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Buzz Bits: Dow, Nasdaq Rise


Your daily Buzz & Banter highlights...


Editor's Note: This is a small sample of the content available on the Buzz and Banter.

Earnings Report - MV News

  • Jo-Ann Stores (JAS) reports 1Q EPS in-line of ($0.07) on revs previously reported of $424.2 mln.
  • TiVo (TIVO) reports 1Q EPS of $0.01 vs. ($0.02) cons on revs of $60.38 mln vs. $58.71 mln cons.
  • Chico's FAS (CHS) reports 1Q EPS of $0.28 vs. $0.26 cons on revs previously announced of $453.08 mln.

King jumps Queen. Rook jumps Queen. Everybody jumps Queen! - Todd Harrison - 3:24 PM

Holy guacamole, I step out of our high level TD-Ameritrade mindmeld to find a sea of green that's full of steam. China? No worries. Persian Gulf war games? Silly talk. Housing to weigh on growth longer than anticipated? Dude, that's awesome!

While the reaction to news is more important than the news itself, we must respect--but not defer to--the action itself. I say that as we tickle S&P 1527 and the bulls shoot for the vacuum beyond. I don't know if we get there (that was contra-hour) but the Matador Crowd has to feel emboldened as they eye thy bell that tolls.

A few quickies...
  • Mea culpa, Minyan Mike, for now spying the DRG before it bounced right where it should have.

  • Please note that there are less 'new highs' and more 'new lows' than there were yesterday at this time.

  • You know what would really suck for the bulls? Another day of hard China slippage. Along those lines, please note that the FXI (i-shares China) is barely holding on to a gain.

  • You wanna hear something crazier than a brick house rat? China sells off 6.5% and the VXO (vol index) is 3.5% lower.

  • Hey Macke, vertical stripes. Not horizontal. Vertical. Every little bit helps.


Fashionable Randoms - Jeff Macke - 2:14 PM

  • A memo from Wal-Mart's (WMT) former ad-agency outlining the reasons for the giants failed forays into fashion and other arenas was leaked to the NY Times and is featured in today's paper. A WMT spokesperson called the report "outdated and... just plain wrong." Ironically, that's exactly how most customers described WMT's efforts at high-end fashion. Oughta be an interesting annual meeting this week in Bentonville.

  • The art of sandbagging is on display today with Phillips-Van Heusen (PVH). The maker of Izod, the Donald J. Trump Collection and a few brands that don't actually make you chuckle, beat estimates by a penny and guided full-year estimates to a range which is now in-line with where the analysts had them pegged to begin with. Ralph Lauren (RL) is setting up a similar trade; the company beat estimates then guided lower for the coming year this morning.

  • Chachi and the other single youngsters in MVHQ are looking a little sharper today on the news that Anna Kournikova has broken up with Enrique Iglesias. I haven't seen them this excited since the Olson twins turned 18. The smart money is betting on the same outcome here (read: tears and restraining orders).

  • As if Farley's daily reminders weren't enough, the fact that Todd-O is wearing Birkenstocks makes me realize just how badly I underestimated the potential market size for Crox (CROX). I hadn't considered the fact that plastic (sorry... "resin") shoes could represent a fashion upgrade to a whole class of shoppers.

Watching the Dollar and Gold... - Lance Lewis - 10:48 AM

Note that the trade-weighted dollar index slipped again yesterday to a new multi-year low at 104.01, which is its first daily close below its 200-month moving average (at 104.11) since the 1970s (see the chart here).

I'd also note that the gold shares are trying to rally this morning (Newmont (NEM), Barrick (ABX), Kinross Gold (KGC), Goldcorp (GG), etc. are all positive) despite gold retesting last week's low, with both the XAU and HUI appearing to have double bottomed on the charts with the mid-May low. A positive divergence of this sort with the metal (assuming the gold share indices close up on the day with the metal still slightly down) is often the kickoff to a substantial rally in the gold shares.

With the trade-weighted dollar still collapsing, any further near-term weakness in gold is likely to be temporary in my view. I'd also note that gold was higher all night despite the slide in Chinese equities and the US equity futures. It wasn't until around 6:00 this morning when US traders rolled out of bed that the selling began. It wouldn't surprise me to see the metal end closer to positive territory by the close today.

Positions in gold shares, NEM calls

Morning Thoughts... - Sally Limantour - 10:01 AM

  • The resiliency of the market will be put to the test today following Beijing's decision to raise the "stamp duty" on all stock transactions. The Shanghai index has fallen 6.5%. From what I have seen, the last time the government did this was in 1997 when shares fell 30% from their highs. Prior to that; in 1992 shares fell 70% before making a low.

  • Bonds are rallying as stocks break this morning and I will have to watch to see if a significant change in the stock to bond yield gap will develop. For now, I have covered 50% short bond positions and will look to put them back out on a rally.

  • Commodities fell hard yesterday led by energy, crude oil and grains.

  • The strike in Nigeria did not materialize and for now, the spreads indicate ample supply. In the grain market, the USDA has indicated the planting of soybeans and corn are off to a good start and with the recent good rains in the Midwest; profits are being taken. While "rain makes grain," it is still early in the season and anything can happen. I have liquidated all long positions and will wait on the sidelines.

  • The metals are acting heavy so I continue to hold puts from two weeks ago. This time of year, coupled with European legacy bank selling and the ominous looking charts, was reason enough. Now, with the threat of a slowdown in China, all of the metals could suffer.

  • In gold, the ECB reported that three of the "legacy" banks sold 11.2 tonnes of gold and 17.5 last week.

Positions in Gold, Silver, Copper, Bonds, ES

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