1 Thing Investors Are Missing About Fannie Mae

Fannie Mae (NASDAQOTCBB: FNMA  ) has had an incredible run in 2013. Its stock is incredibly up almost 1000% on the year. But there is one critical thing investors may be missing about this stock.

Fannie Mae headquarters in Washington, D.C.  Photo: Flickr/Future Atlas.

Its goals are not your goals
Fannie Mae and Freddie Mac are the two government-sponsored entities, or GSEs, that are principally responsible for providing liquidity in the mortgage market by guaranteeing and buying mortgages from banks. Yet following the spectacular collapse of the housing market in 2008, Fannie Mae was placed into conservatorship by the Federal Housing Finance Agency, or FHFA, as it received a total of $116.1 billion in government bailout funds.

So what does that mean for investors? Well, the FHFA states plainly, "As conservator, the [FHFA] assumed all the powers of the shareholders, directors, and officers, with the goal of preserving and conserving the assets and property of Fannie Mae and Freddie Mac."

Read that statement again.

The FHFA is in complete control of Fannie Mae, and its goal is simply to preserve and conserve its assets.

In the most recent annual report, the position is repeated, noting that "[t]he conservatorship is a statutory process designed to preserve and conserve our assets and property and put the company in a sound and solvent condition."

As conservator, its only aim is to "preserve and conserve," with the ultimate outcome being that the company is "sound and solvent."

Think about that for a moment. When you're buying stock in a company, you aren't gambling on the success of it, but taking ownership in it, with the explicit understanding that the managers and directors will operate in a way that seeks to maximize the value of the return on your investment. Yet in the case of Fannie Mae, it exclusively operates with its conservator's interests in mind, not those of its shareholders.

Consider Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) , Warren Buffett's empire that has been one of the best investments of the past half century. Care to guess what the line item at the bottom of the income statement is titled? "Comprehensive income attributable to Berkshire Hathaway shareholders" (emphasis mine). And at Fannie Mae? "Net income (loss) attributable to Fannie Mae" (emphasis, again, added).

In fact, Buffett even notes that the company's "long-term economic goal ... is to maximize Berkshire's average annual rate of gain in intrinsic business value on a per-share basis." That's a far cry from the "preserve and conserve," "sound and solvent" mentality that those at the helm of Freddie Mac hold.

It isn't even so much that Fannie Mae is operating with its own best interests in mind, as doing so clearly has generated results. It's that Fannie is completely open to the reality that it simply doesn't care about its common shareholders, which is what you are when you buy into the company.

The following are all quotes from its most recent annual report:

"Because we are in conservatorship, we are no longer managed with a strategy to maximize shareholder returns."

"[E]very dollar of earnings that Fannie Mae and Freddie Mac generate will be used to benefit taxpayers for their investment in those firms."

"The conservatorship and investment by Treasury have had, and will continue to have, a material adverse effect on our common and preferred shareholders."

"The future of our company is uncertain."

It is not only open about its position of not operating with the best interests of the shareholders in mind. It is, in fact, adamant about it. Although many have sought to change this course of action, the federal government and those at Fannie Mae have given no indication that it will happen at all, much less anytime soon.

When you buy stock in a company, you're hoping that those directing the company will see to maximizing your return. But when you buy stock in Fannie Mae, you're willingly putting your money behind a company that plainly assures you it will not.

One stock worth buying
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Top 10 Undervalued Companies To Watch In Right Now

�Source: CNNMoney�

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Top 10 Undervalued Companies To Watch In Right Now: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Jacob Roche]

  With the economy starting to improve, you might think Dollar Tree's (NASDAQ: DLTR  ) fortunes will reverse. The deep discounter provided unemployed and lower-income consumers a safe place in the storm, but with the economic weather clearing up, it would be reasonable to expect consumers to venture out again to higher-end retailers. However, that assumption would be wrong.

• [By Rich Duprey]

  Deep discounter Dollar Tree (NASDAQ: DLTR  ) announced today that its current chief operating officer, Gary Philbin, will now also carry the title of president, a position previously held by company CEO Bob Sasser.

Top 10 Undervalued Companies To Watch In Right Now: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By Adam Levine-Weinberg]

  Biggest losers
  Illinois saw the biggest year-over-year jump in unemployment in the U.S. last month. At 9.5%, the Illinois unemployment rate is at a level last seen in 2011. Even worse, the labor force shrank last month, suggesting that tens of thousands of people gave up looking for work. The seasonally adjusted unemployment rate has risen by nearly a full percentage point since December. Moreover, things may not get better anytime soon; earlier this month, Caterpillar (NYSE: CAT  ) announced that it would permanently lay off 460 workers in the state due to falling demand for mining equipment.

• [By Brian Pacampara]

  Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, heavy equipment giant Caterpillar (NYSE: CAT  ) has earned a respected four-star ranking.

Top 5 Safest Companies To Watch For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Tyler Crowe]

  Another reason that shale gas development has not as quickly developed is a lack of clear patent protection laws,�especially�in China. While both Schlumberger (NYSE: SLB  ) and Haliburton (NYSE: HAL  ) have expressed an interest in developing Chinese shale gas, a lack of intellectual-property protection has them hesitant to going all in. Rather, both companies have taken minority interests in smaller,�Chinese-based companies and plan to take orders of drilling fluids and equipment. These kinds of moves are not necessary in the U.S. and have allowed companies to protect and profit from their expertise.

• [By Sean Williams]

  Finally -- and to keep with today's theme of earnings-driven moves -- oil services contractor Schlumberger (NYSE: SLB  ) added 5.4% after topping the Street in the second quarter. Overall, revenue rose 8%, to $11.18 billion, with net income soaring 50%, to $2.1 billion, or $1.57 per share. Excluding one-time gains, Schlumberger topped EPS estimates by $0.05 and slid by revenue projections by $60 million. Schlumberger can thank robust drilling activity overseas in China and Australia, as well as domestically in the Gulf of Mexico, for its market-beating results. To add the icing on the cake for shareholders, Schlumberger also announced a new $10-billion share repurchase program. Investors would be smart to keep their eyes on Schlumberger moving forward.

• [By Arjun Sreekumar]

  For instance, though oilfield services firms Schlumberger (NYSE: SLB  ) and Halliburton (NYSE: HAL  ) have shown a keen interest in developing China's shale resources, the absence of clearly defined and enforceable patent and property protection laws has given them reason to pause. �

• [By Matt DiLallo]

  Along with announcing earnings, both Halliburton (NYSE: HAL  ) and Schlumberger (NYSE: SLB  ) announced multi-billion-dollar stock buybacks. With so much money on the line, investors have to ask if this is the right move for these two oil-field service giants. Are these stocks cheap enough to warrant the buybacks or should these companies consider other options for those funds?

Top 10 Undervalued Companies To Watch In Right Now: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By John Udovich]

  Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.

• [By Dan Caplinger]

  Where growth will come from
  One area that Newell Rubbermaid still has to tap fully is emerging markets. The company has done a good job of expanding overseas, with 17% annual growth in Latin America. But with barely a quarter of its sales coming from outside the U.S. and Canada, the company has a lot further to go. Storage rival Tupperware (NYSE: TUP  ) gets fully 60% of its total revenue from emerging markets, and it too has seen impressive gains in South America as well as the Asia-Pacific region.

Stocks to Watch: ViroPharma, Transocean, Gogo

Among the companies with shares expected to actively trade in Monday’s session are ViroPharma Inc.(VPHM), Transocean Ltd.(RIGN.VX) and Gogo Inc.(GOGO)

Shire(SHPG) PLC has agreed to buy ViroPharma for $4.2 billion, extending its bet on the market for medicines treating rare diseases. The purchase price of $50 a share is a 27% premium to ViroPharma’s closing share price on Friday and a 64% premium to the price in September before speculation of a deal emerged. Shire’s American depositary shares rose 3.7% to $139.36 premarket, while ViroPharma’s shares jumped 26% to $49.58.

Transocean said it has entered into an agreement with activist investor and major shareholder Carl Icahn that includes a proposed reduction in the maximum number of directors on its board, while separately announcing plans for an initial public offering of a master limited partnership. The offshore driller’s shares rose 2.5% to $54.81 premarket.

Gogo’s third-quarter beat-and-raise showed the business that’s liable to be generated as fliers continue to seek out wireless services while flying. As of Sept. 30, the company provided service on 24% more commercial planes in North America than a year earlier and had 41% more business jets with its air-to-ground broadband services. Shares rose 19% to $22.25 premarket.

Cloud communication provider 8x8 Inc.(EGHT) agreed to acquire privately held U.K.-based Voicenet Solutions for $18.4 million in cash. Shares fell 4.7% to $10.14 in light premarket trading.

Best Buy Co.(BBY) joins a growing list of retailers trying to extend the much-hyped Black Friday shopping frenzy by opening most of its stores Thanksgiving Day. The consumer-electronics retailer said that more than 1,000 of its stores will open at 6 p.m. local time Thanksgiving Day.

Cohen & Steers Inc.(CNS) said Monday that it will separate the chairman and chief executive roles in January, as the investment management firm divides up the positions among its two namesakes.

Genesee & Wyoming Inc.'s(GWR) consolidated traffic rose 6.3% in October from a year earlier on a pro forma basis, boosted by growth in metallic ores and metals shipments.

