Jan 5, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

S&P 500 PE Ratio: A Forecast For 2010 - 2011

Posted: 05 Jan 2010 07:45 AM PST

The S&P 500 PE ratio is the primary measure used by many investors to value the stock market and assess S&P 500 trend. Historically, the S&P 500 PE ratio has a median of 15.7. As of September 30, 2009, the S&P PE ratio was 86 based on a closing price of 1057 and trailing annual earnings of the S&P 500 of $46.36. All numbers are from the Standard & Poor’s S&P 500 index reporting. Part of the reason the PE ratio is so high is the negative affect of earnings in … [visit site to read more]


UNG vs USO: A Tale Of Two Commodity ETFs

Posted: 05 Jan 2010 07:01 AM PST

The last two years have forced investors to reevaluate many of the relationships within financial markets that have historically guided investment decisions and shaped portfolio strategies. Massive stimulus plans have created unprecedented amounts of liquidity, which has in turn caused traditional correlations between asset classes to break down. The notion that developed economies will lead the global economy out of downturns has been challenged and shot down by upstart emerging … [visit site to read more]

Ruth’s Sales Fall

Posted: 05 Jan 2010 07:00 AM PST

Ruth's Hospitality Group, Inc. (RUTH), one of the leading upscale dining restaurant operators, recently posted lower-than-expected preliminary fourth-quarter 2009 sales results, sending its shares down 4.1% to $2.32 in after-hours trading, after closing at $2.42 per share on Monday, up 15.8% from the previous day. 

Based in Heathrow, Florida, Ruth's company-owned restaurant sales fell 10.5% to $83.7 million from $93.5 million posted in the prior-year quarter. The Zacks Consensus … [visit site to read more]

BofA CEO: Expect Sluggish Revival

Posted: 05 Jan 2010 01:45 AM PST

Bank of America Corporation's (BAC) new chief executive officer (CEO), Brian T. Moynihan, said on Monday that he anticipates a sluggish and prolonged recovery of the U.S economy. He also expects a high unemployment level in the near term. 

According to the CEO, de-consolidating the banking sector would be a mistake, but the financial services industry should abide by the regulatory changes which helped stabilize the economy to a great extent. 

With respect to BofA, the market … [visit site to read more]

Political Mainstream Finally Learns To Appreciate Ron Paul

Posted: 05 Jan 2010 06:37 AM PST

For a congressman, Dr. Ron Paul (R-TX) holds contrarian economic views but, as the Los Angeles Times explains, his Austrian School perspective is increasingly gaining traction with a wider audience.
From the LA Times:
"Paul's once-lonely espousal of the Austrian School's ideas has gotten new impetus from conservative economists and Republican political strategists.
"A lot of good ideas were shoved aside because of the Depression and the rise of the Keynesian view of the world," said … [visit site to read more]

Semiconductor ETFs: Back On Track

Posted: 05 Jan 2010 06:36 AM PST

As recession gripped the global economy in 2008, nearly all sectors and regions took a hit. But as is usually the case, not all areas were impacted equally, as certain corners of the market delivered much worse results than others. Now, those industries that were hit the hardest on the way down have become the biggest gainers during the subsequent recovery, further proving the wisdom of the Buffett mantra "be fearful when others are greedy and greedy when others are fearful."
Semiconductor … [visit site to read more]

VeriFone Launches New Initiative

Posted: 05 Jan 2010 01:30 AM PST

VeriFone Holdings,Inc. (PAY) recently announced a strategic initiative to leverage its current and future payment assets into the rapidly growing payment-enabled media marketplace. 

Management stated that consumers now want to take advantage of electronic payment options in locations that offer unique media and marketing opportunities. VeriFone currently provides advertising opportunities on a number of its taxi cab payment systems in New York City. 

