Market Recap: Retail Ho-Hum; Solars Shine
Just when you thought home prices bottomed! Retailers weren't pretty, but solars continued to shine.
Data from the S&P/Case-Shiller home price index, which showed a -6.1% decline from October 2006 levels, re-ignited fears in the housing sector sending stocks to its lowest levels of the day. Professor Depew noted the decline in the index was the largest decline since the group began tracking year-over-year records in 2001. In addition, compared with a month earlier, home prices fell further dropping 1.4%, the largest one-month decline also since records began. "Barring a bizarre surprise in November or December, home prices will have fallen every month in 2007 for the first time ever," he said. For more read today's Five Things You Need To Know.
The retail sector failed to provide significant lift. Shares of Target (TGT) fell as the company reported over the holiday that same-store sales could post anywhere from a 1% decrease to a lower-than-expected 1% increase. "The company has had a pretty rough 2007 on the fundamental side. The consumer may not be 'dead' but the retailers who aren't on the their A-Games are going to be better sells than buys," said retail specialist Professor Macke. Shares of Target settled -2.50% to $51.16 with other retail stocks falling as well: Wal-Mart (WMT) closed -0.74%, Costco (COST) fell -0.31%, and BJ's (BJ) fell -2.12%. For more read Retailers On Thin Ice.
But Solar stocks were hot today as news spread that China's government pledged to give top priority to developing energy. Professor Adam Katz noted this as part of the reason, but also possibly a bit of staging on China's part. "Professor Krueger has done an excellent job to point out the pollution problems they are having over there…but the solar story is clearly a secular one." Notable stocks included Evergreen Solar (ESLR) +15.24%, First Solar (FSLF) +3.31%, SunPower (SPWR) +1.93%, and SunTech (STP) +1.32%.
Crude oil rallied the highest level in a month. Front month futures for crude oil gained +1.72 to 95.85. "I don't think there is a catalyst besides general demand in my opinion. My commitment of traders reports show open interest is down from record levels and commercials are not that net short anymore. I would not be surprised to see us at 100-110 by the end of January," said Professor Adam Michael. Also check out his Trends Affecting Oil Price.
Gold performed strong today. Gold specialist Professor Lance Lewis said "It is trying to break out of its wedge on the charts. HUI is sling-shotting back up after overshooting to the downside like we have been talking about and the dollar is rolling over against the euro and taking down the dollar index. All friendly to the gold complex in my opinion." Gold settled +12.80 to 825.60.
In other metals, silver added +0.16 to 14.68, and copper gained +0.80 to 315.50. The dollar index was down -0.404 to 77.193.
Click on Minyanville's Buzz Bits for more summaries.
Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.
Some bullish trade or investment ideas: TIVO, ESLR, gold, HUI, BTU, crude oil, VAR, COST, ATVI, CRA, CSCO, TNH, YTEC, INFN, OPXT, EMKR, FNSR, CMI, MRCY, ESLR, PAAS, ONYXX.
Some bearish trade or investment ideas: EMC, CYNO, MXF, UA, TIVO, FSLR, TGT, CC, BBY, C, dollar index.
Make sure you check out the Exchange. Have a good night!
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