IntercontinentalExchange Inc.(ICE) and NYSE Euronext sa(NYX)id Friday they had received the necessary regulatory approvals to close their deal. ICE’s $9.4 billion acquisition of NYSE will close Wednesday, the companies said.

RDA Microelectronics Inc.(RDA) agreed to be acquired by a unit of Chinese state owned Tsinghua Holdings Co. in a deal estimated at $910 million. RDA Microelectronics shareholders will receive $18.50 per American depositary share, a 5.5% premium to Friday’s close.

3 Stocks Rising on Unusual Volume

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

>>5 Stocks Ready to Break Out

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

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

>>5 Hated Earnings Stocks You Should Love

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

Fairway Group

Fairway Group (FWM) sells fresh, natural and organic products, prepared foods and hard to find specialty and gourmet offerings. This stock closed up 10.6% at $24.47 in Monday's trading session.

Monday's Volume: 388,000

Three-Month Average Volume: 146,163

Volume % Change: 190%

>>5 Big Stocks to Trade for Big Gains

From a technical perspective, FWM soared sharply higher here right off some near-term support at $22.03 and back above its 50-day at $24.02 with strong upside volume. This move is quickly pushing shares of FWM within range of triggering a big breakout trade. That trade will hit if FWM manages to take out Monday's high of $25.67 to $25.93 and then once it clears more key overhead resistance levels at $27.31 to its all-time high at $28.87 with high volume.

Traders should now look for long-biased trades in FWM as long as it's trending above support at $22.03 and then once it sustains a move or close above those breakout levels with volume that's near or above 146,163 shares. If that breakout hits soon, then FWM will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $33 to $35.

Buckeye Partners

Buckeye Partners (BPL) owns and operates refined petroleum products pipeline systems. This stock closed up 0.76% at $66.43 in Monday's trading session.

Monday's Volume: 1.67 million

Three-Month Average Volume: 407,520

Volume % Change: 189%

>>5 Stocks Under $10 Set to Soar

From a technical perspective, BPL trended modestly higher here with strong upside volume. This move is quickly pushing shares of BPL within range of triggering a near-term breakout trade. That trade will hit if BPL manages to take out some near-term overhead resistance at $66.96 to its 50-day moving average at $67.19 with high volume.

Traders should now look for long-biased trades in BPL as long as it's trending above Monday's low of $65.02 and then once it sustains a move or close above those breakout levels with volume that's near or above 407,520 shares. If that breakout hits soon, then BPL will set up to re-fill some of its previous gap down zone from September that started just above $70. If that gap gets filled with volume, then shares of BPL will set up to re-test its 52-week high at $73.44.

Penn National Gaming

Penn National Gaming (PENN) is a diversified, multi-jurisdictional owner and manager of gaming and pari-mutuel properties. This stock closed up 0.95% at $56.05 in Monday's trading session.

Monday's Volume: 1.77 million

Three-Month Average Volume: 858,142

Volume % Change: 170%

>>5 Stocks Hedge Funds Love This Fall

From a technical perspective, PENN spiked higher here right above some near-term support at $54.97 with strong upside volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $48.70 to its recent high of $57.44. During that move, shares of PENN have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PENN within range of triggering a near-term breakout trade. That trade will hit if PENN manages to take out some near-term overhead resistance levels at $56.67 to $57.44 with high volume.

Traders should now look for long-biased trades in PENN as long as it's trending above its 50-day at $54.40 or above its 200-day at $53.53, and then once it sustains a move or close above those breakout levels with volume that's near or above 858,142 shares. If that breakout hits soon, then PENN will set up to re-test or possibly take out its 52-week high at $59.93.

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

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>Why I'm Sticking By Dow 55,000

>>4 Stocks Under $10 Making Big Moves

>>SolarCity Set to Soar Even Higher

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

Obama admits 95% of income gains gone to top 1%

President Obama said his priority as president -- after stabilizing the economy and creating jobs -- has been to chip away at the growing trend of income inequality.

NEW YORK (CNNMoney) President Obama has been loud and clear about his fight against income inequality, but he admitted that the rich have fared far better than the poor during his time in the White House.

In an interview that aired Sunday on ABC's "This Week with George Stephanopoulos," the show host cited a recent study from the University of California, Berkeley, that found 95% of income gains from 2009 to 2012 went to the top 1% of the earning population.

The president agreed with Stephanopoulos.

"The folks in the middle and at the bottom haven't seen wage or income growth, not just over the last three, four years, but over the last 15 years," the president said.

In fact, other data also show that America's median household income has dropped by more than $4,000 since 2000, after adjusting for inflation.

During the interview, Obama said his priority as president has been to stabilize the economy and create jobs. He said the country has made progress with 42 straight months of economic growth and 7.5 million new jobs in the private sector.

His other focus he said has been to chip away at the growing trend of income inequality.

The president cited his efforts to tax the rich more, make health care more affordable, and usher in financial reforms to avoid future bailouts funded by taxpayers.

However, Stephanopoulos pressed the president, highlighting again that the economic recovery since the financial crisis has overwhelmingly favored the richest Americans.

"Do you look at that, four and a half years in, and say, 'Maybe a president just can't stop this accelerating inequality?'" he asked.

!

Obama admitted that some of it stemmed from events that are beyond Washington's control. He pointed out that globalization and technology has robotized "entire occupations" like bank tellers and travel agents.

As president, he said his administration has pursued policies to push back against these trends, such as prepare kids for higher skilled jobs, and invest in research, new ports and a smarter electricity grid. However, he voiced his frustration at the lack of support for his agenda from Republicans.

"There's no serious economist out there that would suggest that, if you took the Republican agenda of slashing education further, slashing Medicare further, slashing research and development further, slashing investments in infrastructure further, that that would reverse some of these trends of inequality," Obama said.

  How I live on fast-food wages

While income inequality has been on the president's agenda since his first campaign in 2008, the issue has been in the spotlight this year as the debate over raising the minimum wage has intensified.

During his State of the Union address in February, Obama unveiled a plan to boost the federal minimum wage to $9 an hour in 2015, up from the current $7.25, and index it to inflation.

"This single step would raise the incomes of millions of working families," the president said during his speech that night. "For businesses across the country, it would mean customers with more money in their pockets."

And in July, Obama pledged that he will spend the remainder of his presidency trying to reverse growing income inequality.

"This growing inequality isn't just morally wrong; it's bad economics," he said. "Because when middle-class families have less to spend, guess what, businesses have f! ewer cons! umers. When wealth concentrates at the very top, it can inflate unstable bubbles that threaten the economy. "

The Week Ahead: Will the Double Digit Gains Hold?

The S&P 500 is up 18% so far in 2013, but the Washington debt ceiling crisis has many people, including MoneyShow's Tom Aspray, wondering if the stock market can hold these gains through the rest of the year.

As we approach another financial crisis in Washington, a scene that may be repeated next month, many are wondering whether or not they should be invested in stocks. The year to date gain in the Spyder Trust (SPY) of over 18.4% is well into the double-digit territory I expected at the end of 2012. Of course the question is how will stocks do in the fourth quarter? But will the market be able to hold these gains until the end of the year?

January’s 4.6% gain reinforced the positive view and, as I noted on February 1st, “that since 1929, a higher January close in the S&P 500 has resulted in an average 13% gain.”  In that column, I pointed out that the best prior January was in 1997 when the S&P 500 finished up 31% for the year. There were several wide swings that year, as one had to endure a 13.6% drop in October, before the S&P 500 finished the year near its highs.

I also shared examples of 2001 and 1994 when strong January gains still resulted in a down performance for the year. I do not think this will happen in 2013, as the patterns of those years were much different. If we do get weekly sell signals, we will give up a chunk of the current gains before moving higher into the end of the year.

Asset values have improved markedly from the recession lows, as this WSJ chart illustrates. Pensions, as well as cash and other assets, have moved above the pre-crash highs. Stocks and bonds are close to the 2007 highs, as is real estate. Another positive is that the debt levels have improved.

Of course, the concern now is that the impasse in Washington will derail the recovery and that the higher mortgage rates will slow down the housing markets. As the Wall Street Journal pointed out, “Economic output would actually have contracted in both late 2012 and early 2013 if it hadn't been for solid gains in consumer spending.”

Consumer sentiment has had a rough month, as Friday’s release of the final month reading from the University of Michigan was 77.5. It  had been above the 80 level for the past several months. The positive uptrends for both consumer sentiment and consumer confidence are still intact

The bond market appears to have had a pivotal trend change since the FOMC announcement,  as yields on the 10-Year T-Note (TNX) have dropped from just under 3% to 2.614% on Friday. I have been looking for a pullback in yields for the last two months, but it certainly took longer than I expected.

The weekly chart shows the completion of the reverse head and shoulders bottom formation in May that was supported by the positive signals from the MACD. The break of initial support, line a, is consistent with a further decline in yields and the MACD is now moving into the sell mode. Therefore, a further decline to the 2.40% area is clearly possible.

The news out of the Euro zone continues to improve, but their major stock markets, like the German DAX, have also pulled back from their all-time highs. The GDP numbers out of China were also better than expected, and while the emerging markets are below their September highs, they still appear to be in the bottoming process.

