Happy Cinco de Mayo!

In celebration of the holiday, I thought it would be nice to remind investors not to forget about the opportunities in our southern neighbor. While Mexico is not a red hot emerging market like China or Brazil, there are still profits to be had there if you know where to look.

Here's why:

As Wall Street gyrates around in the wake of the Goldman Sachs (GS) fraud allegations, investors are starting to feel the old doubts and fears creep up again. After surging over 70% from the March 2009 lows, the market appears to be stalling at least in the short term.

One place low-risk investors can take refuge is low-risk dividend stocks in reliable industries – like health care giant Abbot Laboratories (ABT) with its 3.4% yield, or in energy giant Exxon Mobil (XOM) with its 2.5% yield. Those nice payouts ensure that you'll see some returns on your investment even if things stay rocky on Wall Street. And since dividend stocks added $6.4 billion to payouts in the first quarter, the cuts we saw during the recession appear to have been reversed by many stocks.

As an investor in Chinese stocks, I'm constantly bombarded by predictions of the country's coming economic bust. When a scandal at poultry company Yuhe International (YUII) brutalized this stock, people emailed me, saying that all Chinese companies are cooking the books. When a China-based ETF pegged to the S&P 500 launched, I was told that it was a clear sign that investors there knew it was safer to invest here than in their own country. The list goes on and on.

Lately, the recent pullback in several high-profile Chinese stocks, as well as a pullback in the iShares FTSE/Xinhua China 25 Index (FXI) -- the major Hong Kong market index -- has been cited as more evidence for the country's pending economic hardship. While it is true that some stocks have sold off lately after big runs higher in 2009, FXI is only down 3.8% over the past three months. That's hardly a huge giveback. And besides, America itself would be in pretty dire straits if every market slide meant that its economy was doomed.

Carlton Delfeld reveals his latest global ETF picks and warns of leveraged funds.

Q. Carlton, in your last newsletter, you commented on the low valuations of several global markets, including Ireland, Singapore, UK, and Sweden, among others. Have you since added any ETFs from these regions to your portfolios?

A. Yes, I have added iShares MSCI South Africa Index (NYSEArca: EZA), iShares MSCI Singapore Index (NYSEArca: EWS), and the iShares MSCI United Kingdom (NYSEArca: EWU). South Africa is in part a currency and commodity play. The United Kingdom is very much predicated on global financial recovery, and Singapore will likely be a core holding.

Q. Each of these regions seems to have its own stress points right now. Do you think that South Africa is particularly vulnerable to a global slowdown? Hasn't Singapore been hit hard by the bear market in China? And isn't the UK just moving into a housing decline that may rival that of the US?

A. South Africa, China and the UK are all trading at attractive valuations. They all have challenges. The South Africa Rand has been a strong currency and will come back with higher gold prices, the UK is already moving through the housing issue and its financial-oriented market has already been hammered. Lastly, Singapore is a very high-quality China play.

Think that Google, Inc. (NASDAQ: GOOG) puts the U.S. first in terms of service quality? Although most users would probably not ever notice, the U.S. actually ranks near the bottom in terms of downtime to internet users, according to a recent survey.

Among a measurement of actual downtime for one of the world's largest internet properties, Google's U.S. figure came in at number 26 on the list. That figure included 31 minutes of measured downtime for the yearlong period of September 1, 2006 to September 1, 2007. Thirty-one minutes may not seem like a lot of time, but for an internet-based company, that can be considered moderately high. For most of us who use Google, I sincerely doubt any downtime at all was seen. Did you witness any?

The study also said that Googlers in the U.S. of A. were 10 times more likely to encounter issues compared to Google users located in Brazil. For being Google's home market, apparently the search giant doesn't prioritize quality on that basis. Of course, the number of variables that can affect downtime must be virtually unlimited, with many of them outside of Google's control.

Indeed, Brazil had the best uptime for that annual period, with three short minutes of downtime. The Netherlands experienced 11 minutes of downtime, followed closely by India, Thailand and Japan. The worst? Those countries included Israel at 34 minutes of downtime, followed by Turkey, Singapore, Taiwan and Sweden. If those numbers sounds like a lot, none of the countries saw below a 99.99% uptime level at all on a global basis, according to the article. That fact in and of itself is pretty amazing, all things considered.

