Looking at stronger sections of the economy, it's time to start seriously thinking about Christmas and Hanukah and the joys of the gift-giving season. There should be zero doubt that Apple (AAPL) products will be at the top of virtually everyone's list, including kids, teens, twenty-somethings and even grown-ups. Analysts' channel checks show that the recent iPod refresh and iPhone price cut has invigorated sales both at Apple stores and at partners such as Best Buy (BBY). What's more important, though, is that Mac sales are off the charts. We know that not just from Apple figures but also by looking at its partners. Hard drive makers Seagate (STX) and Western Digital (WDC) have both lifted their forecast for the September quarter. You should also know that Best Buy has quietly become a Mac reseller in recent months and the new aluminum-cased iMacs are selling extremely well.

3M (MMM) looks promising, and it's not just because my kids appear to have cornered the market on Post-It notes and Scotch tape. Research shows that 3M has outperformed the S&P 500 Index when investors are risk averse, which is a condition that we may see reappear over the next few months. According to research by UBS analysts, institutional investors collectively consider 3M a "safer" industrial company to own during turbulent times for the broad economy.

You may know of 3M primarily for its consumer products, but it also has a large display and graphics business, as well as substantial electronic and communications industry exposure. As inventories have shrunk dramatically in all of those areas this year, 3M is in a good position to keep up its earnings growth in the low double digits, especially since more than 65% of its income comes from overseas markets, where it is helped by the lower dollar.

Right now, 3M is pretty cheap, having underperformed the S&P 500 for the past 40 months, posting just a 1% gain in 2006 and declines of 3% and 6% in 2004 and 2005. The shares are up almost 20% this year, but it has a lot of ground to make up. If its valuation gets back to historic norms over the next 12 months, I think 3M will be in business.

Honeywell International (HON) is one of those quiet conglomerates that doesn't get a ton of respect, or calls much attention to itself. But year in and year out, the company creates an amazing amount of value throughout the entire food chain of industry -- its four main segments include: Aerospace, Automation and Control Solutions, Specialty Materials and Transportation Systems. Through these businesses, Honeywell creates innovative control technologies for commercial and residential buildings; new parts for automobiles; avionics and frames for commercial jets; cooling systems for power generation plants; and proprietary chemicals, fibers and plastics.

Based in Phoenix, Arizona, Honeywell had sales of $31.4 billion in 2006, and it currently employs 120,000 people in more than 100 countries at its manufacturing and service centers. You may have seen its brand name on the thermostat in your home or office, as those products are what Honeywell is most easily recognized for. But what you probably didn't realize is that it has a profound influence on the aerospace and space industry as well, providing technology, engines and service solutions for aircraft.

The most important recent aviation business at Honeywell was announced last month: The company won a gigantic $16 billion contract from Airbus to provide the major mechanical systems for the new long-range, wide-body A350 aircraft. That money will come over the next 20 years, with first deliveries expected in 2013. Honeywell will design and build the auxiliary power unit for the A350, as well as cabin heating and cooling and pressurization. Also, analysts believe that Airbus will dole out the plane's avionics and cockpit contracts by yearend, and Honeywell is among the candidates for that plum assignment as well. All in all, the company so far is expecting to have at least $1.4 million worth of content on board each A350. Since there are firm orders for 254 planes so far, this is definitely a good chunk of its business.

The outlook for Honeywell is sweet -- the company has grown earnings at a remarkable 15%-plus annually over the past five years. And as Honeywell shares are currently performing well, especially in comparison with other stocks on the Dow Jones Industrials, they are expected to fly much higher in the coming months.

Even though it is hard to believe, the migration of individuals from farms to cities is still new and important, and it's happening in many countries, as people trade in their plows for factory coveralls and business suits. At the same time, people are traveling between cities more than ever before, so more infrastructure is being created to meet both the needs of new businessmen and women and travelers.

This is exactly what's happening in China -- Domestic business travel demand to Chinese cities is growing rapidly, but domestic tourism now actually amounts to 70% of all tourism revenues generated in the country, according to analysts. One think tank recently reported that the tourism industry is growing at 10.4% per year and will amount to 8% of China's national GDP by 2017, compared with 5.4% today.

Naturally, these people are not staying in four-star hotels. Or even three-star hotels. They are staying at budget hotels owned by chains have risen to the challenge with awesome service and facilities. Analysts say that 90% of Chinese travelers stay at budget inns where they can find standardized rooms, comfy beds, great locations near business centers, free Internet access, hair dryers and ironing boards for the equivalent of $22 per night. Imagine the Chinese roadsides dotted with the equivalent of brand-new Super 8, Motel 6 and Best Western motels, and you'll get the picture.

Well, that's not exactly how it will look because those are not the main brands of hotel chains in China. The leading brand for inexpensive digs on the road is Home Inns and Hotels Management (HMIN), which listed its shares on the NASDAQ about a year ago and now sports a $1.2 billion market cap. It reported $95 million in revenues in the past 12 months, and $5.4 million in income.

Deutsche Bank analysts report that HMIN is enjoying "exceptionally strong pricing power" in virtually all of its markets because travelers don't seem to mind paying a little bit more for its high-quality rooms, especially in second-tier cities. And the nice thing about an investment in HMIN today is that it has more than just a rise in domestic business travel and vacationers on the horizon. It also has the Olympic Games in August next year, which are hosted in Beijing but will spur traveling to many other nearby cities as well.

The hotel chain has plenty of competition, as analysts report that the number of budget hotels has grown from fewer than 100 in 2003 to around 1,300 this year. Yet, as you can imagine, that is hardly excess supply in a country the size of China. The competition is heating up, but as a leader in the budget hotel business and huge growth plans in the works, I think that HMIN should come out on top as Chinese tourism increases and the Olympic Games near. I expect HMIN to report as much as 13 cents per share in earnings when it reports third-quarter results in November, and my estimate for 2008 and 2009 is 68 cents and $1.08, respectively.

The government recently released some new details on state and local employment in September, and it turns out that the employment picture is not quite as rosy as it looked earlier this month. Slightly less than a third of states lost jobs, while the 23 that gained jobs were very muted. As an example, Wyoming saw a 0.7% increase and West Virginia saw a 0.4% increase, both coal mining related. According to analysis by Philippa Dunne, 18 states went from positive to negative job growth.

One of the big issues with jobs lately is that high-wage jobs are being replaced by low-wage jobs. As an example, mortgage brokers in places like Phoenix, Arizona, and Costa Mesa, California, have exited that formerly high-paying line of work and instead moved on to service jobs in hotels, transportation and fast food. California alone is showing a loss of 11,000 financial jobs and many more in construction. In the manufacturing states, the tempo of losses are actually a bit worse, with large year-over-year losses in Arkansas, Colorado, Georgia, Idaho, Kentucky, Michigan and elsewhere. Once again, virtually the only states with rising employment are involved with mining, such as Montana, Nevada and South Dakota. It's tough to see this happen around the holidays, but the cycle is merciless in that way.

Dunne, who knows more about employment trends than anyone in the country, called it a "discouraging" report that "further erodes any hope for hidden strength in the U.S. job market." I would agree, and it provides more grist for my view of trouble going into November.