NEXT PAGE: What to Watch

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5 Stocks Spiking on Unusual Volume

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

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

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

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

B/E Aerospace

B/E Aerospace (BEAV) is a manufacturer of cabin interior products for commercial aircraft and business jets and a distributor of aerospace fasteners and consumables. This stock closed up 1.4% at $72.24 in Wednesday's trading session.

Wednesday's Volume: 1.37 million

Three-Month Average Volume: 834,650

Volume % Change: 70%

From a technical perspective, BEAV bounced higher here right above some near-term support at $70 and into new 52-week-high territory with strong upside volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $51.53 to its intraday high of $72.79. During that move, shares of BEAV have been making mostly higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in BEAV as long as it's trending above support at $70 or above more support at $68.15 and then once it sustains a move or close above Wednesday's high of $72.79 with volume that hits near or above 834,650 shares. If we get that move soon, then BEAV will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $75 to $80.

Arcos Dorados

Arcos Dorados (ARCO) operates and franchises McDonald's restaurants in Latin America. This stock closed up 7.7% to $13.33 in Wednesday's trading session.

Wednesday's Volume: 3.81 million

Three-Month Average Volume: 856,761

Volume % Change: 333%

From a technical perspective, ARCO soared higher here back above both its 50-day moving average at $12.31 and its 200-day moving average at $12.86 with heavy upside volume. This move has now taken shares of ARCO out of its downtrend and the stock closed strong near the highs of the day. Shares of ARCO are now moving within range of triggering a near-term breakout trade. That trade will hit if ARCO manages to take out its intraday high of $13.42 and then once it clears more resistance at $14.35 with high volume.

Traders should now look for long-biased trades in ARCO as long as it's trending above its 200-day at $12.86 or its 50-day at $12.31 and then once it sustains a move or close above those breakout levels with volume that hits near or above 856,761 shares. If that breakout triggers soon, then ARCO will set up to re-test or possibly take out its next major overhead resistance levels at $15.52 to its 52-week high at $16. Any high-volume move above those levels will then give ARCO a chance to tag $18 to $19.

AerCap

AerCap (AER) provides aircraft leasing and aviation finance services. This stock closed up 3.3% at $18 in Wednesday's trading session.

Wednesday's Volume: 740,000

Three-Month Average Volume: 318,589

Volume % Change: 85%

From a technical perspective, AER jumped higher here right above its 50-day moving average of $17.27 with above-average volume. This stock has been uptrending strong for the last five months, with shares moving higher from its low of $14.84 to its recent high of $18.16. During that uptrend, shares of AER have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AER within range of triggering a near-term breakout trade. That trade will hit if AER manages to take out its 52-week high at $18.16 with high volume.

Traders should now look for long-biased trades in AER as long as it's trending above its 50-day at $17.27 or above more near-term support at $17.17 and then once it sustains a move or close above its 52-week high at $18.16 with volume that's near or above 318,589 shares. If that breakout hits soon, then AER will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $20 to $23.

HHGregg

HHGregg (HGG) is a specialty retailer of consumer electronics, home appliances and related services operating under the name hhgregg. This stock closed up 2.5% at $17.25 in Wednesday's trading session.

Wednesday's Volume: 472,000

Three-Month Average Volume: 314,280

Volume % Change: 80%

From a technical perspective, HGG bounced higher here right above its 50-day moving average of $15.93 with above-average volume. This move started to push shares of HGG into breakout territory, since it took out some near-tem overhead resistance at $17.24. Shares of HGG are now starting to move within range of triggering another big breakout trade. That trade will hit if HGG manages to clear its 52-week high at $17.71 with high volume.

Traders should now look for long-biased trades in HGG as long as it's trending above its 50-day at $15.93 and then once it sustains a move or close above its 52-week high at $17.71 with volume that's near or above 314,280 shares. If that breakout hits soon, then HGG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $22 to $25.

Swift Transportation

Swift Transportation (SWFT) is a multi-faceted transportation services company and the truckload carrier in North America. This stock closed up 2.9% at $18.03 in Wednesday's trading session.

Wednesday's Volume: 2.93 million

Three-Month Average Volume: 1.33 million

Volume % Change: 195%

From a technical perspective, SWFT trended higher here with strong upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $14.52 to its recent high of $18.44. During that move, shares of SWFT have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SWFT within range of triggering a major breakout trade. That trade will hit if SWFT manages to take out its all-time high at $18.44 with high volume.

Traders should now look for long-biased trades in SWFT as long as it's trending above its 50-day at $16.81 and then once it sustains a move or close above its all-time high at $18.44 with volume that's near or above 1.33 million shares. If that breakout hits soon, then SWFT will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $20 to $25.

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

-- Written by Roberto Pedone in Delafield, Wis.

Will Nissan's Next Electric Car Finally Challenge Tesla?

The all-electric Infiniti LE concept car was shown in New York in 2012. Photo credit: Nissan

We've been hearing for a while that Nissan (NASDAQOTH: NSANY  ) is planning an all-electric luxury car to be sold under the Infiniti brand. It's expected to look a lot like the Infiniti LE concept car, shown above, which the company first unveiled last year.

Many have speculated that this could be the first direct competitor to Tesla Motors' (NASDAQ: TSLA  ) hot Model S sedan, coming from the company that had the first successful mass-market electric car with its Nissan Leaf. But more recently, Nissan has said that the program could be delayed, hinting that other (non-electric) new models might take precedence.

A few weeks ago, Fool.com contributor John Rosevear asked if the real reason for the car's delay might have to do with Nissan's worries about competing with Tesla. Now, new information on the real reasons for the car's delay has come out -- and in this video, Rosevear explains what's going on and how this is likely to play out.

Why Bitauto Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Bitauto (NYSE: BITA  ) have plunged today by as much as 18% after the company reported first-quarter earnings.

So what: Revenue in the first quarter added up to $38.6 million, which translated into non-GAAP profits of $3.7 million. The top and bottom lines were up 34.6% and 29.1% relative to a year ago, but investors were still left wanting more. The results were in line with Bitauto's guidance.

Now what: The company has shifted to a new reporting structure with four distinct segments. The bitauto.com advertising business is the biggest moneymaker, growing 57% during the quarter. CEO William Li said the company is focusing on boosting awareness of its brand, enhancing its platform, and investing in the used-car business. Second-quarter sales are expected in the range of $52.3 million to $53.9 million.

Interested in more info on Bitauto? Add it to your watchlist by clicking here.

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Computer Sciences Corporation (NYSE:CSC): CSC May Miss FY2014 Revenue Target

Computer Sciences Corporation (NYSE:CSC) may miss its fiscal 2014, and 2017 revenue goals, as the next phase of turnaround gets more difficult. The company's margin expansion and cost takeout has tracked ahead of the plan, but the topline has fallen short of expectations.

Falls Church, Virginia-based CSC offers information technology (IT) services to clients in the global commercial and government markets. The company's offerings include IT and business process outsourcing, and IT and professional services.

Although there is some upside remaining in margins over the next few quarters, CSC will soon need improve revenue growth to drive further upside rather than cost saves.

[Related -5 Key Takeaways From International Business Machines Corp. (NYSE:IBM)Troubles]

Deutsche Bank analyst Bryan Keane is more skeptical that CSC can accomplish a revenue turnaround near-term especially given with the recent significant amount of business model changes.

CSC targets revenue of about $16 billion in fiscal 2014 and $18 billion in fiscal 2017. The company is expected to generate sales of $13.07 billion for the year ending March 2014, which is implying a drop of 12.9 percent from last year.

CSC is still in turnaround phase, particularly in aligning sales force and skill sets to higher value-added selling and smaller deals. Over the past few quarters, CSC has won smaller deals, which are faster to ramp and generally have better margins.

[Related -Futures Flat Before Production, Sentiment Data; Restoration Hardware Holdings Inc (RH) Jumps]

Further, CSC's pipeline in cloud, BPO and applications has grown significantly, highlighting that CSC is targeting healthy areas of the services market. The recent acquisition of ServiceMesh should help CSC in signing more cloud oriented deals.

On the flip side, CSC is not responding fast enough to the opportunities including moving to a consulting partnership model, improving cross-selling and focusing away from software licens! es towards a services based BPO model.

Keane notes that it is clear that CSC would come in about $3 billion below its fiscal 2014 revenue targets of $16 billion and clearly miss its fiscal 2017 revenue goal of $18 billion.

The company plans to refresh the sales force (currently 1,200 employees) with new hires with deeper client relationships beyond the CIO. Positively, the faster than expected shift in the market dynamics and the company repositioning, CSC now expects the next-gen services to contribute to 40 percent of revenues in the future up from 20 – 25 percent.

Although some divestitures were contemplated, CSC has divested about $1.6 billion of revenues which can explain some of the shortfall. CSC realizes that its business model needs to change in order to fix top-line issues.

However, Keane noted that further cost take out becomes more challenging. CSC margins have tracked ahead of the expectations which along with lower interest expense and share buyback drove upside to EPS guidance.

In addition, CSC is re-evaluating its pricing strategy as it is losing deals because of price. It should leverage integrated global delivery model effectivelyand creating a utility based pricing model, which could improve win rates but put pressure on billings.

The company expects to expand margins beyond fiscal 2014 by operating leverage, standardization of offering, mix changes towards higher value services, offshoring, leveraging shared services, resetting the pyramid structure, as well as automation.

