Feb 16, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

General Public Feels Bullish On The Gold ETF And Gold Held By The U.S.

Posted: 16 Feb 2010 05:50 PM PST

“The gold price is comfortably above the $1,000 per ounce level and the SPDR gold ETF (GLD) is the second most popular ETF in the world behind the SPDR S&P 500 ETF Trust (SPY). In spite of gold’s increasing popularity as an investment class, there is still significant skepticism amongst most large institutional investors that gold is anything more than the “barbarous relic” that John Maynard Keynes labeled it. The general public, however, apparently feels differently.” Gold Alert … [visit site to read more]

With Gold So Strong Against All Currencies, It Will Not Fall To $950-$1000

Posted: 16 Feb 2010 05:40 PM PST

How can we tell if a market is about to go parabolic? Trendlines are one way. Another way is to look at the length of corrections. How long is it taking the market to correct? Are the corrections becoming shorter and shorter?

In the case of Gold/Euro, we see a market that is ready to go parabolic. The market has had four major corrections and each one has been shorter then the last. See the chart below.

Gold/Euro went from having a 15-month consolidation to an eight-month … [visit site to read more]

Interview With John Dorfman, Chairman Of Thunderstorm Capital And Bloomberg Columnist

Posted: 16 Feb 2010 05:01 PM PST

John Dorfman

John Dorfman’s bio from http://www.thunderstormvalue.com. John Dorfman founded Thunderstorm Capital in August 1999, and launched Thunderstorm Value Fund at the beginning of 2008.

Before he became a money manager, Mr. Dorfman was a financial journalist for many years. He covered the world of investments and related topics at Forbes (1982-1984) and Consumer Reports (1984-1986). From 1986 through 1997 he was a Senior Special Writer for The Wall Street Journal. At the … [visit site to read more]

Forex Trading: AUD/USD Eyes 0.9200

Posted: 16 Feb 2010 04:40 PM PST

4H: Last week, the market showed that it wanted to keep the AUD/USD in consolidation and rejected any further breakout from the downsloping channel. (Refer to Daily Technical Update 2.12.2010 AUD/USD.)
The 4H time-frame shows the upsloping trendline holding and intact. The market is in fact accelerating the rally. The stochastic shows momentum clearly broken above to the bullish side and staying above 65 area, reflecting an aggressive run up in the short-term.
Daily: The daily chart … [visit site to read more]

Stock Picks For Wednesday: ADC Telecommunications, Applied Materials, SIRIUS XM Radio

Posted: 16 Feb 2010 04:01 PM PST

( click to enlarge )

Starting with SIRIUS XM Radio (SIRI), on the daily charts, the present uptrend is getting confirmed as the days go on. Right now I’m in a Long trade that I entered around 0.851. The major trend is still bullish as we can see on the chart above.The bias is Bullish in nearest term. Immediate support is remains at 0.90 followed by 0.861. Initial resistance at 0.98. Break above that area could trigger further bullish momentum towards $1. CCI in overbought area and … [visit site to read more]

Forex Trading: EURJPY Moves Higher On Increased Risk Appetite

Posted: 16 Feb 2010 03:20 PM PST

The EURJPY was vaulted higher today on increased risk appetite and corrective forces in the pair. The price rebounded to the 124.46 high yesterday which was in between the last low price on February 1st of 124.59 and the low from April 2009 at 124.36 (see chart above).  The current price is back below these two levels at the 124.20 area and could look to target support against the 100 bar MA on the 5 minute chart at the 123.96 level.  A move below should target lower levels with the … [visit site to read more]

The 1,100 Level - Resistance To Hold Or Break On S&P 500

Posted: 16 Feb 2010 03:12 PM PST

I wanted to do a quick update showing the key resistance level at 1,100 that either will hold as an overhead sell signal, or break as buyers continue pushing prices higher, triggering a “popped stops” rally if they can move the index above 1,100.

Let’s see this on two quick daily charts:

We see that price bounced off the 38.2% Fibonacci retracement taken from the July 2009 low to the January 2010 high, forming a long lower shadow hammer/doji candle.

