Delamaide: Hot air inflates big bank 'fines'

WASHINGTON — What possible cause could bring together two diametrically opposed senators, the super-liberal Elizabeth Warren of Massachusetts and the arch-conservative Tom Coburn of Oklahoma?

The answer comes in the title of the bill they introduced together last week, "Truth in Settlements Act," designed to expose the misleadingly inflated numbers in the multibillion-dollar government "fines" being meted out to JPMorgan Chase and other banks.

The lawmakers claim that these big headline numbers, like JPMorgan's $13 billion settlement with the Justice Department in November for mortgage securities fraud, include write-offs and credits the bank has already made rather than actual new costs to the bank, while other charges are partly recouped because they are tax deductible.

"Agencies trumpet the topline amount they obtained while failing to disclose that the settlement includes significant tax deductions or 'credits' for routine conduct that dramatically reduce the actual value of the settlement," the lawmakers say in a Fact Sheet accompanying the announcement of their bill.

There is, in other words, less than meets the eye in these mega-fines. As long as there are no criminal indictments and no bankers go to jail, these fines make it look like regulators are cracking down, but they remain for bank executives what they have always been – just the cost of doing business.

The new bill takes a two-pronged approach. It would require regulators to disclose details of settlements, item by item, and how each was categorized for tax purposes, and it would require the companies to include any tax deductions on the settlements in their filings with the Securities and Exchange Commission.

"Increased transparency will shut down backroom deal-making," Warren said in a statement last week, "and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable for strong and effective enforcement that benefits the public interest."

When JP Morgan rea! ched a new settlement for $2.6 billion last week in connection with failure to report suspicious behavior in Bernie Madoff's accounts at the bank, the media dutifully reported that the bank's total in fines and penalties now reached more than $20 billion over the past 12 months.

David Dayen, a blogger who has chronicled the evolution of these inflated numbers, criticized these latest reports. "That $20 billion is a FAKE NUMBER," he railed.

The headline numbers are double-counting various types of payments and charges, failing to take account of offsetting tax relief, and failing to note that it is investors, and sometimes even the bank customers themselves, who are being penalized by the measures, Dayen says.

And the press uncritically accepts these self-serving numbers from the government agencies involved. "Regulators are basically getting a free ride from the press for their inadequacy in enforcing the law," he writes.

Dayen noted in November that the famous $13 billion JP Morgan settlement, for instance, included $4 billion that had been previously announced and reported, so that the new fine was only $9 billion.

News editors, Dayen wrote in Salon, "aren't obligated to do the Justice Department's P.R. for them" with misleading headlines. "We don't say the Miami Heat beat the San Antonio Spurs 200-98, but 100 of those points came from a previous game," he said.

Moreover, he continued, half of that $9 billion settlement was in the form of mortgage relief to be distributed over a period of years, so hardly much of a hit to the bank's bottom line.

This is why JPMorgan's stock continues to rise even in the face of these record fines, as investors – apparently unruffled by the ethical and management lapses exposed by the settlements – just pay attention to the financial behemoth's powerful earnings capacity.

The Warren-Coburn bill is designed to at least expose this bait-and-switch on regulatory penalties to congressional and public scrutiny.

"Taxp! ayers des! erve to know the settlement details corporations arrange with the government, and the best place for Congress to start is with policies that enhance transparency," Coburn said of the bill.

The new bill is the second major piece of bank legislation in recent months for which Warren has reached across the aisle for a bipartisan proposal. In July, she joined with Arizona Sen. John McCain to introduce a new version of the Glass-Steagall act to separate commercial and investment banking.

Even though tougher restrictions on banks and regulators clearly have bipartisan appeal, the House Republicans' preoccupations with Obamacare and budgets means neither of these Senate bills is likely to be enacted.

But the very drafting of the legislation is a signal to regulators that not everyone is being fooled by their tardy and overblown claims of reining in the banks.

Darrell Delamaide has reported on business and economics from New York, Paris, Berlin and Washington for Dow Jones news service, Barron's, Institutional Investor and Bloomberg News service, among others. He is the author of four books, including the financial thriller Gold.

IRS Scandals Fueled by Lack of Funds, Taxpayer Advocate Says

The Internal Revenue Service’s internal watchdog says “unstable and chronic underfunding” of the agency is “the major problem facing the IRS today.”

In its congressionally mandated 2013 annual report, released Thursday, National Taxpayer Advocate Nina Olson offers details on the 25 “most serious” problems — the law requires her to identify at least 20 — and funding issues are seen as a gateway to broader problems, including the scandal involving targeting of politically conservative groups.

The targeting of Tea Party and other groups at odds with the Obama administration policy is addressed in a technical sense in the report’s 15th problem, which details the IRS' erroneous revocation of exempt status for tax-exempt organizations.

However, in its very first plank, the taxpayer advocate’s report deals with the issue in calling on its parent agency to adopt a taxpayer bill of rights whose existence might forestall the kind of tampering that embroiled the agency and led to the early retirement or resignation of Exempt Organizations director Lois Lerner and two other senior officials.

In a footnote to the bill of rights portion of the report — many of the report’s sections are hundreds of pages, and its executive summary alone weighs in at 76 pages — Olson cites a previous analysis from her office arguing that the IRS’ political targeting violated eight out of 10 items in her bill of rights.

“Had there been a published taxpayer bill of rights, organizations applying for tax-exempt status, IRS employees processing their applications, IRS executives overseeing the program and congressional offices receiving complaints likely would have flagged the inconsistencies between the applicants’ rights and the IRS’ actions more quickly," the report says. "There is no guarantee that would have happened, of course, but the existence and broad awareness of a taxpayer bill of rights would have substantially increased the odds that the problems would have surfaced and been addressed sooner.”

For example, item No. 4 of her proposed bill of rights is “the right to challenge the IRS’ position and be heard,” which includes receipt of a written response from the agency if it rejects a challenge; and item No. 5 is “the right to appeal an IRS decision in an independent forum,” which again includes a written response if an appeal fails and the right to further court challenges.

The Office of the Taxpayer Advocate, with some 2,000 employees, doesn’t seem to address its own role or absence thereof in the political targeting crisis. In May, in the heat of the scandal, former Democratic Sen. Bob Kerrey, an author of 1990s legislation revamping the IRS, criticized Olson’s office for failing to pay attention to complaints from conservative groups having difficulty with their tax-exempt status:

“That was the whole idea of the creation of the taxpayer advocate — that somebody could intervene on behalf of the taxpayer, and it looks like the intervention didn’t happen,” Kerrey told Politico at the time.

From Olson’s point of view, the key underlying problem is the IRS underfunding. She cited three years of across-the-board budget reductions and the severe recent effects of sequestration. The result has been a situation in which the can answer just 61% of the 109 million annual calls from taxpayers, who waited an average of 17.6 minutes to talk to a customer representative in 2013.

Because it is so pressed, the agency will now answer only “basic” questions from taxpayers accessing representatives by phone, mail or walk-in to one of its agencies and will not be answering any tax law questions (even “basic” ones) after the coming tax season ends in April.

"At the risk of vast understatement, it is a sad state of affairs when the government writes tax laws as complex as ours — and then is unable to answer any questions beyond ‘basic’ ones from baffled citizens who are doing their best to comply,” Olson writes.

Some of the other “most serious” issues identified by Olson this year included the difficulty of complying with U.S. tax law for Americans living abroad and the need for tax guidance to assist Bitcoin users.

