress urinary incontinence, pelvic organ prolapse and excessive uterine bleeding. The Company offers a line of stone management products, including ureteral stents, wires, lithotripsy devices, stone retrieval devices, sheaths, balloons and catheters.

The Company markets a range of devices for the treatment of conditions, such as female urinary incontinence, pelvic floor reconstruction (rebuilding of the anatomy to its original state), and ! menorrhag! ia (excessive menstrual bleeding). It offers a breadth of mid-urethral sling products, sling materials, graft materials, pelvic floor reconstruction kits, and suturing devices. The Company markets its Genesys Hydro ThermAblator (HTA) system, a next-generation endometrial ablation system designed to ablate the endometrial lining of the uterus in premenopausal women with menorrhagia. The Genesys HTA System features a smaller and lighter console, simplified set-up requirements, and an enhanced graphic user interface and is designed to improve operating performance.

Neuromodulation

The Company within its Neuromodulation business markets the Precision Spinal Cord Stimulation (SCS) system, used for the management of chronic pain. In 2011, the Company launched its Clik Anchor for its Precision Plus SCS System, a rechargeable SCS device for chronic pain management. During 2011, it received FDA approval for and launched the Infinion 16 Percutaneous Lead, a 16-contact percutaneous lead. The Company also markets the Linear 3-4 and Linear 3-6 Percutaneous Leads for use with its SCS systems, which are designed to provide physicians more treatment options for their chronic pain patients. Intelect Medical, Inc. is a development-stage company developing advanced visualization and programming for the Vercise system.

Electrophysiology

The Company within its Electrophysiology business develops less-invasive medical technologies used in the diagnosis and treatment of rate and rhythm disorders of the heart. Included in its product offerings are radio frequency (RF) generators, steerable RF ablation catheters, intracardiac ultrasound catheters, diagnostic catheters, delivery sheaths, and other accessories. Its products include the Blazer and Blazer Prime line of temperature ablation catheters, designed to deliver enhanced performance, responsiveness, and durability. Its cooled ablation portfolio includes the closed-loop irrigated catheter on the market, the Chilli II cooled! ablation! catheter, and the newly launched Blazer Open-Irrigated ablation catheter with a Total Tip Cooling Design.

The Company competes with Abbott Laboratories, Medtronic, Inc., St. Jude Medical, Inc. and Johnson & Johnson.

Advisors' Opinion:

• [By Keith Speights]

  Has anyone noticed a common theme among the first-quarter results for many of the big medical-device companies? In case you missed earnings announcements from Abbott Labs (NYSE: ABT  ) , Boston Scientific (NYSE: BSX  ) , Edwards Lifesciences (NYSE: EW  ) , Johnson & Johnson (NYSE: JNJ  ) , or Stryker (NYSE: SYK  ) , the following chart shows how their medical-device business fared during the quarter.

10 Best Canadian Stocks To Own Right Now: Kesa Electricals(KESA.L)

Kesa Electricals plc, through its subsidiaries, engages in retailing electrical products. The company offers products in three categories: white, brown, and grey electrical goods and related accessories. The white category goods comprise large and small sized domestic appliances, such as refrigerators, washing machines, microwaves, coffee machines, and irons. The brown category goods include various vision and audio products consisting of flat-screen televisions, DVD players, MP3 players, and camcorders The grey category goods comprise telecommunications and multimedia products, including mobile telephones, personal computers, laptops, digital cameras, printers, scanners, games, and electronics. The company also provides various associated services, which include home delivery and installation, and credit and extended warranties. It operates approximately 700 stores under the brand names of DARTY, Comet, BCC, Vanden Borre, and Datart in France, the United Kingdom, Belgium , Holland, the Czech Republic, Slovakia, Italy, Luxembourg, Turkey, and Spain. Kesa Electricals plc is based in London, the United Kingdom.

5 Best Stocks To Buy Right Now: Electro Rent Corporation(ELRC)

Electro Rent Corporation engages in the rental, lease, and sale of new and used electronic test and measurement equipment. Its equipment portfolio consists of general purpose test and measurement instruments; personal computers, workstations, and servers; and electrical test equipment and inspection equipment. The company rents or leases its equipment primarily to companies operating in the aerospace, defense, telecommunications, electronics, and semiconductor industries. Electro Rent Corporation serves its customers through sales offices, and calibration and service centers in the United States, Canada, China, and Europe. The company was founded in 1965 and is headquartered in Van Nuys, California.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Electro Rent (Nasdaq: ELRC  ) , whose recent revenue and earnings are plotted below.

5 Best Stocks To Buy Right Now: Yoma Strategic Holdings Ltd (Z59.SI)

Yoma Strategic Holdings Ltd., an investment holding company, engages in the development and management of properties, and sale of land development rights and houses in Singapore, Myanmar, and the People�s Republic of China. It is also involved in agricultural activities, such as the managing and marketing produce from a 100,000 acre Jatropha Curcas and black pepper plantation located in the Ayerwaddy Division of Myanmar; and automobile dealership business, as well as provision of construction related services. In addition, the company provides project management services; property management; and architectural and design services. The company�s development properties portfolio includes apartments, condominiums, private residential properties, houses, and townhouses. Yoma Strategic Holdings Ltd. is based in Singapore.

Does Kraft Foods Support All-Time High Prices?

With shares of Kraft Foods (NASDAQ:KRFT) trading around $57, is the company 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

Kraft Foods operates food and beverage businesses in North America. The company manufactures and markets food and beverage products, including convenient meals, refreshment beverages and coffee, cheese, and other grocery products. Kraft Foods’s product categories span breakfast, lunch and dinner meal occasions, both at home and in foodservice locations. It sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, drug stores, gasoline stations, value stores, and other retail food outlets. Food and beverage products are essential for the daily lives of consumers, so it is clear the demand will always be there. Now, as consumers and countries around the world see development, Kraft Foods’ products will see increasing demand as the affordability makes them viable options.

T = Technicals on the Stock Chart are Strong

Kraft Foods stock has seen a consistent uptrend since its initial public offering just last year. The stock has seen a powerful run this year that has taken it to all-time high prices. 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, Kraft Foods is trading above its rising key averages, which signals neutral to bullish price action in the near-term.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Kraft Foods Options	18.3%	56%	54%

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

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July 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 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 Mixed 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 Kraft Foods’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Kraft Foods 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)	-7.32%	-71.02%	12.86%	N/A
Revenue Growth (Y-O-Y)	2.09%	-10.74%	2.95%	0.95%
Earnings Reaction	5.1%	0%	N/A	N/A

Kraft Foods has seen mixed earnings and revenue figures over the last few quarters. From these figures, the markets have been happy with Kraft Foods’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Kraft Foods stock done relative to its peers, ConAgra Foods (NYSE:CAG), Hillshire Brands (NYSE:HSH), General Mills (NYSE:GIS), and the sector?

