Buzz Bits: Dow, Nasdaq Creep Higher
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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
- Google (GOOG) reports 3Q EPS of $2.62 vs. $2.41 cons on revs of $2.69 bln vs. $2.62 bln cons.
- SanDisk (SNDK) report 3Q EPS of $0.61 vs. $0.57 cons on revs of $751.4 mln vs. $730.4 mln cons.
- Broadcom (BRCM) reports 4Q net revs of $902.6 mln vs. $900.2 mln cons.
- VeriSign (VRSN) report 3Q revs of $400.0 mln vs. $401.2 mln cons.
- Rambus (RMBS) reports 3Q revs of $45.9 mln vs. $44 mln cons.
- Xilinx (XLNX) reports 2Q EPS of $0.27 vs. $0.23 cons on revs of $467.2 mln vs. $455.9 mln cons.
Bell Buzz - Todd Harrison - 3:37 PM
In like a lamb and out like a chop. Indeed, with a bevy of earnings competing for mindshare--and a fair amount of individual volatility--we've arrived at a tape with much more motion than absolute movement.
A few thoughts have begun to crystallize in my crowded keppe. For one, the notion that a "top" (for lack of a better word) could arrive post-expiration and pre-midterm elections. That would likely fit the path of maximum frustration and flummox the most folks. I know we're not supposed to short charts we can't ski but given the low level of volatility, the risk/reward (cheap options) is there.
The other (entirely different side of my mind) thought is that the dollar has failed at both the 200-day and the five year downtrend line. That could and should help the commodity complex and the equities that track 'em. The drillers (OSX +3%) and XAU (same) seem to be having the same thought.
So, how do these seemingly mutually exclusive views fit? It's a familiar theme for thy faithful but one that I've shared before. I own puts in a few financials (Goldman and JP Morgan, among them) and calls (or cheap common) in the metals (Golden Star among 'em). I sold my energy bets (where's my Weatherford!!?) earlier in the week and have been doing some soul searching as to whether to get back involved.
So that's about it from where I sit as we ready for the freak that is Friday and the weekend that will follow. It ain't easy, Minyans, but it's not impossible either. We just gotta stick together and remember the important stuff. From there, fate will follow- through.
Fare ye well into the bell
position in gs, gss, jpm, metals, financials
Saudi Support For Oil Cut Fails To Help Crude Hold $58 - Jon Doctor J Najarian - 12:52 PM
Index Option Update
Support for a 1 million barrel production cut by the Saudi oil minister had boosted the price of crude, but it came right back to Earth just as quickly as it went up and at mid-session I show Crude trading $57.91, up $0.26 on the session.
The rally and subsequent selloff of Crude hasn't held back the market, as the DJIA is up over 7 points to 12,000 and has flipped back and forth across 12K all day.
The S&P 500 is down 1.37 to 1,364.66 and the CBOE's volatility metric for the SPX (VIX) is down another 2% today to 11.11. Heat Seeker shows 41,340 calls trading against 157,519 puts giving us a 3.81 to 1 put to call ratio, gaining even more strength since yesterday's ratio of 2.67.
IWM is showing a volatility level of 22.74 and the small caps are currently up 0.24 on the day to 76.22.
QQQQ has a volatility level of 17.82. The Q's have traded 165,376 calls to 262,578 puts for a 1.55 to 1 put to call ratio, gaining some more strength since yesterday. The index is currently trading at 41.88 up 0.08 on the day.
Stephanie Pomboy Presents: Dead Cats Don't Bounce - MV Respect - 12:37 PM
Dead cats don't bounce. That's the lesson from the data this week. After plunging to a 16-year low, the NAHB housing index was only able to muster a 1-point rise to 31 from 30. That still beats the pants off the Philly Fed which shocked all by sinking deeper into negative territory after positing its largest monthly decline since 2001, which, it bears reminding, was a recession year. Of all the regional Fed surveys, the Philly Fed has, by far, the best correlation with GDP. In other words, this economy is one feeble feline.
From these data to the inflation stats, it's hard not to worry that the recent euphoria that the soft landing might turn into no landing at all might have gotten a little ahead of itself. We'll get a better sense with the housing data next week. But, with the specs heavily short the 2 year and Fed Funds futures reflecting a more hawkish Fed view, this market is precariously one-sided.
Morning knick-knacks - David Miller - 10:26 AM
Nothing is Sacred - Ryan Krueger - 10:05 AM
General Electric's (GE) NBC announces dramatic cuts and shifts in programming as advertisers' interest has been sinking. Just yesterday in recording my radio show, I looked at all traditional media, and how almost each assumption is being destroyed. (Now if I only looked as cool as Wassong when I talked about it.) A couple of interesting items were discussed which I will share in an article soon.
My hat is off to the Lone Wolf. (And speaking of brilliant retail minds, there's a tremendous marketing opportunity no? Now in the Northeast, who will cover that dome fashionably? If Marbury can still get shoe contracts, I'm thinking wool for the Wolf is a deal that needs to be done.) Macke made a really great call preseason that Sunday Night Football's audience would exceed Monday Night's – and for the first time in history that happened this week. Denny Green didn't hurt the odds of this call to be sure. That same day I traded in return a sleeper of the year of my own for all fantasy footballers – Phillip Rivers. You can't get this stuff outside the Buzz.
The Wolf's call was dead on and telling – nothing is sacred in media right now, even an American tradition like Monday Night Football. And it doesn't help that the biggest ad spender of all, General Motors (GM), is slashing costs at a historic rate.
Citigroup: Reading Through the Numbers - John Succo - 9:45 AM
On a headline basis, Citigroup (C) did beat and had an outstanding quarter from cost control and international. Looking through the numbers, however, some of the earnings beat was due to a 0.05c tax benefit. Real earnings run rate is closer to $1.01-1.02, in-line with expectations.
This could be perceived as a mediocre quarter for C, similar to JP Morgan (JPM), but a little better than Bank of America (BAC). It is possible that the stock trades off a little as a result.
1) Phony tax rate.
2) NIM compression.
3) Flat revenues y/y and down sequentially.
4) Low comp ratio at IB.
5) Unsavory performance from cap markets.
6) Like everyone else, grew loan book, but took loan loss allowances down.
7) Credit cards contributed more than I would have expected.
1) International performed well across all categories.
2) Credit still best in sector (recently upgraded to AAA by Moody's).
3) Bought back 41 mln shares.
4) Fee based income, especially transaction services up 20% y-y.
Steve Zausner also contributed to this Buzz.
Positions in C, JPM, BAC
Hooray Dow 12k? Not so fast...Divergences building - Bennet Sedacca - 9:14 AM
There are so many divergences in this run for the roses that I have decided to spare you from the gory details. So I will harp on just one.
See it here. The chart of net new 52 week highs in the NYSE. It actually fell yesterday and is way below previous highs-divergence defined. On a day when the party hats and cheerleaders were out in full force.
It felt toppy to me, but jeez, I have said that before. And my firm sells some IVW into the early festivities. A close ABOVE 1370 on a weekly basis is what may change our opinion.
Can it happen? Of course and I respect Mr. Market. I would be surprised, but then again I am surprised that I (as a life long Yankees fan) find myself rooting for the 'other' New York team every night lately. So, sports fans, like in baseball, anything can happen.
Position in IVW
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