From One Storm to Another

09/04/2008 12:00 am EST

Focus: GLOBAL

Nancy Zambell

Editor, Wall Street's Best Investments and Wall Street's Best Dividend Stocks

Although the US Gulf Coast did not escape hurricane Gustav, fortunately the damage—estimated between $4 and $10 billion—will be much less than that of 2005’s Hurricane Katrina, which totaled some $41 billion. Yet no one is breathing a sigh of relief, as three more tropical storms are churning in the Caribbean and may be headed towards our shores.

An interesting outcome of the fairly mellow Gustav is his influence on oil prices, which have fallen under $108 as I write this. That news doesn’t seem to have filtered down to my local gas stations that raised their prices pre-Gustav and seem to be in no hurry to reduce them!

Around the globe, most markets continued to be morose, with just a couple of exceptions, as Japan’s and Mexico’s bourses seemed to find firmer footing this week. Japan had something to cheer about on the heels of Nissan Motor’s (Nasdaq: NSANY) announcement that its US light truck sales had increased more than 32%, boosting total company revenues for the month of August up by 14%.

China’s market had the distinction of being crowned the “worst in the world” by IBD, as it has fallen 56% so far this year—almost double that of most other stock exchanges around the globe. Yet its gross domestic product growth continues strong—more than 10%—which compares pretty favorably to the US’s 3.3% in the second quarter.

And China’s major banks posted phenomenal earnings, with Citic, Bank of China, and China Construction Bank all beating estimates. But before you jump on that bandwagon, be sure to note that forecasts for the near future are not quite that rosy.

In more Asian bank news, it was reported that long-suffering Lehman Bros. (NYSE: LEH) may have suitors among banks in China, Korea and Hong Kong.

Global markets—although experiencing continuing softness in emerging regions and economic weakness across the developed world—are far from dead. In fact, even deal-making hasn’t completely collapsed, as evidenced by Coca-Cola’s (NYSE: KO) recent announcement to further expand its global reach by bidding to purchase juice maker China Huiyuan Juice Group for some $2.5 billion.

And some analysts are now calling European markets “attractive,” citing the 20% decline this year in the pan-Euro Dow Jones Stoxx Index 600, which now rests at its three-year low.

In this week’s features, Carlton Delfeld, editor of Chartwell Advisor Global ETF Report, agrees, offering a recommendation to take advantage of the big changes afoot in France.

David Fuller, editor of Fullermoney, offers an upbeat outlook for Asia, noting the positive aspects of investing in China, India, Vietnam, and Singapore.

And Roger Conrad, editor of Canadian Edge, takes an in-depth look at a Canadian income trust whose shareholders are benefiting from hefty dividend increases.

And while we are on hurricane watch this week in the States, we are tempering that seriousness and concern with a bit of fun as we watch the pomp and circumstance of the Republican National Convention.
 
Alas, when it’s all said and done, the show is vastly entertaining, as Senator John McCain’s selection of relatively unknown Alaska Governor Sarah Palin as his vice- presidential running mate has created a media frenzy at least as strong as that accompanying the Clintons’ appearance at last week’s Democratic event.

But the actual impact of a change in administration (one way or another) ultimately may not mean a whole lot to investors. For us, the key is finding those pockets around the world where—no matter which way the winds of politics blow—we can still make money.

Nancy Zambell edits Global Investing for MoneyShow.com. Her opinions are her own and not necessarily the views of InterShow or MoneyShow.com.

Related Articles on GLOBAL