After today, earnings season will be almost halfway complete, in terms of the total number of public U.S. companies reporting quarterly earnings. So far, the majority of companies reporting are beating estimates (70+%). Here are 3 more large-cap companies, one a Dow component, that reported earnings today:

MetLife (MET): Shocking Analysts with a Big Surprise

Earnings: Q2 profits of $1.84 vs. $1.00 consensus and net loss of $1.74 in Q2 last year, huge rise in profits Year-over Year.

Revenue: Increased 7% Year-over-Year at $13.5 Billion vs. $13.05 Billion consensus, breezing by expectations.

C. Robert Henrikson, Chairman, President & CEO of MetLife (MET) stated, “We achieved top line growth and increased operating earnings by 41% over the prior year period.”

Comment: Shares of MetLife (MET) are trading up following the company’s earnings release after-the-bell, trading at $41.39 per share, compared to today’s closing price of $40.20 per share.

In the chart above, MetLife (MET) shares are breaking away from the all important 50-day and 200-day moving price averages to the upside after today’s earnings report. The next test for MET shares will be $42, as it was a prior level of resistance multiple times. The life insurance company proved they are turning around the ship today with a very solid report that beat analyst profit estimates by 84%. Did Meredith Whitney catch wind of this report? MetLife’s 42,000 employees need to pat themselves on the back today for a job well-done on pulling the company out of one of the greatest black holes called the Great Recession that our financial system has seen in history. I’ve noticed some insider buying in 2010, and with a 1.9% annual dividend, support could firm up at current price levels.

Tyco (TYCO): A Turnaround Story

Earnings: Q2 profits of $.51 vs. $.64 consensus and $.60 in Q2 last year. As a result, profits were down Year-over-Year.

Revenue: Increased 0.3% Year-over-Year at $4.3 Billion vs. $4.33 Billion consensus, slightly under expectations but higher than the same period last year.

Ed Breen, Tyco Chairman and CEO said, “Our results for the quarter reflect the continued strength of our recurring and service revenue base, improving order trends and operating margin improvement across all of our business segments.” These comments are a positively stark contrast to last year’s depths of the Great Recession.

Comment: Shares of Tyco (TYC) are trading up 1% following the company’s earnings release this morning, closing the trading day $36.97. Investors see the integrations of Broadview Security as good for Tyco’s future, as well as separation and spin-off of other non-core business unrelated to security.

Based on Tyco’s technical chart above, shares closed above the 50-day and 200-day moving price averages today. Tyco’s share price is in a very tight range right now between $35-$38. As the company continues to deliver a 2.4% annual dividend and buyback company stock, it appears firm support is forming at these current price levels for a higher possibility of a gradual wave up into the second half of this year. Everyone is complaining about jobs, and Tyco is one of those companies that has the power to hire big. They already employ 106,000 people. As they receive big pay days for units they are selling to private equity shops and other companies, they can utilize the cash to re-invest back into their core business model. With a cleaner and leaner machine emerging down the road, Tyco is one company to watch pull itself out of the mud of the jobless recovery with the confidence to create jobs soon…We’ll have to stay tuned on Tyco’s developing story.

Exxon-Mobil (XOM): The Energy Goliath

Earnings: Q2 profits of $1.60 vs. $1.47 consensus and $.81 in Q2 last year. According to the AP, Exxon-Mobil (XOM) delivered its highest quarterly profit since the $7.82 billion earned in the last quarter of 2008.

Revenue: Increased 24% Year-over-Year at $92.59 Billion vs. $98.49 Billion consensus, missing a rather lofty analyst consensus expectation.

David Rosenthal, head of Exxon-Mobil Investor Relations, said “You are starting to see, I think some of the benefits of having a very diverse portfolio. We don’t have any one footprint more than the others across the world. So, slight delay in the Gulf of Mexico, but progressing full speed ahead in the rest of the world.”

Comment: Shares of Exxon-Mobil (XOM) were up at the bell, then faded the remainder of the trading day. The company’s shares closed the day at $60.34.

In the chart above, Exxon-Mobil (XOM) shares are trading above the 50-day moving price average, yet below the 200-day moving price average. On the heels of BP’s $17 Billion dollar reported loss, XOM is not wasting any time attempting to seize market share and rein the victor of energy brand image. During the quarter, Exxon completed the acquisition of natural gas producer XTO Energy. The deal, valued at $29 billion, immediately makes Exxon the largest natural gas company in the U.S. XOM was one of Business Insider’s 12 Stocks Ready to Run after BP Plugged the Leak.mpanyAs dose of confidence in the share price on June 25th, Insider Jack Williams 66,697 shares of XOM stock. With a 2.9% annual dividend and a massive natural gas integration coming into play for XOM, the conservative investor may find it prudent to start nibbling for the energy allocation of their portfolio.