The independent office within the IRS has labored largely in obscurity since its creation in 1996 as part of the Taxpayer Bill of Rights act, though each year it issues an annual report on systemic problems within the IRS. It achieved greater than usual notoriety last year as a result of one attention-getting recommendation that U.S. tax rates could be cut 44% without any ensuing loss of revenue.

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Check out IRS Says 44% Cut in Tax Rates OK With Us on ThinkAdvisor.

S&P 500, Nasdaq end higher, but Dow drops

NEW YORK (MarketWatch) — U.S. stocks ended mostly higher on Friday, managing to erase losses that had followed a weaker-than-expected jobs report, with the S&P 500 and the Nasdaq Composite recording their first weekly gains this year.

After a choppy trading session, the S&P 500 index (SPX) gained 4.24 points, or 0.2%, to 1,842.37, leaving it up 0.6% on the week, its first weekly gain this year.

The utilities sector was the top gainer, rising 1.4%.

TRADING STRATEGIES: January
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• Fourteen stocks for 2014
• Buying the 2014 recovery • See full Trading Strategies report /conga/story/2014/01/trading-strategies.html 292531

The Nasdaq Composite (COMP) gained 18.47 points, or 0.4%, to 4,174.66 and added 1% for the week, its first weekly gain this year.

Bucking the positive trend, the Dow Jones Industrial Average (DJIA) closed 7.71 points lower to 16,437.05, shedding 0.2% over the week, posting its second weekly loss in a row this year.

The Labor Department said on Friday that the U.S. economy added just 74,000 jobs in December to mark the smallest increase since the start of 2011, suggesting that the nation entered 2014 with less momentum than other economic indicators had signaled.

The unemployment rate fell to 6.7% from 7.0% to mark the lowest level since October 2008. Yet the decline appeared to occur partly because more people dropped out of the labor force; some 347,000 Americans were no longer looking for work in December.

Click to Play Markets react to disappointing December jobs data

Brendan Conway takes a look at the markets, including three stocks to watch today. Photo: Getty.

"When the nonfarm-payrolls report is worse than expected, the S&P 500 and nine out of ten sectors have averaged declines. Sectors that have typically held up the best are utilities, materials, and consumer staples. On the downside, if the jobs report is worse than expected, two sectors to avoid are technology and financials," wrote analysts at Bespoke Group.

Comment: Chris Millard, investment specialist at J.P. Morgan Private Bank, said that markets initially shrugged off the disappointing jobs figures, judging them to be a blip while seasonal factors played a role. "Markets have parsed through the details now and decided the numbers are really bad even if you factor in bad weather." Speaking about the Federal Reserve's decision to scale back its bond buying, he added: "We don't think this report will have any impact on the Fed; they will still reduce bond purchases at a pace of $10 billion a month and will be done by the end of the year. It will take a lot more meaningful data sets to alter their decision. But ultimately, we do not expect the actual tightening until 2015."

Movers and shakers: Alcoa Inc. (AA)  shares dropped 5.4% after the aluminum producer said it swung to a fourth-quarter loss. The firm also said Thursday it had settled charges of corruption in Bahrain with a $384 million payout to the Securities and Exchange Commission and Department of Justice. Abercrombie & Fitch's shares (ANF)  rallied 12% after the firm raised its full-year adjusted earnings projections. Gap Inc. (GPS)   gained 1.1% after saying it expects full-year earnings near the top of its projected range of $2.57 to $2.65. The firm also said same-store sales in December were flat, missing expectations of a 1.5% increase, according to a survey of analysts by Thomson Reuters. Sears Holdings Corp. (SHLD)  disappointed the market with plunging same-store sales, sending its shares tumbling 13.8% Friday. The company said it had a 7.4% decline in quarter-to-date holiday-season comparable sales. Five Below Inc. (FIVE)  tanked 7.2% after updating its guidance for the three months ended January 4. The retailer said it now expects adjusted per share profit to be between 44 cents and 46 cents. In December, the firm said it expected adjusted profit of 49 cents to 51 cents.

In other markets: Stocks in Shanghai ended the day lower after data showed Chinese exports grew 4.3% on the year in December, slower than the 4.5% expected by economists. The dollar gave up gains after the employment report, but gold priced rose. Oil prices rebounded, helped by the Chinese import data and the weaker dollar.

More stories from MarketWatch:

U.S. posts smallest jobs gain in three years

Fed still on steady taper course despite weak job growth

Treasurys rally on disappointing jobs data

Gold Bugs Chart Dilemma: Breakout or Fake Out?

Gold is back. After challenging $1,200 per ounce in December, gold bugs have become bullish again and the shiny yellow metal is back above $1,300 per ounce. Now a key technical milestone has been hit that chart watchers are sure to be following closely. The question is whether this will mark a new bull market or just another chance to sell.

Gold is back above its key 200-day moving average. This is a chart development that just came to fruition on Thursday and Friday. So, is this a breakout, or is it a fake out?

The gold miners had been trading in 2013 as though gold was not just going toward $1,200 per ounce. In many cases, you would have assumed that the miserable gold performance was taking gold down to less than $1,000. Gold miners and producers cut their dividends and had to take unilateral accounting charges against the book value of all those gold reserves. Falling from close to $1,900 to $1,200 will just cause that.

A review from Friday and from the weekend showed that the gold miner exchange traded fund called the Market Vectors Gold Miners ETF (NYSEMKT: GDX) was breaking out above the 200-day moving average. This was actually before the “real gold” broke above its 200-day moving average.

We checked this on multiple systems and have shown the charts, but we are keeping this one simple. The GDX gold chart on Yahoo! Finance shows that the mining ETF started making its chart break earlier last week. The big gold ETF, the SPDR Gold Shares Trust (NYSEMKT: GLD), just made its first breakout above its 200-day moving average on Friday.

What makes these chart breakouts different than the last time we saw a breakout attempt on the 200-day moving averages is that the price levels are vastly different. Gold was closer to $1,600, versus about $1,325 today. The GDX ETF was at almost $50 and ran to $55, but the ETF is closer to $26 this time around.

Even in the key gold trust, the SPDR Gold Shares (NYSEMKT: GLD) was trading above $160 the last time it challenged the 200-day moving average. It is taking place around $127 this time around.

Top Asian Companies To Watch For 2015

We have always said this: Chart readers are an interesting lot. Pure technicians claim not to never really care about the news. The charts tell them whether they should buy or sell, supposedly factoring in all known market information at any given time. Our warning is that charts, just like fundamentals, come with no guarantees. When they do not work out, there are many excuses as to why it was the wrong read.

The fundamentals may be coinciding with the chart this time. First off, it looks like the strong base is around $1,200 in gold. Gold may be back as a risk-on trade. Then it could be a hedge as well — is there too much emerging market currency risk out there? Is India really going to be back as a gold buyer with lower purchasing and taxing restrictions? Is the unfolding of Bitcoin proving that gold is a better hedge than a fake (virtual) currency?

The answer to any of the points above is likely yes, at least in part, on all of these. Still, pure technicians do not care. They just read charts. The markets will know very soon whether this is the start of the first gold chart breakout or just another fake out.

