About Me 0059: Making Money Jobs

Today, I’d like to speak with you about the ongoing and urgent efforts to avoid a first-ever default and get our fiscal house in order.

Republicans in the House of Representatives just spent precious days trying to pass a plan that a majority of Republicans and Democrats in the Senate had already said they wouldn’t vote for. It’s a plan that wouldn’t solve our fiscal problems, but would force us to relive this crisis in just a few short months. It would hold our economy captive to Washington politics once again. If anything, the past few weeks have demonstrated that’s unacceptable.

Any solution to avoid default must be bipartisan. It must have the support of both parties that were sent here to represent the American people -- not just one faction of one party. There are multiple ways to resolve this problem. Congress must find common ground on a plan that can get support from both parties in the House. And it’s got to be a plan that I can sign by Tuesday.

Look, the parties are not that far apart here. We’re in rough agreement on how much spending we need to cut to reduce our deficit. We agree on a process to tackle tax reform and entitlement reform. There are plenty of ways out of this mess. But there is very little time.

We need to reach a compromise by Tuesday so that our country will have the ability to pay its bills on time -- bills like Social Security checks, veterans benefits and contracts we’ve signed with thousands of American businesses. If we don’t, for the first time ever, we could lose our country’s Triple A credit rating. Not because we didn’t have the capacity to pay our bills -- we do –- but because we didn’t have a Triple A political system to match it. And make no mistake -- for those who reflexively oppose tax increases on anyone, a lower credit rating would be a tax increase on everyone -- we’d pay higher interest rates on mortgages, car loans and credit cards.

That would be inexcusable, and entirely self-inflicted by Washington. The power to solve this is in our hands. All that’s needed is a simple vote that Democrats and Republicans have taken for decades, including all of the leaders in Congress today. It was done 18 times under President Reagan. Seven times under George W. Bush. And it must be done again now. It’s not a vote that allows Congress to spend more money. Raising the debt ceiling simply gives our country the ability to pay the bills Congress has already racked up. It gives the United States of America the ability to keep its word. And it will let businesses and our economy breathe a sigh of relief.

On Monday night, I asked you to make your voice heard in this debate. And the response was overwhelming. One of the emails we received was from a woman named Kelly Smith, who wanted to send this message to Washington:

“I keep my home clean, work hard at a full-time job, give my parents any monies I can so they can afford their medications, I pay my bills and by all appearances I am a responsible person. All I’m asking is that you be responsible. I have my house in order and all I’m asking is that you get yours the same way.”

Here in Washington, we need to get our house in order. And I have to say, Democrats in Congress and some Senate Republicans have been listening and have shown themselves willing to make compromises to solve this crisis. Now all of us -- including Republicans in the House of Representatives -- need to demonstrate the same kind of responsibility that the American people show every day. The time for putting party first is over. The time for compromise on behalf of the American people is now. Thank you. ####

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Photos: Alex Wong / Getty Images; Pete Souza / White House; Dennis Cook / Associated Press (Kyl).

After several dismal trading sessions, investors were able to get their minds off of frustrating debt woes, and celebrate a strong earnings lineup from a number of American bellwethers. Now that earnings season is underway, it will likely be the dominant market mover, while governments’ around the world, including our own, try to figure out a way to deal with their respective debt crises. In the US, our situation finally took a turn for the better during Tuesday trading, as President Obama embraced a bipartisan proposal to reign in the deficit and help avoid an early August default. Thanks to these easing tensions, the focus will likely continue to be on the slew of earnings reports that will arise, as some of the most popular blue chip firms get ready to announce their most recent fiscal quarter results [see also ETF Insider: A Most Unexpected Rally].

Yesterday, after the bell, technology giant Apple reported their earnings from Q3 2011. The company famous for bringing us household names like the iPod, iPhone, and most recently the iCloud, a new online storage system for music, is known for their innovation in the tech space. Last year, the company surpassed Microsoft in market capitalization as new products continued to propel them to the front lines of consumer discretionary spending. But the company has been in the limelight in 2011 for different reasons, as CEO Steve Jobs took another medical leave of absence early in the year, with many speculating whether or not he intended to return. COO Timothy Cook took the reins of the company, and has kept them on a steady track as they report their most recent quarter without Jobs behind the helm [see also Five ETFs To Look Forward To].

Analyst estimated the company would bring in EPS of $5.80 per share with revenues just under $25 billion. As is typical Apple fashion, the company blew estimates out of the water, hauling in an astonishing EPS of $7.79 and revenues of $28.5 billion. This big jump was largely due to Apple’s iPad sales which were up over 180% from a year ago, and the company also crushed its iPhone sales estimates as well. Though it did have lower than expected sales of Macs, many had already forecast this number to miss the mark as Apple readies its new Mac lineup. AAPL promptly jumped 7% in after-hours trading though the stock trended below the $400 level shortly thereafter [see also AAPL Weighting In QQQ To Be Slashed].

In light of yesterday’s after-hours earnings announcement, today’s ETF to watch will be the QQQ Trust (QQQQ). This ETF tracks the NASDAQ-100 Index which includes the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market. Apple ranks as the top holding of the fund, making up over 13% of the product as a whole. Thus far, this fund has gained 1.7% in 2011 while paying out a dividend of about 0.8%. Because Apple makes up such a vital portion of QQQ, its incredibly strong numbers from its most recent quarter will likely lead to a strong trading day for QQQ and the rest of this tech heavy fund.

[For more ETFs to watch sign up for our free ETF newsletter.]

Disclosure: Photo courtesy of Matt Yohe. No positions at time of writing.

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About Me 0059

Monday 1 August 2011

Making Money Jobs

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