Buzz Bits: Dow, Nasdaq Close On the Upside
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Wedding Crasher - Ryan Krueger - 3:12 PM
- This week, I ran into a broker who noted that when he decided to leave Citigroup (C), the stock was around $55 a share. As we spoke, it changed hands at around $55 a share. The symmetry gets uglier for shareholders when you consider that he left Citigroup seven summers ago.
- Wachovia (WB) announces that it intends to buy AG Edwards (AGE). I believe that decision vaults it into the #2 position, as the largest number of brokers have it trading around $55 a share. Will this marriage work any better than Citi's?
- I'll have more later detailing my opinion in case it helps you pick out the appropriate gifts. Puts or Calls are so much more fun than stemware, don't you think?
- In the meantime, feel free to thumb through past wedding invitations in this industry and notice a few "tells" next to the "I-do's." The number of times that word 'synergy' is found in the press releases seems to strongly correlate with the strength in overhead resistance for the happy couple's shares.
- Being a bachelor has its advantages (if the Special K is reading this, I am still inside a financial analogy here, worry not dear). Just look at the spring in the step of Mr. Charles Schwab (SCHW) since it confessed to falling out of love with U.S. Trust.
We've seen this movie before haven't we?
Position in SCHW
Commodity Update - Sally Limantour - 11:29 AM
Commodity prices ended mixed for the month of May with crude oil down 4.8%, copper down 4.5% while the grains rose an average of 6.3% followed by coffee is 5.7%.
What a difference a week makes. The Shanghai copper stocks that were building have now reversed, LME stocks are also down. It appears the threat of near term oversupply has been downplayed and buyers are supporting the $3.20 level. With Overall global macro economic outlook seemingly improved, China copper stocks falling and India's GDP reported +9.4%, the $3.50 area should be tested soon.
Gold and silver are holding well after testing support areas and the gold/silver ratio has fallen below 50 as silver outperforms. The reality is demand for silver does exceed silver supply. The Silver Institute showed 2006 global production to be 646.1 million ounces which was a minor increase, however they also showed above ground stocks declining to 194.4 from 202.7 million ounces. News of a 9.5% decline in Mexican March silver output also is supportive.
The silver ETF (SLV) is a vehicle that one can own and is equivalent to owning 10 ounces of silver.
Positions in gold, silver, copper, crude oil
Slacker Randoms - Jeff Macke - 10:26 AM
- The report of Russia's ability and willingness to snatch back BPs rights to oilfields is the kind of thing that's going to look like a really obvious warning sign of the perils of globalization. You know... someday.
- The hedge funds who piled in on the original "Rupert for Dow Jones (DJ)" story are getting paid today as the controlling Bancroft family agrees to sit with the Ozzie media baron. Three thoughts: 1) Of course they're going to talk to him, he just offered them $5 billion. 2) Maybe the Bancrofts just want to talk about A-Rod. 3) DJ is worth more to Rupert than anyone else on earth... bulls better hope the sit-down goes well.
- Living well is the best revenge and J. Crew's (JCG) Micky Drexler is living very well today... especially when compared with the folks at the Gap (GPS) who fired him.
- Nasdaq up and Apple (AAPL) down? I didn't even know that was possible anymore.
- Dell (DELL) up 10% in the last month and another buck today. Two conclusions: 1) If you're running long money, "chasing" is starting to feel more like "self-preservation." 2) As I said on last night's show, Old School Big Cap Tech feels underowned.
What the Dollar Means for Gold... - Lance Lewis - 9:37
The trade-weighted dollar made another new multi-year low yesterday and closed on a monthly basis below its 200-month moving average for the first time since the 1970s (see the chart here).
Is it a coincidence that gold has suddenly awakened just when everybody was convinced that it was time to get bearish because the "US dollar Index" was bouncing and anybody with a ruler saw a trendline on the metals chart get broken? I think not.
The US dollar Index is irrelevant for gold. The trade-weighted dollar index holds the key to future inflation and the purchasing power of the dollar, which is what determines gold prices at the end of the day, and the trade-weighted dollar continues to tank.
Don't be fooled by the euro-heavy "US dollar index" that the folks in the media keep yapping about. The "dollar" isn't bouncing. It's collapsing, and that's bullish for gold...
Position in gold shares
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