April 29, 2011
Market is Atypically Strong for the Season
 April is typically the month that traders decide to sell off for the slow summer months, but instead major U.S. stock indexes are reaching multi-year highs. The closing bell on Friday indicated the all three major U.S. Indexes considerably higher for the year, and with strong corporate earnings and encouragement from the Federal Reserve, the gains seemed poised to keep coming. Analysts have been taking note of indications that the market is currently overbought, but for the most part there seems to be a tone of optimism as evidenced by week-long gains. The S&P shattering the 1,340 range is seen as a positive sign, with many analysts expecting the index to be in the clear until its next ceiling, around the 1,400 level. Next week, the earnings will wane and the focus will move more toward economic data. During trading (more)…
Predictive vs. Diagnostic Investing
 If you are around Wall Street you will hear all kinds of predictions…the economy will do this or that, a bio-tech will get an approval, a takeover is eminent… Some of these come to fruition, most don’t. One of the most empowering realizations I had years ago was that nobody knows the future. Rather than frustrate me, this understanding helps me to operate under a probabilistic methodology. Aaron Brown from AQR helped me to understand this too. The Poker Face of Wall St. by Brown talks about the need to use odds in your favor, use money management, and to relax and go with the flow. IBD talks about market, sector, stock. How does this all work together? The diagnostics of the market is about the internals: take an MRI of the market rather than guess what will happen…the A/D (more)…
3 Potential Buys Hovering Over Their 52-Week Lows
 Buy low is a mantra for many successful investors and while some companies lose ground as a result of structural flaws, a changing economic landscape or another misstep, others selling at their 52-week lows may be on their way back up again. To highlight the latter group, prime for a return we’re highlighting between a number of stocks trading within 10 percent of their worst trading levels of the last year. Among the stocks that appear more bullish are the following: Cisco (NASDAQ:CSCO), the recently maligned networking and communications device producers appear to be well positioned for a comeback. At present, shares are trading 4.78 percent above 52-week lows. The stock declined by close to 38 percent this year but most recently it was trading at $17.39. Shares of Cisco often find resistance when they neat around $17.50 but some (more)…
Equities Sector Coverage: Stocks Push Dow Higher
 The Dow Jones Industrial Average traded to another 2011 high at 12,832.83. The NASDAQ eked out a new 2011 high at 2876.83. The Dow Transports set a new all time high at 5551.31, quite surprising given near record high fuel costs. The Russell 2000 also traded to a new all time high at 866.90, which is sign of stock speculation given the slower than expected economic growth and Bernanke’s downgrade of future GDP growth made public on Wednesday. U.S. stocks continued its Fed-induced rally on Thursday with the Dow Industrial Average tacking on 72 points to 12,763 up 10.2% year to date. The NASDAQ lagged adding only 3 points to 2873 up 8.3% year to date. In Asia stocks were mixed with the Nikkei 225 closed. In London the FTSE 100 was closed for the Royal Wedding. The US Treasury (more)…
Equities Mid-Day Stock Market Roundup: Caterpillar Leads the Way
 U.S. stocks are mostly up today as industrial equipment giant Caterpillar (NYSE: CAT) produced better than expected results for the quarter. The company said profits for the quarter increased five folds and also raised its full-year outlook. According to the Wall Street Journal, first quarter results thus far have seen the largest corporations in the U.S. are up 26 percent year-over-year and are projected to produce a quarterly record of $22.05 a share. Full year earnings are also on pace to reach a record $94.80 a share, according to Standard & Poor’s. But as hot as stocks have been in April, major indices are now nearing key resistance levels. The Dow Jones Industrial Average is less than 200 points away from 13,000, and analysts anticipate more pressure on bulls as it gets closer. Commodity prices are still rising fast as (more)…
Best Six Months for Investing Ends Today
