August 31, 2012
Equities Sector Coverage: Stocks Close Out Summer on High Note
 The Chicago PMI declined slightly to 53.0 in August, below expectations. The University of Michigan Consumer Sentiment reading for August was finalized at 74.3 slightly high than July’s reading, but well below the 90 to 120 neutral zone. Factory Orders rose 2.8% in July, the best gain since July 2011. Fed Chief Ben Bernanke in his Jackson Hole speech indicated that the Fed will provide additional accommodation as needed as it is important to make additional progress on economic growth and job creation. Bernanke stated that QE1 & QE2 raised GDP growth by about 3.0% and lifted employment by two million jobs. The Dow Industrial Average traded up to 13,122.62 then fell to 13,002.64 before rallying to 13,151.87. The NASDAQ traded up to 3075.64 then fell to 3040.59 before rallying to 3078.52. Asian stocks were lower on Friday. The Nikkei (more)…
U.S. Consumers May Not Be Confident, But They’re Still Spending
 Consumer confidence jumped up to a three-month high according to the most recent survey from Thomson Reuters and the University of Michigan. Though the numbers do contradict against the Conference Board’s index that was released earlier this week that showed the biggest drop since October of 2011. Both surveys agreed that Americans are pessimistic regarding their future economic outlook. But whether consumers are growing more or less confident in the economy, the important thing is that they’re spending. With about 70 percent of the U.S. economy reliant on consumer spending, growth and recovery will hinge on whether Americans are willing to open up their wallets going forward. In July, personal spending rose to 0.4 percent, representing the largest increase in five months, according to the Commerce Department. Another encouraging sign is the strength that major retail stocks have displayed, many of (more)…
No Surprise Here: Markets Up After Bernanke’s Speech at Jackson Hole
 While the market has been buzzing about the central bank meeting at Jackson Hole and accompanying statement from Federal Reserve Chairman Ben Bernanke for the past week, not much was actually expected to come from it. So it was no real shock to Wall Street when QE3 was not announced. However, Bernanke hinted strongly that the Fed is ready and willing to initiate additional stimulus to help spark economic growth, which was all the encouragement the market needed despite receiving no timeline for more easing to begin. The Fed could make a major announcement as soon as its next FOMC meeting in September, that is, if the economy does not significantly improve by then. It could also decide to hold off until after the presidential election is over in November. Perhaps the strongest indication that the Fed could act sooner (more)…
Is the Worst Over for Netflix?
 After hitting a two-year low at the start of the month, shares of Netflix (NFLX) have since inched their way back over the $60 mark. Boosting the DVD rental and Internet streaming company was an upgrade from Below Average to Average by Caris & Co analyst David Miller, who noted that Netflix will get a boost from the likely renegotiation of a deal with pay-TV channel Epix. Netflix had signed a five-year contract with Epix back in August 2010, in which the former would obtain the exclusive online streaming rights – 90 days after the pay TV window – to movies produced by Paramount (VIA), Lions Gate (LGF) and MGM, the three co-owners of Epix for at least two years. For the remaining three years of the contract, a provision in the deal allows Epix to license the rights to other competitors. Two years have since elapsed, and (more)…
Don’t Buy the Open – Facebook in Final Plunge
 Investor’s first read – Brooksie’s edge before the open Friday, August 31, 2012 9:17 a.m. DJIA: 13,000.71 S&P 500: 1399.48 Nasdaq Comp.: 3048.71 Russell 2000: 808.64 Fed Chief, Ben S. Bernanke will deliver his annual message on monetary policy at 10 a.m. E.T. today. Investors are hoping they get guidance regarding QE3. I think they will have to read between the lines, because an announcement will more than likely come when the FOMC meets September 12 – 13. With many economic indicators reflecting softness, investors only naturally want reassurance the Fed will step in to head off another recession. Also at 10a.m. will be the report for July Factory Orders. A Bloomberg survey of 60 economists concludes these orders rose 2% in July up from a decline of 0.5% in June. That news may offset the Chicago PMI report 15 (more)…
