King Dollar Still Rules

Kevin Cook with you one more morning until Steve settles back into reality. Not all of us go cliff diving at Rick's Cafe in Negril for Thanksgiving.

I was on FOX Business channel Friday with Charles Payne talking about the continuing flock to US Treasuries and how soon this bubble had to burst. He noted this has been an issue for a couple of years. Actually it's been a debate for over a decade as China's dollar stockpile grew to over $2 trillion and they finally surpassed Japan as the largest foreign holder of our debt.

As the yield on the 10-year slipped below 2%, I explained that the bubble wasn't bursting anytime soon especially with European debt getting ever colder shoulders from institutional investors. Yes, our Treasuries are "overbought" because the world's reserve currency is so much more plentiful these days. But it's all relative in a global economy of fiat currencies, and betting on the top in debt of the top economy has broken more than a few banks lately.

And the German conundrum may not be as painful as it looks. While they appear to be dragged down by the weight of numerous ball-and-chain Club Med debtors, they actually like the weaker euro. A eurozone divorce that creates a core union of stronger countries could suddenly ignite a much stronger euro than the German economy can stomach right now.

I noted here Friday before the open that this decline will continue until there is a bigger fear-driven dip below S&P 1,150 accompanied by a spike in volatility. All we got in the light trading session was a feeble rally to 1,172 and then a close on the lows at 1,158. I'm looking forward to what surprises our favorite show "Dancing with the PIIGS" brings us this week.

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Best,

Kevin Cook
Senior Stock Strategist, Zacks Investment Research

Today's Top Stories: Monday- November 28, 2011

ZACKS RANK BUY STOCKS

• Aggressive Growth - MoneyGram International, Inc. (MGI) shares are trading at an attractive 15 times forward estimates, which puts the PEG ratio at 1.0. The price to sales is near 0.7 times. Read More...
   
• Growth & Income - Ross Stores, Inc. (ROST) earnings per share came in at $1.26, in-line with the Zacks Consensus Estimates. It is a 24% increase over the same quarter in 2010. Sales rose 9% to $2.046 billion. Read More...
   
• Momentum - Fair Isaac Corp. (FICO) saw some pretty solid movement in estimates off a good quarter, with the current year up 34 cents to $2.48. The next-year estimate is pegged at $2.72, a solid 10% growth projection. Read More...
   
• Value - The Finish Line, Inc. (FINL) 2012 Zacks Consensus Estimate has risen 2 cents to $1.57 in the last 60 days. That is earnings growth of 23%. The 2013 Zacks Consensus is also up 2 cents to $1.71 per share. Read More...
   

Learn how to profit from our exclusive Zacks Rank stock-ranking system with free resources. Read More...

• Top 5 Technology Mutual Funds Read More...
• Mutual Fund Homepage

• Bull Of The Day: Salix Pharmaceuticals
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• Bear Of The Day: Montpelier Re Holdings
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• Zacks Industry Outlook: Restaurant Industry Stock Review - Nov. 2011
  Restaurant operators have managed to post improved results riding on the back of modest traffic improvement and the consequent rise in comparable-store sales. Read More...
  
  
• Analyst Blog Highlights
• Earnings Preview: Tiffany & Co.
• Capital One-HSBC Deal Under Review
• Chevron's Brazil Dream Sours
• Full Analyst Blog

• Dell Sales Slippage
• Aggressive Growth Stock Picks-Nov. 23, 2011
• Value Stock Picks-Nov. 23, 2011

PeopleAndPicks.com:

VIP "SteveHarm" stacked his portfolio to weather the market with BUY calls in (AKRX), (SPRD) and (STMP). Read More...

• Italian bond yields back in the danger zone @ CNNMoney.com
• Third-Quarter Earnings Send Mixed Message @ TheStreet.com
• Week Ahead: November Jobs Report @ FOXBUSINESS.com
• AT&T's $4 billion mess is of its own making @ MarketWatch.com

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