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Morning Rage 8.13.2012

The Hang Seng fell for a second session in a row dropping .3% today. Tencent Holdings lost 1.9%, but
is still up over 45% this year. Citi analysts agree with their performance stating that Tencent should
be “resilient” to the slowdown in China. Yanzhou Coal lost 5.2% today after a downgrade to sell from
neutral by Goldman Sachs. The property sector was down yet again today as Citic lost 7.3% however
Haitong added 4.4%.

Europe is just slightly down at the moment with the FTSEurofirst off .1% today with very low trading
at 11% of its 90-day daily average. Investors are appearing unsure of where to put their money at the
moment in Europe.

BAC agrees to sell Merrill Lynch’s private bank outside the US to Switzerland’s Julius Baer for 1.47B Swiss
Francs. BAC needs a strong cash position to meet Basel III requirements.

At the moment commodities are showing crude +.70%, natural gas +1.05%, gold +.25% and silver the
only downer -.12%.

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 8.10.2012

In corporate news, Monster Beverage (MSNT) lost 12%, the biggest drop in the S&P after reporting a smaller than expected increase in Q2 profit and a reported scandal involving their ingredients.

JC Penney (JCP) climbed 6% climbed after executives said that the company has plenty of cash to complete a turnaround and revitalize their stores, despite falling on EPS and revenue. Finally, Manchester United (MANU) premiered on the NYSE today to a stable buying as their stock hovered above the $14 level all day long.

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Natural Gas Update 8.10.2012

Yesterday, the government weekly natural gas report released a smaller than expected growth in natural gas supplies. Supplies came in at 24 billion cubic feet, last week’s storage was 28 billion and analysts’ expected a number of 30 billion, causing a 19 cent increase in the front month futures contract. This price increase comes at the end of the seasonal peak summer demand, and historically prices tend to fade from about this point on.

This morning natural gas prices dropped almost 5% after weather forecasts looked cooler than expected and the demand for natural gas this summer may be fading sooner than expected. The front month natural gas futures were trading at $2.8100 this morning. I am looking to short futures after a pullback.NatGas


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

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Halftime Report 8.10.2012

This morning’s monthly USDA report caused erratic price movement in grains after forecasting a 17% cut in the yield estimate and new 17 year lows. After the 7:30 AM CDT announcement, corn had a range of over 30 cents within 5 minutes of the announcement, reaching highs of $8.4360 and lows shortly after of $8.1000. Corn futures are currently trading down 4.60 cents from the open at $8.1360. Soybeans are up 19.80 cents to $16.7440.

Gold futures gained $3.90 to $1624.10 and WTI crude futures lost 51 cents to $92.85.

S&P 500 futures fell 3.75 points to 1396.75, Dow futures traded down 40 points to 13098.00 and NASDAQ futures were down 5.50 points to 2712.25.

Research In Motion Ltd. (RIMM) rose 5% after a patent suit issued by Mformation Technologies Inc. was dropped.

Monster Beverage Corp. gave back some of yesterday’s gains after receiving a filing from the SEC regarding marketing and ingredients used in their products. MNST was down 8.25%.

Yahoo Inc. (YHOO) was down 5.56% after warning investors that they may not reward shareholders the cash earned from selling its share in Alibaba.

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

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Manchester United: A Buy?

The IPO valued Manchester United, known wolrdwide as Man U, at $2.3 billion but shaved off nearly $100 off the proceeds for the team and its owners. Man U is one of the best soccer teams in the world and have won the English Premier League, the world’s top league, a total of 19 times with even more championships in the Champions League and associated tournaments.

Despite the fanfare regarding the IPO, investors should stay away from the stock as a trading tool and see the investment as a collectible rather than a profitable trade. Investors will have little control over the team’s activities and control is likely to remain with the current owners. In additon, publicly traded sports teams rarley outperform the market and if they do, they do not issue a dividend and offer little control of company decisions. Finally, it should be noted that, historically, even on field performance has little effect on publicly traded sports teams. For example, the Cleveland Indians stock did not increase substantially even after five straight AL Central winning seasons.

In conclusion, if you love Manchester United, feel free to buy one share of their common stock and hang the certificate above your bed, but should you expect return on your investment over the next few years? No.