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Buzz Bits: Dow, Nasdaq Edge Lower

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Your daily Buzz highlights...

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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

H&R Block
(HRB) reports 1Q EPS of ($0.22) vs. ($0.26) cons on revs of $540.8 mln vs. ($587.0) mln.


Bell Buzz - Todd Harrison - 3:47 PM

  • For all ye faithful fighting the good fight tomorrow, remember that we've got a big breakfast with Beeks and a slew of new economic data coming down the pipe. The risk profile you go to sleep with is the one you'll be wearing in the morning.

  • In Flow's Diner, we've seen 10,000 Starbucks September 30 puts bought and 10,000 Exxon Mobil January 55 puts being sold.

  • It's today's action snazzy and jazzy? It's constructive---the piercing of the pennant in the homebuilders, the ability of the brokers to bounce and the 2:1 positive breadth are net positives. But considering A) volume is anemic and B) it's month-end, I don't think we can read too much into it.

  • As you know, I'm sans costume, flattish deltas and long alotta gamma. Given that I'm gonna be away from my screens for two sessions, I'm alright with that.

  • I've gotten a ton of emails from my former readers at TheStreet.com who are discovering Minyanville for the first time. Welcome, my friends, I'm quite sure that you'll enjoy your stay in the 'Ville.

  • And check out this out--it's my favorite part of my newfound existence.

  • I think this was an important Buzz (lest you missed it).

  • And just like that, August is behind us and the autmn wind is a Raider. As I ready to turn my attention to my Queen and celebrate her __th birthday, I wanna thank you all for sharing your journey with Minyanville. Something tells me that September is gonna be a humdinga on alotta levels and we will, as always, chew through it together.

  • May peace be with you.

    R.P.



It doesn't matter what you believe... - Rod David - 3:37 PM

...Just so long as you don't altogether believe it.

Last-minute trending ahead of a weighty news event tends to be wrong. In theory, bigger money has already positioned itself, so last-minute trending is considered to be smaller players. And smaller players tend to be wrong, especially when collectively expressing an opinion loudly enough to influence price, and especially when their timing is so close to weighty news.

Trending up into today's close doesn't mean the market will react down immediately on tomorrow's Employment Situation report. But it does make a reaction down more likely, whether it is the first tick or following a higher high. Regardless of the initial reaction's direction, it will be difficult to sustain any trending past mid-morning as ranks start to thin-out ahead of the three-day weekend.


Starbucks Updates Street After the Close - Brian Gilmartin - 3:29 PM

Starbucks
(SBUX) updates the Street on August sales after the close tonight, and expectations are pretty muted coming into the update with the Briefing.com consensus looking for +4%, or at the low end of the company's historical comp guidance of +3% to +7%, which has been in place for years.

Last month's comp was issued in conjunction with the fiscal 3Q earnings report, and overshadowed what was in fact a pretty good quarterly update, but SBUX has always traded off of comps.

I have no insight into tonight's number, but what I did was go back and see was when SBUX comps have dropped more than 2% sequentially, and there have been many instances of a 2% decline:
  • March - April '01
  • July - August '01
  • April - May '02
  • Nov - Dec '02
  • Jan - Feb '03
  • July - August '04
  • Nov - Dec '04


plus a few more...

Looking at historical comps, when we see a decline in the comp like we saw in July, we usually get a few more in the same area. SBUX hasn't seen a string of 3%-4% comps since 2001.

Technically, SBUX held the Jan 3rd low of $29.90 and has bounced a little, thus the '06 low is still intact. Looking at the weekly chart, $25 is where the 200 week average comes in. Also on the weekly chart, the stock is as now oversold on stochastics as it was on '01 and '05.

Position in SBUX



Mini-Minyan Mailbag - Scott Reamer - 3:04 PM

Minyan C. sent John and I the following email a bit ago and I wanted to share it with the MV community because I think it is as concise a summary of our worries as I have seen:

Prof's -

Regarding the economy's addiction, it's pretty simple:

  • Economic growth is tied to debt growth.
  • Debt growth is tied to low interest rates and risk appetite.
  • Interest rates are tied to debt demand.
  • Debt demand, which is the same thing as risk appetite, is based upon higher and higher asset prices (as businesses have shown they have no use for capital other than buying back stock).
  • Asset prices are tied to investor greed/fear.


So our economy is based upon the greed and fear of investors. And until people become fearful, debt-based growth continues, and the imbalances grow.



Lucky 13 - Kevin Depew - 2:46 PM

Taking a look at some recent DeMark TD-Sequential signals of note:
  • H&R Block (HRB) registered a TD-Sequential 13 "buy" signal yesterday after last Friday's gap down. It may also register a weekly TD-Combo "buy" signal depending on tomorrow's action. HRB has resistance at 21.50 and then 21.80. Best case, in my opinion, is the gap gets filled before this trend downward resumes. Coming below 20 would be an obvious problem. The ultimate PnF downside count is to 16.50.
  • Pfizer (PFE) registered a TD-Sequential 13 "sell" signal on Tuesday. I have no position in PFE, but like big cap pharma as a longer-term position trade since the conventional wisdom is the stocks are completely dead. Interestingly, PFE has a far more bullish pattern on the monthly chart (registered a TD-Combo "buy" signal last November) and the longer-term PnF upside objective is 38.



Futures are excited this morning! - John Succo - 9:04 AM

TV is trumpeting the consumer as alive and well. Personal spending is up 0.8%!!

Let's use deduction instead of induction.

Personal spending rose 0.8% yet personal income only rose 0.5%. That is a negative savings rate of -0.3% for the month. That equates to an annualized negative savings rate of -3.6%.

We can say that the consumer continues to borrow to spend last month. That is quite different than saying the consumer is alive and well.

And Tiffany & Co. (TIF) guides down and is trading lower pre-open. TIF's new middle class customers trying to buy high class goods tripped in the mall.

All this continues to build compression. Stocks are depending on a stretched consumer hoping against hope that income conditions will improve.


What you need to know... - Jon Doctor J Najarian - 8:17 AM

Goldcorp (GG) Buying Glamis (GLG) For $21 Billion! There's nothing like waking up and finding your stock up nearly 33%, but if you are a GLG shareholder, that's just what you'll see! Glamis Gold closed yesterday at $38.86 a share, and Goldcorp's offer values it at over $51! BTW, it appears someone knew about this one ahead of this takeover. More to come on that!

Tiffany (TIF) Sales Up, Earnings Down - TIF today reported results for its fiscal 2Q with sales growth of 9%. TIF also extended its share repurchase program and threw in an additional $700 million to boot.

Tivo (TIVO) Beats Street - The maker of digital televison recording devices reported a loss of $.07 versus an expected loss of $0.14 per share. Total August sales rose 4.6% to $29.6 million. Sales in the first few days of fiscal September have exceeded sales in the same period of last year, the company said.

Positions in TIVO, GLG

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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