Metals, (Silver and Gold) are finally trading in the green this morning after a few days of heavy selling pressure. Gold is trading at the all important support 1652 level and Silver caught a bid at the 31.75 level as investors want to own Gold rather than the Euro. Crude Oil is showing no sign of weakness and is staying above the 106 level for the time being. Their is a lot of risk premium built in Crude as speculators think a Middle-East war is inevitable.
Economic Events: UK BoE Minutes and 2012 Budget Data Bernanke will be lecturing on Monetary Policy at George Washington Univ. Existing Home Sales
Tomorrow bring us more housing data with Existing Home Sales at 9:00 AM CST and an important Oil Inventory Number at 9:30 AM CST. The important levels in the S & P 500 Futures for tomorrow will be 1391.75 and 1393 to the downside and 1408.25 and 1411 to the upside. I am bullish and always look to get LONG on dips. Have a great night guys.
ES is currently trading in a tight 14 point range. Crude Oil is down $1.76 or 1.7% at 106.25. Perhaps the “SPR (strategic Petroleum Reserve)” is priced in WTI. Also, Saudi Arabia will help with any shortages of Crude/Brent Oil. Also, Saudi Arabia reported that the ideal price for a barrel of oil should be around $100. BHP Billiton, the world’s largest miner, expressed concerns regarding the possibility of a slowdown in the demand of metals in China.
Todays Economic Events: Bernanke speaks at 11:45CST
Wednesday’s Economic Events: UK Bank Of England Minutes and 2012 Budget.
Chart Glance- TRGT is a Bio-Tech, High Speculation stock. Not alot can be said regarding TRGTs chart. NO DEMAND at this time and TRGT is currently, Tom Petty, “Free Falling.” 50 DMA ($6.52), 100 DMA ($7.76), 200 DMA ($12.94). Support 1: NA Support 2: NA
Astrazeneca and Targacepts depression drug, “TC-5214,” DID NOT PASS PHASE III. Astrazeneca invested over $1.25 Billion dollars in the depression drug “TC-5214.” Targacepts CEO, DeBethizy states, “we will announce our plans regarding the Renaissance Program at the end of May of 2012.” TRGT has a strong balance sheet, with positive cash-flow. If TRGT trades down in the low 5’s I might look to take a stab at it and buy some OTM Calls.
USD is way higher and Saudi Arabia says they have an abundance of Oil. The VIX rose once again and the term structure flattened. Finally, average trade size in ES was the highest in 6 months yesterday. Americans are paying 3.8 cents “more” for a gallon of gasoline in just “one” week the U.S. government said on Monday.
Bank of America denied it has any plans to issue stock in a secondary offering and shares rebound in the after hours. BAC is up over 20% in the last five trading sessions. Last week, the bank was named as one of the 15 financial institutions that passed the Federal Reserve’s annual stress test.
Computer software company ADBE, posted fiscal first-quarter earnings of 57 cents per share, down from 58 cents a share in the year-earlier period. ADBE Revenue rose 1.9% to $1.05 billion from $1.03 billion a year ago. However, revenue growth of 1.9% was down big-time from the 14% reported in the fourth quarter of 2011.
Apple opened higher in the pre-market at $605, was halted at $599.32, then reopened at $580 (higher then Fridays close). Apple announces plans today to initiate a $2.65 Quarterly Dividend in the fourth quarter of its fiscal 2012, which will begin on July 1st, 2012. Also, Apple announces that it plans to buy back $10 Billion shares over the next three years. Apple plans to spend over $45 Billion over the next three years
Economic Events for Tuesday, March 20th:
RBA Minutes and Italy Labor Market Reforms (Hopefully they can pass legislation before the end of the month. UK CPI (Feb): Analysts expect a rise of 3% YOY.
Chart Glance- Apples chart glance looks like a Roller Coaster Ride that’s next stop is the moon. Apple is making “higher/ highs” and “lower/ lows.” Technicals indicate that Apple is in the middle leg of up-trending to higher prices and taking out recent 52 week highs ($600.01). Smart Money says buy and check back in a year or so!
Apple announces plans today to initiate a $2.65 Quarterly Dividend in the fourth quarter of its fiscal 2012, which will begin on July 1st, 2012. Also, Apple announces that it plans to buy back $10 Billion shares over the next three years. Apple plans to spend over $45 Billion over the next three years. Apple CEO Tim Cook states, ““We have used some of our cash to make some great investments in our business through increased R&D, acquisitions, new retail store openings, strategic prepayments and capital expenditures, and building out our infrastructure. You’ll see more of all of these in the future,” In my opinion, I do not understand why Apple is buying back shares now. Apple stock is up over 45% in the last 4 months.
Monday morning, Apple will announce plans regarding their $100 billion plus in cash, balance sheet. The street is expecting a “dividend.” Is a dividend already priced in? AAPL will not be discussing current quarter numbers or any other topics regarding Apples product cycle, etc. Apple in the pre–market hit a NEW RECORD HIGH, $606. Apple authorizes a 3 year 10. Also,Apple sets quarterly dividend of $2.65 per share/will be initiated in Q4, 2012. Finally, Apple shares are halted at $599.32.
Here is a direct quote from the conference call from Joe Ficalora, the company’s CEO, “The fourth quarter was notable not only for the continued strength of our earnings and margin, but also for our increased efficiency and high volume of loan production and the continuing improvement of our asset quality. Notwithstanding the decline in market interest rates over the course of the quarter, we generated fourth quarter earnings of $117 million or $0.27 per diluted share. Our earnings provided a 1.23% return on average tangible assets and a 15.89% return on average tangible stockholders equity. The continued strength of our earnings is reflected in our solid capital position, with tangible stockholders equity representing 7.95% of total assets excluding accumulated other comprehensive loss”.
I like regional banks because many of them are lagging the moves in big banks. Now generally, you want to chase the strongest stocks in a sector which would appear to be BAC, JPM, WFC, GS and MS, but many regional banks are extremely well capitalized and offering higher yields. NYB is expected to grow EPS by roughly 4.6% for the next three years.
NYB broke $13.65 today which was a key level. It then broke out of its opening day range at $13.75 to trend upwards to $13.99 where it saw pressure. It retested VWAP before the close and then recaptured the $13.85-$13.87. Someone bought 557,000 shares on the offer at the close. This is very bullish in my opinion. Another 2,000,000 and 1,000,000 shares traded after hours. Stock traded 11M shares today which is 2x normal volume.
Gold traded lower on Friday, moving towards a third straight week of losses on the heels of a recovering, better then expected, US economy. This caused investors to put their money in other “risk-on” assets like equities,etc. ES average trade size has drifted notably lower and was its lowest in nearly a week today suggesting a decrease in institutional buying. Can this indicate that we are close to a near-term “top?” Also, investors will keep a close eye on the steepness of the VIX Yield Curve and not so much the deceiving, low, front month prices. Industrial Production Misses and capacity utilization declines for the first time since early April.Industrial production was unchanged in February after having risen 0.4 percent in January.
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