We’ve been in retracement … [visit site to read more]

Greeks Get Default Deadline

Posted: 16 Feb 2010 03:00 PM PST

Bonds can be a boring business…right up until they're not. Scanning the globe today, the theme is debt, and companies and nations desperate to deal with it.
Let's recap. The easy target: Greece.
"If risks to Greece's deficit targets materialize, then Greece will announce additional steps by mid-March," said European Monetary Affairs Commissioner Olli Rehn yesterday.
Translation: The EU is giving the Spartans 30 days to get their act together. If the appropriate steps aren't in … [visit site to read more]

Weakening Outlook On Sanofi

Posted: 16 Feb 2010 03:00 PM PST

We recently downgraded our recommendation on Sanofi-Aventis (SNY) to Underperform from our earlier Neutral recommendation. Although Sanofi's fourth-quarter earnings came in a couple of cents above the Zacks Consensus Estimate, we are concerned about the company's high exposure to generic risk on many of its leading franchises.
We see generic risk to products like Avapro, Allegra, Lovenox, Eloxatin, Delix, Taxotere, Plavix and Ambien all keeping a lid on shares. With Eloxatin facing … [visit site to read more]

Daily ETF Roundup: JJC Surges, UNG Sinks

Posted: 16 Feb 2010 02:51 PM PST

Investors returned from a long holiday weekend with an abundance of optimism on Tuesday, as encouraging news from Asia helped to boost markets. Europe, which recently replaced Japan as the unofficial drag on the global economy, surged as well, as confidence in the Greece bailout efforts picked up. In takeover news, Simon offered $10 billion for rival mall operator General Growth, which is currently operating under bankruptcy court protection.
The ETFdb 60 Index, a benchmark measuring the … [visit site to read more]

Unum Group Upgraded By Fitch

Posted: 16 Feb 2010 02:46 PM PST

Following favorable fourth quarter earnings, the rating agency Fitch upgraded the employee benefits and disability insurance provider Unum Group's (UNM) senior debt rating to “BBB” from “BBB-.” Fitch also moved up the group's issuer default rating to “BBB+” from “BBB” and raised the insurer financial strength ratings of Unum Group’s domestic operating subsidiaries to “A” from “A-.” All the ratings carry a stable outlook.
The rating agency acknowledges Unum's favorable operating … [visit site to read more]

Illinois Tool Works Sees Growth

Posted: 16 Feb 2010 02:31 PM PST

Illinois Tool Works Inc. (ITW) reported operating revenue for the three months ended January 31, 2010. During the quarter, total operating revenue increased 5% year over year. The growth in revenue was due to acquisitions and currency translation, which contributed 1% and 6%, respectively.
Although base revenue declined 2%, it improved versus the fourth quarter of 2009 when base revenue fell 10% on a year-over-year basis. The sequential base revenue improvement was largely due to easier … [visit site to read more]

Video: RBS Sells Its Commodities Unit To JPMorgan For $1.7B

Posted: 16 Feb 2010 02:15 PM PST

The Royal Bank of Scotland PLC announced Tuesday that its joint-venture commodities unit, RBS Sempra Commodities, has sold its metals, oil, & European energy businesses to JPMorgan for $1.7B. … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: CVX, AKS, KFT, JPM

Posted: 16 Feb 2010 02:14 PM PST

The latest in news, commentary, and information on what’s moving the US equities markets. Watch this broadcast LIVE at 4:00 pm EST daily @ “http://www.nyx.com/marketmonitor” … [visit site to read more]

11 Rigs Added To National Count

Posted: 16 Feb 2010 02:11 PM PST

According to data from Houston-based oilfield services company Baker Hughes Inc. (BHI), the number of rigs searching for natural gas in the U.S. rose for the week ended Feb. 12, 2010, reflecting intensified drilling activity by the producers in response to rebounding commodity prices. However, the oil rig count dipped slightly.
As shown in the first chart below from Baker Hughes, rigs exploring and producing in the U.S. totaled 1,346 during the week. This is up by 11 from the previous … [visit site to read more]

Video: Crude Soars 4% On Weak Dollar

Posted: 16 Feb 2010 02:03 PM PST

Front month crude prices soared more than 4% this session following strong equity performance and a weak US dollar. … [visit site to read more]

Buying Into Brazil By Betting On Vale (VALE)

Posted: 16 Feb 2010 02:01 PM PST

On Oct. 27, 2008, I strongly recommended that Money Morning readers invest in the Brazilian stock market through the iShares MSCI Brazil Index Fund (EWZ).