Management now intends to … [visit site to read more]

Palladium, Platinum ETFs Near Launch

Posted: 05 Jan 2010 01:23 AM PST

ETF Securities (ETFS) indicated in a filing with the SEC last week that financial firm Susquehanna Capital Group has bought 100,000 shares of its proposed first-ever platinum ETF, with delivery expected by the end of this week. Susquehanna has also purchased 100,000 shares of a physically-backed palladium ETF proposed by ETFS. According to an October SEC filing, ETFS planned to register about 12.9 million shares of its palladium fund with a maximum offering price per share of … [visit site to read more]

Swiss Franc: Bullish Bias Above 102

Posted: 05 Jan 2010 06:18 AM PST

Update on supports and resistances. … [visit site to read more]

Japanese Yen: The Upside Prevails

Posted: 05 Jan 2010 06:17 AM PST

Update on supports and resistances. … [visit site to read more]

British Pound: Rebound

Posted: 05 Jan 2010 06:17 AM PST

Update on supports and resistances. … [visit site to read more]

Euro: The Upside Prevails

Posted: 05 Jan 2010 06:17 AM PST

Update on supports and resistances. … [visit site to read more]

Chesapeake Forms JV With Total

Posted: 05 Jan 2010 01:15 AM PST

Chesapeake Energy Corporation (CHK) has joined hands with the world's fifth largest integrated oil and gas company Total S.A. or Total (TOT) for the development of Barnett Shale assets by creating a joint venture. Total will acquire a 25% interest in Chesapeake's upstream Barnett Shale assets. In consideration, Total will pay $800 million in cash at closing, which is anticipated by the end of this month and subject to regulatory approval. Total will pay an additional $1.45 billion by … [visit site to read more]

Stock Market News Briefs: Barclays PLC, Cadbury PLC, Credit Suisse Group, Goldman Sachs Group, Inc. (The), Intrepid Potash, Inc, Kraft Foods Inc., Las Vegas Sands Corp., Morgan Stanley, Motorola, Inc., Potash Corporation Of Saskatchewan Inc., Radioshack Corporation, Brightpoint, Inc., Google Inc., Research In Motion Limited

Posted: 05 Jan 2010 06:10 AM PST

 Kraft (KFT) announced plans to utilize proceeds from the sale of its Canadian frozen food operations to Nestle for $3.75 billion cash, raising the cash portion of its hostile bid for Cadbury (CBY) by 97 cents per share. Cadbury maintained the offer remains derisory

 Brightpoint (CELL) said it sees fourth-quarter non-GAAP earnings of 13-18 cents per share, below estimates of 19 cents. However, the firm expects to continue market share gains in 2010

 Google (GOOG) … [visit site to read more]

AIG Reshuffles Senior Management

Posted: 05 Jan 2010 01:00 AM PST

After the shakiness of top executives due to pay limit imposed by the government pay czar, American International Group Inc. (AIG) announced a few executive changes on Monday. 

Its chief administrative officer (CAO) Jeff Hurd has been replaced by Michael Cowan of Merrill Lynch. Hurd will now head human resources. Also, AIG’s senior vice president of communications Nick Ashooh is joining Alcoa Inc. (AA) as head of corporate affairs. Christina Pretto will assume the responsibilities of … [visit site to read more]

FTSE Trades At 15 Month High

Posted: 05 Jan 2010 05:56 AM PST

I’m not ready to bet on the FTSE just yet, but it’s at a very interesting level that could determine the next big move.

Just forget the mess that the real world is in and take a look at the charts:

Weekly chart

The FTSE index is toying with a key level; the last gasp 61.8% Fibonacci retracement of the 2007-2009 collapse (some chartists will point to a 72-something-or-other level, but for me the 61.8% is the make or break level). The theory is that when a market moves in one … [visit site to read more]

Chip Sales On The Rise

Posted: 05 Jan 2010 12:45 AM PST

According to the latest updates from the Semiconductor Industry Association (SIA), worldwide sales of semiconductors rose to $22.6 billion in November, up 3.7% from October and up 8.5% year over year. 

SIA President George Scalise added that sales of many IT and consumer products fared much better than earlier projections in 2009. Sales of personal computers continue to be strong, signaling the beginning of a recovery of demand from the business sector. The release of Microsoft’s … [visit site to read more]

Forex Trading: EURUSD Breaks Below The 1.4400 Level. Will We Start To Trend?

Posted: 05 Jan 2010 12:42 AM PST

The EURUSD has moved below the 1.4400 floor. Look for the sellers against the level with stops on a move back above close from yesterday at 1.4413.  The 1.4370 is the next downside target for the pair.  The 100 hour MA is also near that level currently.

