Buzz Bits: Dow, Nasdaq Have a Strong Day
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Earnings Report - MV News
- SanDisk (SNDK) reports 2Q GAAP EPS of $0.47 vs. $0.45 cons on revs of $719.0 mln vs. $691.2 mln cons.
- Kraft (KFT) reports 2Q EPS of $0.51 vs. $0.48 cons on revs of $8.62 bln vs. $8.49 bln cons. The company guides full year EPS to $1.78-$1.83 vs. $1.90 cons.
- Netflix (NFLX) reported 2Q non-GAAP EPS of $0.27 vs $0.21 cons on revs of $239.4 mln vs $241.7 mln cons. Sub ads were 303k, SAC was $43.95 and churn was 4.3%.
- Altera (ALTR) reports 2Q revs of $334.1mln vs. $318.0 mln cons. Additional financial results for 2Q will be available as soon as practicable after the company's previously announced review of historical stock option practices and related accounting concludes.
- Nabors Industries (NBR) reports 2Q EPS of $0.82 ex-charge vs. $0.72 cons on revs of $1.12 bln vs. $1.09 bln cons.
- Texas Instruments (TXN) reported 2Q EPS of $).47 (in-line) on revs of $3.70 bln (in-line). Gross margin was 51.6% and orders were +8.4% q/q to $3.914 bln.
Bell Buzz - Todd Harrison - 3:54 PM
- The bulls are trying to push this pup through resistance and trigger a fresh round of technical buying. I don't see it--not today, anyway.
- Note the VXO is off 17% as traders puke their puts. We saw similar readings last Wednesday and opined that, hand over eyes, it's not bullish.
- Remember Minyans, field position "matters" during earnings season. Bad news (that isn't horrid) typically runs 'em in oversold tapes and good news (that's not fabu) typically hits 'em. Given the beat down we've seen in semi-land (today notwithstanding), I'll be watching this Texan with wide-eyed anticpation.
- I just got off the horn with Michael Thompson, the savvy strategist from Thomson Financial, and we were discussing his presentation at MIM3. Suffice to say that there's gonna be grist on both sides of the macro mill this year.
- Speaking of which, we're slammed like Paris on.....OK, we're real busy at MVHQ in front of our mountain mingle. Hey--if you had 250 Minyans trekking to a three-day Festivus, you'd be paying attention to every detail too! Thanks kindly for the continued patience as I'm not wacking 'em around as I otherwise might.
- Fare ye well into the bell, good luck with earnings and have a most excellent evening.
It could be a mountain or it could be a molehill - Fil Zucchi - 2:28 PM
Apologies Minyans for the relative silence, but I am trying to wade through the ocean of call transcripts. First on my list was F5 Networks (FFIV) considering that I was buying it pre-market on the open as it was being jettisoned "no questions asked."
It will be some time before I'll find out whether my perhaps cavalier attitude toward the option scandal is justified or not. But I am comfortable that the Friday morning sellers were not likely acting on the partial quarterly numbers released by the company. Everything I've read suggests that business at FFIV is fine, if not getting better, and the macro backdrop for web traffic management is in its infancy.
But as I have mentioned before, I am not sitting and watching FFIV 10% daily swings. Both puts and calls are pricey and I am actively trading around my stock to chip away at my cost basis.
Position in FFIV
Juice on the Loose? - Kevin Depew - 12:43 PM
- Just past the bottom of the lunch hour, new PnF buy signals have expanded from three to six.
- Unfortunately, new PnF sell signals have also expanded, from seven to 15.
- How can this be happening, you might ask? I share your pain, because I ask myself that very same question every morning when the alarm clock rings. "How can this be happening, self," I ask.
- Also, how can new sell signals be expanding even as the market indices move up so sharply, you might ask?
- Take a look at this chart of the Oil Service HLDRs (OIH). Since the majority of the 18 stocks in this ETF have patterns nearly identical to the OIH, it may help explain things.