Disclosure: No positions in the stocks mentioned.

Apocalyptic bears take note: current conditions are hardly as hellish as when markets crashed in 2008.

Despite a long secular bear market with a powerful recovery rally for the financial markets, we now look at some contrarian data points which may keep markets from falling in a second leg down.

6) The BP Failure is Not The Credit Crisis Failure

Once sporting a $180 Billion dollar market cap, British Petroleum (NYSE: BP) is now valued under $90 billion just 2 months later. Even if bankruptcy is imminent due to the magnifying environmental catastrophe, BP’s failure is still no comparison to the Credit Crisis Collective of AIG, Ambak, Bear Stearns, Citigroup (NYSE: C), Fannie Mae, Freddie Mac (NYSE: FRE), Lehman Brothers, MBIA Inc (NYSE: MBIA), Merrill Lynch (NYSE: BAC), Wachovia (NYSE: WFC), WaMu (NYSE: JPM). These financial cancers caused well over $1 Trillion in market cap losses.

In the case of BP, there are Dow components and blue-chip companies like Chevron (NYSE: CVX), Exxon Mobil (NYSE: XOM), Shell (NYSE: RDS-A), Proctor & Gamble (NYSE: PG) and Marathon (NYSE: MRO) gaining market share as beneficiaries of the BP Bust.

5) Global Liquidity

The $1 Trillion E.U. Stimulus package delayed by European bickering will likely play out like the famed $787 U.S. stimulus package. In February 2009, the U.S. stimulus bill became law and consequently the markets bottomed a month later. In May, the E.U. initiated the same, yet larger, stimulus-saving injection into the European economy. Once that money hits the system, a similar playbook could take effect.

4) Upcoming Congressional Elections in November

Extension of the first-time home buyer tax credit is a vital necessity to give the housing market sustainable signs of support. The wake up call for politicians was the latest May new homes sales figure dropping 33%. Right now, politicians are seeking out the best policies for re-election, and the tax credit extension for first-time home buyers is a simple vote-grabber for any politician who wants to strengthen chances for victory this Fall. Thus, future housing relief policy announcements should come to the forefront as a price floor to the overall housing markets.

3) CEO Hiring Confidence Reaches 3-year High

This week, the Business Roundtable — a group of CEOs from large U.S. companies — shared their survey showing 39% of CEOs expect to hire new employees in the second half of 2010. In conjunction with positive double digit sales growth from a high number of companies so far this year, private employment numbers could see a significant and surprising rise. Also, 79% of CEOs surveyed said they expect sales to rise in the second half of 2010. If you rewind the picture to the March crash period of 2009, both the sales numbers and sentiment has improved dramatically since then.

2) Technology is Driving Innovation Out of the Recession

Mobile is quickly becoming the future. Sprint (NYSE: S) is feeling the pent up demand for their new Evo 4G mobile phone. I was recently at a retail Sprint store location in Chicago and asked a sales rep if any Evo 4G mobile phones were available. She said they were sold out and on back order. This is a great sign. Moreover, Microsoft’s (Nasdaq: MSFT) breakthrough joystick-free 3-D Gaming Technology is slated to be a December holiday hit. Intel (Nasdaq: INTC) is entering into the world of Google TV. Google (Nasdaq: GOOG) has positioned itself as the small business savior success story in the Great Recession. There are now over 234 million living websites on the internet while online ad spending increases and entrepreneurs utilize Google’s more efficiently expanding toolkit for making money.

1) The Consumer is Not Dead

Retail is showing signs of life. Adobe (Nasdaq: ADBE) reported strong revenue growth of 34% year-over-year. Additionally, Oracle (Nasdaq: ORCL) delivered a 39% rise in revenues from $6.86 Billion to $9.51 Billion. Apple (Nasdaq: AAPL) has sold over 3 million iPads in less than 3 months, with swarms of demanding consumers lined up for the iPhone 4 release. Amazon (Nasdaq: AMZN) is still glowing from their expanding online shopping dominance, 46% worldwide revenue growth in their Q1 2010 report. Even though private employment numbers were weak, strong government hiring is still putting money in people’s pockets. Consequently, consumers remain in line for breakthrough gadgets like the iPhone 4.