The EURUSD is in a non trending mode as moving averages (100 and 200 bar moving averages in both the 5 minute and hourly charts above) are going more or less sideways and also are starting to converge.  This normally leads … [visit site to read more]

Stocks To Watch On Tuesday Jan 05

Posted: 05 Jan 2010 05:30 AM PST

( click to enlarge )

(OSIR) has been sitting around the $7.40 level for the past week and looks like it wants to break out of this range. The volume has been slowly picking up the last few trading sessions, which is another sign of a buyer in the stock. I am a buyer of OSIR once it breaks through the high of $7.54 on the breakout move. This stock can move very fast, so watch it closely and do not miss out when it breaks through. By a technical perspective, stock still trading in a … [visit site to read more]

Forex Trading: EURUSD In The Meat Of The Trading Range

Posted: 05 Jan 2010 12:21 AM PST

The EURUSD is back in the meat of the trading range over the last few days. The bottom is defined by support at 1.4400 and the topside is defined by 1.4432/37.  The price is currently below the 100 and 200 bar moving averages on the 5 minute charts and this gives a bearish intraday bias.  A break of the 1.4400 level should lead to further selling pressure with the 1.4370 level being the next downside target, … [visit site to read more]

Chart Of The Day: Bank Lending Still Shrinking

Posted: 05 Jan 2010 05:01 AM PST

As shown in the graph below, courtesy of Clusterstock - Business Insider, the latest figures from the St. Louis Fed show that commercial and industrial lending is still declining.
The dilemma is that US banks can borrow for almost nothing and lend money to the government by buying 10-year Treasury Notes and 30-year Treasury Bonds with yields of 3.8% and 4.6% respectively. “Thus, the banks are thriving on the 'yield curve’ while the poor slob on the street gets nothing for his savings … [visit site to read more]

Forex Trading: AUDUSD Non Trending. Watch 0.9148. Correction May Be Coming.

Posted: 05 Jan 2010 04:47 AM PST

The 61.8 % retracement of the move down from the November high at the 0.9405 to the December low at 0.8733 comes in at the 0.9148 level. The price moved above this level today but has come back down below this level currently.  Watch the level. The market surge may be ready for a correction … [visit site to read more]

Forex Trading: GBPUSD Watching The 1.6071 Key Resistance Level Today

Posted: 04 Jan 2010 11:26 PM PST

The GBPUSDs 200 day moving average comes in at the 1.6071 level today. This is a key level to stay below for the bears today.  As a result, look for sellers against the level with buying on breaks above.  The 100 bar moving average is also up near this level (currently at 1.6065 and moving lower).  The market will pay attention to this level as well today.
 Finally, on the hourly chart (see chart below), the price is currently between the 100 and 200 hour MA level (blue and … [visit site to read more]

Forex Trading: UK Sovereign Debt Concerns Weighs On British Pound

Posted: 05 Jan 2010 04:12 AM PST

The major thorn in the side of risk appetite towards the end of last year was the mounting speculation of sovereign debt crises stemming from credit ratings downgrades in Ireland, Greece and Dubai. With time, and the absence of any further negative developments into the holiday season, it appeared that most of these concerns had been absorbed by the markets and largely pushed to the sidelines.

However it appears that the demons of 2009 have reappeared early in 2010; as an article in the UK’s … [visit site to read more]

Forex Trading: USDCAD Moves To Test Support. Price Remains Below The 100 Bar Moving Average Resistance.

Posted: 04 Jan 2010 10:45 PM PST

The USDCAD has moved lower in early NY trade and tests the 1.0346 level.  The last time the pair was down at this level in October 2009, the pair used this price area as support/resistance during a consolidation period at that time (see chart above from that period).  Additional support from that time period comes in at the 1.0300 level. 
The USDCAD has been helped by higher commodity prices. Oil is up again today  by a modes $0.22 and Gold is also up. Both benefit the … [visit site to read more]

Mutual Funds: Top Japanese Equity Funds

Posted: 04 Jan 2010 05:51 PM PST

Today we are featuring top-performing “Japanese” equity mutual funds, which invest at least half of their net assets in equity securities of Japanese companies.
Investors can find such funds by checking out the entire list of the Investors can find such funds by checking out the entire list of the Zacks #1 Rank Japanese Equity Funds.
3 Excellent Picks
Hennessy Sparx Japan Smaller Cos (SPJSX) was incepted in August 2007. The fund seeks long-term capital appreciation.
The fund normally invests … [visit site to read more]

Stock Buy: 3M Co.