China Stocks May Turn Volatile Next Week
 China stocks continued to slide Friday in somnolent trading ahead of Fed Chairman Ben Bernanke’s much anticipated speech. Hong Kong’s Hang Seng index slipped 0.4% to 19,483, a drop of 2.0% for the week, and the index of Chinese companies sank 0.6% to 9,280 to end the week off 4.1%. Despite the retreat, the Hang Seng has mostly traded in a narrow range with modest daily movements In the last three weeks. It has also hung onto a large part of the 1,352 points it gained from July 25 to August 9 when hope swelled that major central banks would inject cash into the sagging world economy. But things could get more volatile next week as investors get a better idea of whether that hope will be fulfilled or dashed, according to Ben Kwong, chief operating officer at KGI Asia. (more)…
August 30, 2012
Equities Sector Coverage: Stocks Fall Ahead of Jackson Hole
 Initial Jobless Claims were unchanged at 374,000 still above the 350,000 recessionary threshold. Personal Income rose 0.3% in July with Spending up 0.4%. The Dow Jones Industrial Average traded down to 12,978.91. The NASDAQ traded down to 3045.92. Asian stocks were lower on Thursday. The Nikkei 225 ended the day at 8,984 – down 0.95%. The Hang Seng ended the day at 19,553 – down 1.19%. European exchanges traded lower on Thursday. The FTSE 100 ended the day at 5,719 – down 0.42%. The DAX ended the day at 6,895 – down 1.64%. The CAC 40 ended the day at 3,379 – down 1.02%. The yield on the 10-Year US Treasury note declined from 1.657% to 1.608% versus the five-week modified moving average at 1.649%. Gold traded rebounded to $1666.7 the Troy ounce then declined to $1652.3 staying above the (more)…
Pandora Jumps Out of the Box
 Shares of internet radio company Pandora Media (P) soared over 20 percent to as high as $12.43 today as it reported better-than-expected numbers for the second quarter and raised guidance for Q3. Impressive growth in mobile-driven revenue also helped to inject renewed confidence that the company can continue to expand in the face of stiffer competition–particularly from the increasingly popular Spotify, Clear Channel’s (CCMO) iHeartRadio, or even satellite service SiriusXM (SIRI). For the quarter, the company reported that net income was break-even and revenue grew 51 percent to $101.3 million. Analysts were expecting a 2 cent loss on revenue of $100.9 million. What stoked the excitement, however, was the 86-percent growth to $59.3 million in mobile revenue. Pandora also said that its active membership grew 50 percent to almost 55 million users. Investors were also encouraged as two analysts tracking the company–Canaccord Genuity’s Michael (more)…
Buying the Premium Blend: A Look at Spread Trades
 The uncertainty that has kept retail investors out of the equity markets, out of the interest rate markets and out of the commodity markets still remains as all eyes focus on this weekend’s Jackson Hole meeting of central bankers, minus Mario Draghi, President of the European Central Bank. Investors are unsure what to do as the decisions made at the meeting will have a bigger impact on the markets than any earnings story in the stock market or supply and demand story in the commodity futures markets. Cash is still king. However, a spread trade is one type of discretionary trade that is relatively immune to the central bankers’ decisions. Spread trades are relative value plays. The actual profit or loss is determined by the movement of the markets relative to each other as opposed to what each market does (more)…
As Sam Sees It: Wall Street Braces for Another September Slump
 Each week, we tap the insight of Sam Stovall, Chief Equity Strategist for S&P Capital IQ, for his perspective on the current market. EQ: The market has been very quiet this week, which is normal for August, but with nothing really to look forward to other than Jackson Hole, are investors holding their breath for Fed Chairman Ben Bernanke or have they just checked out for vacation? Stovall: I have a feeling that most investors don’t really expect much to come out of this week’s statement by Fed Chairman Bernanke, especially since we have received better-than-expected S&P Case/Shiller Home Price data, an upward revision to second quarter GDP, and most recently, an improved tone from the Fed’s Beige Book. So I think most financial media will be saying that investors are holding their breath, when in fact, they’re more likely to (more)…
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