	Kraft Foods	ConAgra Foods	Hillshire Brands	General Mills	Sector
Year-to-Date Return	26.57%	18.58%	25.76%	21.47%	19.79%

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

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Conclusion

Kraft Foods provides essential food and beverage products to many consumers and businesses looking for quality and affordable items. The stock has surged higher since its initial public offering that occurred just last year to all-time high prices. Over the last few quarters, earnings and revenue numbers have been mixed, which has kept investors in the company happy. Relative to its peers and sector, Kraft Foods has been a year-to-date performance leader. Look for Kraft Foods to OUTPERFORM.

Pending Home Sales Down 0.4% From 6-Year High

The Pending Home Sales Index fell 0.4% to 110.9 for June, according to a National Association of Realtors report released today.

After jumping up a revised 5.8% in May to reach its highest level in more than six years, analysts had expected an even larger 1.4% dip in the Index's reading.

Source: Author, data from Realtor.org. 

The index is based on contract signings (with sales usually finalized one or two months later) and is benchmarked to 2001 contract activity. (An index of 100 is equal to the average level of contract activity during 2001, which was the first year the association examined data).

NAR's Chief Economist Lawrence Yun pointed to expensive price points and rising mortgage rates as two of the primary impediments to the housing market's recovery:

Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June. The persistent lack of inventory also is contributing to lower contract signings. There are some homebuyers who sign contracts with strong lender commitment letters, but have floating mortgage interest rates. Those rates can be locked as late as 10 to 14 days before closing, so some homebuyers may change their minds if the rate rises too much, which apparently happened with some sales scheduled to close in June. Closed sales may edge down a bit in the months ahead, but they'll stay above year-ago levels.

The average rate on a 30-year fixed mortgage has jumped a full percentage point since early May and reached a two-year high of 4.51% in late June.

June marks the 26th straight month that pending sales have clocked in above year-ago levels. The June index is 10.9% above the year-ago reading.

Looking ahead, the NAR expects 2013 existig-home sales to grow more than 8%, while a continued supply squeeze will push median prices up almost 11%.

-- Material from The Associated Press was used in this report.

link

European Fund Favorites

Europe's equity markets have benefited lately from signs of economic stabilization, suggests fund expert Mark Salzinger; in his No-Load Fund Investor, he highlights three well-positioned funds.

The purest way to bet on a continued rebound in European equity markets would be to invest in top-rated international equity funds focused on Europe. In our stock rankings, three such funds that are open currently make the grade.

One is Vanguard European Stock Index (US:VESIX), which strongly emphasizes the countries with the largest economies in Europe. It devotes more than three quarters of its assets to stocks from four major countries: the UK (33.6% of assets), France (14.8%), Switzerland (14.0%), and Germany (13.4%).

In terms of sectors: financial services, consumer staples, and healthcare account for at least 12% each of the fund, while utilities and technology account for less than 5% each. The fund includes more than 500 holdings, with an average market cap of about $41 billion.

As a passively managed index fund, Vanguard European Stock Index benefits from a low expense ratio: only 0.26% on the Investor class shares ($3,000 minimum initial investment), and only 0.12% on the Admiral class (VESIX; $10,000 minimum).

Portfolio turnover is also minuscule: usually less than 10% a year, which speaks well for the fund's tax efficiency and minimal transaction expense.

We also recommend several actively managed Europe funds, including T. Rowe Price European Stock (US:PRESX).

Compared to the Vanguard fund, Price European Stock has considerably more in Spain (15.2% of assets as of July 31) and Italy (7.7%) and only about half as much (18.3%) in the UK. It also invests a higher percentage of assets in mid-cap stock.

Based on these comparisons, the Price fund would seem to be riskier than the Vanguard offering. Statistically speaking, however, that hasn't been the case. In fact, the funds have been equally volatile over the past several years.

Meanwhile, Price European Stock has produced a three-year annualized return of 15.9% through Aug. 30, 2013, beating Vanguard European Stock by 5.4 percentage points a year, despite having a higher expense ratio (1.00%).

Dean Tenerelli joined Price in 2000 and began managing the fund in 2005. Tenerelli has been favoring the consumer discretionary sector (21.1% of assets), especially media stocks, including broadcasters.

Though Fidelity Europe (US:FIEUX) is also actively managed, it has quite a bit in common with Vanguard European Index. Its portfolio is dominated by stocks domiciled in the UK, France, Germany, and Switzerland, and it devotes little to the continent's riskiest nations.

Consumer discretionary stocks represent the only very significant overweight (15.4% of assets, versus 8.9%), while energy and telecom services get less than, in the index fund.

Though Fidelity Europe includes only 124 holdings, many of them are the same multinational household names that factor so importantly into the index fund.

Despite the similar positioning of Fidelity Europe to Vanguard European Index, the former fund's return has beaten that of the index fund by 2.4 percentage points over the 12-month period ended Aug. 30.

Fidelity Europe's manager, Risteard Hogan, began his tenure in April 2012. He favors companies with moderate, stable growth trajectories, combined with propensities to repurchase stock and pay dividends.

While the portfolio's valuation ratios approximate that of the index fund, he sometimes invests with a contrarian mindset.

He especially favors attractively valued companies that compete well in global markets, as opposed to companies that focus on their home markets in Europe. The fund's expense ratio is 0.83% (very reasonable for an actively managed foreign stock fund), and the minimum initial investment is $2,500.

Subscribe to No-Load Fund Investor here…

More from MoneyShow.com:

Fund Guru's European Trio

Best of the Bargains: Europe-Based Blue Chips

Global Guru Eyes France and Italy

Tesla: Domestic Performance Not Indicative Of International Success

It is difficult not to like an ambitious company like Tesla Motors (TSLA). The groundbreaking technological progress and the quality both from a performance as well as aesthetic perspective are to be admired. However, at current valuations, we believe Tesla is worth $100 per share. One of the biggest challenges moving forward is whether Tesla can carry over its domestic success to international markets.

Tesla is pursuing an aggressive path to expansion both domestically as well as internationally. The Model S has sold around 15,000 models since its debut and the demand is expected to ramp up to around 20,000 per year moving forward. Customer opinion on the model has been so far positive, scoring a perfect score in terms of safety and reliability.

Whereas domestic sales are picking up, international sales are still in early stages. Sales in North America have jumped more than 3600% year over year for the first half of 2013, whereas European revenue growth was cut by half in the same period, suggesting European sentiment for Tesla may not be as strong as it is domestically.

So far, most European success has come from Norway, with over 800 units delivered, more than Netherlands, Denmark and Germany combined. The success of Tesla in Norway is tied to favorable government tax incentives and other perks that bring the cost of owning a Tesla down. However, we see price as a factor that could limit demand in the rest of the European countries. Most other European countries can expect a 20% markup due to additional expenses on logistics and import taxes. The European Model S has a 60K Euro base price ($82K), compared to the US domestic price of $62K after tax incentives.

