This stock is the big winner as oil rebounds

The company's shares are the hottest thing in the stock market this week -- besides Netflix (NFLX, Tech30), of course.

Don't know much about Transocean (RIG)? It's a huge offshore drilling company that you may have heard before because it owned the rig that exploded causing the 2010 Gulf of Mexico oil spill.

Transocean stock is up a whopping 13% this week alone. That's the best performance among all S&P 500 energy stocks.

The rally for Transocean and other drilling companies in recent days is a direct result of the huge rebound for crude oil, which has surged 35% since the mid-March lows.

Just a few weeks ago some smart people on Wall Street predicted oil could tumble to just $30. Now at least some investors are betting the worst is over for oil. It's closed higher for six consecutive days, with the latest gains coming after a new report showed U.S. oil supplies didn't grow by as much as feared. The price is now over $56 a barrel.

Related: Oil just hit its highest price of 2015

Cheering oil higher: While American drivers will greet higher oil prices with sighs, the rebound is great news for most energy companies -- and their shareholders.

People who believe oil prices are going to stay hot may instinctively want to buy shares of brand name oil companies like Exxon (XOM) and Royal Dutch Shell (RDSA). However, these energy titans have very diversified business models that protected their stock prices (somewhat) from a crash in oil prices. For example, their refining operations actually benefit from less expensive crude.

They didn't go down as much as some other energy companies, so they are unlikely to see as big of a rebound.

Related: Bond king: Stop being 'cute' and buying energy stocks

Drillers make a comeback: The real beneficiaries of higher oil prices are likely to be drilling stocks like Transocean that really crumbled as oil fell over 50% since last summer. Business slowed drastically as big oil companies scrapped expensive projects that were no longer economical. After all, Transocean's deepwater rigs can cost $500,000 to rent -- each day.

That's why this group of stocks, led by Transocean and rivals Noble (NBL) and Ensco (ESV), was the worst performer in the entire S&P 500 last year as they cut dividends and abandoned share buyback programs. The damage even caused Transocean to abruptly part ways with Steven Newman, its CEO.

Transocean is one of the world's largest providers of deepwater rigs. In 2014, a judge ruled that Transocean was negligent in the Gulf of Mexico disaster that caused the death of 11 workers and the spilling of nearly 5 million barrels of oil.

Related: The 'smart money' is investing in oil now

Time to buy? If oil prices keep rallying, look for Transocean to follow it higher. While the stock surged above $18 this week, it's still a shell of its former self.

As existing Transocean shareholders know, it's still down 60% from its 52-week high of $46.12 -- the most out of any S&P 500 stock. The good news is that means it may have a lot more room to run.

Earlier this week Morgan Stanley said it's "calling the bottom" for oilfield services stocks like Transocean. These stocks have enjoyed a multi-month rally at this point in previous cycles, the firm said.

"We believe that now is a good time to build or increase a position in oil services stocks," Morgan Stanley analyst Ole Slorer wrote in a report. The firm said these stocks could soar by 30% to 40% if commodity prices improve, but they only face 10% to 15% of downside if oil retreats.

"Based on what we have seen in prior cycles, these characteristics translate into a very attractive risk reward," Slorer wrote.

Related: US could be energy independent within four years

Related: Netflix stock tops $500 for first time ever. Next stop = $900?

Related: How to invest $1,000

CNNMoney (New York) April 17, 2015: 5:50 AM ET

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Stocks: Six things to know before the open

U.S. stocks fell Thursday.

But fear not, CNNMoney brings you the six things you need to know before the opening bell rings in New York:

1. Bloomberg outage: Bloomberg terminals around the world were down this morning. A member of Bloomberg's technical support team told CNNMoney he could not estimate when the outage would be resolved.

Bloomberg has more than 300,000 terminals globally.

2. Futures flat: U.S. stock futures were mostly flat in early trading on Friday. The Dow Jones industrial average fell 30 points in the early trading. The S&P 500 slipped 0.18% and the Nasdaq edged 0.2% lower in the premarkets.

