Another day, another slow day as we wait for the Jobs Report tomorrow. This is now the 8th straight day were the intraday movement in the S and P 500 Futures were small and tight. What was a mover and shaker today? AAPL surging past the $600 level and traded to almost $613. The biggest dropper today, the Euro getting crushed and I covered part of my Short position, but I still remain short it.
I think the market is very overbought, but it can continue to climb higher longer than I can stay in business, so if I am trading counter trend I want to make sure that I get a great risk vs reward set-up. Have a great night and see everyone tomorrow.
The Nexus 7 is supposed to be the iPad’s biggest competition but in my mind nothing can even come close to the iPad. The iPad has retina display, 4G capability and top of the line applications. And while the Nexus 7 does use Jelly Bean, which is Google’s latest version of Android, it does not have 3G or a rear camera. As for the Kindle Fire, the tablet cannot create art, music or edit photos and spreadsheets as the iPad can. Putting both tablets in a separate market from the iPad.
But that’s exactly what Google wanted. To grab the market share that cannot afford Apple’s $499 price tag on the iPad. So lets compare the Nexus 7 and Kindle Fire. For starters the Kindle Fire only comes in the 8GB form, there is no 16GB option like there is with the Nexus 7. The Nexus 7 also boasts a front camera and a higher resolution screen than the Fire. And thanks to being a Google product the Nexus also has a greater app selection and storage.
Between the apps, front camera and storage ability the Kindle Fire unfortunately is put into a distant last choice for the tablet market. The Fire is a good choice for those who had the original Kindle, like the format and don’t have a lot of data. But customers who want the full package and are not loyal to Kindle than the Nexus is by far the best choice if the iPad is not in the price range. If the iPod is in the price range than by all means join the millions of other Apple users and learn for yourself why the brand has created such a cult following.
S&P 500 futures were trading at 136.75 down 3.25 points, NASDAQ futures were up 5.75 points at 2647.25, and Dow Jones Industrial Average futures fell 9 points and trading at 12858.00.
Europe’s rate-cut caused the EUR/USD pair to fall 221 pipps overnight to $1.2401.
Gold futures fell $13.80 to $1608.00 and WTI crude futures were down 72 cents at $86.94.
Costco Wholesale (COST) reported a same-store sales increase of 3%, missing analysts’ estimates. This morning Costco shares fell .4%.
Buckle (BKE), a clothing retailer fell 3.23% after reporting a 2.5% decline in monthly same-store sales.
AMD (AMD) fell 1.66%, Intel Corp. (INTC) fell .71%, and Cisco Systems (CSCO) fell .87% on low PC demand.
Netflix Inc. (NFLX) jumped 13.69% after they have gained more viewers than any cable network.
David Cornes holds a degree in economics from the University of Montana.
Last night and this morning, the Euro fell against the dollar after the ECB cut its rates to new lows, along with strong U.S. economic data. This decline in the value of the Euro relative to the dollar comes after a rollercoaster ride over the past few weeks, starting with a decline in EUR/USD after Greek elections indicated that Greeks would stay in the Euro-Zone, followed sharp increase in value after European leaders hinted at agreements on how to recapitalize endangered Euro banks. In my opinion the Euro is headed down to at least $1.15 by the end of the summer after markets realize that Europe is not as healthy as people think.
EUR/USD futures were trading at $1.2380 this morning, down 174 pipps (-1.39%).
David Cornes holds a degree in economics from the University of Montana.
The Hang Seng managed to rally in the afternoon to close up although volumes were extremely low, the rally was mainly due to investors covering their shorts. Among gainers were utilities, telecoms and Hong Kong large-caps. China sportswear brand Li Ning jumped 7.3% today after hitting a 7 year low last Friday. European shares are playing it cautious today ahead of the ECB meeting this afternoon where there is expected to be a rate cut of 25 basis points. Let’s hope the expectations are right or the market will for sure be down tomorrow. The FTSE is up .3% however is also very light on volume today. Volkswagen is a standout today adding 6.4% on plans to take full control of Porsche in less than one month.
The MBA Applications were released today showing the purchase index up 1%, however the refinance applications remained down 8% similar to last week. GM reports is automobile sales rose 10.1% in China, however the announcement was ill-timed as it also had to recall 2000 Captiva Sport crossovers due to braking issues.
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
The private equity division of J.P. Morgan Chase (JPM) agreed to buy M*Modal, a voice recognition company for $820 million. JPM was trading up .19% at $36.06, and M*Modal rose 8.28% to $14.00.
As we move into Independence day, markets are keeping a lookout for Friday’s nonfarm payrolls data and the possibility of monetary easing after a wave of poor economic data.
Auto stocks rallied ahead of Total vehicle sales, due to be released at 3:00 PM CDT. Analysts estimate sales of 13.9 million, a decrease from the first third of the year with sales in the $14-15 million range. Ford Motor Co. (F) rose 3.46% and General Motors Co. (GM) rallied 6.39% in anticipation of the number.
Grain prices continued to rise with corn hitting a 10-month high after concerns about global drought conditions. Yesterday the FDA downgraded the outlook of both corn and soybeans. Corn futures rallied 16 cents to $6.6820, soybean futures rose 27 points to $15.2120 and wheat futures were up 17.60 cents to $7.90 a bushel.
Crude oil surged on geopolitical worries about Iran. WTI crude futures were trading up $3.53 at $87.28.
Energy stocks loved the rise in oil prices as Exxon Mobil Corp. rose .92% and Chevron gained 1.29%.
Gold surged up over $23 to $1620.80 after poor economic data hinted that the Fed may step in and use QE3.
David Cornes holds a degree in economics from the University of Montana.
The recent wave of disappointing economic data has caused investors to rely on gold as a risk-free investment with the expectation that the Fed will expand economic growth. GLD typically has an inverse relationship with the USD and is an indicator of economic health. Last Friday GLD shares spiked over $4 after European greed on a plan to save European banks.
Today’s GLD rally is shadowed in other markets with major stock indices slowly rising, along with a massive $3.90 gain in WTI crude oil. In my opinion, this looks like people are getting tired of low-yield “risk-free” investments such as U.S. Treasuries and are willing to buy gold while the opportunity cost is low.
My outlook on gold remains bullish in the short-mid-term simply because I do not think that the world is not as healthy as market prices project.
David Cornes holds a degree in economics from the University of Montana.
In other news, Samsung lost their request to lift the ban on their tablet, Galaxy 10.1. The tablet and now the Nexus phone are under fire by Apple for copyright infringement. And while this creates bad press for the company it does not hurt sales by a large margin. The attack is on last year’s model the 10.1 so Samsung is still able to sell their newest tablet and phone which is their greatest profit margin anyway.
As for the economy, the numbers on Motor Vehicle Sales, ICSC Goldman Store Sales and Factor Orders are due in at 7:45am and 10:00am respectively. All three reports are supposed to yield a further decrease from April.
Turning to the stock market, the S&P 500 was up 0.25% at the close yesterday with the 10-year treasury up as well at 0.57%. Oil joined the upswing at 2.39% and the Dollar at 0.02%, the first time in a while that all four have closed on the rise.
And finally, Happy Fourth of July everyone! Make sure to check out our first webinar this Sunday after the holidays.
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