One particular European country that could pose a problem to Tesla is Germany. The country is home to the top 3 leaders of luxury automobiles, namely Mercedes Benz, BMW and Volkswagen. For the month ended August 2013, the top three best-selling brands were Volkswagen, Mercedes, Audi and BMW taking 5th spot. The German a! utomobile market is essential to European success as it represents more than 20% of all new passenger car registrations within European Union countries. Even with or without tax incentives, it may be hard to challenge the German consumer's loyalty to these iconic local manufacturers.

From a luxury point of view, Tesla is overall an elegant automobile. For a Mercedes enthusiast that sees a Tesla for the first time, he will notice the Model S uses the same gear shifter on the steering wheel as many Mercedes models have used in the past. This aesthetic similarity may seem the Model S is copying the Mercedes brand, although in reality there is a trade of technology between the two companies. The Model S also misses some small features that are either standard or available for most luxury brands. Some of the features are auto folding rear view mirrors, soft close assist for doors and parking sensor, among others. The lack of these small features knocks the Model S one notch below its competitors.

As an electric car, the Model S must compete with the likes of Smart EV, Renault Zoe and Nissan Leaf. All 3 models outsold Tesla in the month of September in Germany. Tesla is in no way similar to these models in terms of size or body style, but in the eyes of German consumers, they serve the same purpose: eliminate fuel consumption.

The biggest difference between the European and American automobile market boils down to fuel type used, as Diesel is the top fuel choice in Europe. Mercedes, Audi and BMW are the top producers of new diesel cars that are not only environmentally conscious, reducing CO2 emissions, and offer better mileage per tank as well. Diesel is also cheaper than regular gasoline in Europe, compared to the United States where the opposite is true.

Valuation

The value of the stock is well ahead of the company's fundamental valuations. The stock price defies conventional investing principles and is propelled by high expectations, factoring in expected earnings for models ! like the ! Model X that is not even available for sale yet. With no solid financial data, the current share price is speculative.

Gross profit margin currently sitting at 16% will improve as more units are sold. Capital spending is likely to increase in the near future due to infrastructure expenses both domestically and internationally. Tesla plans to have a facility within a 200-mile range for a select number of European countries by the end of 2014. The problem is there is no free cash flow and, while there is cash on hand, Tesla is also looking to expand in Asia at the same time. The company may be stretching its financial reach to the limit too soon. Even if we assume Tesla will sell 90K units in 2017 and operating margin drops to 15%, which is close to that of Porsche and an estimate of $55K per unit, we believe Tesla should currently be priced at $100 according to our DCF model.

Conclusion

It will be a difficult task for Tesla to break not only the German market, but the overall European automobile market. Domestic and international consumers may not share the same vision for the company. Tesla expects to sell 20,000 units within the European market, but this feat may not be easily accomplished in the near future.

Domestically, Tesla started offering in April 2013 a "resale value guarantee," whereby customers are welcome to sell their car back to the company within 36-39 months of initial purchase. It will be an interesting statistic to see how many customers decide to take advantage of this offer. This would be a good indicator whether Tesla is more than just a short lived trend.

Source: Tesla: Domestic Performance Not Indicative Of International Success

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Business relationship disclosure: I have no business relationship with any company whose stock is mentioned in this article. The Oxen Group is a team of analysts. This article was written by David Ristau, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

Bank of America to Cut 3,000 Mortgage Jobs

Spencer Platt/Getty Images Bank of America said Thursday that it was cutting 1,200 to 1,300 mortgage jobs because of declines in refinancing activity and an improvement in its portfolio of delinquent home loans. The employees are based in divisions that handle processing new mortgages and service home loans that are past due, a spokesman said. They received notice this week that their positions were being eliminated. News of the layoffs was first reported by the Wall Street Journal. The newspaper also said Bank of America (BAC) was looking to cut 3,000 mortgage jobs by the end of the year. The spokesman couldn't immediately confirm that number. The second-largest U.S. bank laid off more than 9,000 full-time employees in the third quarter. Finance chief Bruce Thompson said on an Oct. 16 conference call with analysts that the reductions were concentrated in the unit that collects payments on current and delinquent home loans, the unit that makes new home loans, and in many of the bank's branches. Bank of America made $22.6 billion in home loans in the third quarter, down 11 percent from the second quarter. The number of mortgage applications the bank had received but not yet processed fell 60 percent from the end of June to the end of September. Also, mortgage loans that were delinquent by more than 60 days fell by 94,000 to 398,000 in the third quarter. The bank expects a further decline to below 375,000 by the end of 2013. Rising interest rates have curtailed mortgage refinancing since the spring. The interest rate on a 30-year mortgage stood at 4.39 percent in the week that ended Friday, according to the Mortgage Bankers Association, down from a high of 4.80 percent in September but above the 3.59 percent rate in early May. Bank of America expects to make fewer home loans in the fourth quarter and will look to cut more mortgage jobs, Chief Executive Officer Brian Moynihan said on the conference call. The Charlotte, N.C.-based bank isn't the only lender to lay off staff in response to a slowdown in refinancing. Wells Fargo (WFC), the largest U.S. mortgage lender, said on Oct. 17 that it was cutting 925 mortgage jobs. That comes on top of the 5,300 Wells Fargo mortgage employees that were notified that they would be laid off in the third quarter.

Emerging Stocks Slump on China as Gazprom to Vale Tumble

Emerging-market stocks retreated from a five-month high amid concern China's economic growth will falter after the nation's money-market rates climbed. OAO Gazprom and Vale SA drove a slump in commodity producers.

The MSCI Emerging Markets Index declined 1.1 percent to 1,033.47, snapping a rally that took the gauge to a five-month high. The Shanghai Composite Index fell 1.3 percent, while Gazprom drove Russia's Micex Index to the biggest slide in two months. Brazil's Ibovespa (IBOV) retreated from the highest since March as iron-ore producer Vale sank. The rand fell as South Africa projected government debt would surge.

Stocks in emerging markets joined a decline in commodities as crude oil tumbled to a three-month low, while copper and gold slumped. China's benchmark money-market rate jumped the most since July as the central bank refrained from adding funds to markets and corporate tax payments drained cash. The People's Bank of China may lean toward tightening should there be an acceleration in consumer-price gains, Song Guoqing, a central bank academic adviser, said over the weekend.

"People do interpret that as a sign that the Chinese government is trying to reign in borrowing, and borrowing is seen as a key engine of their economy," Peter Jankovskis, who helps oversee $3.5 billion as co-chief investment officer of Lisle, Illinois-based Oakbrook Investments LLC, said by phone. "That could certainly be pressuring commodity prices, and that's being reflected in other equity markets as well."

All 10 groups in the MSCI Emerging Markets Index fell as commodity companies dropped at least 1 percent. The benchmark gauge for developing nations has fallen 2.1 percent this year to trade at 10.7 times projected earnings, compared with the valuation of 14.3 for the MSCI World Index.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund sank 2.3 percent to $42.64. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, advanced 12 percent to 21.58.

