Buzz Bits: DOW surges, DirecTV in the Black
Talking cars, a NASCAR theme, PIXAR and a Summer release will beat a little monkey any day
Earnings Report - MV News
- Electronic Data Systems (EDS) reported Q4 EPS of $0.25 vs $0.22 cons on revs of $5.15 bln vs $5.10 bln cons. The company guided Q1 EPS to $0.10-0.15 vs $0.21 cons on revs of $4.7-4.8 bln vs $4.98 bln cons and '06 EPS to $1.05-1.15 vs $1.00 cons on revs of $20-20.5 bln cons.
"$7.5 Billion and the next release is a $100 Million version of the Chevron commercial" - Jeff macke - 3:44 PM
Greetings from the toasty-warm Bay Area as I prep myself for an afternoon meeting with legal types. You Minyans think I need to actually tell them to keep it brief or will my showing up in shorts and golf spikes make the point non-verbally (and in a non-billable manner)?
Keeping y'all up to speed: I've purchased more Safeway (SWY). Because I'm an accountable sort I want to make it clear that this is not advice but rather the result of my own deliberate research. Unless the stock drops in which case it's This Guy's fault.
Also, Chachi and I have agreed to disagree on the respective box-office outlooks for this weekend's Curious George vs. Pixar's (PIXR) Cars which is set for release June 6. He argues that Curious George is too obscure whereas "a talking car is a talking car."
Take it from a parent, lad. A parent who is right now, this very moment, listening to Jack Johnson's Curious George soundtrack totally by choice! If it would keep Miss Lou and Superfly away from Barney or the Wiggles for another week I'd take them to every jam-packed matinee of Curious George from now until Labor Day (when Cars will have been out of theaters for exactly 2 full months and set for release on DVD).
Long funky monkeys, short trippy automotive kids' movies, and a position in SWY
10 year Treasury auction recap...they just don't act right... - Bennet Sedacca - 3:22 PM
At first glance, the 10 year auction looked decent. Bid to cover of 2.32 was as good or better than most over the past few years. Indirect bidders, most likely foreign central bankers, were buyers of 40% of the issue, up from a fraction of that of past issues. That is in direct contrast to their lack of participation in yesterday's 3 year auction. So they are going out on the curve? Why? Do they smell the deflationary issues brought up by Professors Reamer and Succo (and me)?
Positions in various Treasury securities.
Flashback! - Bill Meehan - 3:17 PM
This day in market history...
- Closing levels this day 6 years ago found
- DJIA: 10,957.60
- S&P 500: 1441.72
- Naz: 4427.50
- Crude: 28.05
- Gold: 289.10
This day in Minyanville history...
- Prof. Reamer performed an experiment in Non-Linearity ahead of Cisco earnings
In other news...
- In 1936, the first NFL draft was held. With the first pick, the Philadelphia Eagles selected Jay Berwanger. I wonder if the first round lasted 6 hours then also?
Field position - Fil Zucchi - 3:02 PM
After the close it will be time for Akamai (AKAM) and Whole Foods (WFMI) to tell us their story. In my humble opinion, AKAM has the tougher of the two tasks because expectations are set pretty high. Given the recurring nature of their revenues, meeting/beating estimates likely won't be an issue and won't matter much. The keys will be the number of new subs, the direction of ASP's, and the progress on the roll-out of the new "acceleration" application. If these three pieces are good and guidance is just a bit better than current consensus, the stock should behave.
WFMI is going to be trickier. The recent selling is probably enough to absorb a just-in-line quarter and leaves room for an upside move on any good news. But valuation does not allow for any kind of miss. If WFMI whiffs (say that 10 times fast) the stock will likely be given the Google (GOOG) treatment if not worse. There is no forgiveness for an expensive, fast grower, in a mundane industry, that stops growing fast.
Buckle up Minyans!!
