Buzz Bits: Dow, Nasdaq Close in the Green
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
- UnumProvident (UNM) reported 2Q EPS of $0.43 vs $0.41 cons on revs of $2.67 bln vs $2.63 bln cons.
- Starbucks (SBUX) reported 3Q EPS of $0.17 (in-line) on revs of $1.96 bln (in-line). July comps were +4% vs +6.4% exp.
- Barrick Gold (ABX) reports 2Q EPS of $0.53 vs. Reuters consensus of $0.46 (32.20) on revs of $1.56 bln vs. Reuters $1.59 bln.
- Prudential (PRU) reported 2Q EPS of $1.40 vs $1.44 cons on revs of $6.04 bln vs $6.13 bln cons.
- Alltel (AT) reported 2Q EPS of $0.93 vs $0.89 cons on revs of $2.67 bln vs $2.62 bln cons.
You'll walk over, but you'll be limpin' back - Todd Harrison - 3:48 PM
- Hoofy has thus far steadied the supply and while I "think" we trade higher, S&P 1280 and NDX 1510 are unemotional lines in the sand.
- If you put a gun to my head and said "OK, punk, what now?" I would say "First, get that gun away from my head--I don't respond well to threats." I would then say that a rally into--and potentially thorugh-- August 8th, a PAUSE by the FOMC and then sell the "no news" is as likely a scenario as any.
- I've got a 4pm call before the most important staff meeting of the year. And, as I'm heading to the hills late Friday, I've gotta lotta to dos to chew through. Thanks for patience as we pull this puppy together.
- May peace be with you.
Hot to Trot - Jeff Macke - 1:51 PM
Greetings from New York where I'm waging a guerrilla war against mother nature's wrathful heat by running as many appliances as possible and refusing to set foot outside. If we all "do our thing" to stop Global Warming then Mother Nature has won, people. Sweating profusely and rethinking our waste is what she wants us to do on days like this. Nature is trying to push America around the same way the British once did and it's not going to happen on my watch.
Perhaps ironically, my shut-in warfare strategy is not only super cool, it also serves to conserve my own energy ahead of a busy few days. Beyond tonight's weekly Fast Money show on CNBC at 8pm we've got the Retail Round-Up in the morning then yet another very special Fast Money Town Hall show tomorrow night.
Be sure to set your Tivo (TIVO) boxes, crank up the AC, pop some popcorn and maybe leave the car idling in the driveway (not so much for the show but just so you don't have to worry about getting into a hot car). By way of forecast/prediction/not-advice, I'm thinking the Same Store Sales are going to be something of a horror show in the morning. The question, as always, is the market's reaction. For what it's worth, I remain bullish against the 1260 area on the SPX and I'm eyeballing some Big Pullback names like Gymboree (GYMB) in retail-dom.
Position in TIVO
Dime Store? - Kevin Depew - 12:45 PM
See GOOG has broken the long-term PnF trendline highlighted yesterday in Point & Go Figure. Meanwhile, the SPX, covered in the same piece, is inching closer to a break of the 1280 resistance (needs to print 1285 today).
The higher prices for SPX does not change (at least not yet) the negative Bullish Percent index, however, and that creates a negative divergence. In other words, every upmove by the SPX (and the Dow and the Russell 2000 and NDX for that matter) is being accomplished with fewer and fewer stocks participating in terms of real PnF demand.
How one positions for that is a function of time horizon and agility. I am playing this as a dimes in front of a bulldozer move with far better risk reward available by selling it than buying it for a quickie.
Position in SPX/RUT equivalents
Silver and Gold - Adam Michael - 11:17 AM
Silver just took out its July highs and I have to wonder if Gold can't be too far behind. According to my analysis, there are few believers in this move in silver.
I flagged both Silver and Gold as having bullish setups back in early July based on the Williams %R analysis I use. Gold has moved to a more neutral reading since its bullish setup back in June, but silver remains bullish despite a 25%+ move off its lows in June.
Here are the latest Williams %R readings for Silver and Gold based on last Friday's COT data.
13 Week %R for Open Interest in Silver Futures.
26 Week %R for Net Commercial Position in Silver Futures.
13 Week %R for Open Interest in Gold Futures.
26 Week %R for Net Commercial Position in Gold Futures.
I have been playing the gold/silver shares rather than futures. Yesterday on the buzz, I highlighted some of the setups I thought looked interesting such as Kinross (KGC), Yamana Gold (AUY), and Golden Star Resources (GSS).
Position in KGC, AUY, GSS
Homies catching a bid - as Toddo mentions....but why...and will it last? - Bennet Sedacca - 9:40 AM
Well, homies are a busted bubble, but as I alluded to a few weeks ago, despite my negativity towards the group, that they were ripe for a bounce. And they have. Why? I imagine the "hopers" out there think that lower rates will reinvigorate the group's fundies. My answer? Wrongo.
I think the hopers can get their bounce just as the Naz bounced on its way to a 90% decline, the Dow in the 30's, and Japan. See my revised chart here if you don't believe me.
But let's examine where busted bubbles come from in the first place. It comes from overcapacity and overbuilt inventories. And hopers. So I 'see' the bid in homies and as rates, all as we fall into recession, maybe the hopers will think the lower rates will resuscitate them longer-term. My answer once again - wrongo. No way. Inventories are through the roof, for sale signs abound and they are unaffordable anyway.
Note to self - 'hope is a poor road map to success in the markets.'
Walgreens July Comp's Looks Good - Brian Gilmartin - 8:42 AM
Walgreens (WAG) reported an increase of 9.7% (versus a 9.5% Briefing.com consensus) for July comp's while comp pharmacy increased 12.5%, scrip comp's increased 7.4% and front-end comp's increased just 4.8%.
With the exception of the front-end number, the July comp's look pretty good (see attached spreadsheet), and continue the acceleration we saw start in April, and is the strongest overall month for comp's since February, 2004.
The only aspect about the numbers that is puzzling is the front-end comp: with the kind of foot traffic that July must have seen to generate those kind of prescription and sales comp's, the front-end comp should be north of 6%, so July could have been more promotional than desired for WAG.
WAG is "this" close to busting out to an all-time high in a tough tape.
Position in WAG
What you need to know... - Jon Doctor J Najarian - 8:06 AM
Toyota Says Sayonara To Ford - Although General Motors (GM) sales were down 22.5%, they held the number one spot, but Toyota (TM) sales rose 11.7% from a year earlier to 241,826 units. All of Ford's (F) brands reported sales declines for a total drop of 34.3% to 239,989 cars and trucks, according to Autodata.
ADP Spinning Off Brokerage Services – In a deal that could yield up to $3.5 billion, Automatic Data Processing (ADP) (yeah, the guys that have flamed out so spectacularly estimating the employment numbers from BLS), will sell its back office processing unit that is responsible for $2 billion in rev and $300 million in net income per year.
Senate Clears Gulf Oil Bill – The House passed a far broader bill last week. The arguments about risks were shouted down by Senators that said the benefits outweigh the risks. Stay tuned.
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