Conclusion: Japan’s Lost Decade Was Not a Crash

I expect choppy waters as we undergo a turbulent period of uncertainty and volatile swing action. Even with a hurting housing market, a failing BP catastrophe, and the EU sovereign debt crisis, the U.S. economy in June 2010 is beyond the lows of March 2010. U.S. companies were the first to implement cost-cuts and ultimately they will be the first to lead the future hiring rebound.

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As we have all witnessed the tragedy of habitat destruction over the past 50 days, it is important to digest and rethink your energy portfolio this morning.

How can anyone feel ‘good’ about owning BP (NYSE:BP) stock right now? Why would anyone want to stop at a BP gas station to continue supporting BP’s wallet with our money?

BP recently spent $50 million dollars on an advertising campaign to improve their image during a time of crisis. However, BP needs to apply that money directly to the problem: the gushing hole they created.

Right now, I strongly believe you should be reshaping your energy portfolio with companies that are in no way agents of this disastrous oil spill, but beneficiaries of BP’s market share. Here are 7 stocks you need to consider as a boycott to BP:

Chevron (CVX): $70.45 per share

Proctor & Gamble (PG): $61.19 per share

ExxonMobil (XOM): $60.48 per share

Shell (RDS-A): $51.23 per share

Occidental Petroleum (OXY): $79.49 per share

Marathon (MRO): $31.19 per share

Natural Gas (UNG): $8.19 per share

Your investment in other energy companies besides BP improves the future of our energy infrastructure and the environment in which we must live.

If you are interested in detailed entry and exit plans for low risk-high reward stocks which meet our proprietary standards, click here for a free trial to our Wall St. Cheat Sheet Premium newsletter written by the Hoffman Brothers.

The Motley Fool recently penned an article touting BP as buying opportunity. In a nutshell, the author reasons that BP’s recent stock price hit (down 40 percent) as well as its massive 9 percent dividend (on a trailing basis) justifies the risk. He then goes on to say that BP is in a reasonably good cash position to cover claims and to borrow if necessary. (Keep in mind that the author owns BP.)

Here’s an interesting excerpt:

Estimates on how much the spill will cost vary greatly, ranging from lowball numbers in the $3 billion range all the way up to $25 billion or even $30 billion. When considering these hefty tabs, though, investors need to remember that BP has only a 65% interest in the oil field, with Anadarko Petroleum (NYSE: APC) and Mitsui owning the rest. Driller Transocean (NYSE: RIG), services provider Halliburton (NYSE: HAL), and blowout-preventer manufacturer Cameron International (NYSE: CAM) may also end up on the hook for part of the costs.

That’s a good point. Even so, the risks are real. How do you evaluate liability and its consequences for one of the biggest oil catastrophes in history and the upcoming criminal investigation?

The Crime

If history is any example, it is unlikely that the criminal investigation will result in criminal charges. First of all, intent is hard to prove, and it will be extremely hard to claim that BP intended an environmental holocaust. A finding of negligence is quite possible; however, the quiet mumblings coming out of Washington with words like “blunder” suggest the investigation is just another dog-and-pony show to keep the masses at bay and even a finding of negligence will have no significant results. And then there’s the whole Marx brothers finger-pointing by the big three (BP, HAL, and RIG), virtually guaranteeing an entertaining, but inconclusive and toothless hearing.

The Cap

Although the cap for environmental remains at $75 million, Congress may move to raise the limit to $10 billion. This is a real risk for BP and cohorts. The most compelling reasons for raising the cap are claims that the cap itself contributed to the disaster. It’s easy to shrug off risky behavior when your cost of failure is only a small portion of the potential total damages, which typically run in the billions. Looking at raising the cap, however, is not the same as doing it, and we can expect Congress to drag their feet unless some politician desperate to win an election takes the lead.

The Copout

BP is currently “volunteering” to compensate victims for their “all legitimate claims,” but this is not a guarantee. Plus there is the “legitimate” wording for lawyers to haggle over ad infinitum so that BP can move its losses forward in to future years. At the same time, they are running PR ads to wear down the anger with that soft-spoken CEO (how could we possibly be mad at that guy, even if he is killing turtles?). You may not agree with the strategy, but I bet it works.

