Buzz Bits: Dow, Nasdaq Close in the Red
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Editor's Note: This is a small sample of the content available on the Buzz and Banter.
Earnings Report - MV News
LAM Research (LCRX) reports 1Q EPS of $1.13 ex-items vs. $1.03 cons on revs of $604.4 mln vs. $593.63 mln cons.
Yum! Brands (YUM) reports 3Q EPS of $0.83 vs. $0.75 cons on revs of $2.28 bln vs. $2.27 bln cons.
Bell Buzz - Todd Harrison - 4:05 PM
- Write today's date (10.11.06) on a piece of paper and turn it upside down. Weird, eh? (I know, I'm not the first to noodle this but lest you haven't seen it).
- Did the hedgie press (on the plane news) and subsequent short covering "save" today's tape?
- Maybe, maybe not....but I'll offer that the bears had plenty of ammo to turn the screws today. And didn't. Again.
- What's that smoke you smell? The wheels grinding at MVHQ as editorial works towards a slew of new content, Team MIM pushes towards December 1st and the rest of the gang does the "next gen" thang.
- Good luck to Pepe Depew on tonight's NBR business report. Me? I've got a face for radio. But Pepe is sure to shine.
- Have a mindful night, Minyans, and lest you're bummin' about dormant thoughts that were strirred anew, take tonight to celebrate the fact that it didn't. Tomorrow, as we know, is promised to nobody.
Minute by Minute - Kevin Depew - 2:49 PM
Since the Fed minutes release showing the Fed has no idea when housing will bottom but that growth is likely to accelerate next year even as Fed Chairman Ben Bernanke last week noted the housing market will shave a full point off GDP, which Freddie Mac confirmed this morning, the dollar has broken out again and bond yields have surged.
Meanwhile, gold is lower and crude is off 1.4% despite the OPEC production cut that most seem to agree will never actually materialize.
What to do? My sense is that there haven't until recently been enough longs out there even as sentiment begins to percolate for the first decent pullback we've seen in weeks. I see the negatives - deflation, higher rates, commodities weakness, N. Korean nukes, defiant Iran - but none of that matters until it matters... and it matters... right.... now. Just kidding.
I wish I had a better feel for things right now, but the truth is I don't, and from what I can tell a lot of grizzled (not grizzly) veterans are right there with me.
Some more DXY stuff - Bennet Sedacca - 1:34 PM
The dollar tends to do well in the last half of a Presidential term as I mentioned the other day. Why? Presumably it is due to two rhetorical points.
1. What every first term President wants is a second term.
2. What every second term President wants is to have a great legacy and his party to get re-elected.
So, in the 3rd year, in this case, 2007, we can expect some economic stimulation. I would even guess that the Fed took rates too high to 5.25% in order to have room to lower and save the day before the election. Minyan Ken 'Big Papi' Klaiman and I were talking about it earlier wondering if this is some sort of 'conspiracy theory?' I say, no, it is just 'politics as usual.' And I continue to expect multiple easings in 2007 and/or some fiscal stimulus (self-directed Social Security accounts anyone?).
Oh back to the chart. Important stuff. The dollar has broken the important 5 year downtrend line against the Japanese yen. Makes you wonder about their economy and maybe a short position in EWJ???
Med-Tech Bonus - Fil Zucchi - 12:02 PM
Med-Tech has been a nice bonus to the long side of my sheets. After sputtering to the low $50's shortly after I got in (was there any doubt that it would happen?) Zimmer Hldgs. (ZMH) has bounced back and then some. However, the downside insurance I shed below $55 is now back in place through 2007. I doubt that the journey toward realizing ZMH's Free-Cash-Flow value will be a smooth one, but if Harrah's (HET) grand total of $500 mln of free cash flow over the past 5 years was worth north of $28 bln, what's $800 mln per year worth? Just askin'.
St. Jude Medical (STJ) has been good to me as well, but more because of my entry price than the stock or business performance. Let's face it, STJ is not immune to the mess Boston Scientific (BSX) and Medtronics (MDT) are in. STJ's business is not humming, but that's why the stock has been trading in the low-mid 30's. Stick this in the "you gotta have some longs" category.
Position in ZMH, STJ
A falling knife that can actually be caught? - Rod david - 10:05 AM
Here's the S&Ps potentially bullish setup that occurred ahead of the cash session's open. MACD and RSI diverged positively into the lows and improved into the bounces. Above SPX 1349 (ESz 1357'50) would target a 2-point bounce to SPX 1351 (ESz 1359'50).
Since the open gapped under Tuesday's lows - completely rejecting the afternoon's rally - risk is abnormally high, so better to try catching this knife on a bounce unless a very tight stop is used. Back above the bounce's SPX ~1349 (ESz 1357'25) peak should extend higher if the setup is valid.
NOT recovering or even holding the first half-hour's low would instead be more likely to trend down throughout the day.
Platinum and Gold - Greg Weldon - 8:45 AM
This morning in London, spot Platinum traded below $1060.00 for the first time since March, in line with the directional downside reversal executed by the longer-term 200-Day Exponential Moving Average on September 16th.
Of even greater interest is the fact that Platinum has violated its June low of $1085.00, against which my firm notes that spot Gold has yet to follow suit, and is still holding above the key intermediate downside pivot defined it's the June low of $572.00.
Therefore, most telling is the NEW LOW being set this morning by the Platinum-Gold Spread, which has pushed below $500 (Platinum Over Gold) for the first time since pushing above $500 for the first time ever, this past spring.
Moreover, the PL-GC Spread has virtually collapsed from new all-time highs above $650, having dumped from $634 at the end of August, to the current level at $494, a six-week narrowing of $140 or (-) 22%.
And, even more interesting, particularly as applies to Tuesday's with Toddo, and his latest discussion of the disinflating commodities against the reflating financial equity sector, we note that Platinum, Gold, the CRB Index, and the GSCI are all experiencing serious technical breakdowns, relative to the S&P 500 Index!! "
More on this later, including full-blown chart coverage.
Position in gold
What you need to know... - Jon Doctor J Najarian - 8:11 AM
Alcoa (AA) Drops On Light Rev and Profits - Alcoa 3Q earnings were up 86%, but still missed earnings and revenue forecasts. The world's leading aluminum producer's shares have recovered from a 10% selloff, but are still down 6% in the pre, trading $26.45.
Sovereign Bancorp's (SOV) CEO Resigns – Bowing to pressure from shareholders unhappy about the sale of a major stake to a Spanish banking giant, SOV announced its Chairman has resigned. This could have been the catalyst for the repeated call buying we've cited.
YouToogle May Share Ad Rev - The ink is barely dry, but new business plans are already being drawn up for YouTube & Google (GOOG) and they could make you rich, if you got a dancing cat, or have ever filmed yourself jumping out of a second story window into a kiddie pool! According to published reports those who upload clips will get a slice of advertising revenue on the pages containing their videos.
Apple (AAPL) Backdating Probe Raises More Questions – One of the directors that that examined backdated stock options included one board member who had been involved with awarding Apple options to executives and another whose former company is scrutinizing option grants made while he was its chief executive.
Position in AA, SOV
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