Keane said the slower workforce restructuring especially in Europe has pushed out the restructuring expenses but delivers greater value. In addition, the company has $2.1 billion in cash which the company could leverage for buyback to drive EPS upside.

Also, the headwinds from the one-time out of period adjustment (21 cents in the second quarter) should eventually moderate as the CSC's internal audit completes its review. However, the recent Wells notices from the S! EC may in! crease the cost of accounting issues.

Nevertheless, CSC would need to report some revenue growth in its commercial business to achieve tis fiscal 2014 forecasts. The IT services demand environment remains relatively healthy, but CSC has to go out and win the deals. In addition, federal government budgets still remains weak and may prove to be a headwind for CSC, which derives more than 40 percent of its annual revenue from federal contracts.

As such, it becomes more difficult to become constructive on the shares (at least in the near-term) unless the company shows positive revenue growth. CSC shares, which trade 12.3 times its forward earnings, have gained 29 percent this year.

Will Red Hat Eventually Crush Microsoft and Oracle in the Cloud?

Red Hat (NYSE: RHT  ) will release its quarterly report on Thursday, and investors have only partially recovered from the beating they took in September when the open-source software company made its last earnings report. With huge competitors Microsoft (NASDAQ: MSFT  ) and Oracle (NYSE: ORCL  ) consistently posing a threat to its much-smaller business, Red Hat has to take every chance it can get to keep its edge against its rivals.

Red Hat has championed open-source software since its beginning, and perhaps the most surprising thing about the company is that it has successfully earned profits for years. Although some potential clients have been satisfied with Microsoft's and Oracle's own proprietary offerings, many customers prefer the flexibility that Red Hat's products give them. Can Red Hat take that competitive edge to the next level? Let's take an early look at what's been happening with Red Hat over the past quarter and what we're likely to see in its report.

Stats on Red Hat

Analyst EPS Estimate	$0.35
Change From Year-Ago EPS	21%
Revenue Estimate	$383.12 million
Change From Year-Ago Revenue	11.5%
Earnings Beats in Past 4 Quarters	3

Source: Yahoo! Finance.

Can Red Hat earnings bounce back this quarter?
In recent months, analysts have actually been fairly upbeat on their views on Red Hat earnings, boosting their November-quarter estimates by a penny per share and their full-year fiscal 2014 projections by $0.03 per share. The stock, though, has struggled, falling 9% since mid-September.

Red Hat hit a huge roadblock with its August-quarter report, in which the company gave future guidance that disappointed shareholders. Even though the open-source software company managed to grow its revenue by 16%, resulting in 25% higher adjusted earnings from the previous year, Red Hat cited concerns about IT spending levels in Europe and much slower growth in billings. Analysts followed by downgrading the stock in fear that sluggishness in billings now would translate to weaker business activity in the future.

Yet Red Hat has actually had some notable successes recently. CEO Jim Whitehurst noted that Red Hat has managed to boost its market share at the expense of Microsoft, against which it competes in key markets like operating software and middleware. In particular, with its new JBoss xPaaS services for OpenShift, Red Hat hopes to offer a comprehensive platform-as-a-service to enterprises customers to help them take better advantage of cloud-based applications and business processes. Furthermore, its OpenShift Enterprise 2 release earlier this month includes new features that include data-center infrastructure integration and collaborative capabilities, all the while retaining the flexibility and scalability that open-source arrangements have always fostered. That makes many customers prefer the products to those that Oracle and Microsoft offer, as they tend to be more rigid in keeping a proprietary handle on their clients.

Red Hat has also established itself as a major authority figure in the industry, despite its small size. When the Affordable Care Act website had problems at the beginning of its open-enrollment period, the federal government asked for help from both Oracle and Red Hat to diagnose problems and make the Obamacare applications work better for end users.

In the Red Hat earnings report, watch to see if the company expands on its announcement last week that it would collaborate with Dell to create private cloud solutions using Red Hat's OpenStack platform. Success in the venture would give Red Hat another point in its favor in competing against Oracle and Microsoft, validating Red Hat's status as a key player in the industry.

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On the Market - Iffy underpinnings dominate

Pre-market – Monday 12-16-2013

"The most important single central fact about a free market is that no exchange takes place unless both parties benefit."

~ Milton Friedman ~

Dr. John L. Faessel

ON THE MARKET

Commentary and Insights

Quotes of the day

"The extent of government intervention has been so horrendous that businesses cannot basically decide what to do about the future."

&

"The level of uncertainty about the very long-term future is far greater than at any time I particularly remember."

~ Alan Greenspan ~

12/8/2013

***

MARKET

Last week the S&P 500 (SPX) / market spun back from an extended set-up to the upper trend line and support of the channel that goes back to 2009. It also closed near the 50-day moving average and support that sits 6 S&P points below. Last week's multiyear and decade highs in some models of bullish sentiment* suggested a frothy market that needed a retreat. I continue to be a believer that the market is setting up for a larger retrench soon.

Historically speaking, long periods of "no fear" in the market do not last and during these times prudence suggests taking defensive positioning. We are still in the sweet days of seasonal strength with the wind at our backs because of the Santa Claus rally – not to mention the Fed's money faucet gushing liquidity. And while the S&P futures are up 9 points this week's Congressional 'interviews' of the Fed, where the taper question loams large, could wreak havoc to a market that has dubious and highly questionable underpinnings.Because we are yet extended and above the long term channel highs we remain in La La Land technically speaking.

The McClellan Oscillator is in Neutral at minus 120 – Thursday's posting was an OVERSOLD minus 164

Charts of the Week

Recovery Only With the High Earners

Real Estate Recovery?

Consumers Can't Spend What They Don't Have

Does this look like we are in any kind of real recovery? These charts speak volumes about the health of the economy.

Notable CNBC Interview Today

Robert Benmosche, AIG (AIG) president & CEO said, ""When I go around to my fellow CEOs, people are frightened about whether you want to invest in the United States."

S&P 500

The S&P 500 (SPX) closed Friday at 1775.32. The prior Friday it was 1805.09

Price resistance is at the top tick of 1813 registered on 11/29/2013.

The 50-day moving average support is 1761

Short term 'Price' support is at 1779

The a bit further out 1762 / 1746 / 1740 / 1716 / 1646 and 1627

The 200-day moving average support is at 1664

The top trend line of the channel that goes back 2009 to at (SPX) 1784 - 'that' previous resistance was breached on October 22nd.

Channel and trend line support of (November 2012) is at 1748

Then deep channel and trend line support of (October 2011) is at 1623

Then the deepest channel and trend line support of (March 2009) is at 1402

* This Week's Investor Sentiment

The Bullishness / Bearishness complex overview is mixed, but disturbingly high with some models that posted multi-year and more than decade highs last week. The overall message is a clear danger signal.

(High BULLISH readings in the Investor Sentiment Readings usually are signs of Market tops; low ones, market bottoms.)

Consensus Index of BULLISH sentiment now at 76% from the cycle and multi-year highs of 78% of last week. These new cycle highs in Bullishness of 78% topped the top of 77% Bullish posted on 10/11/2007.

The Citigroup "Panic / Euphoria" Model eased to a plus 0.51 from the plus 0.56 that was more than decade highs in the Euphoria Zone. In early 2000 it ticked its all-time high at plus 0.72. At the end of June, 2011 it ticked cycle lows of minus0.31 in the Panic mode.

The American Association of Individual Investors [AAII]Investor Sentiment Survey of BULLISHNESS has faded to 41.3% from 47.3% of three weeks ago.

The "Bullish" survey posted recent highs of 52.3% 9-months ago. It posted cycle lows of 22.2% on 7/23/2012 the lowest percentile since August 2010. Long-Term Average: Bullish: 39.0%

The American Association of Individual Investors [AAII] Investor Survey of BEARISHNESS lost a few percentiles to 25.0 % from last week's 27.6%. Ten weeks ago it registered the lowest read since 1/12/2012 at 17.6%. Cycle highs of Bearishness of 54.5% were posted 17 weeks ago. Long-Term Average: Bearish: 30.5%

The Market Vane (Market Letter Survey) was up a tick to 66% from last week's 65% In October 2007 it topped at 70% bullish.

Obamacare

"The problem with ObamaCare isn't just a glitch. It's fundamental and it's taking away our freedom. At the heart of the program is the idea that the government should decide your health coverage — what you require and how much you should pay. Never mind what you want, what you need and what you can afford." Pennsylvania Senator Pat Toomey.

On the Mimimum Wage

"the centrist view is probably that minimum wages 'do,' in fact, reduce employment, but that the effects are small."

Paul Krugman - Nobel laureate - The New York Times economist

Friday's key indicators and metrics

Cycle highs or lows are in red

·McClellan Oscillator in Neutral at minus 120 – Thursday's posting was an OVERSOLD minus 164

·3-month $ LIBOR was 2.4385%.Rose again - lows were 0.23660%

·CBOE Put / Call Volume Ratio – 0.85

·VIX – 15.76

·Natural Gas (Globex) – 4.351 @ 7-month highs

·Swiss Franc – 1.1236

·US Dollar Index – 80.22

·Euro – 1.3735

·Japanese Yen – 0.9691 new 7-months lows; close to lows of 0.955 posted in May.