Source: Yahoo! Finance

Hot Blue Chip Stocks To Watch For 2014

After a tumultuous two days, the markets calmed down today, seeming to come to terms with the Fed's announcement that it's bond-buying program could end within a year. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) gained 41 points, the first session in nine that it's had less than a 100-point swing, finishing up 0.3%. The recovery, coming after yesterday's bloodbath, seemed to indicate that there was still bullish sentiment among investors, as there were no economic reports released today to further influence investors. Notably, a Wall Street Journal report said the Fed's taper may not come as soon as expected, which also helped stocks recover. Treasury rates continued to claim as the 10-year T-Note yield rose again, hitting 2.51%. The rising yield could put pressure on the housing market by pushing up mortgage rates.

Leading all Dow stocks today was Procter & Gamble (NYSE: PG  ) , gaining 2.9%. There was no major news out on the consumer goods giant today, but on Wednesday, the company announced a new partnership with fashion designer Alexander McQueen, wherein its P&G Prestige division will produce and sell designer fragrances under the Alexander McQueen label. P&G may also be benefiting today form its position as a defensive stock, as any slowdown in the economy from the Fed's taper will affect it less than other blue chips. Coca-Cola, another defensive stock, was the Dow's second-biggest gainer, moving up 1.6%.

Hot Blue Chip Stocks To Watch For 2014: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Sean Williams]

  The restaurant sector is extremely competitive to begin with, so any negative publicity can crush a company, regardless of its size or dominance, over the short term. This week has been something of a nightmare for fast-food restaurant chains McDonald's (NYSE: MCD  ) and Burger King Worldwide (NYSE: BKW  ) .

Hot Blue Chip Stocks To Watch For 2014: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

• [By Jon C. Ogg]

  What we would first refer you to is our prediction of the six major dividend hikes before the end of 2013. Then we would focus on Visa Inc. (NYSE: V) as well, even if it was not included in our recent dividend hike predictions. Frankly, it should have been obvious but for some reason was not.

• [By Reuters]

  Andrew Harrer/Bloomberg via Getty ImagesThe Dow Jones news ticker in Times Square, New York City. NEW YORK -- Investment bank Goldman Sachs Group (GS), credit-card company Visa (V), and footwear Nike (NKE) will join the blue chip Dow Jones industrial average (^DJI) Dow Jones industrial average, the index managers said Tuesday, in the biggest shake-up for the 30-stock average in nearly a decade. The three companies will replace Bank of America (BAC), Hewlett-Packard (HPQ) and Alcoa (AA), all lower-priced stocks that exert a lesser pull on the price-weighted index. The changes will be effective on Sept. 23, S&P Dow Jones Indices said in a statement. The average, first established in 1896, includes 30 stocks, but very little money is indexed to its performance, unlike the broader Standard & Poor's 500 (^GSPC) or other indexes. In addition, because it is weighted by price, companies that are smaller in value with higher prices have more influence on the average. "Wow, those are big changes," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, N.Y. "The Dow is really an antiquated index. It is price-weighted, which makes no sense. But there are still are some people that pay attention to it, and some technicians, so it has an influence on some people." Google (GOOG) and other names were considered for inclusion but passed over because of high stock prices, David Blitzer, managing director and chairman of the S&P Index Committee, told CNBC. The index manager said the changes were prompted by the low stock price of the three companies slated for removal and a desire to diversify the make-up of the index. Alcoa, in particular, has been seen as a candidate for elimination for some time, as the stock's market value of $8.5 billion is easily the lowest in the average. It is the first three-for-three change to the index since April 8, 2004, when American International Group (AIG), Pfizer (PFE) and Verizon (VZ) replaced AT&

Hot Insurance Stocks To Buy Right Now: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

• [By Dan Caplinger]

  Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Colgate-Palmolive (NYSE: CL  ) , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

• [By Dan Caplinger]

  One concern, though, is how the company handled news of Venezuela's currency devaluation. Clorox (NYSE: CLX  ) and Colgate-Palmolive (NYSE: CL  ) also felt the pinch, with Clorox taking about a $0.05 to $0.10 per-share earnings hit and Colgate losing about $0.50 per share. But they also addressed the potential devaluation more proactively than P&G did. Clorox actually�anticipated�the devaluation in its February earnings report, projecting the potential hit if a devaluation took place. Colgate didn't provide specific guidance in advance but clearly saw it as an issue, delivering on a promise to give prompt guidance revisions after the devaluation occurred.

• [By Eric Volkman]

  It's one of the steadiest dividend payers on the market, and it's continuing to fly level. Colgate-Palmolive (NYSE: CL  ) has declared a fresh quarterly common stock dividend, which is to be $0.34 per share, paid on August 15 to shareholders of record as of July 23. That amount matches the firm's previous distribution; this was paid in May. Prior to that, Colgate-Palmolive handed out $0.31 per share.

Hot Blue Chip Stocks To Watch For 2014: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Dan Caplinger]

  Tomorrow, Chevron (NYSE: CVX  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

• [By DailyFinance Staff]

  The looming Fed taper has been the talk of Wall Street for months, but it still came as a surprise to investors when it actually happened. Stocks rallied Wednesday following the Fed's decision to cut its $85 billion a month purchase of bonds by $10 billion, beginning in January. Outgoing Fed Chairman Ben Bernanke said the economy continues to "make progress." The Dow Jones industrial average (^DJI) soared 292 points on the news, its third biggest one-day gain this year. The Dow also hit a closing high, as did the Standard & Poor's 500 index (^GPSC), which gained 29 points. And the Nasdaq composite (^IXIC) rose 46 points. Consider it Bernanke's final present to the market before he retires from his position atop the Fed. Among the big blue chip winners, 3M (MMM) rose 3 percent, while Exxon Mobil (XOM), Chevron (CVX) and Goldman Sachs (GS) all rose 2 percent. But Microsoft (MSFT) was flat, reflecting across the board weakness in tech stocks. Many of the biggest players on the Nasdaq lost ground despite the overall market rally. Apple (AAPL) and Twitter (TWTR) ended lower and Tesla (TSLA) lost nearly 3 percent. Part of the reason for the tech weakness was an earnings miss and a weak forecast from Jabil Circuits (JBL), a key maker of electronics. Its shares plunged 20 percent. But homebuilders were strong following a report showing that housing starts last month rose to highest level in nearly six years. Lennar (LEN), which also posted strong earnings, jumped 6 percent. William Lyon Homes rose 4 percent, KB Homes (KBH) and Toll Brothers (TOL) each rose 3.5 percent. Ford (F) shares skidded more than 6 percent after lowering its profit forecast for next year. The company also warned that it may not meet its target for 2015 and 2016. In part, Ford blames the high expenses tied its planned launch of a record number of new vehicles next year. Finally, the movie theater chain AMC Entertainment (AMC) rose 5 percent from its $18 a share IPO price. This is exp

Hot Blue Chip Stocks To Watch For 2014: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:

• [By fedezaldua]

  I became interested into IBM's (IBM) shares ever since Warren Buffett (Trades, Portfolio) bought stock in the company for the first time back in 2011 ��and he kept on buying shares to this day. Nevertheless, I never found a price point where I would be interested to buy the company's shares until now. After disappointing fourth quarter results came up, IBM's shares took a plunge (the stock is down by 4% since quarterly results were unveiled) leaving the company at an attractive valuation point for a company which is growing its EPS and buying back shares.

• [By Rick Munarriz]

  Briefly in the news
  And now let's take a quick look at some of the other stories that shaped our week.