In the meantime, what is likely to happen is a takeover or merger, so that BP as an entity will go away and their liability claims can be circumscribed. A similar practice occurs in bankruptcies when companies act to protect assets by screwing the employees (with no severance, for example). It’s far easier shifting responsibility and accountability through some external event, leaving the victimized at a loss (except for those ingenious Nortel employees in France who engineered a bomb threat and got their severance). So except for those pained Gulf Coast dwellers, people will forget about BP over time and begin to be thankful they can still fill their tanks even at $100 a barrel.

Aside from the ethics issues, it looks like a buy for Big Oil — unless you are squeamish about bailing out more bad behavior with your investment. Then again, with its safety record, BP is the equivalent of a serial killer, and you may be unpleasantly surprised in a year or so.

Here are the charts for the Big Three:

BP (NYSE: BP)

Comments: The stock is oversold but still trending down. BP needs a good news day. When it comes, expect high volume on an up day for a good day trade. The stock got slammed and gapped down at the beginning of June. BP has room to fall further, so bottom fish with caution.

TRANSOCEAN (NYSE: RIG)

Comments: With a controversial dividend payout from insurance profits on the leaking rig (under government investigation) and a recent negative earnings report (before the disaster), Transocean presents greater risk. On the plus side, RIG is currently selling at about 75 percent of book value.

Halliburton (NYSE: HAL)

Comments: The sell off in Halliburton looks to be tapering off and it may be close to a bottom. Despite a fall in earnings and the Gulf spill, the stock is not cheap even at current levels. Still, the stock is rated as a buy or strong buy by analysts.

Disclaimer: No positions

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(Source: The Daily Gold)

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Jordan Roy-Byrne, CMT

http://www.thedailygold.com

Jordan@TheDailyGold.com

Here’s the latest NOAA 72-hour oil slick projection map, which was prepared Saturday night at 9:00 PM.

The red dots represent beached oil.

Oil has broken out to the upside of what we called an awkward consolidation. This breakout will usher in a fifth wave move rather than a third wave. That just means that we’d look for a peak after the breakout move.

There is a little bit of resistance at $86 and at $91 (50% retracement) but the next strong resistance target is $100.

As we noted last month, the sentiment picture is confusing. Commercial traders are heavily short but this always hasn’t been a reliable indicator like it has been with Gold and Silver. A high commercial short position in Oil has only coincided with one major peak.

If you are interested in this type of professional analysis for all the major markets in a 25 page report, click here to try a free trial of my Macro Investor Premium service.

Jim Rogers

Jim Rogers is one of the most respected investors in the world. I had a chance to chat with him the other morning to get more details about some of his recent comments in the media …

Damien Hoffman: Jim, you were in the media a few times last week and I want to follow up on a few points you made. You said on Bloomberg that Nouriel Roubini did not do his homework regarding the asset bubbles about which he is now warning. Can you explain what homework he did not do?

Jim: All of it. How can you talk about a bubble when assets such as silver are 70% below their all-time high? Same for coffee, sugar, cotton, natural gas, and many more. I have a problem talking about a bubble when assets are this depressed from their all-time highs.

A bubble is when assets are screaming to new highs everyday, everyone is talking about them, and everyone owns them. Right now, virtually no one owns commodities. So for Mr. Roubini to talk about a bubble in commodities defies comprehension. It proves he does not understand markets.

I am flabbergasted at Mr. Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except Gold, US Government Bonds, Cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there.

If an asset rises 100% in one year, that’s a great year, but not necessarily a bubble. Look at oil. It’s up huge off the bottom but nowhere near it’s old highs. Look at Citigroup. The stock is up 3 or so times off the bottom …

Damien: … and I doubt long term shareholders feel like they are in a bubble.

Jim: Exactly. And since Mr. Roubini thought oil would stay below $40 a barrel for all of 2009, I would love for him to tell me and the rest of the world exactly where are all the oil supplies because the International Energy Agency (IEA) — which has the best global data set on energy supplies — has no idea where is the oil. Mr. Roubini should tell us where this price suppressing oil supply is hidden. All the oil possessing countries in the world have declining reserves. All the oil companies have declining reserves. So Mr. Roubini must know something the rest of us don’t.

Damien: On another note, Gold has been reaching new all-time highs, although not inflation adjusted. You said Gold may reach $2,000 an ounce over the next decade. Can you explain what variables will push Gold to $2,000?