It was a momentous decision. The U.S. economy and the global financial system seemed to be coming to a precipitous end.

The day before Money Morning published my lengthy analysis and recommendation, The New York Times published an editorial by the newly anointed economics Nobel laureate Paul Krugman, entitled “The Widening … [visit site to read more]

US Budget Deficit: Enjoying The Ride On The Road To Ruin

Posted: 16 Feb 2010 02:00 PM PST

Let's focus on the good news. Well, our first item is good news if you were fool enough to follow our "Trade of the Decade."
We suggested that buying Japanese stocks could be the best investment you can make in the next 10 years. We immediately heard from dozens of friends and enemies. The friends were concerned because they thought we'd made a bad bet. Enemies were delighted that we'd lost our grip completely. After all, they remarked, who in his right mind would buy Japanese … [visit site to read more]

Emerging Global Advisors To Launch China Infrastructure ETF (CHXX)

Posted: 16 Feb 2010 01:58 PM PST

Emerging Global Advisors, the New York-based ETF issuer that pioneered sector-specific emerging markets ETFs last year, is scheduled to launch its first China ETF on Wednesday. The INDXX China Infrastructure Index Fund (CHXX) will be based on the INDXX China Infrastructure Index, a free-float cap-weighted index comprised of 30 companies determined to be representative of China's infrastructure sectors. 
Although the benchmark focuses exclusively on the infrastructure sector, the … [visit site to read more]

Telus Misses, Reaffirms Outlook

Posted: 16 Feb 2010 01:57 PM PST

Telus Corporation (TU) reported fourth-quarter 2009 results with adjusted (excluding debt redemption and favorable tax related adjustments) earnings per ADS of 43 US cents (46 Canadian cents per share), missing the Zacks Consensus Estimate of 56 US cents. Adjusted earnings also declined from 72 US cents per ADS (80 Canadian cents per share) reported in the year-ago quarter.
Reported net income for the quarter plunged 45% year-over-year to C$156 million (US$147 million) or 49 Canadian cents a … [visit site to read more]

Risky Business

Posted: 16 Feb 2010 01:56 PM PST

In a special report, “The Gods Strike Back,” The Economist confirms what those of us who had anticipated the meltdown of recent years already knew: financial risk got [way] ahead of the world’s ability to manage it:

"THE revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before nature." So wrote Peter Bernstein in his seminal history of … [visit site to read more]

Stoneridge Loss Narrows

Posted: 16 Feb 2010 01:42 PM PST

Stoneridge Inc. (SRI) reported a narrower loss of $200,000 or 1 cent per share in the fourth quarter of 2009, compared to the net loss of $108.4 million or $4.63 cents per share in the same quarter a year ago and the Zacks Consensus Estimate of a loss of 4 cents per share. This was attributed to benefits from restructuring and cost-reduction initiatives.
Net sales dipped 15.3% to $133.8 million due to the reduction in production volumes in the commercial vehicle markets in Europe (53.9%) and … [visit site to read more]

ETF Exclusive: Guggenheim Partners Buys Rydex

Posted: 16 Feb 2010 01:39 PM PST

A group led by financial services firm Guggenheim Partners, which bought Lisle, Illinois-based ETF issuer Claymore last year, has reached a deal to acquire Security Benefit Corp., the parent company of ETF issuer Rydex SGI.The group led by Guggenheim will make an investment of approximately $400 million for a controlling interest in Security Benefit. According to a press release (PDF), the deal is expected to close in the third quarter.
Using the figures from the latest industry snapshot from … [visit site to read more]