  IBM (NYSE: IBM  ) proved mortal on Thursday, missing Wall Street's profit expectations for the first time in ages. Outside of a quarter in 2007 when IBM merely matched analyst bottom-line estimates, IBM managed to keep its impressive streak of beats going until now. BTIG Research initiated coverage of Netflix (NASDAQ: NFLX  ) with a Buy rating and a $250 price target. Some may argue that BTIG is late to the game, since the stock has already tripled from last year's low, but better late than never. Intel (NASDAQ: INTC  ) didn't do itself any favors by missing Wall Street's profit projections. Rival Advanced Micro Devices (NYSE: AMD  ) surpassed expectations, but it still recorded a loss. It was also surprising to hear Intel's CEO tease about lower prices. Folks won't be spending good money on tech if they see prices falling in the near future.

• [By Dan Caplinger]

  Indeed, most private companies have followed the strategy of protecting current pensioners while removing benefits from future workers. Over the past several years, IBM (NYSE: IBM  ) , Verizon (NYSE: VZ  ) , and countless other major employers have frozen existing pension plans, keeping them in place for employees that already earned benefits from them. New hires, however, were shunted into 401(k) plans and similar defined-contribution plans, which carry far less risk for the employer.

Hot Blue Chip Stocks To Watch For 2014: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:

• [By Alex Planes]

  Microsoft (NASDAQ: MSFT  ) took its biggest step toward consolidating the fast-growing PC industry under its operating system on May 22, 1990, when it released Windows 3.0 to the public. It had been five years since Microsoft's first Windows release, which introduced a graphical user interface to compete with Apple's (NASDAQ: AAPL  ) Macintosh systems. However, earlier versions of Windows were barely used -- Microsoft itself didn't introduce Excel on the platform until 1987, and Word wasn't available on Windows until version 3.0 was nearly finished. That finally began to change with the launch of 3.0, especially once Windows 3.1 hit the market two years later.

• [By George Kesarios]

  Finally, granted that BlackBerry is several years late coming out with a more sophisticated OS, and has let Google's (GOOG) Android and Apple's (AAPL) iOS take over market share; however, as the saying goes, never says never, because you never know what might happen in the future. Need I remind that Apple was once on the brink of bankruptcy and today it is the most valued company in the world?

Hot Blue Chip Stocks To Watch For 2014: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

• [By Tim Melvin]

  Some of the traditionally defensive stocks like Phillip Morris International (PM) and Merck (MRK) also fail our test for operating conditions and financial changes. Yield chasers have also pushed the value of their shares to unsustainable levels, and are unlikely to see much more than mid- to low-single-digit profit growth for several years.

• [By Patricio Kehoe]

  Phillip Morris International Inc. (PM) is the world�� largest tobacco manufacturer in the world, after China National Tobacco, and holds 29% of the entire industry�� market, outside the U.S and China. Most commonly known for its flagship brand, Marlboro (accounts for one-third of total volume), this firm also owns seven of the 15 international leading cigarette brands. Its supporting brands ���&M, Phillip Morris, Bond Street, Parliament, Chesterfield and Lark ���ave allowed the company to attain consistent growth margins over the past decade. Given its addictive product and global manufacturing and distribution system, this comes as little surprise.

Icahn Bows Out Of Apple Fight For Now

Last week Tim Cook told the Wall Street Journal that Apple Apple bought back $14 billion worth of stock in the two weeks following its fourth-quarter earnings release. Now the billionaire campaigning for a far bigger distribution of cash from the iPhone maker is laying down his sword.

Carl Icahn issued a letter to Apple shareholders Monday morning that effectively declares detente. The legendary investor, who had been campaigning for a massive buyback from the company, is backing down after shareholder advisory service ISS sided with Apple and recommended shareholders vote against Icahn's proposal that urged an additional $50 billion share repurchase.

Icahn's letter (posted to his Shareholders Square Table website), cites ISS' finding that with the recent stock buybacks Apple is well on its way to repurchasing at least $32 billion in stock this year, not far off the billionaire's demands.

"[I]n light of Tim Cook's confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple's future," Icahn writes. " Additionally, we are pleased that Tim and the board have exhibited the "opportunistic" and "aggressive" approach to share repurchases that we hoped to instill with our proposal."

Cook and the Apple board " clearly seem to agree that our company continues to be extremely undervalued, and we all share a common optimism with respect to the company's bright long term future." he continues.

The news comes just a few weeks before Apple's February 28 annual shareholders meeting, at which Icahn's non-binding proposal would have come up for a vote. It also marks the second billionaire investor Cook has successfully defanged.

Last year, Greenlight Capital's David Einhorn urged the company to launch a series of perpetual preferred shares with richer dividend yields. Apple shot down that idea, but did issue billions in debt to fund an upsized share repurchase plan and increase its dividend.

Icahn, who owns an Apple stake that has swelled to more than $4 billion, is dialing down his campaign for now, but his continued presence means there is at least one big shareholder keeping a constant watch on the board's money management.

Top Bank Companies To Watch In Right Now

Google Google, another tech giant with a sizable war chest, has been more inclined to use its largesse for acquisitions, recently ponying up more than $3 billion for smart device maker Nest. The search giant also carries a far richer multiple than Apple, Icahn noted in a recent tweet, as good a reason as any for Cook and the board to keep buying back stock.

Apple shares were up 1.3% at $526.22 Monday morning.

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Consumers up borrowing nearly $19B in December

WASHINGTON (AP) — Consumers boosted their borrowing in December by the largest amount in 10 months as demand for auto, student and credit card loans showed big gains.

Consumer borrowing rose $18.8 billion in December, the biggest increase since February, the Federal Reserve reported Friday. The category that includes auto and student loans increased the most, rising $13.8 billion. Credit card debt, which has been lagging, rose by $5 billion. That was the largest jump since May.

The big increase pushed total borrowing to a fresh record of $3.1 trillion. Gains in borrowing are viewed as an encouraging sign that consumers are more confident and willing to take on more debt to finance consumer spending, which accounts for 70% of economic activity.

Consumers had increased borrowing by $12.4 billion in November.

Over the past year, consumers have become more confident and have been willing to take on debt. Most of those gains have come in the category that covers auto and student loans. Credit card borrowing has been rising more slowly.

Borrowing on credit cards plunged after the Great Recession as financial institutions tightened lending standards and households became more cautious about taking on high-interest debt at a time when millions of people were losing their jobs.

Even with recent gains, credit card debt is still 15.7% below its peak above $1 trillion reached in July 2008. Credit card debt in December stood at $861.9 billion, up just 1.9% from a year ago.

The measure of auto loans and student loans in December stood at $2.24 trillion, up 8% from a year ago. It has been up every month but one since May 2010.

A separate quarterly report on consumer credit done by the Federal Reserve Bank of New York shows that student loan debt has been the biggest driver of borrowing since the recession officially ended in June 2009.

The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages or home equity loans.

Best Financial Companies To Invest In 2014

At the top of the list sits JPMorgan Chase JPMorgan Chase with a whopping $2.46 trillion in assets followed by Bank of America Bank of America with $2.12 trillion. The two banks are the only ones with assets exceeding $2 trillion.

Citigroup Citigroup, the third largest bank by assets, isn�� too far behind with $1.89 trillion and San Francisco-based Wells Fargo Wells Fargo is fourth with $1.48 trillion.

