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Buzz Bits: BSX Wins GDT Bid, Oil Below 66, Markets Dip


Tomorrow is another day...


Earnings Report - MV News - 4:15 PM

  • Sanmina (SANM) reported Q1 EPS of $0.08 vs $0.07 cons on revs of $2.86 bln (in-line). The company guided Q2 EPS to $0.05-0.07 vs $0.06 cons and revs to $2.6-2.7 bln vs $2.78 bln cons.
  • Altera (ALTR) reported Q4 EPS of $0.19 (in-line) on revs of $281.9 mln vs $292.3 mln cons, and below guidance of $285.7-297.3 mln. Gross margin was 66.7% vs 65.5% guidance. The company guided Q1 revs growth to 4-7% q/q, implying $293.2-301.6 mln vs $306.2 mln cons and gross margin to 65.5-67.5%
  • Novellus (NVLS) reported Q4 EPS of $0.20 vs $0.16 cons on revs of $332.3 mln vs $314.3 mln cons. Bookings were +22.3% q/q to $351 mln and shipments were $316.6 mln vs guidance of $290-300 mln.
  • Qualcomm (QCOM) reported Q1 EPS of $0.39 vs $0.38 cons on revs of $1.74 bln vs $1.76 bln cons. The company guided Q2 EPS to $0.35-0.37 vs $0.36 cons on revs of $1.63-1.73 bln vs $1.73 bln cons and '06 EPS to $1.43-1.47 vs $1.50 cons.

Flashback! - Bill Meehan - 3:26 PM

This day in market history...

  • Closing levels 6 years ago found
    • DJIA: 11,029.8
    • S&P 500: 1410.03
    • Naz: 4167.41
    • Crude: 30.28
    • Gold: 285.75

This day in Minyanville history...

  • Prof. Goepfert taught us about four of his favorite indicators in Contrary Review

In other news...

  • In 1995, the OJ Simpson trial began.

Pretty Sneaky Sis - Todd Harrison - 12:43 PM

The S&P has dribbled (slightly) below the 50-day moving average. I'm not a big fan of 50-days--I think 200-days are four times as important--but I know alotta folks are eying it so I wanted to keep it on your radar.

Breadth is still surprisingly balanced and the piggies are stubbornly sticky as money rotates into their vaults (after their relative underperformance of late). That bodes well for the bovine--at least for now--although I must once again point to multiple resistance slightly above. Where you stand (and how you trade) is a function of where you sit, as my buddy Jeff Saut likes to say, so use price to your advantage as you shape your risk profile.

Me? I'm just very angry--in a Bruce Banner sorta way--as I build my gamma and await the hamma. I'm also slightly slammed today, which explains the lack of Random Thoughts. Fear not Minyans, any and all insightful vibes will find their way to the Buzz.

As always, I hope this finds you well.


Say what? - Kevin Depew - 12:36 PM

A look at opinion, analysis and commentary from around the world:

  • Pimco's Mark Kiesel asks, "Hit, stay or walk away?" He concludes by saying corporate America should walk away with their cash and continue to pay down debt... surely, unwelcome news for Mr. Bernanke.
  • China is rapidly becoming the R&D center for the world, according to the Asia Times. GE, Microsoft, Intel and Siemens, have each set up research and development facilities in China.

OK , so the trend line in 10's is toast. Now what? - Bennet Sedacca - 11:57 AM

A double top exists from the highs of March 2006 and November 2006 highs at 4.62%. That, in my opinion, is the logical stopping point. Why? As mentioned here yesterday, I really don't think Big Ben wants inversion his first day on the job.

A 4.62% level would give him a likely positively sloping curve, depending on the Fed's language, which is is likely to be on the dovish side. If we get through 4.62%, Katie bar the door. You will see selling from mortgage guys and banks that would make a trip to 5% rather short. I doubt this, but stay tuned. As Professor Succo has said, there is lots of leverage floating around out there.

Positions in various Treasury securities

Sourcing Out - Sanjay Somaney - 10:52 AM

Hearing from my sources that WIT is a strong candidate to get a large part part of GM's $1.8 billion IT outsourcing contract. GM's 10-year agreement with EDS has come to an end. The chatter is that WIT will bag a major part of the auto giants IT managment and maintenance work. WIT already has multi-year deals with the who's who of the auto world: Nissan, Harman Becker Auto et al.

Might explain why EDS is scrambling here, no?

Prepare yourself to hear a lot more wins this year by the likes of CTSH, WIT, INFY, SAY, PTI et al.

positions in all stocks mentioned. (either here or in India or both)

Phone home! - Fil Zucchi - 9:42 AM

Ryland Homes (RYL) report - which showed new orders down 4% Y/Y - has prompted an A.G. Edwards analyst (whom I consider to be a perma-bull) to downgrade it to sell.

Centex (CTX) also reported last night and posted Y/Y new orders growth of 4%.

Looking at other names, so far the new orders trend suggests consistent strength in the Texas region, inconsistent patterns in the Southeast, and across the board weakness in the Mid-Atlantic, Northeast, and West regions.

Stop making excuses! - Jason Goepfert - 9:18 AM

I've been pinged from a couple of Minyans about the extremely low equity put/call ratio reported by the CBOE yesterday. The closing value there was 0.37, meaning that there were 267 calls traded on the exchange for every 100 puts.

That's the lowest put volume relative to calls in over a year, and typically has bearish overtones. However, it's important to note that there were a huge number of calls traded in IVAX Corp (IVX), so much so that they accounted for 38% of all call volume.

Without that one firm's options, the equity p/c ratio would have been 0.61, which is pretty much exactly neutral. I would not consider yesterday's low reported p/c ratio to be a red light - it was more of a one-off anamoly.

Technical commentary from Katie Townshend, CMT, chief market technician for MKM Partners: - MV Respect - 8:40 AM

"REIT sector benchmarks have outperformed the broader market since early November 2005, following a phase of underperformance that began during the summertime. We have expressed concern about the breach of the long-term uptrend in relative strength for the DJ Real Estate iShares (IYR) versus the S&P 500 Index (SPX), which occurred almost simultaneously with a reversal of the long-term downtrend in the 10-year Treasury yield. The 10-year Yield Index (TNX) is poised to rally from current levels based on long-term oversold conditions and a short-term trend exhaustion signal, which we think may be associated with another phase of underperformance in the REIT sector."

End in sight? - John Succo - 8:13 AM

We mentioned last week that JNJ was unlikely to increase their bid for GDT.

They have now said so.

GDT is trading off slightly after rallying yesterday in anticipation.

I was going to review our GDT/JNJ options position in the Reminiscences of an Option Trader column this week, but alas our position has grown again and I defer that column for another day when things are more "wrapped up."

Suffice it to say that our position now looks 180 degrees different than it did before January expiration. Most of our short options expired worthless and now our long options are prevalent.

GDT should begin at some point to trade at a volatility equal to about half the volatility of BSX, a much more volatile stock than JNJ.

Position in JNJ/GDT

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