Related: Fear & Greed Index

3. Stock market movers -- Mattel, Schlumberger, Netflix: Mattel (MAT) was up as much as 8% in after hours trading following its latest quarterly earnings. Although revenue fell from a year ago and the company posted a loss, sales topped forecasts and the loss wasn't as big as expected.

Shares of Schlumberger (SLB) also rose in extended trading after the oil services company said it was laying off another 11,000 workers. The stock was edging up 1% premarket.

Netflix (NFLX, Tech30) climbed 1% premarket after showing strong subscriber growth earlier this week. Worth over $500 a share, Netflix is the best performer by far in the S&P 500 this year, with analysts expecting further growth.

4. Earnings and economics: General Electric (GE) and Honeywell (HON) are reporting ahead of the open.
The Bureau of Labor Statistics will report on the CPI at 8:30 a.m. ET.

Unemployment in U.K. fell to 5.6% in February, the lowest since 2008. Jobs are a big topic ahead of the general election next month.

Related: CNNMoney's Tech30

5. International markets overview: European markets were mainly weaker in early trading. Asian markets ended the week mixed. China's Shanghai Composite climbed 2.2%, while the Nikkei ended the session 1.17% down.

The Greek drama was once again worrying markets after German Finance Minister Wolfgang Schaeuble said he doubted a deal between Greece and its creditors could be reached next week. Greek bond yields climbed further.

6. Thursday market recap: The Dow Jones industrial average fell by 7 points, while the S&P 500 slipped 0.08% and the Nasdaq edged 0.06% lower.

Related: Have an investing question? Ask CNNMoney!

CNNMoney (London) April 17, 2015: 5:34 AM ET

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Bloomberg screens go dark worldwide

The global outage began just as the London trading day was beginning, and forced the postponement of an auction of U.K. government debt.

A member of Bloomberg's technical support team told CNNMoney the company did not yet know what had caused the outage, and could not estimate when its products would be working again.

Bloomberg spokespeople did not respond to requests for comment but the company tweeted that it was restoring service to customers and investigating the cause.

Founded by Michael Bloomberg, the company is one of the leading providers of financial information and dealing systems in the world. More than 300,000 people subscribe to its flagship Bloomberg Professional product.

It competes with companies such as Thomson Reuters (TRI), Factset (FDS), Markit (MRKT) and others, and performs a vital role in providing secure systems for traders and investors in stocks, bonds, currency and commodity markets.

Many Bloomberg users were tweeting their frustration, while others saw the outage as an excuse to put their feet up Friday.

-- Ivana Kottasova contributed to this article.

CNNMoney (London) April 17, 2015: 6:22 AM ET

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Japan now holds more U.S. debt than China

Data from the Treasury Department released Wednesday show that Japan owned $1.2244 trillion worth of U.S. government securities at the end of February, compared to $1.2237 trillion for China.

Both countries unloaded U.S. debt during the month of January, but China sold more, making Japan the top U.S. creditor for the first time since the financial crisis.

The Treasury data should be taken with a grain of salt: Transactions carried out by other nations on behalf of China and Japan aren't included, making the final tally more of an educated guess.

Related: Bubble trouble? China's stock market looks too hot

But the Japan-China switch is backed by larger trends, and changes in the way Beijing manages its foreign reserves. Treasury data show that over the past year, China's U.S. debt holdings dropped by $49.2 billion, while Japan's increased by $13.6 billion.

China had been buying Treasuries as a way to keep its currency, the yuan, pegged to the U.S. dollar. That helped lower the value of the yuan and made China's exports more competitive in foreign markets.

But in recent years, partly due to U.S. pressure and partly as an effort to curb its own inflation, China has allowed the yuan to rise in value.

Closer to home, there's another major buyer of U.S. debt: the Federal Reserve. At last count the central bank owned around $2.5 trillion worth of Treasuries, up from around $800 billion at the end of 2007.

