Doherty At the Close 5.31.2012

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In global news, the International Monetary Fund, or IMF, began discussing contingency plans for a rescue loan to Spanish banks in the event the country fails to find the funds need to bail out failed bank Bankia, according to Dow Jones Newswires. Spanish officials later dismissed the report, fueling the late day loss. A three-year rescue loan for Spain could be as much as €300 billion, one person said, although any bailout could involve smaller, shorter-term loans. An issue in any bailout of Spain, which could end up being bigger than those already agreed to for Greece, Ireland and Portugal, would be the size of the contributions made by the IMF and the EU and where those funds would come from. Spain needs €19 billion to rescue Bankia, but its own bank bailout fund has only about €9 billion left.

Also Thursday, the Commerce Department lowered its estimate for first-quarter economic growth to 1.9% from 2.2%, in line with economists’ expectation that the U.S. economy slowed more than initially thought during the period. The price index for personal consumption increased 2.4%, as previously estimated.

As this blogger predicted on Tuesday, Facebook (FB) found its bottom at $28 and rallied late in the day, finishing up 5.11% at $29.60. However, Facebook remains well below its $38 IPO price. Joy Global (Joy) skid -5.1% as it lowered its full year projections for the international market, citing loss in European and Chinese demand. Ciena (CIEN) rallied as one of today’s top gainers finishing at $13.55, up 14.06%.

Looking forward, tomorrow will be a major day for the macro economy as the unemployment rate and nonfarm payroll values are released in the morning. Additionally, personal spending and private payroll numbers will also be available. Analysts expect the Nonfarm payroll numbers to be at 150K and the unemployment rate to be 8.1%, mirroring last month’s value.

Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com

For more information, Follow Andrew on twitter at https://twitter.com/#!/KeeneOnMarket or like us on Facebook: https://www.facebook.com/KeeneOnTheMkt

Trade of the Day (ASNA) 5.31.2012

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Unprofitable:  I lose money on this trade if ASNA closes under $18.35 on June 15, 2012.  The most I can lose on this trade is the amount the Spread can be . 

Reason I Like This Trade:  I think that ASNA will have strong earnings, but if it breaks $18.50 it could be goodnight ASNA.  In this strategy I make money if ASNA goes up, flat, or down less than 3%

UPDATE 6.4.2012  This Spread is worth $.32 and if the stock can rally above $18.50 then I will collect the whole credit I sold the Spread for.  If it closes above $18.35, it will be a profitable trade.

UPDATE 6.5.2012  This Spread is worth $.35, but I will leave this trade on and hope for a POP higher in the stock.

UPDATE 6.7.2012  This Spread is worth $.15, but since it is such a small position I will leave this trade on.

UPDATE 6.11.2012 This Spread is worth $.10 and I am leaving this position still on.

UPDATE 6.13.2012  With 2 days left, this trade looks like it will be worth zero, but no trade is a winner until it is closed.

UPDATE 6.27.2012  This trade went out worthless and moving to the next trade.

Halftime Report 5.31.2012

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The S&P 500 dropped 9 points, -0.7%, to $1,305 with energy and material stocks leading the decline. The NASDAQ fell 23 points, -0.8%, to $2,814.

Among the day’s economic data, the US economy added 133,000 private sector jobs in May. However, this number was rather disappointing as economists expected the private sector to add 150,000 jobs. Additionally, the number of US workers filing new applications for unemployment benefits increased past industry forecasts. “You take the two together and the labor market is not what you want right now,” said Jim McDonald, chief investment strategist at Northern Trust in Chicago.

This downbeat unemployment report comes on the eve of the government’s closely watched unemployment report Friday morning. The unemployment report has fallen short of expectations for the past two months. Analysts expect non-farm jobs to increase by 150,000 in May with the market moving accordingly with tomorrow’s report. The Commerce Department lowered its estimate for first-quarter U.S. economic growth to 1.9% from 2.2%, in line with economists’ expectation that the U.S. economy slowed more than initial thought during the period. The price index for personal consumption increased 2.4%, as previously estimated.

