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Big Week for Tech Announcements 9.4.2012

Amazon will launch their line of new Kindles featuring a new 10 inch Kindle Fire that will have boosted specs and a bigger display.  Amazon also signed a deal with Epix today which will give Amazon Prime members access to more content. 

The weeks crowded announcement schedule should be to Apple’s advantage.  With nearly all of Apple’s major competitors introducing their new flagship devices this week, the individual visibility of these devices could be lost.  Samsung and Sony held their events last week leaving Apple standing alone next week with the announcement for the iPhone 5.  This should give Apple maximum visibility for the new iPhone and the much anticipated iPad mini. Some analysts believe that the new iPad mini could spell the death of other 7 inch tablets produced by Amazon and Google.  Shares of Apple traded up today surging off of early session lows touching a session high of 674.80. Apple l closed up around 9.10.    

However, this week will not be as kind to Google.  In a joint marketing event with Microsoft, Nokia plans on announcing two additions to its line of Lumia smartphones.  Both of these phones will feature Microsoft’s new Windows Phone 8 operating system.  Samsung announced the introduction of their new Windows Phone 8 device last week.  The Samsung announcement in particular is concerning for Google.  Samsung likely introduced the new Windows Phone 8 device in order to better position themselves against any further legal action from Apple.  With the threat of sales bans of android devices looming overhead more manufacturers could switch to operating systems other than Android.   Google shares are trading down today coming off of session lows.  The stock closed down around 4.05.

James Ramelli UIUC graduate in Finance Email: James@keeneonthemarket.com Follow: @Jim_KOTM

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Trade of the Day (NFLX) 9.4.2012

UPDATE 9.16.2012  With the Calls appreciating in value more than the Puts, this would turn this delta neutral trade into a slightly bullish trade, but I am looking to hedge out of it just yet.

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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

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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.

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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