Related: U.S. runs out of investor visas again as Chinese flood program

CNNMoney (Hong Kong) April 15, 2015: 11:32 PM ET

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Stocks: 5 things to know before the open

U.S. stock futures were flat in early trading while international markets were mixed.

Here are five things you need to know before the opening bell rings in New York:

Related: Fear & Greed Index

1. Earnings and market movers: It's a big day for the financial sector, with Citigroup (C) and Goldman Sachs (GS) reporting ahead of the open. American Express (AXP) will report after the close.

Etsy (ETSY) will start trading Thursday on the Nasdaq. It priced its initial public offering at $16 a share Wednesday, the high end of its expected range.

Watch out for Netflix (NFLX, Tech30) shares today: the stock is rallying nearly 12% premarket following a surge in after-hours trading as the firm reported it added 4.9 million members during the first quarter.

2. Economic updates: The U.S. government will post weekly jobless claims at 8:30 a.m. ET. The Census Bureau will report monthly housing starts and building permits, also at 8:30 a.m. ET.

3. Oil moves: Crude is slipping back in electronic trading to just below $56 a barrel after hitting a 2015 high on Wednesday.

OPEC releases its monthly report March Thursday, on the heels of an update from the International Energy Agency which showed the cartel is fighting hard to keep its share of the world oil market despite last year's price slump.

Related: OPEC pumps up output in fight for market share

4. Leaders gather: The G20 finance ministers and central bank governors gather in Washington ahead of meetings of the World Bank and the IMF.

Greece is also in town. Finance Minister Yanis Varoufakis will meet President Obama today ahead of crucial talks between creditors next week.

The cash-strapped country, which had its credit rating downgraded by S&P again on Wednesday, must present reform proposals to its international backers by the end of the month or risk default and exit from the euro. Germany is again talking tough: Finance Minister Wolfgang Schäuble said it was unlikely Europe would reach a deal with Athens next week, according to reports. And investor nerves are showing, with Greek bond yields rising strongly Thursday.

Related: CNNMoney's Tech30

5. International markets overview: European markets were mainly weaker in early trading. But Unilever (UL) shares got a 4.4% boost in London after first quarter sales beat expectations.

Asian markets ended the session with gains. China's Shanghai Composite pared Wednesday's losses with a 2.7% jump. Stocks in China are on fire -- up nearly 80% since November -- stoking fears that a bubble is forming.

On Wednesday the Dow Jones industrial average gained 76 points, while the S&P 500 rose 0.5% and the Nasdaq closed 0.7% higher.

Related: Have an investing question? Ask CNNMoney!

CNNMoney (London) April 16, 2015: 4:57 AM ET

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Is Britain booming, or barely coping?

With the U.K. election just weeks away, the government is boasting about the recovery. But listen to the opposition and you would think people are barely coping.

What do the facts say? GDP is growing, employment is at a record high, and consumers are the most confident they've been for 12 years. Interest rates are at record lows, and tumbling oil prices have wiped out inflation.

But the economic sweet spot is still not being felt by many people. This could be why:

A slow recovery

Conservative Chancellor George Osborne says Britain is "walking tall again," having left the recession behind. At first glance, the numbers support his statement. The U.K. economy grew by 2.8% in 2014. That's faster than any other major developed country, and double the European Union average of 1.4%.

This looks good on paper, but researchers from the Institute of Fiscal Studies say the economy is still convalescing. Its data show the recovery has been the slowest since the 1920s. And economic output per head is still 1.2% lower than it was before the global financial crisis.

Related: UK tells businesses to pay their workers more

The reason is that Britain is still much less efficient than the United States, Germany and all other G7 economies, with the exception of Japan.

So Britain is growing, but mainly thanks to consumer spending, which was the biggest source of GDP growth in 2014, the IFS said. And with real incomes stagnating, much of that shopping is going on the credit card. Consumer borrowing is at its highest level since the crisis.