Jim: First, I hope you will keep Mr. Roubini’s statement where he said Gold going to $2,000 an ounce by 2019 is “utter nonsense.” I think you’re going to get a chance to call him before 2019 to ask him what he thinks of Gold at $2,000 and why he thought it was “utter nonsense.”

Regarding variables, it’s very clear there is huge suspicion about paper money around the world. This suspicion is gathering steam. Governments are printing huge amounts of money. This has always led to higher prices. Maybe I am wrong and it’s different this time. But I doubt it.

Additionally, no new large gold mines have been opened in decades. Some of those mines are over 100-years old. They are all depleting. On the other hand, central banks have huge Gold reserves above ground — and they are less interested in selling than in the past.

If you adjust Gold for inflation and go back to it’s former all-time high in 1980, Gold should be over $2,000 an ounce right now if you want to say it’s reaching new inflation adjusted all-time highs. That does not mean Gold has to get back to a true all-time high. Nothing has to. However, I suspect that given all the money printing in the world, we will see much higher prices for hard assets.

Despite Gold’s potential, I think I will make more money in other commodities such as silver, cotton, or coffee — all of which are terribly depressed.

Damien: Speaking of other assets, as an outsider living abroad, what is your opinion on US Equities?

Jim: This is one of the few times in my life I have not had shorts anywhere in the world. I have also not had a lot of longs in the stock market because I’ve chosen longs in commodities and currencies. I have kept away from shorts because there is a gigantic amount of money being printed and it has to go somewhere. I thought some of it would end up in the stock market, and it has.

How much higher can the equity markets go? I don’t know. There are a lot of problems in the economy, but I don’t know when those problems will cause a downdraft in the stock market. All we’ve done is paper over the problem, so I expect we’ll have to deal with those issues in the future. Printing and spending money we don’t have simply prolongs the problems and makes them worse in the long run.

If the world economy improves, commodities will lead the way due to demand and shortages. If the world economy does not get better, commodities are still a great place to be because governments are printing so much money. And, if the world economy doesn’t get better, they will print even more money!

Damien: Jim, thank you for taking the time to share your outlook and opinions. I greatly appreciate it.

Jim: You are very welcome. Your site is very impressive. I look forward to staying in touch.

The Associated Press reported:

Investors are worried that a default by a government investment company in Dubai (GAF) over $60 billion in debt payments could have a ripple effect in world financial markets. The fear is that losses in the small emirate, which has drawn wealthy tourists from around the globe in the past decade with its Las Vegas-in-the-Middle East appeal, could imperil a nascent economic rebound.

This isn’t a huge surprise considering the ‘urban jungle in the desert’ exploded during the commercial real estate and oil bubbles. Now that oil has been chopped in half, the credit bubble has deflated, and tourists have less disposable income for luxurious trips to Dubai, seems like the gluttony has transformed into wrath.

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Algae could be the most promising candidate yet for the future of the biofuels industry.

Although algae-based fuels won’t be commercially available for several years, algae offers several advantages over other first-generation renewable fuels, such as corn and soybeans. For example, algae grows faster, requires less resources, can be used as jet fuel, can use existing distribution systems, and absorbs carbon dioxide and other greenhouse gasses.

And according to the WSJ, in theory the U.S. could produce enough of it to meet all of the nation’s transportation needs.

Although developing an economically viable process for refining oil from algae faces challenges on many fronts, interest (and investment) is growing.

Major players in the emerging industry include Exxon (XOM) (working with privately held Synthetic Genomics), BP (BP) (in a development deal with Martek Biosciences Corp (MATK)), Valero (VLO) (invested in Solix Biofuels), as well as the U.S. Military.  Smaller companies include Aquatic Energy, Aurora Biofuels, PetroAlgae, and Origin Oil.

Industry experts claim that in order to speed the process along, algae biofuel feedstocks must get the same benefits and incentives that first-generation biofuel feedstocks receive.

Just recently, Senator Boxer revised the definition of biofuels in the Renewable Fuels Standards of the Clean Air Act, previously defined as “cellulose-based biofuels,” to “advanced green biofuels,” as a way to include algae as a qualifying biomass material in the Renewable Fuels Standard provisions.

All of this syncs up neatly with a White House concerned with climate change and looking to develop “green energy” technologies with long economic coattails.

While it may be too early to call algae the clear winner in the biofuels race, at least for now, the future of algae-based biofuels looks bright.

Disclosure: the author has no positions in the companies mentioned.




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