- Right now the OIH is up more than 3%. Not too bad, eh? But look what that 3% move does to the PnF chart? After breaking a spread quadruple bottom last week, the OIH would have to rally to 154 to generate a new buy signal on the chart.
- That pretty well sums up where equities are as a whole here. Most stocks are simply moving higher into resistance areas without generating new PnF sell signals.
Mini-Minyan Mailbag - Jason Goepfert - 11:37 AM
"We've not had a positive Friday on the Q's since 5/26. When does this become to obvious to work?" Minyan Dave
Dave, such a string of negative Friday's is relatively rare - it happens about once every three years in the S&P 500. I'm using the S&P simply because it has more history - the concept is the same, simplistically assuming that traders don't want to hold long over the weekend.
The last time we saw a string of 6 negative Fridays in the S&P was the week ended 4/22/05, after which it rose nearly 7% over the next quarter. There have been 16 times in the past 56 years that we had a string of 6, and the return over the next quarter was +3.8% with 12 of the 16 being positive.
Only five times did we go on to make it 7 negative Fridays in a row; four times it went to 8 weeks; three times it went to 9 weeks; twice it went to 10 weeks, and once it went to 12 weeks in a row with a negative Friday in the S&P.
Golden Eye - Laurie McGuirk - 10:09 AM
Looks like last week's call of "the low" for this move was typical McGuirk premature speculation. The physical market is hoovering physical metal in all currencies at these prices.
Remember, the physical market is only a fraction of the "paper gold"markets --- 2600 tonnes per annum produced(and falling). Go back to the London Gold Pool to see how quick physical metal can move when the supply/demand equation gets screwed around. Let's see in a month or so how the $620 level looks to buy physical...I am, not advice.
We have spoken many times about the "consolidation" of the gold sector as the majors rush to replenish reserves - quo est demonstratum.
Position in gold
I think we have quite the cat fight brewing in the 10 year note - Bennet Sedacca - 8:59 AM
See the chart here. Open interest over the past 5 years or so is up about 400%. Maybe it is due to more mortgage issuance and more hedging by originators. But at any rate, no matter what the reason, there is still a huge outstanding interest on a relative basis.
While my firm has sold our 10's, as noted on Friday, the hedgers are absolutely flat. The long and short interest out of 2,100,000 contracts is a measly 731 contracts apart. So the way I see it, someone is going to be really right and someone is going to be really wrong.
A cycle high for 10's (part of our reason for selling) is fast approaching and a visit back to 5.25-5.40% area isn't out of the question around the next Fed meeting. So we continue overweight 2's and have quite a bit more cash than normal.
On another note, we continue to avoid corporates as they slowly widen, as is typical in a lowering economy and is also normal in an inverted curve environment as noted by Richard Bernstein of Merrill the other day.
To be frank, I could probably make a convincing argument for a move in either direction, but let's save that for MIM!
Position in 2's
What you need to know... - Jon Doctor J Najarian - 7:45 AM
Crude Down, Gas Prices UP! Crude oil is down $.70, to $73.57, nearly $5 off the recent high, but you and I are paying mucho higher gas prices this week. How much higher Doc ? Well, here in the Windy City the cheapest gas is $3.08 per gallon, but nationwide gas prices are up 2 cents to just over $3 per gallon, which has been in our rearview mirrors for weeks.
AMD Acquires ATYT for $5.4 billion – This one's been on Heat Seeker so often we've given it frequent flyer status! I show ATI Tehnologies (ATYT) up 9% to $18.05 in the pre market, but according to the terms I'm reading, the value of ATYT is closer to $20.35.
HCA To Be Acquired By Investor Group For $31 Billion – Senator Bill Frist's Father founded HCA and his family along with Bain Capital, Merrill Lynch & Co and Kohlberg, Kravis Roberts & Co will offer to buy HCA Inc., the biggest hospital operator, for about $21 billion.
Position in ATYT
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