·Canadian Dollar – 0.9440 just off 3½ year lows

·Aussie Dollar –0.8963

·Crude oil (NYMEX) 96.60

·Brent crude 109.43

·Copper – 3.2120

·Gold (COMEX) – 1234.6 looks to test deep support lows of late May

·The Treasury 5-year yield – 1.53%

·The Treasury 10-year yield – 2.87% - cycle high was on 9/10/2013 at 2.98%

·The 30-year Treasury – 3.87% - cycle high was on August 22nd at 3.93%

·Silver (COMEX) – 19.604

·Platinum 1362.9

·Palladium 716.20

·Lumber (CME) – 365.90

.

Economists: No Fed taper this week, but soon

The Federal Reserve is likely to keep the economy on a full dose of stimulus after this week's meeting but begin dialing it down by next month, say most economists surveyed by USA TODAY.

That would mark the Fed's first significant step in winding down the extraordinary easy-money programs it has put in place since the 2008 financial crisis and Great Recession, and signify that the economy should soon be strong enough to stand on its own.

The drama over whether the Fed will announce the tapering after a two-day meeting that concludes Wednesday has intensified recently, following a flurry of better-than-expected economic developments.

Just a handful of the 34 economists surveyed Dec. 12-13 predict the Fed this week will agree to pare its $85 billion in monthly bond purchases, but a slight majority say the tapering will begin by January. The purchases have held down interest rates and buoyed stocks, and trimming them is expected to gradually push up borrowing costs for consumers and businesses.

MORE: Five strategists and their five stock picks for 2014

Yet that may do little to slow an accelerating economy. Monthly job growth has averaged about 200,000 the past four months, despite the federal government shutdown, and the unemployment rate fell to 7% last month from 7.4% in July.

Meanwhile, the Commerce Department this month estimated that the economy grew at a solid 3.6% annual rate in the third quarter, and consumer spending in the current quarter has exceeded forecasts.

This week, the House of Representatives passed a two-year budget deal that now awaits Senate action. If passed, it would remove much of the uncertainty about federal tax and spending policy that has clouded the economy.

MORE: Economy grew 3.6% at annual rate in third quarte

"How long do you want to wait" before reducing the purchases? asks Paul Ashworth, chief U.S. economist of Capital Economics. He says the labor market's cumulative gains since the bond-buying began in September 2! 012 and recent momentum meet the Fed's standard of "substantial" improvement.

Ashworth adds that the risks of the bond-buying, such as eventual high inflation, are rising as the Fed continues to pump money into the economy.

Stuart Hoffman, chief economist of PNC Financial Services, generally agrees but says policymakers will wait until January to assess holiday retail sales and fourth-quarter economic growth. Like other economists, he thinks the Fed this week will signal that tapering is imminent by upgrading its economic outlook in its post-meeting statement.

But Barclays Capital economist Michael Gapen says the Fed will stand pat until March in part because much of the decline in unemployment has been due to Americans leaving the labor force, including some discouraged with job prospects. Also, about half of last quarter's economic growth was from business stockpiling that's likely temporary. And, he says, inflation remains well below the Fed's 2% target — the hallmark of a sluggish economy.

MORE: Apartment rents expected to keep rising in 2014

"It's better but not strong enough," Gapen says, noting that the Fed has repeatedly said it's seeking evidence that the economy's improvement will be sustained before tapering. He also thinks the Fed is unlikely to jolt financial markets that are expecting it to stay the course.

Still, "it's a fairly close call," Gapen says. "If they (taper) in December, I wouldn't be totally surprised."

Why the Xbox Means So Little to Microsoft

It is as if the Xbox One mattered to Microsoft Corp. (NASDAQ: MSFT) — at least financially. The world’s largest software company boasted it sold two million devices in 18 days. And in a negative note, the supply of Xbox One consoles has gotten low. So much for a huge surge in holiday sales. Whatever happens to the Xbox will have nothing to do with the success of Microsoft. The revenue it generates is so small compared to Microsoft’s big divisions that Xbox One sales are a rounding error.

In the quarter that ended on September 30, Microsoft had total revenue of $18.5 billion and operating income of $6.3 billion. Its Entertainment & Device segment, in which Xbox sales get counted, had revenue of $2.1 billion. Unfortunately, the segment posted a loss of $15 million. The segment also includes sales of other Microsoft hardware. Revenue from Skype, one of the company’s strangest acquisitions, is in there as well. Even if Xbox One is a huge success, the operating income contribution to Microsoft’s overall numbers will be modest, or less than that.

The theory behind why the Xbox One is important to Microsoft beyond revenue is a stretch. Xbox could be Microsoft’s portal into the American home. It could be used as an Internet-connected device that operates in the place of set-top boxes, PCs, Apple Inc.’s (NASDAQ: AAPL) Apple TV or the loads of other devices that sit atop American television sets.

The Xbox does have music and video services, as well as apps and a fitness program. The NFL has a programming deal with Xbox. And there are the games, which are at the heart of why most people buy consoles at all. However, none of these entertainment services is unique, and most have tremendous competition as Americans sort through whether they should have a half a dozen or a dozen devices or services to content with in whatever home entertainment centers they have.

Microsoft has had a dream that it might eventually matter in the hardware sector. That dream has been advanced by the launch of the Surface tablet and ongoing support of Windows-powered smartphones. None of these initiatives has worked very well. The Xbox is the most successful among them. At least Microsoft can boast enough Xbox unit sales to say the device is almost viable, financially.

Xbox One sales may give Microsoft some bragging rights. However, in the matter of Microsoft’s P&L, it means very little.

Don't Bet Against Cinda's IPO

To say that there is a bit of skepticism about China Cinda Asset Management (Cinda) which begins trading on the Hong Kong Stock Exchange this week, would be an understatement. It may actually be the most debated IPO in Hong Kong ever, as highlighted by the title of a recent blog by a fellow Forbes Contributor: Is This the Worst IPO Ever?

Investors have good reason to question the motivation behind those who sought to list the company. Cinda is one of the four "bad banks" established in 1999 to buy non-performing loans (NPLs) from state-owned banks ahead of their public listings in the 2000s.

Acting under instruction from the government, it acquired the loans at par value, which was undoubtedly a bad deal for Cinda. Possibly the biggest worry of investors is that it will again be forced to buy NPLs at unreasonable prices after it raises new funds. In its prospectus, Cinda said that it plans to use 60% of the proceeds of the IPO to purchase distressed assets.

Of particular concern is whether the Cinda IPO is part of a grand scheme by the government to clean up local government debt. There is a worry that Cinda and the other three "bad banks" will be forced to buy loans extended to local government financing platforms (LGFPs) in 2009 and 2010 as a result of the 4 trillion yuan stimulus package, many of which are believed to be non-performing.

The reality is that the biggest negatives overshadowing the company are not new to China, while others are overstated. It is for this reason that investors are lining up around the block to get involved. The company raised US$2.5 billion after pricing its IPO at the top of the range at 3.58 Hong Kong dollars due to the move than $65 billion in orders it received.

Here are a few reasons why these investors will not be disappointed.

1. Cinda is unlikely to be forced to clean up local government debt.

As it stands today, the government does not appear ready to deal with existing local government debt. The major regulatory measures that have been released, including caps on local government debt by the China Banking Regulatory Commission and changes to include debt levels as part of local government officials' assessment standards, focus more on preventing the accumulation of new debt rather than deal with existing. Meanwhile, the fact that the new nationwide survey of local debt has not been released (although planned for Oct/Nov) shows that no national plan has been agreed.

The Chinese government always takes a 'problem solving' approach, which means that the debt is only likely to be dealt with gradually, rather than in a large-scale hive-off. In terms of how it will be done, the emerging plan seems to be to force local-government funded asset management companies (AMCs) to perform this function, rather than Cinda and the other AMCs, aka "bad banks".

2. The real estate market is unlikely to collapse any time soon.

Probably the biggest risk to Cinda's business is its exposure to real estate. Of its distressed assets counted as receivables, which account for 93% of its total distressed assets, 60.4% come from real estate and another 4.5% from construction. This is owing to the fact that fixed assets account for the vast majority of collateral in China. As a result, any major changes in property prices or sector regulation could have an adverse impact on the company.

However, groundbreaking changes in the real estate sector are unlikely in the next few years. While the recently concluded Third Plenum touched upon almost every sector, property regulation was notably absent. Owing to disagreements between the central government and local governments regarding the implementation of a property tax (central wants it, locals don't), new regulation is slow to be rolled out.

Meanwhile, the fact that stable growth was outlined by top leaders as a condition for further reform means that policymakers are unlikely to allow any significant slowdown in the real estate sector, which is the most important sector to the Chinese economy.

Japan lowers third-quarter growth reading

TOKYO--The Japanese government on Monday lowered the reading of the country's growth over the third quarter, saying capital expenditure was weaker than first thought, as lackluster foreign demand took steam out of a brisk rebound fueled by the economic policies of Prime Minister Shinzo Abe, known as "Abenomics."

Japan's gross domestic product, or the total value of goods and services produced, grew an annualized 1.1% in the July-September period from the previous quarter, the Cabinet Office said, changing a preliminary 1.9% increase announced three weeks ago.

That's a sharp deceleration from the first half of this year, when the Japanese economy grew around 4.0%, outperforming the U.S. Economists surveyed by the Nikkei and The Wall Street Journal had expected a downward revision to 1.5% growth. The U.S. economy overtook Japan in the third quarter, registering a revised 3.6% expansion.

