Buzz Bits: Dow, Nasdaq Slip
Your daily Buzz & Banter highlights...
Bell Buzz - Todd Harrison - 3:44 PM
Another Hump edges into the rear-view as we put the lotion on the skin. I've gotta tell ya, while there are alotta reasons for the tape to abate, particularly with the (marginally) stronger dollar, the fact that it doesn't isn't lost on these old eyes. I learned a long time ago to respect--but not defer--to the price action.
What can shift the drift? Any of the following:
- Crimson follow-through in the emerging markets (Hang Seng, FXI).
- High profile pre-announcements (I know Citi didn't matter but if a trend emerges...)
- Some M&A regurgitation.
- Abatement of quarterly inflows.
- Bacon. As you might find in a bacon, lettuce and tomato sandwich.
Contextually, I'm watching S&P 1530 as a near-term guide as a sideways slither above that level could be perceived as a pit-stop before oxycution (acne, or breakouts).
I'm keeping my chips close to the vest, in part because I've been chilly (happens to the best of us) and partly as a function of my massively full plate (MV Kids, The Exchange, Festivus, "Other" stuff). I've learned the hard way that if you don't put 100% into trading, the person on the other side of your risk likely will.
In any event, I'm gonna jump and juggle for part deux of my day as we find our way through the frisky day. I sincerely hope you had a great day and that your night puts it to shame. tomorrow, as they say, is promised to nobody.
Fare ye well.
Afternoon Delights - Jeff Macke - 2:37 PM
Howdy from the NASDAQ market site where I just made the very shvitzy mistake of walking cross town from a Power Lunch (the meal, not the show). Busy, busy, Minyans. Here's what I'm watching as I play catch-up with the tape.
- Microsoft (MSFT) was on such a nice roll in terms of newsflow; then it had to bring that whole Zune mess into it. Much like the Knicks, Mr. Softie needs to simply apologize, take the financial hit and move on to other matters.
- We had the NASDAQ's (NDAQ) Bob Greifeld on Fast Money last night. Whatever you think of the "Exchange Roll-Up" as an investment thesis, one thing I've learned in my short time on TV is "Never Short Stocks when the CEO can't stop smiling."
- Dollar Up, Stocks Down: Day 2. Not huge moves but probably not coincidental, either.
- Google (GOOG) at $600 has every bit as much "meaning" as Dow 14k.
- My Hasbro (HAS) is getting a slight smacking after a BMO downgrade. Like the market and a fist-full o' others (Micron (MU) et al), Hasbro has earned a little break in light of the rally it's put in lately.
- Don't fight the last battle: if you "missed" the rally in the homebuilders (KBH... amazing call, Guy Adami) or the financials and are feeling tempted to chase them, now it might be time to watch a little baseball.
- In fact, I think it's almost time to watch a little baseball, regardless...
Position in HAS.
WYNN, LVS and BRCM, Oh My! - Sean Udall - 1:30 PM
Wynn Resorts (WYNN) and Las Vegas Sands (LVS) are on my short lists and I'm actually not real happy with myself as I've been looking at putting at least a small short of LVS of the books for a couple weeks.
Anyway, stocks that exhibit Island Reversals or something very similar looking (see WYNN and LVS) can continue to be good shorts for an extended periods of time.
Meanwhile, Broadcom (BRCM) looks to be selling off in sympathy with the negative Intel (INTC) and Advanced Micro Devices(AMD) commentary. I'll add to my BRCM position closer to $35 and I may start an INTC position closer to $25 or lower if the opportunity presents itself. The ultra-large INTC is not my favorite semi to trade but I think it will trade closer to the $33-35 level in time than the low $20's. At $25 or lower I think the risk/reward is quite favorable.
Along a similar vein, I've added a Microsoft (MSFT) long today. Many catalysts, which should be well known to all, but you could have said the same thing about EMC (EMC) when it was $14 or lower and that didn't prevent EMC from rising quite a bit over the last few months. As previously stated, I think MSFT will trade at $35 or higher within a multi-month time frame, as well as outperforming the S&P 500 over the next few quarters.
Positions in BRCM and MSFT.
CoStar Rising - Fil Zucchi - 11:18 AM
CoStar Group (CSGP) has ripped almost $10 since I first cast a doubtful eye on the company. Nothing really has changed fundamentally since I began my position, which has since grown and has an average price of about $55. The facts remain that:
- CoStar's guidance for this quarter is for approximately $0.13, while consensus is for $0.16.
- Maybe (probably) CoStar's EPS growth will accelerate in the next few quarters, but estimates already seem to expect that, with consensus for '08 at $0.94, a 70% increase Y/Y.
- The most bullish estimate I have seen for '08 comes from Morgan Stanley (MS), forecasting $1.21, and its price target is still only $66.
- The commercial real estate market is slowing: It's not imploding and deals are getting done, but the frenzy seems over for the most part, and the economy in general is slowing.
- There's a high built-in expectation that not only revenues, but margins will also rise rapidly.
- CoStar has spent a lot of money expanding in new markets, with the all the risks that come with such a move.
This is a set of circumstances which begs for players to be disappointed. I recognize that that could be me and the rest of the "crowded shorts", but my sense is that for that to happen, Hoofy is going to have to come up with a hefty dose of unforeseen good news.
Position in CSGP and IAI.
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