• Shareholders of The Bear Stearns Cos. Inc. (BSC) approved the government-assistant $2.3 billion acquisition by JPMorgan Chase & Co. (JPM), Bloomberg reported. The all-stock deal is expected to close today (Friday), though shareholders who sought more than the buyout’s price of $10-a-share may file suit.

• Shares of Sears Holdings Corp. (SHLD) – owner of Sears and K-Mart department stores – dropped 3.6% yesterday (Thursday) as the company posted a net loss of $56 million, or 43 cents a share, for the quarter ended May 3. “Given that we do not expect any significant near-term improvement in the overall retail environment, we believe that our sales and gross margin for the balance of fiscal 2008 will continue to be pressured,” the company said in a statement.

• Meanwhile, the same economic slump that’s crippling Sears has benefited warehouse retailer Costco Wholesale Corp. (COST), which posted a estimate-beating profit gain of 32% for its fiscal third quarter, Reuters reported. Net income was $295.1 million, or 67 cents a share, as shoppers took advantage of its members-only discounts on clothes, gasoline, food and big-ticket items such as televisions and furniture.

• Taiwan’s economy grew an estimate-beating 6.06% for the first quarter, as exports grew more than expected and consumer spending continued its strength. Bloomberg reported that Taiwan joins Japan, Hong Kong and Malaysia in having reported GDP growth that exceeded expectations.

• General Motors Corp. (GM) announced yesterday (Thursday) that 19,000 workers accepted voluntary buyouts, MarketWatch reported, as the struggling automaker looks to cut costs. The departing employees represent 24% of GM’s Auto Workers Union-represented staff.

Source: Global Investing Roundups Friday, May 30th, 2008

Clearly, we were correct. Although gasoline prices have hit the $4 market in many places, this is hardly the peak. Even though gas prices rose for 14 straight days – a streak 6that ended last week – oil prices have continued their surge, as well, meaning prices at the pump still haven’t caught up with oil prices.

Here’s the question many are asking now: Will Memorial Day represent the peak in gas prices (not very likely)? Or will July 4th now become the new target date for those energy prognosticators?

With investors and traders alike returning from the long holiday weekend, oil-and-gas prices will remain high on their radar screens. For now, those “low supply/high demand” naysayers seem to be winning out over the “weak dollar/speculation” conspirators and gasoline prices in excess of $4.00 a gallon are now a fait accompli.

Far in excess, in fact. Money Morning Investment Director Keith Fitz-Gerald, a longtime energy bull who first predicted triple-digit oil prices back in 2002 (a correct projection, as we know), is now predicting that oil prices will reach $225 a barrel within a just few short years.

New earnings releases this week will reveal how both discounters and high-end retailers are being impacted by both the sluggish economy and rising gas prices. Costco Wholesale Corp. (COST), Sears Holdings Corp. (SHLD) and Tiffany & Co. (TIF) all report, though investors increasingly seem to be welcoming such profit news with a collective yawn these days. Consumer confidence and personal income/spending give investors a more accurate view of the mindset of the consumer, who, after all, accounts for as much as 70% of the U.S. economy’s gross domestic product (GDP). Investors also get a reminder of the weak first-quarter activity, with a revised the revised release of GDP (originally reported as +0.6%); since many analysts believe a buildup in inventories pushed the number up above where it should have been, the revised statistic could be much lower – meaning that renewed talks of a U.S. recession are sure to follow.

The Federal Reserve Bank of New York will host a conference at the Colombia Business School with New York Fed President Timothy F. Geithner and Donald L. Kohn, the vice chairman of the Fed Board of Governors, pontificating on money market issues (as well as other timely topic). Finally, with U.S. Sen. Barack Obama very close to wrapping up the Democratic presidential nomination, his policies on taxes, the economy, entitlements, drilling, globalization, and other key issues will dissected much more now than ever before in the past.

Market Matters

Memorial Day 2008 could not get here soon enough for investors (or at least for the declining numbers of consumers who still could afford to take advantage of this long holiday weekend).

After a week of obsessing over gas prices, they can analyze how those (pessimistic) travel prognostications actually panned out. For 16 straight days, AAA reported record prices at the pumps with the recent average of $3.875/gallon getting dangerously close to the dreaded $4 per gallon mark (as we noted, that psychologically important barrier has already been eclipsed, in many places). AAA even predicted that Americans will travel less this Memorial Day than they did last year, the first such decline since 2002. A Deloitte & Touche LLP survey projected that 23% of folks have changed their plans because of the rising prices, with 12% of respondents canceling their vacations, altogether. While some analysts targeted Memorial Day as the date for gas prices to peak, others are now looking at 4th of July, Labor Day, and beyond.

In reality, the jury is still out for the energy sector altogether. In one group, analysts say that crude prices (which actually punched through the $135 a barrel level this week) still have a ways to go. They claim that supply will not keep up with the summer demand and point to the recent inventory levels, which have unexpectedly fallen of late. Demand in such developing nations as China continues to rise, and the devastating earthquake has only made matters worse. Additionally, some believe that the International Energy Agency is preparing a very pessimistic report on global supply/demand issues as it conducts a thorough review of the world’s largest oil fields.

On the other hand, another group of analysts believe the declining dollar and sheer speculative pressures have more to do escalating crude prices than do actual supply concerns. They scoff at any real rationale for prices rising $4 in one day, $9 in one week, and $16 in one month. But while some feel that the elevated prices are not economically justifiable, they cannot predict with any accuracy when this “speculative mania” will end.

According to one, “it’s a fool’s errand to try and figure out when it’s going to be over. [After all], Internet stocks took a year and a half to explode.”

Some oil-industry executives even believe that the politicians are to blame and are pushing for Congress to lift the “tree-hugger” ban on domestic drilling in certain environmental regions – instead of begging “friends” in Saudi Arabia to increase production. Of course, that’s more than a bit self-serving on the part of the oil companies.

Retailers highlighted the corporate news last week. Home Depot Inc. (HD) reported a 66% decline in income, while Target Corp. (TGT) announced weaker sales, as well. On the other hand, BJ’s Wholesale Club Inc. (BJ) reaped the benefits of shoppers traveling the discount route, and surprised investors with much-higher-than-expected profits. Hewlett-Packard Co. (HPQ) recognized strong overseas sales, while U.S. automaker Ford Motor Co. (F) warned that its future looks bleak as drivers shy away from the gas-guzzling sport-utility vehicles and perennially popular Ford F-150 pickup trucks that have comprised a major slice of its business in favor of more-economical cars and hybrids that are a lesser part of its business mix. Ford’s shares skidded 4.1% Friday after the company backed off its oft-repeated objective of returning to profitability in 2009.