There’s Not Much Hope In Stimulus

Posted: 16 Feb 2010 01:36 PM PST

A great deal of change, in the form stimulus, has been tried at the hope casino. Congress gambled big in hopes of a genuine recovery… with jobs even…  but, reality has fallen far short.
In the place of a real recovery we've landed a false one. Instead of sustainable economic growth, the nation's been saddled with a deficit growing far into the future. It's been about as hopeless as a real-life casino.
The cartoon below came to our attention via Jesse … [visit site to read more]

CF Industries’ Profits Plunge

Posted: 16 Feb 2010 01:26 PM PST

CF Industries (CF) posted earnings of $1.04 in the fourth quarter of 2009, down from the Zacks Consensus Estimate of $1.25. Year-on-year, earnings declined 71%. Sales of $506.7 million in the quarter, more than halved from last year's $1072 million, have been driven by lower price realizations for all fertilizer products.
 
For the full year 2009, the company recorded net earnings of $7.42 per share as against $12.13 per share in 2008. Earnings also missed the Zacks Consensus Estimate … [visit site to read more]

Qwest Meets But Profit Tanks

Posted: 16 Feb 2010 01:13 PM PST

Qwest Communications (Q) has announced fourth-quarter 2009 earnings with adjusted (excluding severance charges) earnings per share (EPS) of 8 cents, matching the Zacks Consensus Estimate while falling from the year-ago quarter adjusted EPS of 11 cents. For full year 2009, EPS of 38 cents missed the Zacks Consensus Estimate of 40 cents.
Reported net income plunged 39% year-over-year to $108 million or 6 cents a share due to higher non-cash pension expenses, increased severance costs … [visit site to read more]

PAA Beats Zacks Estimates

Posted: 16 Feb 2010 12:58 PM PST

Plains All American Pipeline L.P. (PAA) reported adjusted earnings of 80 cents per unit, above the Zacks Consensus Estimate of 70 cents and last year's earnings of 74 cents.
For the full year 2009, the partnership reported earnings of $3.14 per unit, beating the Zacks Consensus Estimate of $2.76 and the year-ago earnings of $2.93. The partnership's 2009 earnings also exceeded its full-year 2009 earnings guidance of $2.88-$3.10 per unit.
Plains All American reported a 1% and 10% increase … [visit site to read more]

In-line Second Quarter For Oclaro

Posted: 16 Feb 2010 12:44 PM PST

Oclaro, Inc. (OCLR) reported revenues of $93.6 million in the second quarter of fiscal 2010, up 10% sequentially. The results beat the high end of the management's updated guidance.
Oclaro Inc. was formed in April 2009 combining Bookham Inc. and Avanex Corporation. Oclaro, a Delaware corporation, designs, manufactures and markets optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals principally for use in high-performance fiber optics … [visit site to read more]

Stock Buyback ETF (PKW) Under The Microscope

Posted: 16 Feb 2010 12:43 PM PST

Most ETF assets are allocated to funds that follow well-known benchmarks such as the S&P 500 or the NASDAQ, but an increasing number use complex strategies or follow relatively obscure indexes. Several of the funds in the Quantitative Methodology ETFdb Category use quantitative indexing strategies that are relatively unknown to most investors. Since the strategies of these funds may not be immediately clear, we put some them "under the microscope" to get a better idea of the risk and … [visit site to read more]

Everest Re Misses Zacks View

Posted: 16 Feb 2010 12:32 PM PST

Everest Re Group's (RE) fourth quarter earnings of $3.19 per share missed the Zacks Consensus Estimate of $3.38. The miss was primarily due to an increase in claims expenses.
However, the results were better compared to the prior-year quarter when the company had reported earnings of $2.92 per share. The increase was primarily driven by higher revenues and a mild catastrophe season.
Including realized capital gains and losses, Everest reported net income of $197.2 million or $3.28 per … [visit site to read more]

