| » Best Buy, Red Hat Beats the Street | |
| Red Hat (RHT) reported its 4th Quarter earnings profits grew 44%. Shares are up 98% for the year. Some currency losses in Europe this year otherwise the profits would have been higher. All in all, a good quarter, with profits of $23.4 million or 12 cents a share. The company announced a $300 million stock repurchase program. The leader in open source software significantly outperformed Novell and Oracle. Trading at $29.43 down $1.27 in afternoon trading giving them a market cap of $5.8 Billion.
Best buy (BBY) announced Q4 earnings at $1.82 3 cents better than the $179 estimated. Revenues of $16.5 billion vs $6.0B estimated. Store sales were up 7% over last year. William Sergautis ChartTrader Hollywood FL
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| » Market Update | |
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Dow leaders include Caterpillar Boeing ,Exxon mobil, , alcoa, att, Bank of America and Merk.Crude oil at $82.50 is up $2.50 or 3%. The U.S. dollar is week sending commodities prices rising. There is optimisim today about the fact that Greece is initiating a new sovereign bond offering and the U.S. treasury chooses Morgan Stanly to handle the sale of its 7.7Billion shares of CitiBank. Other commodities up on the day include: Natural Gas up .06 to $3.92 up 1.6%, Copper + $3.50 up $0.10 or 3.3%, Gold +$8.00 or 0.72% at $1,112. Traders are questioning if the dow can hold above 10,000 with some nervousness in the market waiting for the jobs number coming out this Friday. William Sergautis Registered Investment Advisor ChartTrader.com
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| » Fed Holds Key Interest Rate Unchanged | |
| Stock markets moved higher after the Federal Reserve announced at 2:15pm today that they will leave the Fed Funds rate at zero to 0.25%. The Fed says the labor market is stabilizing and presented a reasonably positive statement saying that "the pace of the U.S. recovery to be moderate for a time” This statement was nearly identical to the Jan. 27 statement where they said they would continue to evaluate the purchases of mortgage backed securities. This time they only said that they will continue to monitor economic conditions. The markets are looking for the November statement as when the Fed may start to raise interest rates. Higher interest rates would be a result of an improving economy so ultimately that is what we are all hoping for. The FMOC wants to act in a steady prudent way with as much transparency as possible so as not to give the markets any surprises. William Sergautis ChartTrader.com Hollywood Florida | |
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| » Ben Bernanke testifies on monetary policy New home Sales drop 11.2% | |
| Ben Bernanke explained before congress today that the Fed benchmark lending rate will remain at historic lows and hold at around zero. He warned of a week job market and explained why due to mainly mechanical reasons the Fed is restoring the supplemental financing program draining 200 Billion of excess liquidity from the market after raising the discount rate last week.
Home sales were unexpectedly weaker
Sales of newly built homes took an unexpected 11.2% drop, falling to a record low. The annual rate of sales was 309,000 units in January, (Commerce Department). That was a 6.1% drop from last year’s number. Economists predicted sales would climb.
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| » Expecting China to Recover in the year of the Tiger | |
| The Peoples bank of China increased reserve requirements to 16% for big banks and 14% for smaller banks to try to cool off their heated economy. Analysts are expecting more increases and expect Chinas central bank to implement further controls on lending. The Dow Jones index is down about 100 pts in afternoon trading but still above the key 10,000 level. Commodities under pressure because Chinas growth has been a bullish theme for commodities. China is trying to lower its growth rate from double digit to high single digit growth. This is the 2nd time the government has increased bank reserve requirements. The dollar is higher on the new sending investor into increased risk aversion. This is very much a surprise especially after its surprising lower inflation numbers posted recently. William Sergautis ChartTrader.com Hollywood, Florida | |
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| » European Union failed to deliver a resolution on Greece Debt Problem | |
| Traders are growing impatient with the EU foot dragging but there are hopes that the EU and Greece would reach an agreement regarding loan guarantees to ensure Greece would not default on its sovereign debt.
Commodities lower at noon trading Wednesday Feb 10, 2010. Dow Jones down 91 pts Disney lower on flat earnings saying consumers and advertisers still cautious. NY Times beat expectations saying advertisers are coming back and circulation is slowly getting better. Bank of America and Merrill Lynch raised Dell Computer to a buy up 2.5%.