From there the 5th largest bank�� assets, Bank of New York Mellon Bank of New York Mellon, drop off dramatically to $371 billion.

The ranking comes from SNL Financial which compiles the data each quarter.

There�� hasn�� been much change at the top of the ranking since 2011 when JPM claimed the #1 spot from BofA.

Ever since, JPM has held a steady lead over the rest of the nation�� banks�� lead that keeps getting bigger. Just a year ago in the third quarter 2012, JPM�� assets stood at $2.32 trillion; they��e since increased 6%.

It will be interesting to see how JPM�� assets evolve over the next 12 months. 2013 wasn�� JPM�� best. CEO Jamie Dimon reported the bank�� first quarterly loss under his watch, it paid $13 billion to settle a big case with the Department of Justice and paid out billions in other suits as well. It was also the first time the bank made a big announcement recently about shutting down a line of business; in September JPM announced it would no longer accept applications for student loans.

Best Financial Companies To Invest In 2014: Chapmans Ltd (CHP)

Chapmans Limited is a Australia-based property, share and general investment company. The Company is engaged in general and share investment; evaluation of investment, mineral exploration, property and venture capital projects. The Company operates in the investment sector in Australia. It operated from a freehold warehouse in Sussex Street, Sydney. The Company has, through its wholly owned subsidiary Gladstone Development Pty Ltd, an interest in a property company which owns two land development projects with potential for 150 residential lots in Gladstone, Queensland. The Company also has a partly-owned subsidiary, Hallmark Minerals N L, which was a listed exploration company and proposes to become involved again in exploration by acquiring interests in mineral projects in Australia or overseas. The Company�� subsidiaries include Hallmark Minerals N L and Gladstone Development P L.

Best Financial Companies To Invest In 2014: TD Ameritrade Holding Corporation(AMTD)

TD Ameritrade Holding Corporation, through its subsidiaries, provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The company?s offerings include TD Ameritrade for self-directed retail investors; TD Ameritrade Institutional, which provides brokerage and custody services to independent RIAs and their clients; thinkorswim that offers a suite of trading platforms serving self-directed and institutional traders, and money managers; and Investools, which provides investor education products and services for stock, option, foreign exchange, futures, mutual fund, and fixed-income investors. Its offerings also include Amerivest, an online advisory service that develops portfolios of exchange-traded funds to enable long-term investors pursue their financial goals; and TD Ameritrade Corporate Services, which provides self-directed brokerage services to employees and executives of corporations. In addition, the company offers various products and services, such as common and preferred stocks; exchange-traded funds; a range of option trades, including complex, multi-leg option strategies; futures trades in various commodities, stock indices, and currencies; and foreign exchange products. Further, it provides mutual funds; treasury, corporate, government agency, and municipal bonds; mortgage-backed securities and certificates of deposit; new issue securities; margin lending; and cash management services. Additionally, the company offers trustee, custodial, and other trust-related services to retirement plans; and cash sweep and deposit account products through third-party relationships. It provides its products and services through the Internet, network of retail branches, mobile trading applications, and interactive voice response and registered representatives via telephone. The company was founded in 1971 and is headquart ered in Omaha, Nebraska.

Advisors' Opinion:

• [By Alexis Xydias]

  Charles Schwab Corp. (SCHW), TD Ameritrade Holding Corp. (AMTD) and E*Trade Financial Corp. (ETFC) have climbed 38 percent on average in 2013, beating the S&P 500 by 23 percentage points and eclipsing returns in financial shares from Goldman Sachs Group Inc. to Bank of America Corp. (BAC), according to data compiled by Bloomberg. The last times that happened, equity mutual funds received about $91 billion, 24 percent more than the annual average in the two decades before the financial crisis, the data show.

• [By Dan Caplinger]

  The carnage of the market meltdown
  E*TRADE's past has been pretty ugly over the past several years, as the brokerage industry has suffered from the shell-shocked reaction that investors had following the financial crisis. Even as stock markets advanced, many investors remained on the sidelines, and that caused problems for players throughout the industry. As you can see below, peers Schwab (NYSE: SCHW  ) and TD AMERITRADE (NYSE: AMTD  ) have both joined E*TRADE in lagging behind the performance of the broader market since mid-2009.

• [By Morgan Myrmo]

  The individual investor is moving to the no transaction fee, low management fee model. The mutual fund fees at GROW are higher than competitors. As most GROW fund investors do not have money directly at the firm, brokerage firms may offer their own funds with lower expenses regarding management fees as well as eliminating the transaction fee cost. For example, TD Ameritrade Holding Corporation (AMTD), a popular discount broker, may charge $50 to purchase any GROW fund, while a similar fund they may broker from Fidelity Investments may also have a lower management fee as well, may have no transaction fee. With lower management fees, free transactions and a larger name than U.S. Global, assets under management are less appealing than competitors.

Top Bank Companies To Watch In Right Now: American Equity Investment Life Holding Company (AEL)

American Equity Investment Life Holding Company, through its subsidiaries, operates in the insurance business in 50 states and the District of Columbia. The company underwrites fixed annuities, including fixed index annuities and fixed rate annuities, as well as single premium immediate annuities. It also offers life insurance products comprising traditional ordinary and term, universal life, and other interest-sensitive life insurance products. The company markets its products through a brokerage distribution network of approximately 60 national marketing organizations and approximately 24,000 independent agents. American Equity Investment Life Holding Company was founded in 1995 and is based in West Des Moines, Iowa.

Advisors' Opinion:

• [By CRWE]

  American Equity Investment Life Holding Company (NYSE:AEL), a leading underwriter of index and fixed rate annuities, reported that Wendy C. Waugaman, Chief Executive Officer and President, will take a medical leave of absence, effective immediately. She will remain on American Equity�� Board of Directors and will participate in certain management and strategic discussions as her health permits.

• [By U.S. News]

  In at least one Texas bank and one Ohio credit union, 3D video banking is currently undergoing testing, according to TheFinancialBrand.com, a website for bank and credit union marketing executives. Three-dimensional video banking is similar to a consumer video conference with a bank representative –- only in this case, the executive looks like a living, breathing person sitting across from you. Thanks to theater surround sound, the representative also sounds as if they're in the same room. And since the consumer is interacting with a real person and not an automated hologram, the experience apparently isn't much different than the real thing. Banking and managing money isn't what it used to be. The 1970s and 1980s brought us the rise of the ATM. Consumers became acquainted with online banking during the 1990s and the first decade of the 2000s. The 2010s are shaping up as the era of mobile banking. That was underscored Sept. 10-11 in New York City when Mitek Systems Inc. (MITK), a San Diego-based technology company, debuted its Mobile Photo Account Opening product at Finovate, a trade show where banking tech products are often unveiled. The product allows consumers to open a bank account within 60 seconds. If you have your bank's app, you can use your smartphone's camera to take a photo of the front and back of your driver's license, and presto, your new checking, savings or credit card account is open. Here's a look at other financial products and services personal financial experts think we'll be using in the future. Within 10 years. "The economic payments system will begin to 'know us,' either through biometrics, optical sensor or facial recognition," says Joshua Siegel, managing principal of StoneCastle Partners, a New York-based asset management firm that invests in banks. That's already happening to some extent with smartphones –- the new Apple (AAPL) iPhone 5S, for example, uses fingerprint scanning to unlock the phone. Meanwhile, some fi

• [By Louis Navellier]