"The economy is swimming in a pool wearing giant water wings. That's no time to be overly confident," said Peter Urwin, professor of economics at Westminster University.

Related: Austerity to shrink U.K. government spending to 1930s levels

Persistent debt

Despite recent strong growth, a tough austerity program, and a public sector pay freeze, Britain is still running a budget deficit of about 5% of GDP.

That is higher than most European countries -- the EU average is just over 3%. The government had promised to cut the deficit to zero by now, but years of weak growth and tax receipts made that impossible to achieve.

At the same time, people are borrowing more. Non-mortgage debt rose 9% to a record high last year, according to data from PWC (PWESF). Low interest rates are encouraging people to take on new loans.

"People are spending extra money that they do not have, because borrowing is virtually free for many of them," Urwin said.

Related: Why Europe matters to Britain

Pay & employment

The U.K. is creating jobs at a record pace, and unemployment is at its lowest level since 2008.

But labor unions say many of the new jobs are part time, insecure, and offer low pay. They claim 1.3 million people are forced to work part time because they can't find full time work. And the numbers of people employed on "zero hours" contracts -- offering no guarantee of work, and little notice of shifts -- or working for themselves is rising.

Earnings have been growing at a slower pace than prices for most of the last five years, meaning real wages have fallen since the global financial crisis began.

Stephen Machin from the London School of Economics said average real wages have dropped by as much as 10% in since 2008. Prime Minister David Cameron has called on businesses to pay more.

Austerity & inequality

Big government spending cuts since the 2010 election have either driven the recovery, or held it back, depending on who you believe.

But the austerity measures have hurt younger and poorer people more than pensioners and the rich.

Pensions and health services have been protected from spending cuts, while many welfare benefits have been slashed. The Center for Welfare Reform estimates people living in poverty bore 39% of the government cuts.

And austerity will continue for a few more years. Both main parties say they want to balance the books by 2020 -- the Conservatives primarily through spending cuts, the Labour Party through a mix of cuts and tax rises.

But the International Monetary Fund has warned the next government will have a hard time eradicating the deficit because it believes growth will be weaker than forecast.

Related: U.K. election is a scary prospect for business

CNNMoney (London) April 16, 2015: 6:26 AM ET

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GM shielded from ignition lawsuits by bankruptcy rule

The decision by Federal Bankruptcy Court Judge Robert Gerber upholds GM's so-called bankruptcy shield. GM acquired the shield as part of its bankruptcy reorganization when a new company was created in 2009, referred to in court as "New GM."

"Judge Gerber properly concluded that claims based on Old GM's conduct are barred," the automaker said in a statement.

The shield had been challenged both by some personal injury attorneys as well as lawyers suing on behalf of owners of the recalled cars to recover damages for the diminished value of the recalled cars.

The decision could prevent lawsuits that would have cost "New GM" billions of dollars.

"This ruling padlocks the courthouse doors," said Robert Hilliard, one of the attorneys suing GM. "Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM, bathing in billions may now turn its back on the dead and injured, worry free."

The decision left the possibility for some suits to proceed if the plaintiffs can prove misdeeds by the company after the 2009 bankruptcy, "so long as those plaintiffs' claims do not in any way rely on any acts or conduct by old GM."

The old and new version of the tiny part that is at the center of the GM recall.

GM (GM) shares were up about 1% in after-hours trading following the decision.

Problems with millions of cars with faulty ignition switches, most of them built before the bankruptcy, have been tied to at least 84 deaths. It is not immediately clear how many of the accidents occurred after the bankruptcy. Accidents that occurred in the years following 2009 were not protected by the shield.

GM has admitted that its employees were wrong not to order a recall of the cars about a decade before the 2014 recall.

The decision will not stop GM from paying an estimated $400 million to victims and their family members. But GM set up a compensation fund voluntarily without waiving the legal protections it acquired as part of the bankruptcy process on pre-2009 accidents.