As the New Year approaches, Japanese government and central bank officials are increasingly counting on a recovery in exports and domestic business investment, which they see as essential if the economy is to continue its rebound after a planned sales tax increase in April next year. But the revised GDP data contained few encouraging signs, with the Cabinet Office revising lower capital expenditure to a flat reading from preliminary 0.7% growth.

The Cabinet Office also cut the reading of inventories, saying they added 0.7 percentage point to the annualized quarterly growth.

In the first six months after Prime Minister Shinzo Abe's return to power a year ago, his radical policy shift known as Abenomics helped drive Tokyo stock prices higher, which led the wealthy to open their wallets, causing a surge in consumer spending. Centering on an aggressive pumping of money into the economy by the Bank of Japan, Abenomics also caused the yen to weaken against the dollar, improving the bottom lines of Japan's exporters, such as Sony Corp. and Toyota Motor Corp.

But the recovery lost steam in the third quarter as stock prices leveled off and the yen's fall stalled, and as emerging market economies--the destination for two-thirds of Japanese exports -- slowed more than expected.

Write to Takashi Nakamichi at takashi.nakamichi@wsj.com

European Stocks Drop for Third Day as ThyssenKrupp Falls

European stocks dropped for a third day as investors weighed valuations before U.S. jobs data this week that may help gauge the timing of a reduction in Federal Reserve stimulus. U.S. index futures and Asian shares outside Japan retreated.

ThyssenKrupp AG slid to a 10-week low after raising 882.3 million euros ($1.2 billion) through a share sale. Antofagasta Plc led a measure of mining companies to a seven-week low. Sonova Holding AG (SOON) declined 1.5 percent as Morgan Stanley cut its rating on the Swiss hearing-aid maker. Orange SA slipped 3.4 percent amid concern a price war in the French mobile market will extend to fourth-generation data services.

The Stoxx Europe 600 Index fell 0.9 percent to 321.15 at 11:30 a.m. in London, for its longest losing streak since Oct. 9. The benchmark slid 0.3 percent yesterday, following a three-month rally, as Spanish manufacturing unexpectedly contracted in November. Standard & Poor's 500 Index futures dropped 0.3 percent. The MSCI Asia Pacific Excluding Japan Index slid 0.5 percent, while the Nikkei 225 Stock Average rose 0.6 percent.

"There's been a frenzy for European equities in the last three months and we're now waiting for a short-term consolidation," said Francois Savary, who oversees about $9.4 billion as chief investment officer at Reyl & Cie. in Geneva. "A lot still depends on a few uncertainties in the U.S., such as fiscal and monetary policy, that have the potential to disappoint investors. Market psychology has been too optimistic for Europe and expectations for 2014 growth may be too high."

Earnings Multiple

The Stoxx 600 has rallied 15 percent this year, even as analysts have cut their earnings estimate for its constituents to 21.37 euros per share from 24.13 euros at the beginning of 2013. That has pushed its valuation to 15 times projected earnings, below the 15.72 mark reached in October 2009, which was its highest level since at least March 2005, data compiled by Bloomberg showed.

On Friday, investors will get the latest reading on U.S. non-farm payrolls for November, and data may show the unemployment rate fell to 7.2 percent, matching the lowest level in five years. A jobs report tomorrow may show U.S. companies added the most workers since June. The Fed has said it will monitor labor-market gains before deciding when to pare its $85 billion of monthly bond purchases.

Policy Meetings

The central bank will release its Beige Book on economic conditions tomorrow. The Federal Open Market Committee meets on Dec. 17-18. Policy makers will probably wait until their March 18-19 meeting to pare stimulus, when they will reduce monthly bond purchases to $70 billion, according to the median estimate in Bloomberg's survey on Nov. 8.

The European Central Bank and the Bank of England will both announce policy decisions on Thursday.

In Portugal, the government raised 578 million euros by selling a 70 percent stake in its postal service, CTT-Correios de Portugal SA. It sold the shares at 5.52 euros apiece, the top of the price range it indicated. This was the first initial public offering in the euro area's third-most indebted country since June 2008.

ThyssenKrupp fell 2.8 percent to 17.14 euros. The German steelmaker sold 51.4 million new shares at 17.15 euros apiece. The stock yesterday plunged the most since August 2011 after the company said it would increase its capital by 10 percent of its market value.

Commodity Producers

Antofagasta tumbled 5.3 percent to 739.5 pence. Polymetal International Plc dropped 4.7 percent to 486 pence, its lowest price since July 10. BHP Billiton Ltd., the world's largest mining company, slid 2.1 percent to 1,783 pence. Rio Tinto Group, the second biggest, retreated 1.5 percent to 3,181.5 pence. A gauge of commodity producers posted the biggest retreat among the 19 industry groups on the Stoxx 600.

Sonova lost 1.5 percent to 123.40 Swiss francs. Morgan Stanley downgraded the stock to equal weight, similar to a neutral recommendation, from overweight. New product releases from competitors such as GN Store Nord A/S and William Demant Holding A/S may hurt revenue growth, Morgan Stanley said.

Orange declined 3.4 percent to 9.20 euros. Iliad SA's Free Mobile subsidiary said it will offer customers 4G Internet as part of its monthly plans at no extra cost, according to a statement. Bouygues SA retreated 2.2 percent to 27.12 euros.

Dow Spikes on Jobs Report as Unemployment Falls to 7%

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

As all indicators leading up to it predicted, the November jobs report soared past expectations. The country added 203,000 jobs last month, up from 200,000 in October, and beat economist estimates at 188,000. Meanwhile, the unemployment rate dropped three-tenths of a percent to 7%, taking a major step to the Federal Reserve's goal of lowering the jobless rate to 6.5%. As a result, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) jumped 199 points, or 1.3%, while the S&P 500 gained 1.1%. Not only was it a strong sign to see a second straight month of 200,000 new jobs added to payrolls, but it was also reassuring to see the market react positively to the news, instead of selling off in fears that the robust employment growth would spark the Fed's stimulus taper. The market's reaction seemed to indicate that it's starting to believe the economy is strong enough to stand on its own, without the Fed's assistance.

The number of long-term unemployed Americans held steady at 4.1 million, though that figure has dropped more than 700,000 in the last year. However, the number of involuntary part-time workers dropped 4% to 7.7 million, a strong sign for those struggling to get out of structural unemployment.

Among stocks riding the rising tide today was Diamond Foods (NASDAQ: DMND  ) , which jumped 6.8% after it beat earnings estimates last night. The maker of Pop Secret Popcorn and Kettle Chips posted an adjusted EPS of $0.18, better than expectations of $0.14, even as revenue fell 9.2% to $234.7 million, below the consensus. The company is in the midst of a multiyear repositioning strategy, and CEO Brian Driscoll noted the "headwinds from lower walnut supply and Emerald relaunch costs." For the year, management said it expects adjusted EBITDA to improve even as it fell in the fiscal first quarter.  While Diamond still has legal woes to contend with, shares have nearly doubled this year, and its strong brand portfolio gives reason to believe that they will reemerge from the turnaround as a stronger company.

Moving in the opposite direction today was American Eagle Outfitters (NYSE: AEO  ) , which finished down 9% after it joined the vast ranks of apparel retailers posting dismal holiday-quarter guidance. The teen retailer said it sees profits for the current quarter at just $0.26-$0.30, below analyst estimates at $0.39. Last year, the company made $0.55 per share in the fourth quarter. Oddly enough, American Eagle is actually doing better than its rivals Aeropostale and Abercrombie & Fitch as consumers seem to be turning away from their brand-heavy apparel and instead shopping at fast fashion retailers such as H&M. With a trend like that confronting them, it seems like those three mall-based retailers have several ugly quarters ahead of them.

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Top 5 Medical Companies To Own For 2014

Shares of Hologic (HOLX) have plunged today after the maker of medical devices for women reported results that left investors searching for a diagnosis.

The Associated Press has the details:

Hologic said late Monday that it expects lower sales of ThinPrep pap tests, NovaSure endometrial ablations systems, and blood screening tests. Hologic also said sales of its older 2-dimensional Selenia digital mammography system will decline as it begins selling its newer Dimensions systems. The company expects to report adjusted net income of $1.32 to $1.38 per share in its new fiscal year, which started Sept. 29. It forecast $2.43 billion to $2.48 billion in total revenue, down from $2.49 billion in fiscal 2013.

Analysts had predicted much higher net income of $1.63 per share and $2.59 billion in revenue, according to FactSet.

Citigroup’s Amit Bhalla summarizes the good and the bad:

While HOLX beat the Street by $0.02 on the bottom-line, revenues came in light and F2014 guidance was below Street expectations. 3D mammo remains a positive (+50% Y/Y) and GPRO was up +11%, but ThinPrep (-13% Y/Y) and NovaSure weakness remain a headwind. Initial F14 guidance includes revs down -1-3% (Street expected +3%) and during this “transition” year, HOLX expects to complete more asset reviews/sales, further streamline the business, and begin a new $250M share buyback. While we believe these efforts are a positive, a $1.1B write-down on diagnostics (GPRO & ThirdWave) indicates that some businesses may need more time to recover ��we remain Neutral-rated.