  American Equity Life (AEL) specializes in fixed-rate and index annuities, and business has been booming as cautious investors and savers look for places to put their money. The company has posted four consecutive positive earnings surprises, causing analysts to raise their estimates for 2014 in the past few months. The shares are still cheap when viewed thought the lenses of the P/E ratio, but more importantly, AEL has the type of solid fundamentals and investor demand that signify a potential winning stock. Shares of American Equity were upgraded to an ����grade back in August, and AEL remains a ��trong buy.��/p>

Best Financial Companies To Invest In 2014: Mitsubishi UFJ Financial Group Inc (MTU)

Mitsubishi UFJ Financial Group, Inc. (MUFJ), incorporated on April 2, 2001, is a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Holdings Co., Ltd. (MUSHD), Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.( MUMSS), Mitsubishi UFJ NICOS Co., Ltd. (Mitsubishi UFJ NICOS) and other companies engaged in a range of financial businesses. Its services include commercial banking, trust banking, securities, credit cards, consumer finance, asset management, leasing and fields of financial services. In May 2010, the Company and Morgan Stanley formed two joint ventures in Japan by integrating our respective Japanese securities companies engaged in investment banking and securities businesses. The Company converted the wholesale and retail securities businesses conducted in Japan by the former MUS into one of the joint venture entities, which is named MUMSS. Morgan Stanley contributed the investment banking operations conducted in Japan by its formerly wholly owned subsidiary, Morgan Stanley Japan Securities Co., Ltd. (MSJS) into MUMSS and converted the sales and trading and capital markets businesses conducted in Japan by MSJS into a second joint venture entity called Morgan Stanley MUFG Securities, Co., Ltd.

Integrated Retail Banking Business Group

The Integrated Retail Banking Business Group covers all domestic retail businesses, including commercial banking, trust banking and securities businesses, and enables the Company to offer a range of banking products and services, including financial consulting services, to retail customers in Japan. This business group integrates the retail business of BTMU, MUTB and MUMSS, as well as retail product development, promotion and marketing in a single management structure. Many of its retail services are offered through its network of MUFG Plazas providing individual customers with access to its financial product offerings of integrated commercial b! anking, trust banking and securities services.

The Company offers a range of bank deposit products, including a non-interest-bearing deposit account that is redeemable on demand and intended for payment and settlement functions, and is insured without a maximum amount limitation. It also offers a variety of asset management and asset administration services to individuals, including savings instruments, such as current accounts, ordinary deposits, time deposits, deposits at notice and other deposit facilities. MUFJ also offers trust products, such as loan trusts and money trusts, and other investment products, such as investment trusts, performance-based money trusts and foreign currency deposits.

The Company creates portfolios by combining savings instruments and investment products. It also provide a range of asset management and asset administration products, as well as customized trust products for high-net-worth individuals, as well as advisory services relating to the purchase and disposal of real estate and effective land utilization, and testamentary trusts. The Company provides a varied line up of investment trust products allowing its customers to choose products according to their investment needs through BTMU, MUTB and MUMSS, as well as kabu.com Securities, which specializes in online financial services. In the fiscal year ended March 31, 2010, BTMU offered a total of five investment trusts. As of the end of March 2010, BTMU offered its clients a total of 73 investment trusts.

The Company offers securities, including publicly offered stocks, foreign and domestic investment trusts, Japanese government bonds, foreign bonds and various other products. The Company offers housing loans, card loans and other loans to individuals. With respect to housing loans, in addition to housing loans incorporating health insurance for seven major illnesses, BTMU began offering in June 2009 preferential interest rates under its Environmentally Friendly Support program ! to custom! ers who purchase environment-conscious houses (like houses with solar electric systems), which meet specific criteria in response to increasing public interest in environmental issues. In September 2009, BTMU launched housing loans with home mortgage insurance, which BTMU jointly developed with the Japan Housing Finance Agency, a governmental agency under the Japanese government�� economic stimulus measures, under which the agency indemnifies BTMU for losses from housing loans.

The Company offers products and services through a range of channels, including branches, automated teller machines (ATMs) (including convenience store ATMs shared by multiple banks), Mitsubishi-Tokyo UFJ Direct (telephone, Internet and mobile phone banking), the Video Counter and postal mail. It offers integrated financial services combining its banking, trust banking and securities services at MUFG Plazas. These Plazas provide retail customers with integrated and flexible suite of services at one-stop outlets. As of March 31 2010, the Company provided those services through 47 MUFG Plazas. The Company offers MUTB�� trust related products and advisory services through its trust agency system not only for MUTB customers but also for BTMU and MUMSS customers. As of March 31, 2010, BTMU engaged in eight businesses as the trust banking agent for MUTB: testamentary trusts, inheritance management, asset succession planning, inheritance management agency operations, business management financial consulting, lifetime gift trusts, share disposal trusts, and marketable securities administration trusts.

Integrated Corporate Banking Business Group

The Integrated Corporate Banking Business Group covers all domestic and overseas corporate businesses, including commercial banking, investment banking, trust banking and securities businesses, as well as UnionBanCal Corporation (UNBC). UNBC is a wholly owned subsidiary of BTMU and a US bank holding company with Union Bank being its primary subsidiary. T! he Compan! y provides various financial solutions, such as loans and fund management, remittance and foreign exchange services. It also helps its customers develop business strategies, such as inheritance-related business transfers and stock listings.

It offers advanced financial solutions to companies through corporate and investment banking services. Product specialists globally provide derivatives, securitization, syndicated loans, structured finance and other services. It also provides investment banking services, such as merger and acquisition (M&A) advisory, bond and equity underwriting. It provides online banking services that allow customers to make domestic and overseas remittances electronically. It also provides a global cash pooling/netting service, and the Treasury Station, a fund management system for a multi-company group. The Company�� global Corporate and Investment Banking business (Global CIB), primarily serves companies, financial institutions, and sovereign and multinational organizations with a set of solutions for their financing needs.

Integrated Trust Assets Business Group

The Integrated Trust Assets Business Group covers asset management and administration services for products, such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and the international strengths of BTMU. The business group provides a range of services to corporate and pension funds, including stable and secure pension fund management and administration, advice on pension schemes, and payment of benefits to scheme members. Its Integrated Trust Assets Business Group combines MUTB�� trust assets business, comprising trust assets management services, asset administration and custodial services, and the businesses of Mitsubishi UFJ Global Custody S.A., Mitsubishi UFJ Asset Management Co., Ltd. and KOKUSAI Asset Management Co., Ltd.

Advisors' Opinion:

• [By WWW.MARKETWATCH.COM]

  LOS ANGELES (MarketWatch) -- Japanese stocks darted out of small gains and losses early Friday, with investors watching the dollar as it traded back slightly below the 102-yen level. The Nikkei Stock Average (JP:NIK) fell 0.2% to 15,142.60, and the broader Topix shed 0.2%. Financial issues were lower, in line with losses on Wall Street ahead of the November U.S. jobs report, due later Friday. In the group, Mitsubishi UFJ Financial Group Inc. (JP:8306) (MTU) shed 0.6%, and Sumitomo Mitsui Financial Group Inc. (JP:8316) (SMFG) slipped 0.2%. Advantest Corp. (JP:6857) (ADTTF) shares were among the strongest performers, climbing 7%, with Kim Eng Securities noting a report of successful cost cutting at the chip-testing equipment maker.