The Ibovespa dropped 1.8 percent as iron-ore producer Vale SA (VALE5), whose main export market is China, snapped a two-day gain. Pulp producer Fibria Celulose SA (FIBR3) retreated after posting quarterly earnings that trailed analysts' estimates. Brazil plans to sell dollar bonds due in 2025, creating a new benchmark security in international markets, and buy back notes maturing in as little as four years.

Russia's Micex Index dropped the most since Aug. 15 as natural-gas export monopoly Gazprom, which has the heaviest weighting on the gauge, sank 2.3 percent. Benchmark indexes in Turkey, Poland and the Czech Republic fell at least 0.8 percent.

South Africa

The FTSE/JSE Africa All Shares Index fell from a record in Johannesburg after the National Treasury said gross debt will balloon to 48 percent of gross domestic product in the year through March 2017 from an estimated 43 percent last year.

China's stocks fell, with the benchmark index for smaller companies capping the biggest two-day loss in 18 months. Leshi Internet Information & Technology (Beijing) Co., the operator of online-video portal LeTV.com, plunged by the 10 percent daily limit for a second day. Huaneng Power International Inc. (902), the listed unit of China's largest power group, slumped 5.8 percent after third-quarter earnings missed estimates.

India's S&P BSE Sensex (SENSEX) dropped to a one-week low as quarterly results disappointed investors. Wipro Ltd. (WPRO), the nation's third-largest software exporter, fell from a 13-year high as Morgan Stanley said the company's sales growth trailed that of its peers. Cairn India Ltd, which runs India's biggest onshore oilfield, slid the most in two months after its profit missed forecasts.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell two basis points, or 0.02 percentage point, to 312 basis points, according to JPMorgan Chase & Co.

Is RadioShack a Buy Post-Earnings?

With shares of RadioShack (NYSE:RSH) trading around $2, is RSH 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

RadioShack engages in the retail sale of consumer electronics goods and services through its store chain. The company operates in two segments, U.S. RadioShack company-operated stores and Target Mobile centers. It offers postpaid and prepaid wireless handsets, tablet devices, home entertainment, wireless, computer, and music accessories, as well as general purpose and special purpose power products. RadioShacks all supplies laptop computers, personal computing products, digital music players, residential telephones, global positioning system devices, cameras, digital televisions, and other consumer electronics products.

RadioShack reported earnings results for the third quarter ended September 30, 2013, including total net sales and operating revenues of $805 million and net loss of $112 million. Joseph C. Magnacca, chief executive officer, said, “We are moving forward quickly and as planned with our turnaround efforts. As we have said, we expect our work to take several quarters and during that time our results will vary quarter to quarter as we make strategic changes to improve our long-term financial performance. This quarter reflects our strategic decision to accelerate the improvements to the product assortment in our stores by removing duplicate and unproductive inventory. The lower inventory valuations for these products and projected disposal costs resulted in an expected increase to our cost of products sold this quarter.”

T = Technicals on the Stock Chart Are Mixed

RadioShack stock has not done very well in recent years. The stock has seen lower highs and lower lows and looks poised to continue this path. 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, RadioShack is trading below its key averages, which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Radioshack Options	105.13%	63%	61%

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
November Options	Steep	Average
December Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish 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 bearish 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 Decreasing 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 RadioShack’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for RadioShack 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)	-136.17%	-152.38%	-437.50%	-634.57%
Revenue Growth (Y-O-Y)	-10.31%	-0.48%	-7.04%	-6.47%
Earnings Reaction	-20.46%*	-5.11%	0.95%	0.32%

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

* As of this writing

P = Excellent Relative Performance Versus Peers and Sector

How has RadioShack stock done relative to its peers, Best Buy (NYSE:BBY), Wal-Mart (NYSE:WMT), Aaron’s (NYSE:AAN), and sector?

	RadioShack	Best Buy	Wal-Mart	Aaron’s	Sector
Year-to-Date Return	32.08%	264.50%	11.75%	1.77%	15.19%

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

Conclusion

RadioShack offers a variety of consumer electronics and services to a growing population. A recent earnings release has investors sour about the company. The stock has declined in recent years and is currently trading near the lower-end of its yearly range. Over the last four quarters, earnings and revenues have been decreasing which has left investors disappointed with the company. Relative to its peers and sector, RadioShack has been a year-to-date performance leader. WAIT AND SEE what RadioShack does this quarter.

Deals Demonstrate Value of MLPs

The leaves have turned and sentiment for MLPs appears to be following suit, as dealmaking reveals strong market appetite for income with a growth kicker.

You wouldn’t necessarily know this from the performance of the benchmark Alerian MLP Index, which has corrected sideways from May highs and has significantly underperformed the broader energy sector as well as the S&P 500 over that span.

But note that the largest IPO of the year took place only last week and related to a master limited partnership, as insiders raised $2.7 billion from the sale of a minority stake in Plains GP Holdings (NYSE: PAGP), the incorporated repository of general-partner interests and incentive distribution rights in Plains All American Pipeline L.P. (NYSE: PAA), one of the largest MLPs.

According to Hinds Howard of MLP HINDSight, PAGP’s resulting indicative yield of 2.7 percent was the lowest ever for a GP offering. The lower the yield, of course, the stronger the investor demand and growth expectations. So even though the deal priced at the bottom of the forecast range, investors still paid top dollar based on comparable past transactions.

Of course, the past didn’t feature rates quite this low, nor comparable demand for midstream infrastructure from this great a variety of drilling basins.

Nor did the past feature quite such a big disparity between MLP valuations and those in the rest of the energy sector, sparking quite the same rush of MLP spinoffs by corporations.

Devon Energy (NYSE: DVN) recently joined the club by announcing plans to spin off some of its midstream assets into an MLP, as a way of capitalizing on the much stronger valuation MLPs enjoy. The money raised could be presumably deployed for investments elsewhere.

Instead, Devon announced today that it would instead combine its US midstream assets with those of Crosstex Energy (Nasdaq: XTXI) and those of the MLP i! t manages, Crosstex Energy L.P., (Nasdaq: XTEX) into a new MLP to be listed alongside its corporate general partner. Devon’s contributing to the MLP its gathering and processing assets in the Barnett Shale near Dallas as well as Oklahoma’s Cana and Arkoma Woodford shales, its interest in fractionation plants on the Texas coast as well as $100 million in cash, for a total investment of $4.8 billion.

Crosstex brings to the table its own overlapping assets in the Barnett, strategically important pipelines in Louisiana, ambitious expansion plans in the Ohio River Valley as well as the Texas shale basins, and an experienced management team that will run the combined operation, even as Devon retains a majority stake and ultimate control.

Far from extracting Devon from the midstream business, the deal gives the gas and oil producer a much bigger stake in midstream’s continued growth.

Investors will get an opportunity to buy a partnership less reliant on a single customer but with the long-term acreage and minimum volume commitments from its committed corporate parent. The MLP will have relatively low leverage, investment-grade credit, a largely fee-based business increasingly profiting from natural gas liquids and petroleum and fast-growing distributions that will improve on what Crosstex has been paying out while still revaluing Devon’s assets at a much higher earnings multiple.

