Buzz Bits: Dow, Nasdaq Seeing Red
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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
Palm (PALM) reports 1Q EPS $0.21 vs. $0.18 cons on revs of $355.8 mln vs. $354.6 mln.
Nike (NKE) reports 1Q EPS $1.47 vs. $1.41 cons on revs of $4.20 bln vs. $4.17 bln cons and Global futures orders rose 6%.
Bell Buzz - Todd Harrison - 3:41 PM
- With the CRB (+1.25%) at session highs--and the broader tape near session lows--some of our questions are seemingly being answered.
- Of course, some of that might be due to the extremely oversold nature of commodities (after the smack dabbage of late).
- Also worthy of a nose scrunch is the dollar (DXY -75 bips) and equities lower in synch.
- Gustave Le Bon? Wasn't he the lead singer of Duran Duran?
- Man, I gotta hit the gym. I can almost hear myself getting fatter.
- So, are we supposed to sell Rosh Hashana and buy Yom Kippur or the other way around? (Happy and healthy new year to those observing!)
- Fare ye well into the bell, Minyans, and have a mindfully fine night.
position in commodity based equities for a trade
Pre-Show Showdowns - Jeff Macke - 3:37 PM
Greetings from a gathering, Fast Money show walk-through where I'm getting my first look at the Risk Doctor's comparison of Jeffmacke to Rosie O'Donnell on Squawk Box this morning. I'd put young Tim on The List for such a thing if not for the fact of my being booked for the same show tomorrow morning. Revenge may be best served cold but, in this case, I'll settle for lukewarm.
Throwing my own 2-cents into the Walgreens (WAG) debate, today feels a bit capitulatory in the defensive area of the drug retailers. Were I more actively trading the sheets these days I'd be taking some of the hard-earned gains in long-time fave Gymboree (GYMB) and starting a long position in Wag. The kids are still better than a'ight but GYMB is up over 35% since the beginning of August. On the other paw, Wag (the dog) has dropped greater than 10% in 10 trading days.
Not advice, just trying to stay a hypothetical step ahead of intra-sector money rotation.
Drugs - Vitaliy Katsenelson - 2:37 PM
I happen to own three of the prominent stocks related to the news today that Wal-Mart (WMT) will cut prices on generic medication. Though it's good news for Wal-Mart, at least from a PR perspective, once the dust settles it should have very little impact on Walgreens (WAG) or CVS (CVS). Most of their sales are paid for by third parties (health insurance, medicaid and medicare). When I say most, I mean over 93% - a huge number. The WMT move should have little impact on them.
Position in WMT, CVS, WAG
Once Again... - John Succo - 1:24 PM
This little sell-off is being met by nothing but option selling. Aggressive option selling.
These sell-offs are viewed as opportunities by option sellers, those who think the market will continue to grind higher. They are, of course, selling options at the cheapest prices I have seen. I am buying volatility cheaper and cheaper.
This is inductive thinking. Investors are rewarded time and time again by this activity as we are all conditioned that the Fed will rescue any sell-off in nominal asset prices.
The very definition of complacency.
Panic in the Options Street - Adam Warner - 11:47 AM
Option volatility in the SPY has gotten positively frothy this week.
Yes, it is thrombolic at a 10, when you compare it to the volatility of the SPY itself over the past 30 days, which checks in at a 7, as you can see on this chart.
Yes, some of that is the dormant pre-Labor Day stretch still working through the system. But still?
It does not mean SPY options are a sale here at virtually single digit volatility. Far from it, in my humble opinion. It does show however that option ownership even at such low prices has not worked out well, to say the least over the past 30 days.
Going forward? I am comfortable *overpaying* for options at these levels.
Position in SPY
Stock market sentiment update - Bennet Sedacca - 11:32 AM
My firm's favorite sentiment indicator, which is a cumulative series of a dozen sentiment indicators, FINALLY made it to extreme optimism territory today. This doesn't come as a surprise but is indeed important.
Perhaps the divergent new high in the DJIA, unconfirmed by other indicators, as talked about by Jeff Saut, is necessary. But market leaders like Goldman Sachs (GS) are getting awfully overbought, so we are on the defensive.
If one wanted to play the short side (I am considering it), I think it would be led by emerging markets like Brazil and EWZ as the likely candidate to short.
Overbought markets can always get more overbought, just as markets can stay irrational longer than you can remain solvent, according to Mr. Keynes.
Not a market call or advice, but important stuff to me nonetheless. Now back to hitting those muni bids....
Position in municipal bonds and GS
What you need to know... - Jon Doctor J Najarian - 8:11 AM
Hewlett Packard (HPQ) CEO OK'd Sting Op – According to published reports, Hewlett-Packard's Chief Executive Mark Hurd approved a sting"operation on a reporter to investigate boardroom media leaks. If true, it clearly puts the fabulous career of Mr. Hurd in jeopardy.
More Looney Toons From Left Coast! California sued six of the world's largest automakers over global warming, charging that greenhouse gases from their vehicles have caused billions of dollars in damages. An automaker trade group called the global warming move a "nuisance suit."
Wal-Mart (WMT) Testing Deep Discounted Generic Sales - The world's largest retailer will sharply cut prices on 300 generic drugs it sells to both staff and customers. Reports say they will test prices as little as $4 per standard prescription, compared with an average of $10 to $30 for a 30-day supply.
Tribune (TRB) Considers LBO and Spinoffs - The board of Tribune will consider taking the company private in a leveraged buyout or spinning off its television station group. The board meeting comes as The Los Angeles Times editor and publisher are resisting pressure to make further cuts in staff, the report said.
Position in WMT
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