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Buzz Bits: Dow, Nasdaq Gain Ground


Your daily Buzz highlights...


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

Earnings Report - MV News

(KSS) reported 2Q EPS of $0.69 sv $0.65 cons on revs of $3.29 bln reported Aug 3.

Analog Devices (ADI) reported 3Q GAAP EPS of $0.39, not comparable to $0.40 cons, on revs of $663.7 mln vs $680.9 mln cons.

Nvidia (NVDA) reported 2Q revs of $687.5 mln vs $677.1 mln and is the latest in a line of companies not reporting full financials due to an ongoing stock options review.

Starbucks: Heavy Volume Already - Brian Gilmartin - 1:30 PM

(SBUX) is up on pretty good volume today (almost average daily vol already) as it fights to maintain the Jan 3rd, '06 low of $29.90.

Longer-term, I love the stock, but it isn't the type of name (higher p/e retail) that is getting any love in this tape.

Last week's earnings report and guidance were actually good: it was the July comp of 4% that caught the Street off guard.

Position in SBUX

People are 'stunned that trannnies are folding?' - Bennet Sedacca - 12:02 PM

Here we are in Vail and I'm looking over the beautiful stream behind the hotel. I read in a publication that people were 'stunned' that the Transportation Average was plummeting. Why people are 'stunned' is beyond me. The economy is slowing, and hence, items moved from point A to point B are slowing down. Not to mention that fuel prices have tripled--yes I know firms have hedges on-but I wonder if those hedges are running off...

Consumers stocks and homies continue to make me believe the economy is slowing and we are headed for rate cuts and possibly recession.

On another note, on my Bloomberg this AM was a prediction that Fed Funds would be 5.5% a year from now and the curve would remain inverted. First of all, the market is TELLING US with the front end inversion that there is no way unless economic strength surfaces from somewhere. In fact, I have taken the other side of the trade. My guess? And this is purely a guess - 3 handle funds in a year......Not advice, just the 'other side of the trade.'

Going Global - Sanjay Somaney - 11:52 AM

Google (GOOG) is the latest in a series of companies that have announced billion dollar investments in India. GOOG has committed to buying a million square feet worth of space in a Special Economic Zone (SEZ) in the state of Andhra Pradesh. Dell (DELL) is also taking space in the SEZ in that state while ACN is committed to space in a SEZ in Karnataka. Cisco (CSCO), SAP, Intel (INTC), Advanced Micro (AMD), IBM, and Microsoft (MSFT) have all announced multi-billion dollar investments in India.

The Indian IT majors already have several campuses spread across the country. These MNC's are now in serious catch-up mode.

However, it's all good.

Position in GOOG

Vail random morning thoughts... - David Miller - 10:36 AM

  • As readers know, my firm expected ImClone (IMCL) wouldn't find the kind of value in an acquisition that people expected. We think management there has an overdeveloped sense of the value of Erbitux. In the face of competition from Amgen's (AMGN) panitumumab, and YM Biosciences' (YMI) nimotuzumab, the value for Erbitux simply isn't there (especially the "nimo" as evidence mounts of efficacy without the major side effects of Erbitux or p-mab). The combination of that with the Bristol (BMY) partnership in place simply does not allow the math to add up for ImClone.
  • Two days on a mountain bike. Two trips over the handlebars. Any bets on whether today is three-for-three? 11am at the bottom of the Lionshead lift if you want to join Minyan Adam and I and observe first hand.
  • It will be interesting to see how biotech overall reacts to the ImClone news. The IBB is down a little less than 1%, but I'm less interested in the price reaction than the sentiment reaction.

Position in YMI

Five Things You Need to Know: Buzz Style - Kevin Depew - 9:41 AM

As we sit down for the market's open from the temporary MVHQ in Vail, Colorado, the first thing we've noticed is that with the time difference between here and NYC it is actually yesterday. We're hoping that should give us a valuable trading edge today... or tomorrow... or something.

Meanwhile, notice that while over on News and Views we will be continuing the Minyanville Five Things You Need to Know series with insights from the Professors, here on the Buzz and Banter I'll be putting out Five Quick Things You Need to Know for today... or tomorrow:
  • 1. Is Tel-Aviv-100 a leading indicator?
    - Keep a close eye on the Tel Aviv 100 stock exchange.
    - The TA-100 is off by 1.6% this morning and has broken any semblance of an uptrend line since the fighting began.
    - If TA-100 was telling us anything previously as it continued to rise despite an increase in hostilities, what is it telling us now?
  • 2. Another General Leaving the Battlefield?
    - We've noted several times the past few weeks the technical teetering of GE as it drips closer to a serious potential breakdown.
    - Note that on a PnF basis the stock will break a triple bottom with a move to 32.
    - Why should we care? Although GE is a serious underperformer vs. the S&P 500, it still carries a better than 3% weighting in the index.
    - It's also a "closet financial" stock.
  • 3. Why the Fed Doesn't Matter: Part Three
    South Korea's Central Bank joined the list of central banks tightening liquidity worldwide.
    - The S. Korean market expected the central bank to "pause."
    - Instead they raised a surprise 25 basis points to 4.5%.
  • 4. Rent or Own?
    - As America tries to come to grips with the deflating housing market (I won't go so far as to say "bubble", but.... you know), the USA Today on the front page notes that, "For some, renting makes more sense."
    - Personally, I'll be watching closely to see when Toll Bros. (TOL) CEO Bob Toll takes down a one-year apartment lease.
    - After all, he nailed the top with that 1,000,000 share sell back in July 2005.
  • 5. Got him!
    - Check out the 9:32 a.m. Buzz post from Brian Gilmartin!
    - Yesterday's action "can't be good." Indeed.
    - Took less than 12 hours with us here in Vail to bring out those bear claws!

What is wrong with Transocean? - Phil Erlanger - 9:26 AM

Last night we heard a television pundit admit that he has been wrong on Transocean (RIG) but has no clue why it is not moving higher as the fundamentals are great. In my firm's opinion, it is nothing other than a good old fashioned long squeeze. Remember a long squeeze occurs when the stock weakens from a technical viewpoint and the short position is light. This stock has risen from $20 in 2003 to its current price of $67 and is now seeing sellers looking to lock in profits.

Our Technical Rank dropped to under 50% at the beginning of June and has yet to recover. Meanwhile shorts have been covering since January and now short intensity is 3% with a short ratio of 2.82 (chart).

It's not a beer party until something gets broken. - Rod David - 8:30 AM

S&Ps finally broke under a prior low Wednesday. Despite three weeks of intraday distribution signals, this was the first prior low to be touched, let alone broken on a closing basis. Of course, S&Ps futures had to firm after the cash session, enough to NOT close under its prior low, and to maintain the potential for recovering any intraday loss.

But then, isn't that what the past three weeks have been all about? Hope springs eternal, and even after nearly a 20-point reversal from the open's surge, sellers still couldn't hold short overnight.

Wednesday's volume was heavy and internal spreads were negative, but neither was by any means exhaustive. Another 10-point drop from overnight highs is already indicating that the rally's back has been broken. That won't prevent bounces back to "higher prior lows." But there is unfinished business at lower levels, and it finally appears to be in-play.

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