The market paid heed to these advantages, rewarding Devon with a 3.3 percent share price rise. XTXI shares, meanwhile, soared 71 percent, while XTEX units appreciated 33 percent. Not a bad windfall for investors in the only MLP involved in a deal capitalizing on elevated MLP valuations.

The takeaway here is not that MLPs are overpriced but rather that the market continues to undervalue some of the midstream assets on producers’ books given the tax efficiency of MLPs as well as the strong demand for additional infrastructure.

XTXI shareholders have been promised a ! 50 percen! t dividend boost next year  (for a prospective 2014 yield of3.2 percent at today’s premium price) as well as long-term dividend growth of 20 percent or more annually. XTEX shareholders can look forward to an 8 percent distribution boost next year and comparable increases longer-term.  As for Devon, its contributions have been valued at 11 times Ebitda, vs. the 6.5 times enterprise valuation for the entire company, and Devon has retained control as well as a lion’s share of the upside from continued growth.

This looks to be a win-win deal, especially for Devon, whose shares may not yet fully reflect the merger’s long-term benefits.

Australia’s Central Bank Pauses to Assess Possible Housing Bubble

Although the Reserve Bank of Australia (RBA) appears to have maintained its easing bias, it may now be in watch-and-wait mode as it monitors how its monetary policy affects the country’s housing market. The central bank has been in an easing cycle since late 2011, and with the most recent 25 basis point cut in August, the cash rate now stands at an all-time low of 2.5 percent.

Following a meeting of the RBA’s board on Oct. 1, Governor Glenn Stevens issued a statement that said the board had decided to leave the cash rate unchanged. However, the central bank chief also noted that it’s still taking time for the economy to show evidence of the full effect of monetary easing, and that the pace of borrowing has remained largely subdued. Stevens also said that even with the decline in the Australian dollar, a further drop will be necessary to boost the economy.

These latter statements suggest that the RBA has maintained its easing bias, and that further rate cuts are forthcoming. However, some analysts and economists are becoming increasingly concerned about the formation of a property bubble. Unlike many of its developed-world peers, Australia’s housing market suffered comparatively minor declines in recent years.

Historically low rates have started to spur greater activity in the real estate sector, including among investors, and prices are on the rise again. In its statement, the RBA was largely silent on the matter, though it may have alluded to the situation by observing that demand for financing had increased among households.

While home prices hit all-time highs in Sydney, Melbourne and Brisbane during September, the average change among the country’s five major cities was just 5.7 percent year over year. The Australian Bureau of Statistics also reported that approvals for private-sector home construction rose for the ninth consecutive month in August. On a seasonally adjusted basis, approvals for new homes were up 10.3 percent year over year.

Overall, these data suggest gathering momentum, rather than irrational exuberance. As such, much of the hand-wringing over the prospect of a bubble appears to be anticipatory, rather than based on current prices. Of course, the housing sector is one area that could help lead Australia’s economy until commodities rebound. And Australia can avoid a housing bubble as long as regulators are monitoring the situation carefully.

As far as the latter goes, Richard Coppleson, a seasoned broker at Goldman Sachs, believes the RBA is very much focused on the housing market. In his daily note, he said the fact that the central bank’s statement on monetary policy did not directly mention rising home prices means that this must be the proverbial elephant in the room, and that it highlights “how concerned they must secretly be.”

Although we don’t believe Australia’s housing market has reached truly frothy levels, one area of legitimate concern is the fact that the unemployment rate is rising at the same time. As the commodities boom peaks, unemployment has been on the rise and now stands at 5.8 percent, which is just a tenth of a percentage point below the level it reached during the Global Financial Crisis. While that trend is worrisome, those numbers would likely make policymakers in the US and other countries in the developed world salivate.

Previously, the conventional wisdom had been that the RBA would make at least one more rate by the end of the year. But now traders and economists believe that the central bank could pause until early next year, which would give the RBA time to calibrate its policymaking should the rebound in the housing sector start to approach unsustainable levels.

According to interest-rate swaps data compiled by Bloomberg, traders believe there’s a 69 percent chance that the cash rate will remain at 2.5 percent through the end of the year. And Westpac Chief Economist Bill Evans has adjusted his rate-cut forecast, with the next round of 25 basis point rate cuts projected to occur in February and May. Other economists have similarly followed suit.

Despite this sudden caution, the RBA has other regulatory levers, beyond tightening monetary policy, to rein in real estate speculation. With the Australian dollar still at relatively high levels, the central bank will need to remain on an easing cycle to force the exchange rate lower. That will help make the export-oriented commodities sector more competitive globally, which should ultimately flow through to our stocks.

Monday's Top News Headlines

Here are today's top news headlines from Fool.com. Check back throughout the day as this list is updated, and follow us on Twitter at TMFBreaking.

Microsoft and Facebook Release Number of National Security Requests

Boeing Wins Contracts for F-18 Parts, Satellite Surveillance

GE Keeps Dividend Steady

Pentagon Awards Nearly $1 Billion in New Contracts Thursday

Netflix, DreamWorks Ink Animated-Content Deal

Apple Reports Up to 5,000 Government Requests for Data

Barnes & Noble Extends Nook Discounts

Eli Lilly to Take Over Development of Diabetes Drug

Pinnacle Gets Preliminary FTC Approval of Ameristar Acquisition

Lowe's Seeks to Acquire Orchard Supply Hardware for $205 Million

Johnson & Johnson to Buy Aragon Pharmaceuticals for $650 Million Up Front

Theravance Will Split Into 2 Companies After Losing Elan Bid

Oil Hits High for Year on Syria Concerns

SkyWest Declares 72nd Consecutive Quarterly Dividend

"Man of Steel" Smashes Through June Box Office Record

Chesapeake Energy Sets Common and Preferred Dividends

Google Settles Class Action Lawsuit Over Nonvoting Stock

Prospect Capital Sets 4 Months of Dividends

Hard to Get Small Business Loans, Survey Says

B/E Aerospace Logs More Boeing, Airbus Business

Himax Raises Annual Dividend

Little Joy in Croatia as It Enters the EU

Metals Fall; Soybeans Drop as Weather Boosts Crop Prospects

Builder Confidence Positive for First Time Since 2006

Zoetis to Join S&P 500; First Horizon National, QLogic Moved to New Indices

Despite Legal Marijuana Rules In 20 States Feds Won't Play Ball

Washington State has set rules for retail production and sale of marijuana. The State Liquor Control Board sealed the deal in less than an hour, unanimously approving regulations covering production, processing and retailing. Land is allocated, 40 metric tons of production is allowed annually, and even marijuana-infused products are monitored in solid, extract and liquid form. See Washington State Sets Pot-Sales Rules.

Sounds pretty organized compared with our nation's capital. Not every government is gridlocked and unable to inch toward progress. It was only last November in Initiative 502 that Washington voters legalized the possession, consumption and purchase of marijuana. Although Internet sales and home delivery are verboten, 334 retailers are to open next year.

