Morning Rage 6.12.2012

Europe, surprisingly, is currently trading up with the FTSEurofirst rising a cautious .5%. Food & beverage
and the telecom industries are propelling the area .8 and 1.1% respectively.

Greek shares are down 1.6% as the financial world braces for the upcoming wildcard that is the Greek
elections.

Michael Kors has jumped in pre-trade, after beating its Q4 EPS, up over 6%.

One day after ditching Google maps, Apple signs a global mapping deal with TomTom, the terms were
undisclosed.

Crude is down today currently under $83, as are natural gas and gold, silver is staying afloat currently at
a plus .5%.

The NFIB Small business index jumped 2 points in April to 94.5, the highest reading in a year, and holds
in May at a 94.4. Job creating plans and job openings were both up as were capital spending plans.

Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to [email protected]

Doherty at the Close 6.11.2012

Across the pond, the Stoxx Europe slipped less than -0.1% after seeing earlier gains of as much as 1.9%. Spain’s IBEX-35 stock index dropped 0.5% after surging as much as 5.9%. Asian markets gained after the Spain news and also benefited from Chinese economic data that exceeded some expectations. Japan’s Nikkei Stock Average rose 2% and China’s Shanghai Composite gained 1.1%.

In corporate news, Apple’s (AAPL) WWDC went off as expected and if you browse to our article from Friday, exactly as how we predicted. Apple’s shares dropped -1.6% and continue to drop in aftermarket trading after they announced their new product lines. Centene (CNC) tumbled -22% as the Medicaid insurer lowered its 2012 earnings outlook. Finally, Forest Laboratories (FRX) eased -3.5% after lowering its current-year earnings forecast, saying it was hit harder than expected after its depression treatment Lexapro lost patent protection in March.

Energy Solutions (ES) slumped -55%. The provider of nuclear-power services such as plant decommissioning lowered its outlook, citing a slowdown in government and commercial businesses.

Thomas Doherty is a Villanova University student majoring in Finance and Economics. Questions and comments at [email protected]

Trade of the Day (FXE) 6.11.2012

Unprofitable:  I lose money on this trade if FXE closes above $125.25 June 15, 2012.  The most I can lose on this trade is the amount the Spread can be worth $1 minus the price I sold it for $.25 for a total of $.75.

Reason I Like This Trade:  I like to sell premium on the weekly options and I will sell the Euro and FXE on any rally.  The best part of this trade that I do not lose money until this Stock .8% to the upside.  So, I can make money on the trade, if the stock is flat, down, or even higher. 

UPDATE 6.13.2012  The FXE is rallying above $125, but I still think it is a sale on any rally.  This Spread is currently only worth $.45, but if it expired right now it would only be worth $.30.  I will leave this trade on until Friday.

UPDATE 6.27.2012  This Spread expired worth $.60 and I took this trade off and moving on to the next trade.

Read more about total by www.keeneonthemarket.com

Halftime Report 6.11.2012

Overnight and into the morning the Euro hovered around the $1.2540 level and is currently trading at $1.2497.

Crude is down over $0.75 cents on the day and trading at $83.34, -0.9%, on slower growth expectations in the U.S.A. and China, as well as gains in the EUR/USD and lower stocks. Gold futures were relatively unchanged on the day, trading at $1591.10, down 30 cents.

Major US stock indices are down on the day. The Dow Jones Industrial Average futures are trading at $1,2431, down 72 points (-.58%), the S & P 500 futures are trading at 1314.75, down 7.25 points (-.41%), and the NASDAQ 100 futures were trading at 2546.50, down 10.5 points (-.68%).

Diamond Foods Inc. (DMND) is trading at $18.67, down $1.49 (-7.39%) after the snack maker was not able to meet today’s earning’s deadline. Volkswagen AG (VLKAY) is trading at $29.79, up 32 cents (1.09%) and is considering taking a stake in Navistar International Group (NAV), a commercial truck and engine maker.

ZaZa Energy Group was a big mover this morning, trading at $4.25, up $1.00 (30.77%) after ending its’ partnership with Hess Corp. (HES) to explore shale formations in Texas and France.