Mattel Upgraded To Outperform

Posted: 16 Feb 2010 12:17 PM PST

We are upgrading our recommendation on the shares of Mattel Inc. (MAT) to Outperform from Neutral.
Mattel reported fourth quarter earnings of 89 cents per share. Excluding a tax benefit in the quarter, the company had earned 81 cents per share, well ahead of the Zacks Consensus Estimate of 68 cents a share. The company had earned 49 cents per share in the year-ago quarter.
The better-than-expected results were primarily driven by strong sales of its Barbie dolls and Hot Wheels cars during the … [visit site to read more]

Penn Virginia Gains

Posted: 16 Feb 2010 12:04 PM PST

Penn Virginia Resource Partners L.P. (PVR) posted adjusted net income of 49 cents per unit, above the Zacks Consensus Estimate of 31 cents and well above 28 cents posted a year ago. The significant improvement in quarterly results was due to much higher fractionation spreads for PVR Midstream due to higher natural gas liquids (NGLs) prices and continued low natural gas costs.
For the full year 2009, the partnership reported adjusted earnings of $1.27 per unit, above the Zacks Consensus … [visit site to read more]

Are Your Mutual Funds Underperforming? Try Exchange Traded Funds (ETFs) Instead

Posted: 16 Feb 2010 12:01 PM PST

A press release by BlackRock Inc. (BLK), dated January 22, 2010, states that trading of Exchange Traded Fund (ETF) represents “16 % of all equity volume in Canada.” In response to increasing money flows into these securities, there is increasing choice, including bank sponsored ETFs. News released by the Bank of Montreal (BMO) recently, highlights some of the benefits of ETFs over mutual funds as being “liquidity, risk control and cost effectiveness.” But wait, there are even more … [visit site to read more]

An Insider’s View Of The Real Estate Train Wreck, Part II

Posted: 16 Feb 2010 12:00 PM PST

Right now there are an awful lot of banks that do an awful lot of commercial real estate lending, and for about a year now you've been telling me that you saw the first and second quarter of 2010 as being particularly risky for commercial real estate. Why this year, and what do you see happening with these loans and the banks holding them?
MILLER: It's an educated guess, and it hasn't changed. I still think that it's second quarter 2010.
The current volume of defaults is already … [visit site to read more]

Setback For Cadence Pharma

Posted: 16 Feb 2010 11:50 AM PST

Recently, Cadence Pharmaceuticals, Inc. (CADX) suffered a setback when the U.S. Food and Drug Administration (FDA) refused to approve its intravenous painkiller Ofirmev because of deficiencies in its third-party manufacturing facility. The FDA, however, stated that Ofirmev is an acceptable trade name for IV acetaminophen. 

The U.S. agency issued a complete response letter to the company in response to the New Drug Application (NDA) filed for the approval of intravenous (IV) … [visit site to read more]

SGMS Divests Racing Division

Posted: 16 Feb 2010 11:35 AM PST

Earlier this month, Scientific Games Corporation (SGMS) announced the sale of its Racing and Venue Management businesses (Scientific Games Racing) to Sportech, a U.K.-based gaming company for approximately $83 million in a cash and stock deal. Investors continue to view the divestiture positively, which resulted in buoyant prices since the company made the announcement. Shares were up 4.17% on Friday alone, closing at $15.25. 

Scientific Games is a global IT systems and services … [visit site to read more]

Dynavax Into Hepatitis Study

Posted: 16 Feb 2010 11:20 AM PST

Dynavax Technologies Corp. (DVAX) recently announced the commencement of a large-scale late-stage study of its hepatitis B vaccine (HBV) Heplisav. The trial will enroll 2,000 patients in Canada and the United States. Out of the 2,000 patients, 1,600 will be treated with Heplisav while the remaining patients will receive GlaxoSmithKline plc's (GSK) HBV vaccine, Engerix-B.
 
The company expects to report data from this study in the first half of 2011. The large-scale study intends to … [visit site to read more]

FX Options Weekly Outlook

Posted: 14 Feb 2010 02:00 PM PST

Jason Ayres, founder of OptionSource.net, provides a look a head of this week’s FX activity. … [visit site to read more]
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