European markets fell, erasing earlier gains after the downbeat U.S. data. The Stoxx Europe 600 slid -0.7% after slumping -1.5% on Wednesday.

Shares of Facebook (FB) continued to decline Thursday, down another -4.26%, and are now trading below $27 at $26.99. Once again, this marks a major loss from their IPO price of $38 and the $28 price Facebook at which Facebook was initially marketed. Joy Global (JOY), a mining equipment manufacturer, skidded -4.87% as it lowered its full year guidance on a slowing international market in Europe and more importantly, China. Ciena (CIEN) rallied 11.45% after they reported a fiscal Q2 adjusted profit that topped analyst expectations of a slight loss. TiVO Inc. (TIVO) dropped -6.86% as the DVR maker posted larger than expected quarterly losses due to litigation costs and updated a downbeat outlook on weaker sales due to on demand and cable services.

Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com

For more information, Follow Andrew on twitter at https://twitter.com/#!/KeeneOnMarket or like us on facebook: https://www.facebook.com/KeeneOnTheMkt

Movers and Shakers (TIVO) 5.31.2012

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TiVo’s first-quarter loss of $0.17 a share was wider than the analyst expectations of $0.15 cents a share. TiVo also announced that it expected a second quarter loss of $28 million to $30 million and service and technology revenue of $53 to $55 million. Previously, analysts had expected a loss of $16 million, almost doubled in current expected losses. The majority of the loss is associated with litigation expenses in TiVo’s lawsuit with Verizon Communication (VZ) over patent copyrights. The California based DVR provider has seen major losses over the past few years as rising costs and increasing competition from cable companies and on demand services continue to pressure TiVo’s bottom line.

For the period ending April 30, TiVo reported a loss of $20.8 million, or $0.17 a share. Compared to the previous year’s profits of $139 million, or $1.04 a share, TiVo has significantly increased costs against their bottom line. Net revenue rose 48% to $67.8 million, while service-and-technology revenue climbed 40% to $54.5 million. Gross margin widened to 51.1% from to 46.1%. TiVo has not issued dividends in more than two years.

Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com

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Morning Rage 5.31.2012

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The Yen was up due to rising fears of the Euro, making for more costly exports in Japan.

The Hang Seng lost under .5% today with Land holding companies dragging the index down. China
overseas land and Investment LTD lost 4.25% and China Resources Land LTD lost over 2.5%.

The FTSEurofirst 300 is managing to stay afloat so far, ahead of US Employment data, being propped up
by the energy and banking sectors. Bank stocks are up .6% after 4 straight session losses.

The German retail sales rose .6% compared to an estimated .2% and the jobless rate fell to a 20 year low
of 6.7% from 7%.

Broadcasting companies News Corp, Disney, CBS and Comcast will be among the stocks to take a look at
today as they go to court to stop an internet television startup alleging the provider, Aereo, copy’s and
retransmits their programming.

Commodities are starting out similar to yesterday with crude, gold and silver all trading positive and
natural gas in the red 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

Doherty At the Close 5.30.2012

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The Standard & Poor’s 500-stock index lost 17 points, or -1.3%, to $1,315, while the Nasdaq Composite shed 30 points, or -1%, to $2,841.

Leading the major regression today were US companies with significant international exposure. Energy stocks fell as crude oil dropped -3.2%, while Caterpillar (CAT), -2.50%, had the largest drop from the Dow. Stocks in the telecommunications and health care sectors fare relatively better on a day that saw all 10 sectors of the S&P 500 trade lower.

The Stoxx Europe 600 index finished down 1.5% and France’s CAC-40 lost 2.2%. In Spain, the IBEX 35 declined 2.6%, finishing near the day’s lows. The euro, meantime, slumped to $1.2373, its lowest level since the summer of 2010 and down from $1.2503 late Tuesday in New York.

Worries about Europe spilled into the crude-oil market, as prices settled at $87.82 a barrel, its lowest settlement this year. Gold prices rose 0.9%, to $1,563.40 a troy ounce. The yen fell against the dollar.

Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com

For more information, Follow Andrew on twitter at https://twitter.com/#!/KeeneOnMarket or like us on facebook: https://www.facebook.com/KeeneOnTheMkt

Halftime Report 5.30.2012

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Leading the stock declines were U.S. companies with significant exposure to global growth.

Energy stocks led the fall as crude oil tumbled more than 2.5%, while heavy-machine giant Caterpillar CAT -2.64% and aluminum maker Alcoa AA -3.26% led the Dow decliners. Defensive stocks in utilities, telecommunications and consumer staples fared relatively better.

The fall is volatile stocks came as Spain’s banks saw an erosion in deposits, further intensifying the currency crisis in Spain and throughout Europe. Retail and corporate deposits in Spanish banks fell €31.44 billion ($39.31 billion) to €1.624 trillion, their lowest since the euro-zone debt crisis began, according to data published by the European Central Bank. In response to the deposit loss, the Spanish 10-year bond shot higher, to 6.641%, the highest level since November 2011.

The Stoxx Europe 600 index fell -1.3% and France’s CAC-40 lost -1.8%. In Spain, the IBEX 35 declined -1.5%. The euro, meantime, plunged to $1.2421, its lowest level since the summer of 2010 and down from $1.2503 late Tuesday in New York. The European concerns sent demand for U.S. Treasurys higher, pushing the yield on the benchmark 10-year note down to a record low of 1.6459%. The yield on Germany’s two-year bond, another haven, fell to 0.018%.

In economic news, the pending home sales data come out this morning with worse than expected results. In the report, pending home sales for April decreased by -5.5% on a month by month basis.

Research in Motion Ltd. (RIMM) slid -7.39% after it was announced that they expected to report an operating loss for the current economic quarter. RIM, manufacturer of blackberry smartphones, faces major competition from Apple’s iPhone and the Android market and is having sales problems. Apple (AAPL) -0.34% slipped after CEO Tim Cook expressed Apple’s interest in TV with their iTV or unknown, currently developing products, and said the company wants to move the majority of their manufacturing stateside. Pep Boys (PBY) plunged -21.89% after the auto parts retailer terminated an agreement to be taken private by Gores Group. Finally, FormFactor (FORM) climbed 6.43% after the semiconductor-equipment maker raised its second-quarter revenue outlook, citing strong demand of Dynamic Random-Access Memory and Flash memory.

Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com

For more information, Follow Andrew on twitter at https://twitter.com/#!/KeeneOnMarket or like us on facebook: https://www.facebook.com/KeeneOnTheMkt

Trade of the Day (JOY) 5.30.2012

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Unprofitable I lose money on this trade if JOY closes under $52.78 or above $57.22 on June 15, 2012.  The most I can lose on this trade is the amount I paid for the Spread, $.28. 

Reason I Like This Trade:  I think that JOY will sell off on earnings and I I think it could sell off to $55 based on the 7.1% implied movement in the stock.  I think this represents a great risk vs reward as I am risking only $28 per 1 lot and could make $222.  Earnings are today after the bell.

UPDATE 5.31.2012  I was trying to take off half of my position for a a double, or $.56.  This trade is up 50% overnight, but I am leaving it on in order to maximize more value.

UPDATE 6.4.2012  This Spread is still worth $.56, so I am trying to take off half of the position for a double and leave the other half on.

UPDATE 6.5.2012  This Spread has not increased in value as I thought it would decay more.  I still like this Spread though.

UPDATE 6.7.2012  This Spread is Out of the Money right now and looked like a great trade, but has gone Rogue.  I am leaving this trade on for more possible downside in JOY and the stock market.

UPDATE 6.11.2012  JOY has been all over the place and right now this Spread is worth $.60, I am looking to take half of my positon off and let the other half ride until expiration.

UPDATE 6.13.2012  I took half of my position off at $.60 taking a double and I am leaving the other half on for more future profits.  I will leave this half on until expiration.

UPDATE 6.27.2012  I took off the other half for $1.80 on expiration, averaging $1.20 and took five time my money on a great risk vs reward on earnings.

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