Apple is up on the day at $587.09, up 43% year-to-date on the positive outlook that they will announce new products the annual Worldwide Development Conference. Updated versions of the iPhone, Apple TV, iPads and MacBooks are expected.

Greece Elections and the Euro

While no party is expected to gain an absolute majority in Greece, coalition governments take their place and have a significant effect on legislature and country leadership. The leader of the party with a relative majority in Greece is appointed as Prime Minister, regardless of district voting. Essentially, a vote a member of a party in your district is the equivalent of a vote for the leader of the party for Prime Minister. In turn, the President of Greece is elected by members of Parliament every five years. The next Presidential election is scheduled for 2015.

Per Greek law, opinion polls on the election cannot be released within 14 days of an election, so the last available data is from Friday, June 1 and could be slightly outdated. Despite the restrictions on polls, with an expected 22.7% of the vote and 121 seats in Parliament, the New Democracy party is expected to lead a relative majority. The New Democracy party has backed the country’s international bailout and would be a significant force in Greek’s economic future. In contrast to the New Democracy Party, second place goes to The Coalition of the Radical Left with 16.78% of the vote for 69 seats. The Coalition of the Radical Left opposes the international bailout and advocates unilaterally canceling the austerity measures demanded for a bailout, with an agenda of re-negotiating the terms of the rescue. To put the austerity measures into perspective, the cuts required for 240 billion euros, or $306 billion, of aid have driven Greece into the worst recession since World War II. Finally, the bronze medal goes to the Panhellinic Socialist Movement with 13.18% of the vote for 35 seats. Overall, eight parties are expected to gain seats in the election with no party gaining an absolute majority.

In a nutshell, the Greek elections are a referendum on their place in the euro. If Greece stays in the euro, the US economy could stabilize in the coming months and sustain Obama’s concept of the US economy slowing improving. However, if Greece leaves the euro, the buzz around the Spanish bank bailout could lead to fears of another global crisis.

As no party will gain a complete majority in Parliament, a coalition government will be dependent on the willingness of parties to cooperate and should be led by the New Democracy party. Once the new Parliament takes effect, their first moves must be to return Greece to business as usual and focus on getting their economy back in line.

Thomas Doherty is an undergraduate at Villanova University majoring in Finance and Economics.

Movers and Shakers (CNC) 6.11.2012

Centene Corp. is an operator in two major markets: Medicare Managed Care and Specialty Services. Their stock plunged when they forecasted a loss led by unexpected rising costs and claims in May, as well as possible additional write-downs in Kentucky, Texas, and their Celtic branches. A week ago, Molina Healthcare (MOH), one of Centene’s largest competitors, withdrew its’ earnings report due to high margin pressure for it’s Texas division, foreshadowing CNC’s outlook.

CNC’s 1202 earnings outlook fell from $1.45 to $1.65 a share, down from its original outlook of $2.64 to $2.84 a share. CNC has a market capitalization of $1.83 billion and a P/E ratio of 16.81. Although Centene’s current outlook is dimmed by its’ Kentucky, Texas and Celtic divisions, it is confident that will return to profitability by the end of the year.

David Cornes holds a degree in Economics from the University of Montana.


Morning Rage 6.11.2012

The Nikkei gained 2% sparked by the news. Among gainers were Sharp adding 8.2%, recently
inconsistent Canon adding 3.5, TDK with 4.8 and Mazda up 3%.

The Hang Seng added 2.5% with every stock in the index gaining except Want Want China Holdings who
lost .75%.

All indexes in Europe are currently up, hitting 4 week highs, with the FTSEurofirst 300 up 1.4%. Spanish
banks, the target of the bailout, all rose with Banco Santander adding 3.9%, Bankia adding 8, UniCredit
up 1.5 and Credit Agricole putting up 3.7%.

In commodities crude is up while gold and silver are pretty flat and natural gas down around 1%.

Apple may be a stock to watch for the week with the Apple conference kicking off today where they will
unveil the next iOS operating system for the iPad and iPhone and updates for the MacBooks.

Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to [email protected]