But even Washington State wasn't always a well-oiled machine. Over the last year, there were raucous public hearings. The State's Liquor Control Board hired Prof. Mark Kleiman of UCLA to research Washington's existing marijuana market. He estimated Washington's medical and illicit consumption generates approximately $1.2 billion in sales annually.

The new regulations spell out many details. For one, the time to apply for a license in retailing, growing or processing will be open for 30 days starting Nov. 18. And while some will complain, it seems deftly handled for now, especially when contrasted with so much at the federal level. It's been only a year since voters in Colorado and Washington voted to legalize marijuana.

For much longer than that, we have had legalized medical marijuana. The tally is now 20 legal medical marijuana states and D.C. Yet in the Feds' view, regardless of state legality, marijuana is a controlled substance and illegal under federal law. Recently, though, the Department of Justice issued a response suggesting that it will lay off the raids and prosecutions.

But the feds will lay off only if the states create "a tightly regulated market" with rules that address federal "enforcement priorities" such as preventing interstate smuggling, diversion to minors, and "adverse public health consequences." Those phrases seem imbued with discretion. This memo to U.S. attorneys makes clear that the DOJ can still prosecute growers and sellers.

On top of this, the tax problems of the industry are one of the major impediments facing the industry. And the main culprit is Congress, not the IRS. Section 280E of the tax code denies even legal dispensaries tax deductions. In the past the IRS has said it has no choice but to enforce the tax code passed by Congress. "The federal tax situation is the biggest threat to businesses and could push the entire industry underground," the leading trade publication for the marijuana industry reported.

One answer has been for dispensaries to deduct expenses from other businesses distinct from dispensing marijuana. If a dispensary sells marijuana and is in the separate business of care-giving, the care-giving expenses are deductible. If only 10% of the premises are used to dispense marijuana, most of the rent is deductible.

Good record-keeping is essential. See Medical Marijuana Dispensaries Persist Despite Tax Obstacles. And even if one is aggressive in allocating expenses between business, there is only so far one can go. Another idea is for marijuana sellers to operate as nonprofit social welfare organizations. That way Section 280E shouldn't apply.

The industry needs to operate more like other businesses. See Medical Marijuana Goes Even More Corporate. Sometimes such matters involve structural questions. To avoid trouble with the IRS, some claim that dispensaries should be organized as cooperatives or collectives.

Legislation proposed by Congressmen Jared Polis (D-CO) and Earl Blumenauer (D-OR), the Marijuana Tax Equity Act, would end the federal prohibition on marijuana and allow it to be taxed. That way growers, sellers and users would not be in fear of violating federal law. The bill would also impose an excise tax on cannabis sales and an annual occupational tax on workers in the growing field of legal marijuana.

There are bigger problems in Washington DC, of course. But on these issues, DC could surely learn something from the State of Washington.

You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

In default-risk market, investors weigh realities

Every investor should be afraid of a U.S. government debt default. But tearing a portfolio apart because of the risk of a default is risky, too.

A U.S. default would be catastrophic.

Even one day in default would harm the nation's credit rating, and have serious ripple effects, including:

• Damage consumer confidence, and possibly the economy.

• Cause interest rates to spike higher.

• Hurt stock and bond prices.

• Wound the value of the U.S. dollar on international currency markets.

SHUTDOWN: Day 7; what you should know

MONDAY: How markets are doing

Already on Monday morning, 10 days before the default deadline of Oct. 17, the Japanese stock market has fallen more than 1%, and the value of the U.S. dollar has fallen sharply against major currencies. Futures on the Dow Jones industrial average were down 132 points at 7:30 Monday.

And default would be an inexpressibly stupid event.

The debt limit isn't a law that prevents Congress from authorizing new expenses, such as building a dam or an aircraft carrier. And it doesn't cover government activities that are largely self-funded –- including the Affordable Care Act, which is the reason for the current stalemate. Rather, it allows Congress to pay the bills on spending it has already authorized, from building leases to Medicare payments to interest and principal on the national debt.

It's the latter that most worries the financial markets.

Treasury secretaries, both Democratic and Republican, are clear about how bad a default on the debt would be. Jacob Lew, the current Treasury secretary, said in a letter to Congress in September:

"The debt limit impasse that took place in 2011 caused significant harm to the economy and an unheard of downgrade to the credit rating of the U.S.. The drawn-out dispute caused business uncertainty to increase, consumer confidence to drop, and financial markets to plunge. If Congress were to repeat that brinksmanship again this time, it! could inflict even greater harm on the economy. And if the government should ultimately become unable to pay all of its bills, the results could be catastrophic.

Henry Paulson, Treasury secretary under George W. Bush, said this about a default in an interview with National Public Radio last month: "As a former Treasury secretary, I take the view that it is unthinkable that Congress wouldn't live up to our commitment to make good on past spending commitments and obligations," he said.

By not increasing the debt limit, the nation would have to rely on cash on hand – as well as some accounting sleight of hand – to function, and even then it would run into problems, possibly as early as Oct. 17. By Oct. 30, a default on Treasury securities, regarded as gold-plated worldwide – would be nearly inevitable. On that date, the U.S. will be short about $7 billion what it owes its creditors.

Default could come more quickly than Oct. 30 if investors in Treasury bills decide not to reinvest their money, requesting their principal back instead. Investors roll over about $100 billion in T-bills every week.

What could happen to your investments in a default?

• In the credit markets, those with poor credit ratings pay higher interest rates, and there's no faster route to a bad credit rating than missing a payment. In order to convince investors to buy Treasury securities, the U.S. would have to offer higher interest rates – which, in turn, would make borrowing for home buyers and businesses higher at the same time.

• For bond investors, a sharp rise in interest rates is pure poison. When interest rates rise, the price of existing bonds fall, and vice-versa. Analysts use a measurement called duration to figure out how badly a bond will be hurt by an increase in rates. A bond fund with a duration of five years, for example, will lose 5% of its value if interest rates rise one percentage point.

With rates at current levels – the 10-year Treasury note yields a low 2.6! % -- rein! vested interest would provide very little cushion against price declines if interest rates rose.

• Stock investors would also be hurt by rising rates and a weakening economy. Higher interest rates mean that bank CDs and other, safer investments would be tougher competition for dividend-paying stocks. And a weakening economy would pose a threat to corporate earnings.

• The value of the dollar would also take a hit. Investors would be likely to sell U.S. dollars on the currency market, pushing down the value of the sawbuck against other currencies. If confidence in the dollar falls enough, it could lose its status as the world's reserve currency – a tremendous advantage. When the U.S. issues bonds, it pays interest in dollars. If the nation had to issue bonds payable in, say, euros, it could find itself in a tough spot if the euro soared in value.

What can an investor do? That depends upon how much confidence you have that Congress will fix its own self-inflicted problem. Markets will probably sell off as the deadline looms. If there's a last-minute resolution – as there was in 2011 – stocks and bonds should soar in value, as should the U.S. dollar.