 Brooksie’s Daily Stock Market blog: An edge before the market opens. Friday, April 29, 2011 9:24 am EDT DJIA: 12,763.51 S&P 500: 1360.48 Nasdaq Comp.: 2872.53 Russell 2000: 861.55 I was bullish in late February and early March 2009. I had no problem coaching readers to “Lock and Load” ( Feb. 27 – 7,182) ; “Ready….Aim” (Mar.2 DJIA 6,832); Fire” (Mar. 10 – DJIA:6,805). But I am having some problems being as bullish now, at least short-term. I can’t say my unease about piling into the market now is “technical,” because a number of the classic overbought indicators are not ripe enough yet. Clearly it is not because there is a lack of interest, or that corporations are not making money. Not only are they beating (low-ball) estimates, but they have trillions in cash reserves. Global economies and securities markets (more)…
Investors Watch Stocks as Chinese Interest Rate Hike Looms
 Hong Kong stocks followed the Shanghai exchange down this week, with the Chinese market undermined by rumors of an interest rate hike ahead of the Mainland’s Labor Day holiday next Monday through Wednesday. Eric Yuen, head of research at Guoco Capital, told the Weekly Report the trend toward economic tightening would likely squelch any major stock rebound. For the week the blue chip Hang Seng Index slumped 1.7%, 417 points, to 23,721. The index of Chinese companies fell almost twice as much, 3.3%, 450 points, to 13,209. The Hong Kong market will be closed for a holiday Monday. Not only does a Chinese weekend interest rise loom over the markets, but China is taking steps to cool off the property market to quell stubborn inflation. “The situation will not change until inflation is under control, probably in the third quarter,” (more)…
April 28, 2011
Microsoft Earning Improve but Shares Fall
 Microsoft (NASDAQ: MSFT) announced today that their latest quarterly earnings increased by 31 percent despite a decline in sales of the company’s Windows operating system. The good news; however, was not enough to push share prices higher for the day as analysts suspected that the weak performance in the Windows division may dim the prospects for next quarter. This is the second consecutive quarter that Windows has fallen from the year before and some infer that attention has been redirected to improving mobile devices. The fruits of that labor; however are not expected to have a major effect on earnings and revenue until next year. The mobile device market is flooded with competition right now, with tech companies across the board attempting to capture some of the market share currently inhabited by the iPad. Microsoft is devoting a great deal (more)…
Exxon and the Energy Sector
 Exxon Mobil’s (NYSE: XOM) first-quarter earnings sky-rocketed 69 percent to $10.65 billion or $2.14 a share, revealing the extent that the company has been profiting from elevated oil prices, wider refining margins and increased production. Today’s results indicate a broader return for the energy sector, reminiscent of the days prior to the financial collapse in 2008. The steady climb to these earnings numbers has been well documented in the news and subjected to constant analysis on Wall Street. The results though, surpassed even analyst expectations of $2.06 per share, as natural gas and greater strength in its chemical division helped push profits even higher. Chemical profits for the quarter were equal to $1.5 billion, indicating a rise in the demand for the products and potential strength in shares of companies with a focus on these chemicals. Exxon’s production and exploration (more)…
Equities Market Recap: Market Rally Continues on Positive Earnings
 Stocks continued to rally during Thursday trading with the Dow Jones transports closing at a record high and all three sectors making steady gains. The Dow Jones Industrial Average surged 72.35 points, or 0.57 percent, to close at 12,763.31. The Standard & Poor’s 500 Index added 4.82 points, or 0.36 percent, to finish at 1,360.48 while the Nasdaq Composite Index was higher by 2.65 points, or 0.09 percent to 2,872.53. Transportation was a major source of gains today with the sector rising 1.02 percent. All-stars in the sector included, Pacer International (NASDAQ: PACR), up 17.61 percent to $6.01 and Norfolk Southern Corp (NASDAQ: NSC) which was higher by 8 percent at close. Horizon Lines Inc. (NASDAQ:HRZN) was higher by close to 13 percent on Thursday as well. For every 11 stocks falling, roughly 18 gained on the New York Stock (more)…
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