Although the heated battle this week between the United Autoworkers Union and General Motors Corp. (NYSE: GM) was more than enough distraction for the Detroit automaker, GM finally admitted that it make vehicles -- not health plans -- but it will make nice and compromise anyway. For a company still struggling to return to consistent profitability, it needs to get back to making vehicles.

Competitor Ford Motor Co. (NYSE: F) stated this week that the deal cut with GM may not be enough for it in terms of cost cuts. Ford is in worse financial shape than GM at this time, something very well known to UAW president Ron Gettelfinger. In fact, Gettelfinger stated that the GM deal worked on this week will be a rough template for deals with Ford and the Chrysler group. But, with Ford needing cuts that go deeper than GMs, the template may need major modifications when Ford's time rolls around.

Although reports state Gettelfinger will take Ford's current status into account when both parties sit down at the negotiating table, Ford CEO Alan Mulally will require it. Mulally says that no deal will be accepted by Ford that doesn't make the automaker fully competitive with overseas rivals. Its goal: cut labor costs in the U.S. by 30%. If we think the UAW / GM deal was intense, the feathers will really fly when Ford sits down at the lead chair soon.

Of course, David Cole, chairman of the Center for Automotive Research, said that "The last thing the UAW wants to do is jeopardize the future of Ford ... they'll get some modification that fits the situation." Ford's 2006 annual loss of $12.6 billion will require on heck of a modification to any new agreement, that's for sure.

MOST NOTEWORTHY: Netflix (NFLX), NiSource (NI), TiVo (TIVO), Williams-Sonoma (WSM) and KLA-Tencor (KLAC) were today's more noteworthy downgrades:

• Netflix (NASDAQ: NFLX) was cut to Hold from Buy at Needham to reflect the lowered subscriber guidance and their belief that things can get worse before getting better. Shares were also downgraded at Cowen, to Neutral from Outperform, and Lehman, to Equal Weight from Overweight.

• NiSource (NYSE: NI) was cut to Underweight from Equal Weight at Lehman based on the expected increases in interest expense and taxes.

• TiVo (NASDAQ: TIVO) was downgraded to Short from Sell at SMH Capital and believes the current valuation now reflects 20% penetration of the Comcast Corp (CMCSK)-owned digital sub base for the joint venture product bundle, which the firm considers aggressive. In addition, the firm believes TiVo's new pricing structure doesn't add much value.

• Matrix cut Williams-Sonoma (NYSE: WSM) to Sell from Hold on valuation and deteriorating operating results.

• Citigroup downgraded shares of KLA-Tencor (NASDAQ: KLAC) to Hold from Buy on valuation as they see risk to 2H07 estimates due to slower near-term cost savings and higher integration costs...

OTHER DOWNGRADES:

• Friedman Billings downgraded American Express (NYSE: AXP) to Market Perform from Outperform.

• Piper Jaffray cut Atheros Communications (NASDAQ: ATHR) to Market Perform from Outperform.

• Jefferies downgraded United Rentals (NYSE: URI) and GlobalSantaFe (NYSE: GSF) to Hold from Buy.

• Merrill downgraded Wyeth (NYSE: WYE) to Neutral from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

China Tech News has reported that IBM and Lehman Brothers are working in financial and technical alliance to help bring Chinese software provider Kingdee into fully global status. IBM (NYSE: IBM) has been associated with Kingdee for approximately ten years already, and an offshore business alliance between IBM and Lehman Brothers (NYSE: LEH) is focusing on helping mid-stage and maturing Chinese businesses expand their business and management capabilities. IBM helps with the operational and technical aspects while Lehman Brothers will be assisting with investment strategies and private equity direction. This cooperative financial support is being provided through what has been labeled the "China Investment Fund." What makes this particular scenario a bit more interesting is that Lehman Brothers and IBM are each purchasing just under 4% of the issued share capital interest in Kingdee.

