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Doherty at the Close 8.14.2012

Michael Kors (KORS) also rose 16.43% after they announced that first quarter earnings nearly tripled.

In Europe, markets were broadly higher with the Stoxx Europe 600 rose 0.7%, closing at the highest level since March, after better-than-expected growth readings from the Continent’s two largest economies. German gross domestic product increased 0.3% in the second quarter, beating expectations. In France, GDP was flat compared with the first quarter but topped forecasts for a slight contraction.

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Trade of the Day (ANF) 8.14.2012

shutterstock 35457625 2Trade:  Selling the ANF Aug 29-28 Put Spread and 35-36 Call Spread for $.37 total

Risk: $63 per 1 lot

Reward: $37 per 1 lot

Notes:  good risk vs reward that ANF does NOT move the measured move target

UPDATE 9.11.2012  This Spread blew up a little and went to fair value of $1.  Not every Condor will Work.

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Weekly Grains Update 8.14.2012

On Friday morning, the USDA released their monthly report stating that U.S. corn production will be reduced by 13% to 10.779 billion bushels. A price drop after a number like this simply does not make sense. Analysts expected a corn yield of 127.3 bushels per acre while the surveyed number was 123.4, a significant drop from July’s number of 146 bushels. A drop in expectations like this should cause a rise in corn prices. Apparently traders are taking this time to cover their positions before markets continue to rise. Markets have shown that supply is low. I think that markets will continue to slowly rise as this year’s crop is harvested. Soybeans were reported to have a yield of 2.692 million bushels, the lowest in 9 years.

Wheat estimates came in stronger than expected at 74.67 million bales, causing a pullback in wheat prices. As of Monday, wheat prices have lost 4% since the USDA data release.

In my opinion this year’s grain markets will remain strong. Although wheat is having a pullback, yields are still low for the year across the grains markets and in many analysts’ opinions, it is too late to fix damaged crops.

soyyyyyyyyyyyyyyyyy

David Cornes holds a degree in economics from the University of Montana.

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Morning Rage 8.14.2012

Hong Kong snaps two days of losses with a 1.1% gain today as investors venture back into Chinese bank
stocks with each of the Big Four banks seen at least a 1% gain on the day. China Mobile had its best day
in two months, adding 2.2%, putting it at its highest since August 27 of 2008. Its shares are up 22% so far
this year and the company is set to report earnings Thursday. Utilities rose with Power Assets and Hong
Kong and China gas both adding 1.2%.

Europe is on the rise today as low figures give way for hopes of new stimulus. The FTSEurofirst is up .4%
as GDP data shows a .2% decrease in the second quarter compared to the first and a .4% decrease
compared to a year earlier. The Eurozone bank index was up .8% today and has jumped 25% since
Draghi’s comments on doing whatever it takes to preserve the Euro. Banco Santander, Unicredit and
Natixis are up 1.4, 1.2 and .9% respectively.

Greece sells 4.063B 13-week treasury bills to yield 4.43%.

A Ford subsidiary in India recalls 130K vehicles for a manufacturers defect in models from 2008-10.

Commodities are set with gold, silver, crude and natural gas all trading up this morning.

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

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Doherty at the Close 8.13.2012

European markets ended similar to the US, if not slightly lower, with the Stoxx Europe down -0.4%. In other european news, Greece is reported to have contracted 6.2% in the second quarter and is expected to lose near 7% of its GDP year over year.

In corporate news, Sears (SHLD) gained 5.72% after Barron’s reported that their proposed asset sales could boost the company’s share price after faltering in national prominence over the last decade. Google also gained 2.81% after they announced that they will be buying the Frommer’s travel guide brand from John Wiley & Sons (JWB) and will be cutting employees to reduce Motorola’s Mobility’s workforce to 20%, or nearly 4,000 jobs.