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Buzz Bits: Dow Takes a Dip, Nasdaq Steps Up


Your daily Buzz & Banter highlights...


Editor's Note: This is a small sample of the content available on the Buzz and Banter.

Earnings Report - MV News

  • Palm (PALM) reports 4Q $0.17 EPS vs. $0.15 cons. Company issues downside guidance for 1Q, sees EPS of $0.07-0.09 vs. $0.14 cons on revs $355-365 mln vs. $392.41 mln cons.
  • Solectron (SLR) reports 3Q $0.06 EPS vs. $0.05 cons on revs $3.0 bln vs. $3.0 bln cons.
  • Micron (MU) reports ($0.29) EPS vs. $(0.25) cons on revs of $1.29 bln vs. $1.27 bln cons.
  • 3Com (COMS) reports 4Q $0.02 EPS vs. $0.03 cons on revs of $310.9 mln vs. $316.4 mln cons.
  • Christopher & Banks Corporation (CBK) reports 1Q $0.32 EPS vs. $0.30 cons on revs of $149.4 mln revs vs. $149.2 mln cons. Company issues downside guidance for 2Q, sees EPS of $0.11-0.12 vs. $0.20 cons.
  • Research in Motion (RIMM) reports 1Q $1.17 EPS vs. $1.06 cons on revs $1.08 bln vs. $1.05 bln cons.

Sweet Calls- Ryan Krueger- 2:23 PM

I'm sharing three phone calls and an idea to chew on through the West Coast lunch hour. I just spoke to Prof. Sedacca, who can afford to buy me lunch next month in Montana, thanks to his consistently hot hand. He thinks the Fed may start warming up to my favorite group of longs, the Farmers, by worrying about Agflation. Owning everything a farmer needs and selling everything they feed (especially bond yields) is a trade I have on, in good size, here.

There is an unusual company worth mentioning, rallying in the face of higher corn prices this past year. Corn Products (CPO) offers up a few clues to the food chain. It refines corn into products like High Fructose Corn Syrup (which some very smart people believe is a huge cause of the skyrocketing cases of type 2 diabetes). Thankfully for CPO shareholders, Americans don't have time to listen to smart people while they are pulling into the drive-through lane. HFCS is in more of what you eat and drink than you may know, or that your doctor would like. I, for that reason, am biased against the stock.

I was also incorrectly assuming, in a too simple analysis, that higher input costs for CPO (it buys corn before turning it into syrup) would hurt the business. When Coca-Cola (KO) and millions of other food and beverage producers have a choice of sweetener, you would assume, correctly, that price is an issue. The business of CPO depends on HFCS being cheaper than sugar. My incorrect calculation last year was higher corn prices, without factoring in lower sugar prices. Sugar sweetener prices are significantly higher than HFCS, and, according to my trusted analyst in this space, the gap is huge. That is why I am long, and a management team I like doesn't hurt.

My third call was to my commodity broker who says sugar is cheap for a reason, with perhaps a couple of year's worth of inventory. But it would have to get much cheaper from here to come close to the cost of HFCS.

Only seven Wall Street analysts follow CPO and only three rate it as a "buy." The company's earnings the past few quarters have far exceeded these sour expectations.

My assistant tells me that the vending machine selling Coke's has raised prices for the first time in years. I don't drink that stuff, but I don't discourage it as loudly anymore

Position in CPO

Under the Hood- Kevin Depew- 1:52 PM

  • New point and figure buy signals are today leading new sells 15 to 7.
  • Overall buy signals are leading 39 to 12.
  • That's not surprising given the generally positive action in the indices.
  • Days such as yesterday are what are so unusual, where the broad indices are up big, but new sell signals far outstrip new buy signals.
  • These are not timing measures; they are breadth measures and risk indicators.
  • They offer insight into the health of the movements in the indices and when they disagree, such as yesterday, and when the bullish percents turn negative, as the S&P 500 Bullish Percent is now, they tell us that risk has increased.

Commodities Update- Sally Limantour- 12:45 PM

Hey Uncle Ben, rice is going higher and is up 73% since 2005. While rice is not included in the CRB this is important as it is a staple in Asia and the eastern part of the world.

Commodities are up today led by crude oil, metals, ags, and cotton. Since May, cotton has rallied 22.5% and is poised to go higher. Crude oil popped through the 70 level and is hanging just below it.

Ben (our Ben), that 7% you calculated is going higher.

Ben (heli Ben), you're in a tough spot.

Here are charts of rice & cotton.

Click here to see full sized chart

Click here to see full sized chart

Positions in oil, wheat, rice, cotton

i-Ninja- Jeff Macke- 11:24 AM

Greetings from Saddle River where I'm multi-tasking Mr. Momming with the cleaning people, the Cablevision (CVC) Cable-Guy and two dogs who, frankly, have totally let me down by not dedicating their lives to avenging my pit-bull bite. On the upside, I now have an answer to the childhood question "Why do our pets have to die?"

"Because they disappointed your father, kids." In other news...

  • Speaking of Cablevision; it's remarkable to me that there are entire generations of children who grew up in Cablevision regions and thus have no perspective on just how bad their cable provider is. I blame both CVC and box-maker Cisco (CSCO) who produces the single worst DVR imaginable. The cable guy may be able to return my picture but he says it's impossible to get the actual box to stop sucking.

  • I've alerted CNBC that I'm going to become a full-time Ninja, dedicating my life to the stealthy killing arts, if forced to talk about Apple's (AAPL) over-hyped, retro-network i-Phone one more time. Not to over-tease tonight's Fast Money or anything but let's just say I'm in the market for some XL black pajamas.

  • Bed Bath & Beyond (BBBY) down again today, as Dr. J pointed out earlier. After spending seemingly forever as a company unable to do any wrong, BBBY has missed sales and guided lower in the last 30-days. Two questions are begged: 1. why didn't BBBY take down estimates for the year when they warned last month? 2. Is it the consumer or is BBBY another example of Love Dying in specialty?

    And why would Bed Bath & Beyond have to die? Because they disappointed their daddy, Mr. Market, naturally.
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No positions in stocks mentioned.

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