For now the declared intent of this joint project is primarily to facilitate the growth of Kingdee, but the long-term language suggests that IBM is helping to nurture the Chinese software industry as a whole. I can't help but wonder what the implications might be for Microsoft (NASDAQ: MSFT) as the Chinese software industry continues to push into global markets with background support from IBM. At this point in time I can only draw one undeniable conclusion: This is definitely not something to be taken lightly.

The Fed chairman decided to side with global central bankers rather then direct his comments solely at the U.S. economy earlier this week, saying the central bank remains focused on inflation as "risks remain to the upside."

Ben Bernanke is in a tough spot. On the one hand, economic data suggests the US economy is slowing down, but there is scant anecdotal evidence to suggest this is actually happening. Virtually everywhere you go, the economy looks good, with most employers having trouble finding qualified employees and eateries and other social settings showing little, if any, signs of inactivity. This is despite a meaningful slowdown in the housing market.

Further, the Fed chairman has to decide if inflation is a U.S. or global problem as emerging markets make up more of the global economic pie. While economic data suggest the Fed could be close to dropping rates, very resilient emerging markets, such as China, cannot seem to get their economy to slow down.

What will the Fed do? Very hard call. Properly side with controlling global inflation. Inflation, or lack thereof, has been, for the most part, a global phenomenon. If China is unsuccessful at curbing its higher growth rate and building pricing pressures, it will hurt the economy of the entire world, not just China.

This is why the market got hit this week. Expect Bernanke to continue talking up the fight against inflation as long as emerging-market central bankers are still attempting to slow down growth. While this might cause some short-term pain, it will prove a positive for the long term, particularly for equities which like low inflation environments.

Lately, commentators have noted that U.S. long-term interest rates are on the rise. As of today, the yield on the 10-year Treasury note is hovering just below its late-January closing peak of 4.89%.

Yet this is not a purely domestic phenomenon. The same also holds true for bond markets around the world.

In each of seven selected international markets -- Europe, Switzerland, United Kingdom, Japan, Canada, Australia, and Hong Kong -- 10-year interest rates are at or near 2007 peaks. In four of them -- Europe, Switzerland, United Kingdom, and Australia -- long-term yields are not far off 12-month highs.

Amid signs that many central banks outside the U.S. are also poised to boost short-term rates in their own countries, some might say that the monetary environment is becoming less supportive for share prices.

So much for excess global liquidity?

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

MOST NOTEWORTHY: The more noteworthy downgrades today came from Calyon, which cut five companies in the oil services and equipment sector:

• Calyon is taking a more cautious stance due to valuations in the sector. The firm believes strong fundamentals are now reflected in share prices. As such, Calyon downgraded Global Industries, Ltd (NASDAQ: GLBL), Ensco International Inc (NYSE: ESV), Transocean Inc (NYSE: RIG) and Schlumberger Ltd (NYSE: SLB) to Add from Neutral and downgraded Gerber Scientific, Inc (NYSE: GRB) to Neutral from Add...

OTHER DOWNGRADES:

• Piper Jaffray cut ValueClick, Inc (NASDAQ: VCLK) to Market Perform from Outperform.

• UBS cut Lyondell Chemical Co (NYSE: LYO) and IndyMac Bancorp, Inc (NYSE: IMB) to Neutral from Buy.

• Goldman downgraded Worthington Industries, Inc (NYSE: WOR) to Sell from Neutral.

• Matrix USA cut Allergan, Inc (NYSE: AGN) to Sell from Hold and Fifth Third Bancorp (NASDAQ: FITB) was downgraded to Underperform from Market Perform at Keefe Bruyette.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Is Starbucks Corporation (Nasdaq: SBUX) becoming one of those core holdings that just about every investor should seriously consider adding to his/her portfolio?

Apparently so. For Starbucks the news, and the growth outlook, seems to just get better and better.

Starbucks has as a strategic goal a store target of 40,000 stores worldwide - up 10,000 from the previous target.

Further, the operative phrase in the above statement is the word "worldwide." Currently with about 10,200 coffee shops, Starbucks plans to enter four new markets in 2007: Brazil, Egypt, India, and Russia - which would place company operations in 40 countries. Starbucks hopes to have a coffee house in about 50 countries by 2011. Starbucks' shares closed down 6 cents Friday to $36.42.