Posted: 04 Jan 2010 04:00 PM PST

3M Co. (MMM) recently provided its outlook for 2010, forecasting earnings of $4.85 to $5.00 per share. Analysts polled by Zacks were in agreement and have since become more bullish, calling for earnings of $5.04 per share, versus last month’s $4.91.
Company Description
3M produces thousands of innovative products for dozens of diverse markets. The company’s core strength is applying its more than 40 distinct technology platforms, often in combination, to a wide array of customer needs. With $25 … [visit site to read more]

Stock Buy: ZOLL Medical Corp.

Posted: 04 Jan 2010 04:00 PM PST

ZOLL Medical Corp. (ZOLL) just hit a new 52-week high on continued momentum from the company’s better than expected Q4 results from early November.
Company Description
ZOLL Medical Corp., together with its subsidiaries, develops and sells specialized medical devices and software solutions in the United States and Internationally. The company was founded in 1980 and has a market cap of $578 million.
Shares of ZOLL are once again pressuring the 52-week high after rebounding from a short-term … [visit site to read more]

Analyst Interviews: Restaurant Industry Update

Posted: 04 Jan 2010 04:00 PM PST

The restaurant industry has been facing extremely tough challenges due to the ongoing economic turmoil. With a weak labor market, lower discretionary spending and continued credit-market access issues, it may be too early to predict any improvement in the restaurant industry, which is grappling with sluggish consumer demand.
Although current economic indicators show some signs of improvement, we believe that the weak labor market will continue to adversely impact the restaurant industry, even … [visit site to read more]

Stock Buy: Eastman Chemical Company

Posted: 04 Jan 2010 04:00 PM PST

Eastman Chemical Company (EMN) expects to see 20% earnings growth as the recovery takes hold. EMN is trading with a forward P/E of 14.03.
Company Description
Eastman Chemical manufactures chemicals, fibers and plastics materials from 11 manufacturing facilities around the world.
The company has 5 business segments: Coatings, Adhesives, Specialty Polymers and Inks; Fibers; Performance Polymers; Performance Chemicals and Intermediates; and Specialty Plastics.
Eastman Updated 2009 Guidance
On … [visit site to read more]

Bear Of The Day: Aetna, Inc. (AET)

Posted: 04 Jan 2010 04:00 PM PST

Aetna Inc. (AET) reported third quarter earnings per share of 69 cents, which beat the Zacks Consensus Estimate of 66 cents per share. However, earnings declined 38% compared to $1.12 reported in the prior-year period.
Although revenues increased 9% year over year to $8.72 billion during the quarter, membership has slumped throughout the health insurance sector as employers have cut jobs, thereby leading to a reduction in the number of people covered by employer-sponsored plans.
While we are … [visit site to read more]

Stock Buy: Cliffs Natural Resources, Inc.

Posted: 04 Jan 2010 04:00 PM PST

Cliffs Natural Resources Inc. (CLF) shares continue to set new highs as analysts and management raise estimates.
Company Description
Cliffs Natural Resources mines iron and metallurgical coal in the U.S., South America, and Australia. The company focuses on supplying growing markets.
Improving Outlook
When Cliffs reported third-quarter results on Oct 29 it included comments on improving business conditions and a positive outlook. Revenues fell 44% year-over-year to $666 million, but demand … [visit site to read more]

Bull Of The Day: RadioShack Corp. (RSH)

Posted: 04 Jan 2010 04:00 PM PST

We upgrade our recommendation for RadioShack (RSH) to Outperform based on our assessment that the company is likely to improve its earnings in future reporting quarters as a result of a significant boom in the wireless industry.
The company is generating healthy revenue growth from stronger sales for its Sprint Nextel postpaid wireless business, netbooks and prepaid wireless handsets and airtime. The addition of T-Mobile as a postpaid wireless carrier also contributed to revenue.
RadioShack’s … [visit site to read more]
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