If you're gambling on a default – and gambling is the precise term, because you're making a decision based on something as unpredictable as Congress – then you'd want to either move money from stocks into bank deposits, or invest in funds that rise when stocks fall, such as the Rydex Inverse S&P 500 Strategy fund (RYURX).

International bond funds, which get a boost from a falling U.S. dollar, might be another way to play a default. (International stock markets would probably fall along with Wall Street). And gold, the ancient all-time cure-all for a collapsing currency, could also be a hedge. Bear in mind, however, that if rates rise and the economy tumbles, gold might not rise with it. Gold pays no interest, and thrives the most in an ultrainflationary period. You usually don't get high inflation in a recession! .

S! ophisticated investors could buy puts on stocks or stock indexes. These are the right, but not the obligation, to sell a stock at a set price, and become more valuable as stocks fall.

The danger with any or all of these moves is that if you miscalculate, you could miss a significant rally when the U.S. starts to get its financial house back in order. You could incur significant capital gains taxes if you sell stocks or mutual funds that have gains. And if you invest in hedges, such as inverse funds, you could take significant losses if your fears don't materialize.

And even if you're right and the U.S. defaults, you run the risk that the financial markets will not function normally -- if at all. You'll be living in a world where you're far more likely to lose your job than you are today. Your best investment now might be to write to your Congress and tell them they'll be looking for a new job if the nation does default.

American Airlines posts third quarter profit

The parent company of American Airlines, which is in the midst of a federal lawsuit seeking to block its proposed merger with US Airways, posted a profit of $289 million in the third quarter, the second profitable quarter in a row for the airline.

AMR said Thursday that the quarterly profit was $527 million more than what it brought in during the same three-month period in 2012, when the airline operated at a loss.

The airline company, which has been under bankruptcy protection, said that without the costs of reorganization and other special items, it would have seen a profit of $530 million. That would have made this most recent fiscal period the most profitable quarter in American's history.

In a statement, AMR's chairman, president and CEO Tom Horton attributed the positive returns partly to a reining in of costs as the company restructures and swaps out older planes for new jets. And the efforts, he said, bode well for a union with US Airways.

"Continued execution on our product, network and alliance strategy, combined with cost efficiencies from restructuring and fleet renewal, creates strong momentum towards our planned merger with US Airways,'' Horton said.

American and US Airways announced plans to merge in February, an $11 billion deal that would make the newly combined carrier the biggest in the world based on revenue and the number of passengers it flies. The carriers need to join forces, they say, to better compete with Delta and United, who have been bolstered by their own recent, major mergers.

But in a move that shocked industry watchers, the Department of Justice, along with the attorneys general for several states and the District of Columbia, filed suit to stop American's tie-up with US Airways. They argued that it would boost fares and reduce competition between 1,000 cities where US Airways offers one-stop connections.

The two-week trial is set to start on Nov. 25. Earlier this month, Texas, which had joined the Justice Department in challeng! ing the merger, withdrew from the case. The state has received a three-year commitment that the new American's headquarters would remain in Texas, while service to 22 airports throughout the state would also continue.

Basili Alukos, a credit analyst with Morningstar, noted that American's quarterly revenue was its highest for a quarter ever, while some of its costs were also improving.

"It appears AMR is operating on all cylinders,'' he says.

Europe, China agree currency deal

The new currency swap agreement between the European Central Bank and the People's Bank of China has been in the works for the past few months.

LONDON (CNNMoney) Europe and China have agreed a currency swap deal to boost trade and investment between the regions.

Under the terms of the deal between the European Central Bank and the People's Bank of China, the swap facility could total as much as 350 billion yuan and €45 billion.

The agreement is one of the largest currency deals between China and a non-Asian trading partner and will last for three years.

Europe and China trade roughly €480 billion in goods and services each year, and the European Union is China's biggest export market.

China is pushing to internationalize the yuan, and the currency is being used to conduct a growing number of transactions on international markets.

For years Beijing has kept tight control of the yuan, pegging the currency to the U.S. dollar as a way of promoting manufacturing in its export-driven economy, though it has slowly been loosening its hold recently.

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

"It's a way of promoting European and Chinese trade, but not doing it with the U.S. dollar," said Brooks. "It's a bit like cutting out the middleman, all of a sudden there's potentially no U.S. dollar risk."

In June, China struck a similar agreement with the Bank of England worth up to 200 billion yuan.

The deal with the ECB comes as political gridlock in the U.S. weakens the U.S. dollar against many other global currencies.

A spokesperson for the ECB said the! deal had been in the works for the last few months.

  China's wine obsession spurs Bordeaux sales

The yuan, also called the renminbi, currently trades directly with the U.S. dollar, the Australian dollar and the Japanese yen.

In September, the Bank for International Settlements announced the Chinese yuan was the ninth most traded currency in the world.

The yuan was involved in 2.2% of foreign exchange trading worldwide in April, the period examined by the report, more than double its share in April 2010.

The dollar was involved in 87% of all trades, the euro was part of 33% of trades, and the Japanese yen was involved in 23%.

Why Coach Might Keep Pulling Back

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Coach (NYSE: COH  ) sank about 2% today after Canaccord Genuity downgraded the luxury handbag company from buy to hold.

So what: Along with the downgrade, analyst Laura Champine lowered her price target to $62 ($from 65), representing about 14% worth of upside to Friday's close. While bargain-hunters might be attracted to Coach's recent weakness, Champine cautions that increasing competition could continue to weigh on the shares.

Now what: Canaccord expects Coach's U.S. same-store sales to decline 6% in the third quarter. "Traffic trends appear to be deteriorating, and we believe Coach will be hard pressed to maintain its leading 30% market share with the current product in stores," noted Canaccord. "We expect fast-growing rival Michael Kors will continue to gain ground. ... Given the limited near-term visibility, we are downgrading shares of Coach to Hold from Buy." Of course, with the stock off about 15% from its 52-week highs and trading at a forward P/E of 12, believers in Coach's brand power might want to use that worry to make a long-term commitment. 

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As Gold Falls, Copper Hits Newmont Mining

Shares of Newmont Mining (NEM) have dropped today as gold prices have slumped, but the damage hasn’t been as bad as to other big gold-mining stocks. Could it be that be that the good news about its gold production outweighed the bad news about its copper?

Reuters

Yesterday after the close, Newmont announced its production numbers for the third quarter. And while the gold numbers looked good–it mined 1.283 million ounces of gold–its copper production was weaker than expected, with 34 million pounds of copper mined. Newmont also said that it expects to produce just 134 million to 145 million pounds of copper this year, well below its previous guidance for 150 million to 170 million pounds.

JP Morgan’s John Bridges and Anant Inani find the copper number surprising but are impressed with gold production. They write:

Expect a strong Q4 with increased production from Nevada and ounces from new mine Akyem. The new African mine Akyem is expected to deliver 50-100koz this year once it comes online in Q4. Nevada is forecast to produce 1.7-1.8moz this year implying a Q4 production of about 520koz.

