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Buzz Bits: Dow Climbs, Nasdaq Falls

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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

  • Agilent Technologies (A) reported Q2 EPS of $0.40 vs $0.34 cons on revs of $1.43 bln vs $1.41 bln cons.


Rollin' Down the Street... - MV Respect - 1:59 PM

"In our note last week, "To Believe or Not to Believe – THAT is the Question," we highlighted the likelihood of near-term risk and suggested it would be difficult to make a buy decision as momentum areas got hit, the economy began to slow and core inflation picked up.

There should be signs of all fears this week and we wanted to point out that while a drop could be sharp – it should provide an attractive entry point that could come as early as THIS week.

Again, we expect roughly 20% upside over the coming year. Ultimately, we try not to time it because bottoms are made over time as the overbought excess are relieved. The same should be true during this correction, which suggests that most of major pain could be this week and that the bottoming (churning, fear) process should provide liquidity to add to equity market exposure at attractive prices.

The key is that investors must believe we are in a mid-cycle vs. end-of-cycle environment. We would focus new purchases in the Financial, Information Technology, Consumer Discretionary sectors with a particular emphasis on Large Financial Institutions, Communications and Entertainment/Media areas within our favored sectors."

Snoop Tony Dwyer of FTN MidWest Securities



Why would anyone pay 140% of net asset value for a bunch of Russian stocks? Well, they are still paying 120%!!!!!! - Bennet Sedacca - 12:56 PM

Toddo has mentioned the severe (20% or so) drop in the Templeton Russian and East European Fund (TRF) a couple of times lately. While that is a steep drop, I was curious if maybe, just maybe, it was tradable or is some sort of value play.

So I checked out its Net Asset Value as of last night and it was still 21.18% above the current market price. Before the sickening 3 day drop, investors (well, 'speculators' is probably a better word) were paying almost 145% of asset value.

If this does not tell the tale of outrageous risk taking, I don't know what does. It usually also smells of greed which, last I checked, leads to fear and lower prices. Not advice, just my experience talking.

PAAS Nearing Long-Term Support - Brian Gilmartin - 11:26 AM

We bought some Pan American Silver (PAAS) this morning on the early swoon as the stock is nearing the trend line off the May '05 low (see the attached chart), and also is as oversold as it was in May of last year as well.

No doubt the volume today and the last week is a result of purchases as the silver ETF frenzy reached a peak in the last few weeks, and we'll use the wholsesale dumping to add to positions.

Pan-American and Newmont (NEM) have both been a bit of a puzzle relative to the ETF (particularly the Gold ETF as the silver ETF has just started trading) since an investor seems to have been penalized for owning an operating company rather than the outright commodity.

We are trading the group rather than buying-and-holding, since I don't understand the dynamics nearly as well as other Minyanville professors. To me the metals seems inversely correlated to the dollar's direction rather than any inflation harbinger, (although one can make a case that a sustained drop in the dollar is inflationary) thus I tell clients we'll sell into strength, try and take gains, and wait for good opportunities to repurchase.

Position in PAAS, NEM


And the dollar goes TIC, tock, TIC, tock - Kevin Depew - 11:08 AM

Net foreign purchases of long-term securities were $69.8bln, according to Treasury Department TIC (Treasury International Capital) data released this morning.

So what? First, the numbers are well below the consensus expectations of $79.9bln, which already showed reduced expectations from February's decrease. More importantly, the numbers show that foreign central banks only accounted for 1.7% of net inflows, and that Japan actually sold about $18bln as their net holdings fell from $658.3bln in February to $640.1 in March.

Fortunately, private investors picked up the slack, buying $87.6 billion in securities while official institutions accounted for $1.6 billion. Meanwhile, private investors bought a record $45.5 billion of corporate bonds in March, the Treasury data show, the second-highest amount ever.

So bottom line, what does this mean? Well, for one thing, it helps explain the Bush administration's sudden about face to embracing a weaker dollar! Why would the Bush administration change course 180 degrees and support a weaker dollar? Because with central banks ratcheting back their purchases of our securities, perhaps they have no choice.



Well, at least I might have a few days to regroup... - Jason Goepfert - 10:58 AM

Last week, we saw the S&P 500 suffer back-to-back days of losing 1% of its value, when it had set a new 52-week high just a few days prior. As you might suspect, this is relatively unusual - it's happened 17 other times in the past 56 years.

Typically, what we saw was a short-term bounce (the index was higher 3 days later about 78% of the time), then more weakness. If you had waited three days, then shorted the S&P and held for a month, you would have had 14 winners out of the 17 trades, for an average gain of 2.5%.



It's that time of year already... - David Miller - 9:50 AM

The NASDAQ Biotech Index (NBI) undergoes its semi-annual shuffle effective one week from today. The number of stocks in the index will move from 159 to 165.

In (15):

Acadia (ACAD), Adams Respiratory (ARXT), Aspreva Pharma (ASPV), AVI Biopharma (AVII), Columbia Labs (CBRX), Cerus (CERS), Collagenex (CGPI), Genomic Health (GHDX), GTX (GTXI), Inhibitex (INHX), Matrixx (MTXX), New River Pharma (NRPH), Novavax (NVNX), Solexa (SLXA), and Threshold Pharma (THLD).

Out (9):

(For too low market cap) Accelerys (ACCL), Bioveris (BIOV), Caliper (CALP)

(Due to reclassification) Affimetrix (AFFX), Biosite (BSTE), Luminex (LMNX), Martek Bioscience (MATK), PAREXEL (PRXL), and SFBC Int'l (SFCC).



Sick, sick, sick. - Rod David - 8:12 AM

S&Ps fell overnight to within a tick of our target. Monday's opening price action was already indicated to trend down, since Friday's opening and closing price action both trended down. Lower lows were already likely because Friday closed at new relative lows, under the morning's lows in a downtrend. And the implication was for a gap down because Friday's low held at our intraday target, and only an influx of new and invigorated sellers could extend the decline.

In last week's last two sessions, S&Ps fell from new highs, to back under the prior four months highs and attacking April's lows, which was tested overnight. NDX is indicated to gap open at new lows for the year, back into last year's highs.

Bullish hopes are pinned on the decline having expended its near-term selling pressure. The risk in taking this tack is that oversold conditions can become more oversold as new sellers are attracted to the established trend. Also, the overnight lows created a "new Globex trend extreme" that is almost historically mandated to be retested during regular trading hours.

At this moment, 90 minutes from Monday's open, S&Ps have been ranging for nearly 3hours. Another dip under SPX 1285.50 (ESm 1289'50) would be signal that sellers are still in control. And buyers won't be in control until - at the earliest - S&Ps close above Friday afternoon's high.


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