BNN Interview 9.4.2012
Category: Blog
Halftime Report 9.4.2012
This index printed 49.6 below the important 50; which is significant for it represents expansionary economic conditions. CAT’s dramatic move could also be attributed to the construction spending data that came out today too. This economic indicator printed a -0.9% month over month decline. The broader XLI industrial etf is weaker by 1.4%; top holdings include GE (12%), UPS (5.5%), and UTX (5.24%) among others.
On the positive side BIDU is up about 2.8% today; however the search giant had a rough August…for it was down nearly 9% as sellers stepped in. BIDU, the largest Chinese search provider by revenue, is currently above the intraday high of 8/30/12 and may be looking to retrace some of the August 29th sell-off.
NFLX dropped like a rock in the first 15 minutes of the trading day, but has since rallied back to down 7% on the day. News of AMZN and Epix getting together for a streaming deal is the reason behind today’s fall.
Earnings tonight include FRAN, GWRE, AVAV, FNSR, and TEA. Earnings before the open tomorrow include DG, HRB, PAY, NAV, and MW.
mark@keeneonthemarket.com
Bloomberg Interview 8.31.2012
First Business Interview 9.4.2012
Morning Rage 9.4.2012
Facebook Inc. (FB | 18.06 [ -5.40%]) is once again at a new low since the IPO in late May. FB is now more than seven points below its fifty day moving average. FB had a high in August that jumped over $22 but has been below $20 for most of the second half of the month. In pre-market trading today, FB dropped another half of a percentage point to 17.97. Where is the bottom? Amazon.com Inc. (AMZN | 248.72 [+0.18%]) sneaks higher overnight, trading about 120 thousand shares and edging higher $0.45.
A market moving report, the ISM manufacturing Index, will be released today at 10:00 AM EST. The ISM surveys 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. Readings above 50 percent indicate expanding, while below indicates contracting. Fed surveys have some southern cities improving while some New England cities continuing to be negative in the index, leaving the consensus before announcement below 50.
Market Recap 8.31.2012
Metals and energy rallied on Bernanke’s announcement that though no action will be taken now, the Fed will be ready to act should economic conditions worsen. His comments are reminiscent of remarks he made in 2010 from Jackson Hole where he strongly hinted at the possibility of QE2. Crude moved up $1.73 closing at $96.35. Natural gas rallied nearly 2% closing at $2.801. Gold surged higher closing up $36.60 closing at 1691.40. Silver moved up 4.18% closing at 31.72.
Volatility was down today with the VIX falling a little over two percent closing at 17.47.
The story of the day was the Bernanke speech. Although he made no explicit statement about what action they would take if the economy deteriorates, the consensus is that it will almost certainly be another round of asset purchasing. Markets rallied after the implementation of the first two rounds of easing but markets are concerned over the effectiveness of further easing. Analysts expect that there the likelihood of easing is now very high and that we won’t hear another announcement of significance until around the election.
James Ramelli University of Illinois graduate in finance Email: james@keeneonthemarket.com, Follow @Jim_KOTM
Trade of the Day (WMT) 8.31.2012
UPDATE 9.21.2012 I feel like I make money daily in this trade as this Put Spread is now worth $.68. I continue to leave this trade on.
Chris Cruises the Globe 8.31.2012
The Nikkei remained down again today losing 1.6% due to pressures from a slowing Chinese economy and doubt on US stimulus, a very similar day to yesterday. Sharp Corp sank 12.8%, they seem to have very few small days as of late, due to uncertainty over their deal with Hon Hai. Komatsu Construction and Hitachi Construction both shed again today 2.2 and 2.6% respectively. The two have fallen in 9 of the last 10 sessions. Nippon Steel and Sumitomo Metals fell 5.6 and 5.1% respectively. The Iron and Steel and mining sector were not surprisingly the biggest losers today down 4.1 and 2.3%.
Hong Kong slipped 0.4% today, 1.6% this month, its first monthly loss of three, as China closed today at level not seen since early 2009. Citic Pacific lost 7.1% with Iron hitting its lowest level in 3 years. Sany Heavy Industries lost 4% due to missed forecasts. The top performing stock this month was Esprit rising 30% during August as it rebounded from a year low on July 25. Sands China took second adding 20% for the month. The slacker of the month, of many, was Li & Fung, losing 18%, its worst monthly performance since October 2008.
Europe snapped 3 days of losses with the FTSE currently up 0.3% due to Spanish and Italian Rallies. The Spanish IBEX is up 0.8% and the Italian MIB is up 0.9% as the ECB signals it plans to buy bonds from the troubled countries to help lower borrowing costs. Spanish lender BBVA is up 1% so far and their peer BancoPopolare is at a gain of 0.9%. Around Europe the French CAC is up 0.6% and the DAX is up 0.4%
European unemployment remained at a record high of 11.3% for July rising by 88,000.
Time Warner’s HBO and Netflix are set to battle it out in Sweden, Denmark, Norway and Finland as they both are set to release their streaming services in the countries, as of now HBO plans on its release in October, while Netflix is uncertain however before 2012 close.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
First Business Interview 8.31.2012
Morning Rage 8.31.2012
Dow futures have been volatile for the past 24 hours. Yesterday, before opening, the Dow saw a 42 point dip to 13042 and followed the same trend after open, breaking below the 13,000 mark for a two week low. The losses followed reports of stagnant jobless claims in the U.S. and Germany.
Crude Oil futures (95.21 [+0.5]) up about one half of a point overnight, while Gold futures (1661.80 [+3.8]) gained about four points.
OmniVision Technologies (OVTI | 17.33 [+8.93%]) traded 1.4 million shares overnight, gaining a point and a half. Earnings were weak but beat expectations. OVTI relies on the implementation of cameras in new technology, for their image recognition chips. OVTI supplies it’s chips to Apple for iPhones and iPads.
Splunk Inc. (SPLK | 35.25 [+4.75]) jumped 15.57% last night reaching a prices it last hit at the end of May. Splunk Inc.’s software collects indexes data with heterogeneous formats and enables users to analyze the data real time. The source of the gain is an announcement by SPLK that fiscal year 2012 revenue estimates are being raised as third quarter revenues were $45-$47 million.
Alex Kalish has a masters in economics from Suffolk University.