An evening taste of the daily buzz...
Evening Earnings - MV News - 4:45 PM
- KB Home (KBH) reported Q4 EPS of $3.51 vs $3.34 cons on revs of $3.15 bln vs $3.30 bln cons.
- Oracle (ORCL) reported Q2 EPS of $0.19 (in-line) on non-GAAP revs of $3.292 bln vs $3.41 bln cons.
- Adobe Systems (ADBE) reported Q4 EPS of $0.30 vs $0.29 cons on revs of $510.4 mln vs $507.0 mln cons.
Can we get some gum here please? - David Miller - 2:50 PM
Despite the green, breadth in biotech is not very minty. Abgenix (ABGX) is propping up the ticker even though breadth on the NBI is slightly into the negative.
The three companies leading the charge are Abgenix, Cell Genesys (CEGE), and Medarex (MEDX). The first two I've already written about on the Buzz today. Medarex is in our coverage universe and, I suspect, is up today because it is a very similar company to Abgenix in that it humanizes antibodies, has a ton of technology partnerships, and has its lead drug partnered. Medarex's share price has been burdened by a dumb convertible debt deal they did and the fact their lead indication is melanoma -- the cancer where good drugs go to die and a favorite target of biotech short sellers.
I can't believe I ate the whole thing! - Todd Harrison - 2:00 PM
Note to self: When extremely busy, juggling proposals, positions, auctions and discussions, don't put the entire right side of the Happy Taco menu within reach. I'm not quite sure what I ate but there was a lot of it and it's all gone. Somebody stop me....
Speaking of digestion, the busiest opening hour in recent memory has been a staring contest since, with all eyes on the prize (S&P 1270) and select sectors and situations standing out. There are a spate of volatility pops--Sandisk (SNDK), Bear Stearns (BSC), silver equities, Amgen (AMGN), Lennar (LEN)--but, in terms of tape callin', it's thus far a Snoozerooni.
With a week left in my year, I'm content to play situations and schnitzel only when the ducks are quacking. I think we stumbled onto something with this pharma focus and, bigger-picture and longer-term, energy and metals are where I wanna be.
I see the angst out there--fund managers trying to squeeze basis points from the stone--and I'm unsure how that will manifest. With 8000 hedge fund managers standing in a circle shooting at each other, I'm happy to pick my spots and trade 'em tight. Shooter McGavin? Not so much, but we don't need to play every trade--we just gotta win the ones we choose to play.
As always, I hope this finds you well.
position in select pharma, energy, metal equities
Flashback! - Bill Meehan - 1:51 PM
This day in market history...
Closing levels 6 years ago found
S&P 500: 1413.33
This day in Minyanville history...
'03, Prof. Reynolds looked at past economic cycles as A Trip to the Barber Gives Some Perspective to an Odd Cycle.
In other news...
In 1791, the Bill of Rights was ratified, forever giving Boo an unfair advantage in his duels with Hoofy courtesy of the 2nd amendment.
Mini-Minyan Mailbag - John Succo - 11:21 AM
Look at the NZD/JPY cross this morning. Looks to me like a bunch of carry traders are feeling the pain. The volatility is extraordinary lately.
This trade goes into the category of "well that didn't work." The yen carry trade is an example that there is no free money, something our printing happy FED should learn.
Those hedge fund managers, banks, and brokers that thought they were making free money in November by borrowing in yen to invest in dollars (thus earning a "carry" or interest differential) have in the last two days learned that lesson the hard way.
The rally in the yen versus the dollar yesterday and again this morning has wiped out all that "income." This is just like investors that sell volatility thinking it is "income." They will learn their lesson too.
TJ Hookah? Stacy Sherismoke? Officer Vince Robusto? - Kevin Depew - 10:14 AM
With the favorable ruling for Altria (MO) now a matter of record, I was taking a look across the tobacco group and noticed a confluence of DeMark upside exhaustion readings for most stocks here. On a point and figure basis, Reynolds (RAI), Loews - Carolina Group (CG) and British American (BTI) are all well extended above long-term trendline support. Interesting blow-off top potential here given the "happy" news, though that is not advice.
Also, note the relative weakness of the Russell 2000 (RUT) which is being exacerbated by the Dow' s knee-jerk reaction fueld by MO. The RUT has reversed to Os here with support at 682.50.
If it ain't Roque... - MV Respect - 9:58 AM
"We don't know what you're going to do, but here's what we're focusing on:
(1) We're sticking with our bullish call on gold in particular and commodities in general. This idea has worked pretty well since October 2001 and we don't see any reason to punish our winners.
(2) If there is some problem with respect to the market then banks/financials should weaken. Given the technicals for the BKX we're figuring an important reversal is not likely right here.
(3) Expecting the 10-year yield to work higher seems right intuitively but that ain't gonna give us any particular edge with respect to equities unless #2 occurs.
(4) Leave the macro stuff to the pros, stick to stocks and group themes, and hope Santa Claus neatly wraps up Nomar Garciaparra for the Yankees."
-- John Roque of Natexis Bleichroeder
Say what? - Kevin Depew - 8:30 AM
A look at commentary, opinion and analysis from around the world:
First off, let's take a brief trip down to South Africa where a BusinessDay "Street Dogs" column spends a total of three-paragraphs to correct a Washington Post $100 billion dollar economics error.
The longer the iPod stays anchored to the personal computer, the further behind Apple will fall, writes Adam Penenberg in Slate.
Finally, for a useful bit of perspective, former Wall Street Journal reporter Matt Pottinger writes about his decision to leave the newspaper to join the US Marines.
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