• [By Jim Jubak]

  Shares of Mitsubishi UFJ Financial Group (8306:JP) in Japan or (MTU) in New York, kept on tumbling yesterday, despite unexpectedly positive earnings for the third quarter. Net income climbed to 255 billion yen ($2.5 billion) in the three months ended on December 31. That was a 5.4% increase from the December quarter of 2012, and beat the average estimate of 200 billion yen, by analysts surveyed by Bloomberg. The bank is now 86% of the way to its profit target for fiscal year that ends on March 31, 2014.

• [By Jim Jubak]

  I think you can use shares of Japanese exporters-such as Toyota Motors (TM)-or Japanese financials-such as Mitsubishi UFJ Financial Group (MTU)-as trading vehicles for this move. I mention both because they trade as very liquid ADRs in New York. If you trade in Tokyo, you should look at exporters more leveraged to the yen than Toyota-such as Hino Motors (JP:7205 in Tokyo) or Mazda Motor (JP:7261)-or real estate development companies with more yen sensitivity than more diversified financials-such as Sumitomo Realty and Development (JP:8830). Toyota and Mitsubishi UFJ are both members of my Jubak's Picks portfolio.

Best Financial Companies To Invest In 2014: Commonwealth Bankshares Inc. (CWBS)

Commonwealth Bankshares, Inc. completed the sale of Bank of the Commonwealth to Southern Bank and Trust Company in September 2011. Previously, the company provided a range of commercial banking services to individuals and small to medium-sized businesses in the United States. Commonwealth Bankshares, Inc. was founded in 1970 and is headquartered in Norfolk, Virginia.

Best Financial Companies To Invest In 2014: Icap Ord 10p(IAP.L)

ICAP plc, together with its subsidiaries, operates as a voice and electronic interdealer broker. The company provides post trade risk and information services. It involves in commodities, credit, electronic and emerging, equities, foreign exchange, futures, interest rates, and equity derivatives markets, as well as in post trade risk services and shipping. The company provides information services that cover real-time, end-of-day, and historical market data products; post-trade processing, portfolio compression, and reconciliation and risk management services; and independent analysis, third party subscription, and education services. It operates primarily in Europe, the Middle East, and Africa, as well as in the Americas, and the Asia Pacific. The company is headquartered in London, the United Kingdom.

Best Financial Companies To Invest In 2014: Alliance Bancorp Inc. of Pennsylvania(ALLB)

Alliance Bancorp, Inc. of Pennsylvania operates as the bank holding company for Alliance Bank that provides various savings bank services in Pennsylvania. It offers various deposit instruments, including NOW, money market, regular savings, term certificate, passbook and statement savings, and non-interest bearing accounts, as well as certificates of deposit. The company also provides single-family residential real estate loans; multi-family residential and commercial real estate loans; residential and commercial construction loans, and land acquisition and development loans; consumer loans, including student loans, deposit account secured loans, and lines of credit; and commercial business loans. As of December 31, 2010, it operated nine branch offices located in Delaware and Chester Counties, Pennsylvania. The company was founded in 1938 and is headquartered in Broomall, Pennsylvania.

Best Financial Companies To Invest In 2014: Interactive Brokers Group Inc (IBKR)

Interactive Brokers Group, Inc. (IBG, Inc.) is a holding company. The Company is an automated global electronic broker and market maker specializing in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on more than 100 electronic exchanges and trading venues worldwide. In the United States, it conducts its business in Greenwich, Connecticut, Chicago, Illinois and Jersey City, New Jersey. Abroad, the Company conducts business through offices located in Canada, England, Switzerland, Hong Kong, India, Australia and Japan. It operates in two segments: electronic brokerage and market making. As of December 31, 2011, the Company owned 11.5% in IBG LLC, the holding company for its businesses. The Company is the sole managing member of IBG LLC.

As a direct market access broker, the Company serves the customers of both traditional brokers and prime brokers. It provides its customers with order management, trade execution and portfolio management platform. Its customers can simultaneously access different financial markets worldwide and trade across multiple asset classes (stocks, options, futures, foreign exchange (forex), bonds and mutual funds) denominated in 17 different currencies, on one screen, from a single account based in any currency. Its bank and broker-dealer customers may white label its trading interface (make its trading interface available to their customers without referencing its name), or can select from among its modular functionalities, such as order routing, trade reporting or clearing on specific products or exchanges. During the year ended December 31, 2011, the Company introduced the Interactive Brokers Information System (IBIS). IBIS is a market information workspace, which provides subscribers with real-time market data, research, analytics, stock scanners, charts and alerts. As a market maker, the Company provides continuous bid and offer quotations on over 867,000 securities and futures produ! cts listed on electronic exchanges worldwide.

Electronic Brokerage-Interactive Brokers

During 2011, Electronic brokerage represented 50% of net revenues from electronic brokerage and market making combined. It conducts its electronic brokerage business through its Interactive Brokers (IB) subsidiaries. As an electronic broker, it executes, clears and settles trades worldwide for both institutional and individual customers.

The Company competes with TD Ameritrade, The Charles Schwab Corporation, Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch and Morgan Stanley Smith Barney.

Market Making-Timber Hill

During 2011, Market making represented 50% of net revenues from electronic brokerage and market making combined. The Company conducts its market making business through its Timber Hill (TH) subsidiaries. It provides liquidity by offering bid/offer spreads over a base of over 867,000 tradable, exchange-listed products, including equity derivative products, equity index derivative products, equity securities and futures. Together with its electronic brokerage customers, in 2011 it accounted for approximately 9.9% of exchange-listed equity options traded worldwide and approximately 10.1% of exchange-listed equity options volume traded on those markets in which it actively trades. The Company�� United States market making activities are conducted through Timber Hill LLC (TH LLC), a securities broker-dealer that conducts market making in equity derivative products, equity index derivative products and equity securities.

TH LLC is a member of the Boston Options Exchange, BATS exchange, Chicago Board Options Exchange, Chicago Mercantile Exchange, Chicago Board of Trade, International Securities Exchange, NYSE AMEX Options Exchange, NYSE Arca, OneChicago, NASDAQ OMX PHLX and the New York Mercantile Exchange. TH LLC also conducts market making activities in Mexico at the MEXDER and the Mexican Stock Exchange and in Brazil! at the S! ao Paulo Stock Exchange and the Brazilian Mercantile and Futures Exchange. The Company conducts market making activities in Canada through its Canadian subsidiary, Timber Hill Canada Company (THC) at the Toronto Stock Exchange and Montreal Exchange. In addition, it participates in stock trading at the Electronic Communications Networks (ECNs) in both the United States and Canada.

The Company�� European, Asian, and Australian market making subsidiaries, primarily Timber Hill Europe AG (THE), conducts operations in 20 countries, comprising the securities markets in these regions. Its other European operations are conducted on the London Stock Exchange; the Weiner Borse AG; the Copenhagen Stock Exchange; the Helsinki Stock Exchange; the NYSE Euronext exchanges in Amsterdam, Paris, Brussels and London; NASDAQ OMX Nordic in Sweden, Finland and Denmark; the Swedish Stock Exchange; the MEFF and Bolsa de Valores Madrid in Spain; the IDEM and Borsa Valori de Milano in Milan, and the OTOB in Vienna.

The Company competes with Goldman Sachs, Morgan Stanley, UBS, Citigroup, Bank of America Merrill Lynch, Citadel, Susquehanna, Wolverine Trading, Group One Trading, Peak6 and Getco.

