All day and every day, some of the stock market's best and brightest traders and money managers share their ideas, insights, and analysis in real time on Minyanville's Buzz & Banter.
Here is a small sampling of the 120+ posts seen on the Buzz & Banter this week:
Monday, December 23, 2013
Personal Income and Closed-End Fund Update
By Michael Sedacca
The YoY personal income growth rate slowed to the lowest level of expansion since 2008 at 2.3%. I took a dive into into the numbers and part of the drag is coming from a decline in farm subsidies, but from this dataset, wage growth remains too low even though we're seeing other signs of credit growth. It appears that credit growth may be coming from consumers drawing down on their savings rather than rising wages, which would be a good thing.
The November savings rate was 4.2%, the lowest of the year if you remove January. In January, due to a large number of dividend payments that were pulled forward into 2012, the savings rate collapsed because of the lost interest income. So it's safe to say that some of the recent credit growth can be attributed to consumers using credit cards or taking on loans to buy holiday shopping. However, having looked at the annual trends for the last 10 years, this seems to be a seasonal thing.
The Treasury curve continues to take on a flattening tone again today, but there have been some illiquid moves. Overnight, there was a long bond order issued as a "limit" order rather than a "stop" order which caused the 30-year to trade below 3.6%. There were better sellers of MBS early in the session but that seems to have calmed down for now. That seems to be the root cause of the 7-year being the weakest point on the curve today.
Closed-end bond funds, both credit and muni, continue to rip again today, for the fourth straight day. My custom indexes that track both are up more than 1% today, which is a 2.2 standard deviation move. I suppose that the buyers may have been on hold until the December FOMC decision or this could be the other side of the excessive selling we saw earlier in the month. Personally, I prefer the former scenario because market participants probably saw that tapering isn't a big deal for fixed income markets at this stage since they are well prepared.
I'm still a huge fan of closed-end muni funds, but the sizable gap
between the price of these funds and their NAV has closed in a big way over the last two weeks. Using BlackRock MuniVest Fund
as an example, the 6.8% discount to NAV last week has already narrowed to 3.4% (and should narrow another ~1% today) purely from rising price. Also note that Barron's had an article out in its weekend edition
which was bullish on the "sector."
GSV Capital Update
By Michael Comeau
(NASDAQ:GSVC), the publicly-traded investment fund I discussed earlier in December here
, popping 6% today as Twitter
(NYSE:TWTR), its top holding, is crossing the $63 mark.
I did a recalculation of the Net Asset Value, and it comes in around the $17 mark, which takes into account:
1. The rallies in Twitter and Facebook
2. The pop in the valuation of private Palantir
3. The Chegg
(NASDAQ:CHGG) and Violin Memory
(NASDAQ:CTRL) being roughly flat.
It's probably also fair to say that virtue of comparative valuation practices, the multiples on key private GSV holdings Spotify, Dropbox, ZocDoc and SugarCRM have headed higher.
But be aware -- you can't simply declare that GSV is trading at a 30%+ discount as if it's a normal close-end fund with a discount around 10%. GSV still has a hefty deal of liquidity risk. If the equity markets sieze up and the IPO window closes, that 30% 'hypothetical' discount gets even bigger because the timing on potential paydays is pushed back, or taken off the table altogether.
Nonetheless, I still see GSV as having some catching up to do with the social media ETF
(NASDAQ:SOCL), which is its closest equivalent.
Check out the chart below.
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Thursday, December 26, 2013
No Crash Test Dummy
By Jeffrey Cooper
(NASDAQ:TSLA) is gapping up this morning to challenge the 12/18 signal reversal day.
In late November
, we identified a 119/120 square-out and shortly thereafter projected a move to around 160.
Whether TSLA travels to a test of 160, which could represent the neckline of a Head & Shoulders top, remains to be seen, but it may be tracing out a 1 2 3 Swing to a Test of this important 160-ish level.
Conversely, an authoritative move through 160 could indicate an "S Turn" with TSLA taking a trip towards prior highs.
Finance, Family, and Randoms
By Brandon Perry
Merry Boredom Day! When Christmas comes on a Wednesday, it sure is hard to get back into the swing of things on Thursday. One of the major downsides of being in finance is that when spending time with extended family, it doesn't take long for the conversation to turn to "So, what do you think of the markets?" or "What's the next big thing?" or "What should I do with my (Insert investment here)?"
After grabbing an extra glass of eggnog, I usually try to change the subject. If that doesn't work, I revert to my two default responses: A) "The best piece of advice I can give you is "Buy low, sell high", or "My crystal ball is in the shop." This morning, after dodging questions about my uncle's employer's stock, I sneak into the office for a bit to simply review things. If you recall, I have been heavily long since the Fed announcement as it was just what the market needed. So, in no particular order, this is what I see:
1. The S&P 500
(INDEXSP:.INX) - Looking good as it broke out on Fed Day and has "Santa Claus" rallied ever since. We are getting toward overbought here via RSI, so be careful about putting on heavy positions here. However, we still could have room to the upside. I would guess that after the first of the year we should see some rest at least.
2. Cypress Semiconductor
(NYSE:CY)- back on October 2nd
, I shared with you that CY was poised to move back toward around 10.50, at that time a 12% move up. Well, here we are. That was the "easy" short-term swing. I like it for the long-term so I will continue to hold it. For now it will be important to see if we can break above the 200-day moving average. It would be healthy to spend a little time between the 50-day moving average and the 200-day.
3. iShares MSCI Italy Index ETF
(NYSEARCA:EWI) - Italy has just completed the measured move of an inverse head and shoulders, which ironically could be forming a cup and handle formation. That would be a nice powerful combination to break to new highs. This may be setting up a good continuing momentum play here. Most of Europe still looks good to me with my favorites being France, Italy and Spain.
I doubt I will make any substantial changes to the portfolio over the next several days, but I always like to review things when the calls slow down.
I hope you all had happy holidays. The new year is coming soon, so reflect on what you did, and how you could have done it better. 2013 was a year of surprise prosperity in the markets and 2014 is wide open to any possibility. Keep an open mind and a humble heart and you can prepare yourself for anything the market can throw at you. I don't make predictions for each year, mainly because I don't have the skill or ability to see much further out than only a few months, at best. So my wish list would be for a repeat of 2013. Bull markets are fun and easy if you don't try to fight them.
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Friday, December 27, 2013
By Marc Eckelberry
It looks like 3.02% on the yield could do the job, close enough to the 3.03% target especially given the reaction so far. ZN
(10yr future) buyers are coming in with the highest volume since 12/20. The tell was the Euro bid (see pre-open post
), and we are actually seeing some rotation out of equities into bonds. This could be the theme of Q1 2014.
ZN has two NVPOC's above, 123'185 and 124'105. For today, look for resistance now at 123'06.