Position in WFMI AKAM
Eyes and Tries - Todd Harrison - 1:19 PM
As Snapper attempts to recapture the flag--and as I ready for another can't miss meld--the ticks are flickering quicker in the City of Critters. This is shaping up as an important close given the multitude of levels and that thought isn't lost on either side of the ride.
A few random vibes as I apply the clown make-up (read: jugglin'):
- Hoofy would feel much better if A) market internals were supportive of a rally or B) the BKX can find some sponsorship. And yes, he's aware of the N's over S's in play on the back of Cisco.
- Rotation Station continues in force (note pharma and retail today). If you're hedging your risk, be sure that you're tracking the risk. (ie- S&P puts didn't help energy and metal holders yesterday).
- Professor Sedacca pinged me this morning to say that the "housing rationale" reminds him of the "tech rationale" a few years back. I agree--"validation" will only arrive with lower prices.
- That doesn't mean there won't be opportunities to position and prosper (both ways). That's our task at hand and, ergo, why we scribe vibe from dawn till dusk.
- Best guess into the close? If the Matador Crowd can't convincingly mount S&P 1260 soon (and breadth stays flat), we'll see some slippage into the close. Please watch the banks for clues and don't get stubborn with your risk. Emotion is the enemy when trading.
And as always, I hope this finds you well.
Position in financials
Say What? - Kevin Depew - 12:44 PM
A look at opinion, commentary and analysis from around the world:
- John Weicher writes in the Financial Times that rumours (note fancy English spelling of "rumors" proffering a sense of gravitas) of US housing bubble are "hot air."
- Meanwhile, in Phoenix, where hot air is abundant virtually year-round, folks are hoping to get their homes to sell faster by burying a St. Joseph statue upside down next to their For Sale signs. Seriously.
But where are all the wires? - Sanjay Somaney - 12:02 PM
A total of 4.7 million mobile subs were added in January of 2006 with the total sub base now reaching 81.1 million. I think India will finish CY:06 with a net mobile sub base of between 140-150 million. I got a few emails asking who will be the biggest beneficiaries of the surging demand and growth in cellular services.
Besides the cellular service operators who will be direct beneficiaries, Sify (SIFY) is also going to be riding that wave through their SIFYMax mobile service offering.
So Many Channels - Tom Peterson - 10:52 AM
DIRECTV (DTV)announced their results, of course. In addition, DIRECTV's Board of Directors has authorized up to a $3 billion share repurchase program. Most investors were expecting only about $1 billlion. "DIRECTV expects these repurchases to occur from time to time, in the open market or in private transactions, subject to market conditions," the release says.
The conference call is minutes away.
See the chart here.
This morning's open is indicated to gap up nearly 3 points from Tuesday's cash session close for a test of our bias-up signal. The ESh 1259'75 target of yesterday's last half-hour bounce was already met several hours after the Globex open, and its test sent S&Ps to new lows, so we know the pattern is accurate. The 4-point drop has been fully retraced, and maintaining the recovery through 10:15am ET would signal a bias-up. Extending above the Globex highs would offer helpful confirmation that the corrective bounce was underway as described after yesterday's close.
Morning market comments from Katie Townshend, CMT, chief market technician for MKM Partners: - MV Technicals - 8:44 AM
The Philadelphia Housing Index (HGX) penetrated its 200-day moving average this week. This follows a break below the 50-day moving average, which puts next support at the October 2005 low (HGX 231.61) in our opinion. A short-term trend exhaustion signal was flashed in mid-January, when we discussed the positive correlation between the housing and REIT sectors. Both sectors have managed to outperform the broader market since November 2005, but we expect rotation out of homebuilders and REITs as the risk of higher interest rates becomes more palpable. Already, the relative strength comparative of the HGX versus the S&P 500 Index (SPX) appears to be making a lower top in confirmation of price, and the weekly stochastics are pointing lower in support of a deeper correction. The HGX could be in the early stages of forming a head and shoulders pattern.
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