Top 5 Medical Companies To Own For 2014: Oncolytics Biotech Inc (ONCY)

Oncolytics Biotech Inc. (Oncolytics), incorporated on April 2, 1998, is a development-stage company. The Company is focused on its research and development of REOLYSIN, which is its cancer therapeutic. REOLYSIN is developed from the reovirus. This virus has been demonstrated in tumour cells bearing an activated Ras pathway. Oncolytics is directing a clinical trial program with the focus of developing REOLYSIN as a human cancer therapeutic. The clinical program includes clinical trials, which it sponsors directly along with Third Party Clinical Trials. Third Party Clinical Trials are clinical trials that are being sponsored by other institutions. As of December 31, 2011, the United States National Cancer Institute (NCI), the University of Leeds and the Cancer Therapy & Research Center at the University of Texas Health Center in San Antonio (CTRC) were sponsoring part of its clinical trial program.

The Company�� clinical trial program has included human trials using REOLYSIN alone, and in combination with radiation and chemotherapy, and delivered via local administration and/or intravenous administration. Oncolytics uses contract toll manufacturers to produce REOLYSIN. On December 31, 2011, the Company had two wholly owned subsidiaries, Oncolytics Biotech (Barbados) Inc. (OBB) and Valens Pharma Ltd. Oncolytics Biotech (US) Inc. and Oncolytics Biotech (U.K.) are wholly owned subsidiaries of OBB.

Advisors' Opinion:

• [By Sean Williams]

  With this in mind, I feel it'd be prudent of biotech-savvy investors to give Oncolytics Biotech (NASDAQ: ONCY  ) a closer look.

  The big risks
  I'm quite aware that there are a lot factors that'd raise a red flag with Oncolytics. Similar to Affymax, you could say that Oncolytics has put all of its eggs in one basket with its lead experimental drug, reolysin. According to Oncolytics' website, including its U.K., Canadian, and U.S. studies, reolysin as either a monotherapy or combination therapy is the basis for all 31 clinical trials! Obviously, if reolysin proves ineffective or unsafe, Oncolytics is going to be a world of hurt.

• [By John Udovich]

  The biotech sector along with small cap biotech stocks Cardiome Pharma Corp (NASDAQ: CRME), Oncolytics Biotech, Inc (NASDAQ: ONCY), Vital Therapies Inc (NASDAQ: VTL) and TNI BioTech (OTCMKTS: TNIB) have all been producing their share of news this week for investors and traders alike to trade on. Moreover and while some 42 ��ife sciences��companies have gone public raising about $3 billion from investors so far this year, there are a growing number of biotechs pulling the plug on upcoming IPOs who are citing market conditions. With that in mind, here is a look at important news from the biotech sector and small cap biotech stocks this week:

• [By Maxx Chatsko]

  T-VEC is not your traditional biologic drug. It is actually a bioengineered form of the herpes virus that, once injected into cancerous tumors, replicates, and produces an immune-stimulating protein that puts a bulls eye on cancer cells throughout the body. Despite its promise and intriguing mechanism of action, T-VEC is not in further development at Amgen. However, Oncolytics (NASDAQ: ONCY  ) has shown promising results for its bioengineered form of reovirus called Reolysin. Initial phase 3 results showed that 86% of patients taking the drug had reduced tumor mass or growth after six weeks of treatment. �

Top 5 Medical Companies To Own For 2014: Cell Therapeutics Inc (CTIC)

Cell Therapeutics, Inc. (CTI), incorporated in 1991, develops, acquires and commercializes treatments for cancer. The Company�� research, development, acquisition and in-licensing activities concentrate on identifying and developing new ways to treat cancer. As of December 31, 2011, CTI focused its efforts on Pixuvri (pixantrone dimaleate) (Pixuvri), OPAXIO (paclitaxel poliglumex) (OPAXIO), tosedostat, brostallicin and bisplatinates. As of December 31, 2011, it developed Pixuvri, an anthracycline derivative for the treatment of hematologic malignancies and solid tumors. Another late-stage drug candidate of the Company, OPAXIO, is being studied as a potential maintenance therapy for women with advanced stage ovarian cancer, who achieve a complete remission following first-line therapy with paclitaxel and carboplatin. As of December 31, 2011, it also developed tosedostat in collaboration with Chroma Therapeutics, Ltd. (Chroma). On May 31, 2012, CTI completed its acquisition gaining worldwide rights to S*BIO Pte Ltd.'s (S*BIO) pacritinib.

Pixuvri

As of December 31, 2011, the Company developed Pixuvri, an aza-anthracenedione derivative, for the treatment of non-Hodgkin�� lymphoma (NHL), and various other hematologic malignancies, and solid tumors. Pixuvri was studied in the Company�� EXTEND, or PIX301, clinical trial, which was a phase III single-agent trial of Pixuvri for patients with relapsed, refractory aggressive NHL who received two or more prior therapies and who were sensitive to treatment with anthracyclines. On September 28, 2011, CTI announced that a second independent radiology assessment of response and progression endpoint data from its PIX301 clinical trial of Pixuvri was achieved with statistical significance. The results of the EXTEND trial met its primary endpoint and showed that patients randomized to treatment with Pixuvri achieved a significantly higher rate of confirmed and unconfirmed complete response compared to patients treated with standard chem! otherapy had a significantly increased overall response rate and experienced a statistically significant improvement in median progression free survival. Pixuvri had predictable and manageable toxicities when administered at the proposed dose and schedule in the EXTEND clinical trial in heavily pre-treated patients. In March 2011, the Company initiated the PIX-R trial to study Pixuvri in combination with rituximab in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). Pixuvri has also been studied in patients with HER2-negative metastatic breast cancer who have tumor progression after at least two, but not more than three, prior chemotherapy regimens. In the second quarter of 2010, the NCCTG opened this phase II study for enrollment. The study is closed to accrual and results are expected to be reported by the NCCTG later in 2012.

OPAXIO

OPAXIO is the Company�� biologically-enhanced chemotherapeutic agent that links paclitaxel to a biodegradable polyglutamate polymer, resulting in a new chemical entity. As of December 31, 2011, the Company focused its development of OPAXIO on ovarian, brain, esophageal, head and neck cancer. OPAXIO was designed to improve the delivery of paclitaxel to tumor tissue while protecting normal tissue from toxic side effects. In November 2010, results were presented by the Brown University Oncology Group from a phase II trial of OPAXIO combined with temozolomide (TMZ), and radiotherapy in patients with newly-diagnosed, high-grade gliomas, a type of brain cancer. The trial demonstrated a high rate of complete and partial responses and a high rate of six month progression free survival (PFS). Based on these results, the Brown University Oncology Group has initiated a randomized, multicenter, phase II study of OPAXIO and standard radiotherapy versus TMZ and radiotherapy for newly diagnosed patients with glioblastoma with an active gene termed MGMT that reduces responsiveness to TMZ. A phase I/II study of OPAXIO combined with radi! otherapy ! and cisplatin was initiated by SUNY Upstate Medical University, in patients with locally advanced head and neck cancer.

Tosedostat

In March 2011, the Company entered into a co-development and license agreement with Chroma Therapeutics, Ltd. (Chroma), providing the Company with marketing and co-development rights to Chroma�� drug candidate, tosedostat, in North, Central and South America. Tosedostat is an oral, aminopeptidase inhibitor that has demonstrated anti-tumor responses in blood related cancers and solid tumors in phase I-II clinical trials. Interim results from the phase II OPAL study of tosedostat in elderly patients with relapsed or refractory acute myeloid leukemia (AML) showed that once-daily, oral doses of tosedostat had predictable and manageable toxicities and results demonstrated response rates, including a high-response rate among patients who received prior hypomethylating agents, which are used to treat myelodysplastic syndrome (MDS), a precursor of AML.

Brostallicin

As of December 31, 2011, the Company developed brostallicin through its wholly owned subsidiary, Systems Medicine LLC, which holds rights to use, develop, import and export brostallicin. Brostallicin is a synthetic deoxyribonucleic acid (DNA) minor groove binding agent that has demonstrated anti-tumor activity and a favorable safety profile in clinical trials, in which more than 230 patients have been treated as of December 31, 2011. The Company uses a genomic-based platform to guide the development of brostallicin. A phase II study of brostallicin in relapsed, refractory soft tissue sarcoma met its predefined activity and safety hurdles and resulted in a first-line phase II clinical trial study that was conducted by the European Organization for Research and Treatment of Cancer (EORTC).

The Company competes with Bristol-Myers Squibb Company, Sanofi-Aventis, Pfizer, Roche Group, Genentech, Inc., Astellas Pharma, Eli Lilly and Company, Celgene, Telik, I! nc., TEVA! Pharmaceuticals Industries Ltd. and PharmaMar.