Yanacocha delivered yet another good quarter this year with YTD production of 835koz which is about 86% of its midpoint guidance of 975koz for the year. We wonder whether Yanacocha guidance will rise with the Q3 results or whether NEM is simply borrowing from Q4 when the extra ounces from Akyem should allow the Peruvian mine to rest.

Copper grades at Batu Hijau disappoint. Reconciliation between blast hole drill samples and the milled grade should allow accurate forecasts of the stockpile material. Hence it's a little surprising that stockpile grades missed expectations.

Newmont has dropped 2.2% to $25.73 at 3:02 p.m. While that’s in-line with the Market Vectors Gold Miners ETF’s (GDX) 2.2% fall to 23.03, it’s better than the most heavily traded gold-mining stocks. Shares of Barrick Gold (ABX), for instance, have dropped 3.6% to $17.20, Gold Corp (GG) is down 3.1% at $23.54 and Eldorado Gold (EGO) has declined 3.9% to $5.82.

Marriott International to Voluntarily Transfer to NASDAQ Stock Exchange (MAR, NDAQ)

Starting on October 21, 2013, shares of hotel and resort operator Marriott International Inc (MAR) will trade on the NASDAQ Global Select Market, as the stock voluntarily moves from the New York Stock Exchange.

“We’re pleased to partner with NASDAQ as our new stock market listing. We believe this will provide us with cost-effective visibility, as well as efficient access to a portfolio of tools and opportunities to reach investors,” said Carl Berquist, Marriott’s executive vice president and chief financial officer. “While we are looking forward to our new relationship with NASDAQ, the NYSE was our listing home for many years, and they have served us well over that time.”

This a bit of a win for the NASDAQ (NDAQ) exchange, as it has faced a number of headwinds as of late. Recently, the exchange saw Oracle (ORCL) move over to the NYSE., which was a big blow. Also, the exchange has experienced a number of technical glitches that affected trading.

“Marriott International is known throughout the world as a company dedicated to the pursuit of excellence through innovation and focus on their customers,” said Bruce Aust, executive vice president, Corporate Client Group, NASDAQ OMX. “We are pleased to welcome Marriott to The NASDAQ Global Select Market and look forward to our continued partnership with the company and its shareholders.”

Marriott International shares were down 56 cents, or 1.31%, during morning trading on Monday. The stock is up 12.96% year-to-date.

Top Gold Companies To Own In Right Now

Twitter will try not to mimic Facebook's mistakes on IPO day.

NEW YORK (CNNMoney) At the start of last year, Nasdaq (NDAQ) and Morgan Stanley (MS, Fortune 500) were on top of the tech world. Both landed key roles in Facebook's hotly anticipated initial public offering.

But Facebook's IPO changed that. Both companies were widely criticized for Facebook's face plant of a debut. The problems that marred Facebook's IPO clearly hurt the image of Nasdaq and Morgan Stanley.

Now, their major rivals -- the New York Stock Exchange (NYX) and Goldman Sachs (GS, Fortune 500) -- are expected to be the big winners in the next hot IPO: Twitter.

Twitter has reportedly chosen Goldman Sachs as the lead underwriter for its forthcoming IPO. Goldman Sachs did not comment for this story, and Morgan Stanley did not return calls for comment.

Top Gold Companies To Own In Right Now: Northgate Minerals Corporation(NXG)

Northgate Minerals Corporation, together with its subsidiaries, engages in exploring, developing, processing, and mining gold and copper deposits in Canada and Australia. Its principal producing assets include 100% interests in the Fosterville and Stawell Gold mines in Victoria, Australia; and the Kemess South mine located in north-central British Columbia, Canada. The company was formerly known as Northgate Exploration Limited and changed its name to Northgate Minerals Corporation in May 2004. Northgate Minerals Corporation was founded in 1919 and is headquartered in Toronto, Canada.

Top Gold Companies To Own In Right Now: Claude Resources Inc.(CGR)

Claude Resources Inc. engages in the acquisition, exploration, and development of precious metal properties, as well as production and marketing of minerals in Canada. It primarily explores for gold in northern Saskatchewan and northwestern Ontario. The company holds interests in the Seabee gold mine located at Laonil Lake, northern Saskatchewan; and the Madsen property that consists of 6 contiguous claim blocks totaling approximately 10,000 acres, located in the Red Lake Mining District of northwestern Ontario. It also holds interest in the Amisk Gold project, which covers an area of 13,800 hectares in the province of Saskatchewan. The company was founded in 1980 and is based in Saskatoon, Canada.

Top Penny Stocks To Own For 2014: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

Top Gold Companies To Own In Right Now: First Majestic Silver Corp.(AG)

First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Doug Ehrman]

  It is no secret that precious metals companies have been taking a pounding for some time now. The SPDR Gold Trust (NYSEMKT: GLD  ) and iShares Silver Trust (NYSEMKT: SLV  ) , the gold and silver ETFs, have been hard hit and operating companies like First Majestic (NYSE: AG  ) and Barrick Gold (NYSE: ABX  ) have been hit even harder. Through all of these struggles, and in some cases because of them, one precious metals company continues to look attractive for the long term: Silver Wheaton (NYSE: SLW  ) .

Top Gold Companies To Own In Right Now: Goldcorp Incorporated(GG)

Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Dan Caplinger]

  But Yamana has benefited from its low cost structure, and it only intends to make its operations even cheaper going forward in light of low gold prices. Despite already having cash operating costs of less than $400 per ounce, the company expects to cut those costs by another $100 per ounce, doing its best to increase efficiency and maximize profit margins in a tough environment. Weak prices for byproduct metals like copper and zinc have added to Yamana's woes, but it and peer Goldcorp (NYSE: GG  ) have kept enough of a lid on their expenses to remain profitable even with gold at current levels.

• [By Dan Caplinger]

  Dan, however, does believe CEO Randy Smallwood has the experience necessary to deal with these challenges. Strategies may include obtaining better terms from existing partners such as Barrick Gold (NYSE: ABX  ) , Goldcorp (NYSE: GG  ) , and Hudbay Minerals (NYSE: HBM  ) on future contracts.

• [By Rich Smith]

  Today's high cash-cost of digging through 9.4 tons of dirt in hopes of extracting a golf-ball's weight of pure gold explains why most of the major gold miners -- from low-cost producer Barrick, all the way up through Kinross (NYSE: KGC  ) , Newmont (NYSE: NEM  ) and Goldcorp (NYSE: GG  ) -- are currently in a negative free cash flow state. (Well, the high cost plus the relatively lower prices that miners are getting for their gold today).

Top Gold Companies To Own In Right Now: Newmont Mining Corporation(Holding Company)

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company?s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009, it had proven and probable gold reserves of approximately 93.5 million equity ounces and an aggregate land position of approximately 27,500 square miles. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado.