In major corporates news, J.M. Smucker, finished up 5.18% after reporting that their yearly profit will be above their initial projections following better than expected sales volume. Ann (ANN) jumped 20.57% after the retailer raised its yearly outlook and announced better than expected earnings. Finally, Foot Locker (FL) rose 1.71% following the athletic store’s upbeat earnings.
This will be the final Doherty at the Close as I finish my internship at KOTM and head back to school at Villanova this weekend. I hope you’ve enjoyed this market recap as much as I have. Thank you.
Thomas Doherty is majoring in FInance and Economics at Villanova University. Thomas@KeeneOnTheMarket.com
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Platinum Update 8.17.2012
Platinum producers have been battling falling prices and increased costs associated with mining. Before yesterday, platinum prices were trading down 21% on the year. Today platinum futures were trading at $1472.90 an ounce.
I remain bullish on platinum considering its correlation with gold. The spread between gold and platinum is currently very out of whack with gold currently overpriced with regards to the rarity of the metal.
David Cornes holds a degree in economics from the University of Montana.
Natural Gas Update 8.17.2012
The coming week is expected to be cool along the Eastern Seaboard indicating restrained price bullish movement in the short-term.
The Energy Information Administration natural gas storage number released yesterday reported 20 billion cubic feet of natural gas in underground storage. Analysts were expecting 24 billion, the same as last week’s report.
David Cornes holds a degree in economics from the University of Montana.
CBOE TV Interview 8.17.2012
Treasury Yield Comparisons 8.17.2012
German yields reached six week highs after speculation that Spain would ask for a bailout as Spanish yields reached relative lows. Last week at this time short duration German bond were trading more negative than this week. For example, last week’s 6-month German yield was .1%, this week the yield is .02%. I will keep my eye out for any developments in Europe with regards to Spanish bailouts.
Opportunity still exists for traders to profit from the front end inverted yield curves of the UK and Australia.
David Cornes holds a degree in economics from the University of Montana.
Morning Rage 8.17.2012
The Hang Seng rose near identically to the Nikkei gaining .8% due to Merkel’s support of ECB action,
however ended the week down .1% for its worst week in 10. China Mobile was down yet again losing
3.5%, now at its lowest since June 29 after having its worst single day of the year yesterday. Smaller rival
China Unicom and China Telecom lost 2.6 and 1%. Industrial and Commerce Bank of China rose 1.1%
however remains down 2.4% on the year.
The FTSEurofirst 300 rose .4% boosting the index to a 13 month high to begin today. The index is on
track to post its 11 weekly gain in a row, its longest streak since 2005. Autos were the best performing
sector rising 1% with banks right behind them gaining .8% whereas healthcare stock top the list of the
bottom losing .5%. The index has gained nearly 9% since Draghi’s words in late July. Around Europe
Madrid is up 1.6%, the French CAC up .05% and the German Dax up .22%.
Japan predicts it will emerge from 15 years of deflation in FY 13-14’ forecasting the GDP deflator will
increase .2%.
To add more salt to the wound, Spanish Bank non-performing loans rose to 9.42% in June from 8.95% in
May.
Commodities are set to begin lacking today with Gold up while silver and crude are down and Natural
gas looks to be stuck in neutral.
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
Doherty at the Close 8.16.2012
Facebook fell -6.2%, hitting a brand new all time low, as the lockup period ended on early investors. Many investors were allowed to sell for the first time and quickly unloaded their shares to gain the value that remained. The Stoxx Europe rose 0.3%, finishing at a high month high.
PetSmart (PETM) rose 4.58% after the pet products retailer announced better than expected fiscal second quarter earnings, while reducing full year outlook.
S&P Emini Pivot Points for 8.17.2012
Euro (6E) and Oil (CL) Pivot Points for 8.17.2012
The Social Media Top? 8.16.2012 – Ben Hoben
Fast forward to today. The last few months have seen the likes of Facebook, Groupon, and Yelp
go public. While Groupon has been an utter disaster and Facebook isn’t that far behind, the
fact that these companies with no earnings were able to go public at extremely high valuations
makes you wonder if we are close to a top in the market.
Facebook lets you see 400 pictures of someone’s kid that you kind of know. Yelp tells people
where you are eating at. Then there’s Groupon who sends you coupons. And these companies
came public worth billions. Even Linkedin, which hasn’t imploded yet, is basically Facebook for
business acquaintances.
The market is clamoring for Twitter to go public. I love Twitter and think it is an awesome
platform to converse with people you never would’ve had a chance to meet. You get breaking
news faster than online news sites. Yet as with the rest of the companies mentioned I have
no idea how they will ever monetize their site. Yet it will no doubt come public worth tens of
billions.
Investors seem to be catching on as we’ve seen Facebook and Groupon stock implode. The
simple fact that these companies were able to come public in the first place shows the markets
desire for social media.
When everyone thinks something is the future as with social media it makes me give pause and
think the market may be getting complacent.