Related: Recall victim - GM shouldn't get a tax break from settlement

Related: Barra's recall apology not enough, families say

Related: GM settles second suit with recall whistle-blower

CNNMoney (New York) April 15, 2015: 7:03 PM ET

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Bubble trouble: China's stock market looks too hot

Chinese equities are officially on fire. The Shanghai Composite has skyrocketed 78% since just before Halloween. It recently crested the 4,000 level for the first time since the financial crisis.

Yet stocks in China have achieved red-hot status just as the country's economy is going through a cooling off period. Growth slowed to the weakest pace since 2009.

In other words, exuberance for Chinese stocks isn't being backed up by fundamentals. Instead, the market is being carried higher by various forms of government stimulus and investor frenzy.

All of this raises the question: Is China in the midst of a bubble? And if it is, what should American investors do?

"Certainly a bubble exists," said Ankur Patel, chief investment officer at R-Squared Macro Management.

Rather than enjoy the ride up or try to profit from its eventual popping, Patel said the prudent move for U.S. retail investors is to stay away from the Chinese market altogether.

"The problem with any bubble is if you try to bet against it, bubbles can become even more irrational. The herd mentality can essentially run investors over," he said.

Related: China stocks are on an incredible mystery run

Equity euphoria hits China: There are growing signs of speculative fervor in China.

In recent years, people in China -- who tend to save significantly more than their Western counterparts -- sunk their excess savings into the real estate market.

Now that the bubble in housing is deflating, they are latching onto the skyrocketing stock market. Investors opened 4.8 million new stock trading accounts in March and then another million more in early April, according to the Financial Times.

"There's no question there's a lot of domestic euphoria about equities within China," said Albert Brenner, director of asset allocation strategy at People's United Wealth Management.

Several Chinese retail investors polled by CNNMoney said they trade stocks frequently -- up to several times a day -- in part to have fun. One Shanghai woman, who didn't give her full name, said she's not worried about trading expenses hurting performance because "fees tend to drop during bullish markets anyway."

Non-Chinese investors are also taking notice. Exchange-traded funds that track China -- the best way for U.S. investors to play China -- have soared. The iShares MSCI China ETF (MCHI) and SPDR S&P China ETF (GXC) are both up over 20% so far this year.

Related: China's stock market finally opens up to foreigners. Now what?

Liquidity-fueled bubble? Hoping to avoid a so-called "hard landing," China's central bank is pumping liquidity into the market by cutting rates. That's good for risky assets like stocks, but liquidity-driven moves are susceptible to bubbles.

Liquidity is also being pumped by the Hong-Kong Shanghai Stock Connect Program, which allows investors to buy Shanghai stocks through Hong Kong -- and vice versa. Not only is fresh foreign capital flowing onto Mainland China for the first time, but excess liquidity inside China is flooding into Hong Kong.

Related: Chinese investors trade way more than Americans

Goldman Sachs isn't worried: Of course, not everyone believes it's time to call China's rapid rise a bubble.

Timothy Moe, co-head of macro research in Asia at Goldman Sachs, told CNBC the market "certainly is getting frothy" amid "very frenetic retail activity."

"Is that a bubble that will crash the system? The answer is not yet," Moe said.

In other words, just because Chinese stocks look very speculative doesn't mean the party has to end today.

One possibility, Patel said, is for the bubble to end "benignly" if China's growth regains momentum, justifying current valuations. He said that looks unlikely and there's a better chance the opposite will occur.

Another possible outcome is the stock market keeps roaring ahead before imploding, like it did the last time.

"To be clear, what's underway in China is an out-and-out bubble, but there's plenty of money to be made riding bubbles up a bit," Bespoke Investment Group wrote in a note to clients. The firm said it "may be worthwhile to consider a small position" in Chinese ETFs like the SPDR S&P China ETF (GXC).

Just remember: Bubbles are notoriously difficult to time, even for sophisticated investors.