Advisors' Opinion:

• [By John Udovich]

  Large and small cap cancer stocks Gilead Sciences, Inc (NASDAQ: GILD), Celgene Corporation (NASDAQ: CELG), Veracyte (NASDAQ: VCYT), Genomic Health, Inc (NASDAQ: GHDX), Cell Therapeutics Inc (NASDAQ: CTIC) and MetaStat Inc (OTCMKTS: MTST) have all been producing a steady stream of news lately for biotech investors looking for a way to cash in on the growth in development of�cancer treatments. Just consider the following news:

Top 10 China Companies To Watch For 2014: Antares Pharma Inc (ATRS)

Antares Pharma, Inc. (Antares) is a pharma company that focuses on self-injection pharmaceutical products and technologies and topical gel-based products. The Company�� subcutaneous and intramuscular injection technology platforms include Vibex disposable pressure-assisted auto injectors, Vision reusable needle-free injectors, and disposable multi-use pen injectors. In the injector area, it has licensed its reusable needle-free injection device for use with human growth hormone (hGH) to Teva, Ferring Pharmaceuticals BV (Ferring) and JCR Pharmaceuticals Co., Ltd. (JCR), with Teva and Ferring being its two primary customers. The Company has also licensed both disposable auto and pen injection devices to Teva for use in certain fields and territories and is engaged in product development activities for Teva utilizing these devices.

In the gel-based area, it received Food and Drug Administration (FDA) approval in December 2011 for its oxybutynin gel 3% product, Anturol, for the treatment of overactive bladder. Antares also has a licensing agreement with Watson Watson Pharmaceuticals, Inc. (Watson) under which Watson will commercialize its topical oxybutynin gel 3% product in the United States and Canada. Its gel portfolio also includes Elestrin (estradiol gel) in the United States for the treatment of moderate-to-severe vasomotor symptoms associated with menopause. Antares has designed disposable, pressure assisted auto injector devices to address acute medical needs, such as allergic reactions, migraine headaches, acute pain, emesis and other daily therapies.

Pressure Assisted Injection Devices

The Company�� Pressure Assisted Injection Devices consists of three products: reusable needle-free injectors, disposable pressure assisted auto injectors and disposable pen injectors. Reusable needle-free injectors deliver precise medication doses through high-speed, pressurized liquid penetration of the skin without a needle. The injector employs a disposable pl! astic needle-free syringe, which offers liquid medication delivery through an opening that is approximately half the diameter of a standard, 30-gauge needle.

Disposable pressure assisted auto injectors is a technology of controlled pressure delivery of drugs into the body utilizing a spring power source. The Vibex is designed to provide fast subcutaneous or intramuscular injections of up to 0.5ml with minimal discomfort and improved convenience in conjunction with the enhanced safety of a shielded needle. Disposable pen injectors are needle-based devices designed to deliver multiple injections from multi-dose drug cartridges. The devices contain mechanisms that specify the dose to be delivered by defining the amount of movement by the stopper in the cartridge with each device actuation.

The Vision/Tjet has been sold for use in more than 30 countries to deliver either insulin or hGH. The product features a reusable, spring-based power source and disposable needle-free syringe, which acts as the pathway for the injectable drug through the skin and allows for viewing of the medication dose prior to injection. The product is also reusable, with each device designed to last for approximately 3,000 injections (or approximately two years) while the needle-free syringe, when used with insulin or hGH, is disposable after approximately one week when used by a single patient for injecting from multi-dose vials. The Vision/Tjet administers injectables by using a spring to push the active ingredient in solution or suspension through a micro-fine opening in the needle-free syringe. The opening is approximately half the diameter of a 30-gauge needle. The Vision/Tjet is primarily used in the United States, Europe, Asia and Japan.

Antares has designed disposable, pressure assisted auto injector devices to address acute medical needs, such as allergic reactions, migraine headaches, acute pain, emesis and other daily therapies. Its Vibex disposable product combines a low-energy, spr! ing-based! power source with a hidden needle, which delivers up to 0.5ml of the needed drug solution subcutaneously or intramuscularly. Antares is also developing a Vibex MTX auto injector for delivery of methotrexate for treatment of rheumatoid arthritis. The Company�� multi use, disposable pen injector complements its portfolio of single-use pressure assisted auto injector devices. The disposable pen injector device is designed to deliver drugs by injection through needles from multi- dose cartridges. The disposable pen is in the stage of development where devices are being used in clinical evaluations.

Transdermal Products

The Company�� ATD system penetrates the skin to deliver a variety of treatments. The gels consist of a hydro-alcoholic base, including a combination of permeation enhancers. Products being developed/ commercialized include Anturol, Elestrin and Nestragel. Elestrin is a transdermal estradiol gel for the treatment of moderate-to-severe vasomotor symptoms associated with menopause. Its other injectable drugs that are presently self-administered and may be suitable for injection with its systems include therapies for the prevention of blood clots and treatments for multiple sclerosis, migraine headaches, inflammatory diseases, impotence, infertility, acquired immune deficiency symdrome (AIDS) and hepatitis.

The Company competes with Ypsomed AG, SHL Group AB, OwenMumford Ltd., West Pharmaceuticals, Becton Dickinson, Haselmeir GmbH, Elcam Medical, Vetter Pharma, Bioject Medical Technologies Inc., The Medical House PLC, Watson, Abbott, Eli Lilly, Auxillium, Inc., Endo Pharmaceuticals, Teva, Mylan, Roxane, Bedford Labs, APP Pharmaceuticals, Hospira, Pfizer, GSK/Astellas, Warner Chilcott and Allergan.

Advisors' Opinion:

• [By Luke Jacobi]

  Antares Pharma (NASDAQ: ATRS) added 6.65 percent to close at $4.33 following the announcement that an FDA decision is expected on its drug on October 14. Equities

• [By Keith Speights]

  1. Antares Pharma (NASDAQ: ATRS  )
  Antares has experienced a roller-coaster ride so far this year. The stock was up more than 10% early in January, then proceeded to fall by more than 20% by late February. Since then, Antares has clawed its way back and now stands up a little over 10% for the year.�

• [By Keith Speights]

  Antares Pharma (NASDAQ: ATRS  ) announced its first-quarter results �Wednesday morning but failed to impress the market. Shares were down around 3% in midday trading. Here are the highlights from the company's results.

Top 5 Medical Companies To Own For 2014: EntreMed Inc (ENMD.PH)

EntreMed, Inc. (EntreMed), incorporated in 1991, is a clinical-stage pharmaceutical company. EntreMed's drug candidate is ENMD-2076, an Aurora A and angiogenic kinase inhibitor for the treatment of cancer. ENMD-2076 has completed Phase I studies in patients with advanced solid tumors, multiple myeloma and leukemia and is completing data for a multi-center Phase II study in patients with platinum resistant ovarian cancer. The Company�� other product candidates have includes MKC-1, ENMD-1198 and 2-methoxyestrdiol (2ME2, Panzem) for treatment of rheumatoid arthritis.

ENMD-2076 is a novel orally-active, Aurora A/angiogenic kinase inhibitor with potent activity against Aurora A and multiple tyrosine kinases linked to cancer and inflammatory diseases. ENMD-2076 is relatively selective for the Aurora A isoform in comparison to Aurora B. Aurora kinases are key regulators of the process of mitosis, or cell division, and are often over-expressed in human cancers. E NMD-2076 exerts its effects through multiple mechanisms of action, including anti-proliferative activity and the inhibition of angiogenesis. ENMD-2076 has demonstrated significant, dose-dependent preclinical activity as a single agent, including tumor regression, in multiple xenograft models (such as breast, colon, leukemia), as well as activity towards ex vivo-treated human leukemia patient cells.

Top 5 Medical Companies To Own For 2014: Fuse Science Inc (DROP)

Fuse Science, Inc. ( Fuse Science), incorporated on September 21, 1988, is a consumer products holding company. The Company maintains the rights to sublingual and transdermal delivery systems for bioactive agents that can effectively encapsulate and charge many varying molecules in order to produce complete product formulations which can be consumed orally, applied topically or delivered otherwise sublingually or transdermally, thereby bypassing the gastrointestinal tract and entering the blood stream directly. The Fuse Science technology is designed to accelerate conveyance of medicines or nutrients relative to traditional pills and liquids and can enhance how consumers receive these products. In December 2012, the Company launched its initial DROP products, PowerFuse, an energy formulation in a concentrated drop and ElectroFuse, an electrolyte formula in a concentrated drop, online, with the expansion into targeted retail distribution channels.

The Company is developing formulations and devices, which are compatible with alternative delivery systems for energy, medicines, vitamins and minerals, among other bioactives. These alternative systems include, but are not limited to, sublingual, transdermal and buccal drug delivery methods. use Science has developed and continues to advance, in conjunction with its scientific team, sublingual and transdermal delivery systems for bioactives that can effectively encapsulate and charge varying molecules in order to produce product formulations which can be consumed orally, applied topically or otherwise delivered sublingually or transdermally, thereby bypassing the gastrointestinal tract and entering the blood stream directly. The delivery technology is consists of encapsulation vesicles and ion exchange permeation enhancers. This technology utilizes a gradient across the mucosa membrane to help deliver the bioactive more efficiently through the mucosa.

The Company�� products consist of EnerJel, PowerFuse and ElectroFuse. Ene! rJel is a topical product leveraging some of its technology, which is designed to address muscle fatigue and soreness, before, during and after physical activity. The product contains a natural anti-inflammatory and energy source which is directly applied to the problem area. PowerFuse contains natural ingredients, causes no sugar crash with zero calories and less than half the caffeine of an eight ounce cup of premium coffee. It is available in a great tasting Berry Blast Flavor. ElectroFuse contains natural ingredients, causes no sugar crash with zero calories, is easily portable and is available in a great tasting Salty-Sweet flavor.