Advisors' Opinion:

• [By Matt Koppenheffer]

  For Vanguard, the top-ranked online broker in the world according to this report, that's good news -- a happy customer is a loyal customer. It's likewise good news for competitors like TD AMERITRADE� (NYSE: AMTD  ) -- which ranked No. 2 for its thinkorswim service and No. 8 for its main platform -- Charles Schwab� (NYSE: SCHW  ) (No. 3), and�Interactive Brokers� (NASDAQ: IBKR  ) (No. 4 for its U.S. operations, No. 5 for its offering in Germany).

• [By John Udovich]

  If you have found yourself trading more as the markets�become more volatile or struggling to come to terms with low interest rates, small caps like Interactive Brokers Group, Inc (NASDAQ: IBKR), MarketAxess Holdings Inc (NASDAQ: MKTX), Indo Global Exchanges PteLtd (OTCMKTS: IGEX) which are in the electronic brokerage or trading platform business would be well worth taking a closer look at. Here is what you need to know about all three:

• [By Monica Gerson]

  Interactive Brokers Group (NASDAQ: IBKR) is projected to post its Q3 earnings at $0.34 per share on revenue of $336.48 million.

  Joe's Jeans (NASDAQ: JOEZ) is estimated to post its Q3 earnings at $0.02 per share on revenue of $33.37 million.

• [By Eric Volkman]

  Interactive Brokers (NASDAQ: IBKR  ) results for the company's Q1 have been unveiled, revealing fairly steep drops in its top and bottom lines. For the quarter, revenue was $216 million, or nearly 30% below the $304 million the firm posted in the same period the previous year. Net income also went down by 41% on a year-over-year basis to hit $6.6 million ($0.14 per diluted share). The same line item for Q1 2012 was $11.1 million ($0.27).

Best Financial Companies To Invest In 2014: The Bancorp Inc.(TBBK)

The Bancorp, Inc. operates as the holding company for The Bancorp Bank that provides various commercial and retail banking and related products and services to small and mid-size businesses and their principals. The company?s deposit products include checking accounts, savings accounts, health savings accounts, money market accounts, individual retirement accounts, certificates of deposit, and stored value and payroll cards, as well as commercial accounts, such as general commercial checking, small business checking, business savings, and business money market accounts. Its loan portfolio comprises commercial term loans, commercial mortgage loans, commercial lines of credit, 1-4 family construction loans, direct lease financing, and commercial construction, acquisition, and development loans; and consumer loans comprising loans for consumers to finance personal residences, automobiles, home improvements, and for other purposes. The company also provides other banking serv ices, which include private label banking and merchant card processing services; and Internet banking services. It serves Philadelphia, Delaware, Chester, Montgomery, Bucks, and Lehigh counties in Pennsylvania; New Castle county in Delaware; and Mercer, Burlington, Camden, Ocean, and Cape May counties in New Jersey. The company was founded in 1999 and is based in Wilmington, Delaware.

Best Financial Companies To Invest In 2014: Pioneer High Income Trust(PHT)

Pioneer High Income Trust is a closed ended fixed income mutual fund launched and managed by Pioneer Investment Management, Inc. It invests in the fixed income markets of the United States. The fund primarily invests in below-investment-grade bonds, high-yield corporate bonds and convertible securities. It invests in fixed income securities with average credit quality of B. The fund benchmarks the performance of its portfolio against the Merrill Lynch High Yield Master II Index. Pioneer High Income Trust was formed on January 30, 2002 and is domiciled in the United States.

Best Financial Companies To Invest In 2014: Auburn National Bancorporation Inc.(AUBN)

Auburn National Bancorporation, Inc. operates as a holding company for AuburnBank that offers various banking products and services in east Alabama. The company?s deposit products include checking, savings, and transaction deposit accounts, as well as certificates of deposit, NOW accounts, money market accounts, and time deposits. Its loan portfolio comprises commercial, financial, agricultural, real estate construction, and consumer loans. In addition, the company provides automated teller services; Visa Checkcards, which are debit cards with the Visa logo that work where Visa is accepted, including automated teller machines (ATMs); online banking and bill payment services; and safe deposit boxes. As of December 31, 2009, it operated nine branches in Alabama, as well as three mortgage loan offices in Mountain Brook, Phenix City, and Valley, Alabama; and ATM machines in 13 locations. The company was founded in 1907 and is headquartered in Auburn, Alabama.

Chevron Unleashes Wall Street’s Inner Hamlet

Last week, shares of Chevron (CVX) got hammered after the company met earnings forecasts but missed on revenue and offered disappointing 2014 production guidance. Now Wall Street is pondering that eternal question: To buy or not to buy?

Associated Press

Chevron fell 4.1% on Friday, and helped drag down ExxonMobil (XOM) and ConocoPhillips (COP), which released results of its own last week. Exxon dropped 2% on Friday, while ConocoPhillips fell 1.2%.

UBS analyst William Featherston and team say Chevron looks fully valued:

[Chevron] currently trades at a 36% discount to the S&P 500, slightly above its 5-year relative average of 34% and the 10-year average of 33%. While [Chevron] appears fully valued on relative P/E vs. its historical average, it remains >1,000 [basis points] below [Exxon's] relative P/E multiple.

Hot Insurance Companies To Invest In 2014

[Chevron's] enterprise value is trading at 5.5x and 5.7x 2014E and 2015E [debt-adjusted cash flow] respectively, over a half turn above its historical average of 4.9x. [Chevron] is also now trading at a ~0.8 turn discount to Integrated peers on 2014- 2015E EV/DACF, in line with its historical 0.9 turn discount. Given its attractive 2015-17 growth outlook and a more favorable asset mix (e.g., more oil-weighted upstream, less downstream), we believe [Chevron] has been re-rated upward over the last few years despite missing production growth targets and see limited scope for upside with its EV/DACF now well above its historical average.

Citigroup’s Faisel Khan still rates Chevron a Buy but sound like they’re starting to get worried:

The main deviation from our forecast is a prolonged ramp-up of Angola LNG and Papa-Terra. We have revised our estimates to account for this. In our view, the delay of a number of projects is calling into question [Chevron's] production target of 3.3mmboe/d in 2017. In our view, the target appears feasible given the number of projects under construction and operating below capacity. However, a prolonged delay will mean that [Chevron's] base decline (4%) will eat into the growth.

Credit Suisse analysts Edward Westlake and Rakesh Advani see 30% upside in Chevron’s shares:

In some eyes, flat production and still robust investment leaves 2014 a bust. We make several points: (1) Even without a large amount of Major Capital Projects startups in 2013, and despite PSC impacts, [Chevron] was able to keep production flat in ’13. The base is solid. (2) Large capital projects can add 500kbd to this base over the next several years. These are long lived projects that further enhance base solidity. (3) The [Chevron] shale portfolio in North America (and Vaca Muerta) will be an increasing contributor to growth with good returns. (4) At least half of the shortfall in ’14 was due to project issues which are being resolved. The path of the next few years still appears clear – rising cashflow and falling capital intensity. With no multiple change and a $90/bbl Brent forecast, CVX could be a $150-160 stock in a few years. Don't sell the noise.

Shares of Chevron have dipped 0.4% today, while Exxon Mobile has fallen 1.8% and ConocoPhillips has dropped 1.6%.