Related: This man bet $100K there's a startup bubble

Related: Investors are lining up to get into Iran

Related: How to invest $1,00

CNNMoney (New York) April 15, 2015: 10:10 PM ET

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Japan now holds more U.S. debt than China

Data from the Treasury Department released Wednesday show that Japan owned $1.2244 trillion worth of U.S. government securities at the end of February, compared to $1.2237 trillion for China.

Both countries unloaded U.S. debt during the month of January, but China sold more, making Japan the top U.S. creditor for the first time since the financial crisis.

The Treasury data should be taken with a grain of salt: Transactions carried out by other nations on behalf of China and Japan aren't included, making the final tally more of an educated guess.

Related: Bubble trouble? China's stock market looks too hot

But the Japan-China switch is backed by larger trends, and changes in the way Beijing manages its foreign reserves. Treasury data show that over the past year, China's U.S. debt holdings dropped by $49.2 billion, while Japan's increased by $13.6 billion.

China had been buying Treasuries as a way to keep its currency, the yuan, pegged to the U.S. dollar. That helped lower the value of the yuan and made China's exports more competitive in foreign markets.

But in recent years, partly due to U.S. pressure and partly as an effort to curb its own inflation, China has allowed the yuan to rise in value.

Closer to home, there's another major buyer of U.S. debt: the Federal Reserve. At last count the central bank owned around $2.5 trillion worth of Treasuries, up from around $800 billion at the end of 2007.

Related: U.S. runs out of investor visas again as Chinese flood program

CNNMoney (Hong Kong) April 15, 2015: 11:32 PM ET

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Stocks: 5 things to know before the open

U.S. stock futures are edging higher, with the S&P and Dow futures both up about 0.1%.

Here are five things you need to know before the opening bell rings in New York:

Related: Fear & Greed Index

1. China slows: The world's second largest economy grew at its slowest pace in six years, intensifying pressure on the government to boost stimulus measures. China's GDP expanded by 7% in the first three months of 2015. That was in line with expectations but down from 7.3% in the fourth quarter of 2014.

2. Telecoms and tech: Nokia (NOK) confirmed it is buying Alcatel-Lucent (ALALF) in a €15.6 billion ($16.6 billion) deal that will create a telecoms equipment giant. Nokia shares gained 1.5%, while Alcatel's stock sank nearly 12% after jumping 16% Tuesday on news of the takeover talks.

Google (GOOG) is another tech stock to watch today. Media reports suggest European regulators are preparing to file formal charges after a long running antitrust investigation over concerns the search giant has too much market power.

Related: Nokia is buying Alcatel-Lucent

3. ECB meeting: The European Central Bank is expected leave interest rates at ultra-low levels when it delivers a policy update later Wednesday. Investors will be looking for comments from president Mario Draghi on the outlook for its massive bond buying program launched last month in a bid to boost the economy.

They'll also pay close attention to Draghi's remarks on the state of talks with Greece over its bailout program. Greece needs to reach a deal on economic reforms with its European creditors and the IMF by the end of April or face default on its massive debt.

4. Earnings and economics: Bank of America (BAC), PNC (PNC) and Delta Airlines (DAL) will report ahead of the open. Netflix (NFLX, Tech30) delivers its results after the close.

On the economic front, the NAHB/Wells Fargo Housing Market Index will be updated at 10 a.m. ET. The Federal Reserve will publish its Beige Book report on the economy at 2 p.m. ET.

Related: CNNMoney's Tech30

5. International markets overview: European markets were rising in early trading. Burberry (BBRYF)was a notable mover, with shares up 2% in London trading, after the luxury goods maker reported a rise in second half sales.

Most Asian markets finished with modest losses, though China's Shanghai Composite dropped 1.2% on the fall in GDP.

On Tuesday the Dow Jones industrial average gained 60 points, while the S&P 500 rose 0.2% and the Nasdaq slid 0.22%.

Related: Have an investing question? Ask CNNMoney!

CNNMoney (London) April 15, 2015: 6:36 AM ET

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