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| » Is The Correction Over? | |
| Dow up 112 in early morning trading Tues Feb 9, 2010. Greece proposes significant overhaul of its troubled pension system raising the age of pension recipients and banning early retirement. Unions are in firm opposition.
Coke announcing earnings in line with expectations and showing continued growth in China. McDonald's up with solid growth in Asia as well. European banks up across the board up 4 to 7%. Home builders up this morning with Pulte homes losses shrinking vs. previous quarters. Similar stories among the other home builders. | |
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| » Jobless Claims higher by 15,000 | |
| The weekly jobless claims released at 8:30am today were at 576,000 up 15,000 from a revised 561,000 and well above the expected 550,000 number. Stabilization could be due to the end of benefit cycles.
The Dow is up 30 in afternoon trading showing that the overall market is taking this news in stride. The news is a little disappointing but does not change the overall trend as clearly down. It seems clear we’ve seen the peak in jobless claims which were around 650,000 per week this spring. The unemployment level could still top 10% and then start coming down next year. Only a few months ago people were talking about 12% in unemployment so generally things seem to be improving. If you look at the effect of the stimulus which only modestly improved things; take into consideration that only about 10% of the money has been spent to date. About half of the money will be spent in 2010 and that will have a very supportive effect in the economy. William Sergautis ChartTrader Investment Advisors.
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| » Jobs Report Better Than Expected | |
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| » Oil Inventories Down 3.7M barrels | |
| The Energy information agency announced today at 10:30am that oil Inventories were down 3.7 million barrels. Distillery inventories were up 2.9 M barrels. Gasoline up 2.3 M barrels and refinery utilization was down 0.1% to 87%. The effects of the OPEC supply cuts are starting to show. In June the supply disruptions in Nigeria accounted for 200,000 to 280,000 barrels/day in shut downs according to the national oil company in Nigeria. | |
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| » Stocks and Commodities Up Weds. in Quiet Trading Week | |
| News this quiet Wednesday Morning includes: Courts clear the way for the GM/Fiat deal to move forward. Fed. O.K.'s 10 banks to repay TARP funds and oil closed above $70/barrel. Commodity prices are higher this morning as the U.S. dollar continues under pressure. Data on government energy inventories due out at 10:30 with recent upward revisions in its oil 2009 forecast are lifting oil prices higher. | |
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| » 10 Treasury Yield at 7 Month High | |
| 10 Treasury yields are at a 7 month high this Monday morning with auctions scheduled later this week for both 10yr and 30 yr debt totaling over $65B. There is speculation that the Fed may have to raise interest rates sooner than anticipated and that is moving yields higher. The 2yr bench mark yield is at its highest yield since Nov. 2008 at 1.349%. Later this week the Fed will be releasing its beige book data. Traders are bidding up the dollar the last few trading sessions which has influenced most of the commodities from oil to copper as well as the gold markets. Gold is called down $14 to $948 in pre market trading. Charttrader.com, Registered Investment Advisors. Hollywood Florida. | |
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| » March Home Prices Down 18.7%. More Than Expected | |
| March Case Shiller report out today showed housing prices were down 18.7% slightly more than expected. The slowing pace of declining prices is just not happening. The housing market clearly has a ways to go as far as selling off the excess inventory due to the large number of foreclosure properties currently on the market.
William Sergautis Charttrader.com Registered Investment Advisor. Some housing indicators show signs of bottoming. Home sales and construction activity are near or at bottom. The number of home sales is boosted by the surge in foreclosure sales. Prices can fall a little more before they bottom but housing sales and construction activity is stabilizing. Demand is coming up due to the historically low mortgage rates. This is thanks to the aggressive fed and treasury actions to stabilize the financial markets and to bring in more funds for Freddie Mac and Fannie Mae. Also the drop in prices has made housing a lot more affordable. Income levels are an important factor in housing demand and with the currently high unemployment levels and low consumer confidence levels there is no great increase in demand even with the low prices.
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| » Bank United Sold to Private Equity Group | |
| The biggest bank failure of the year, Bank United was told as early as April to find a buyer because of its serve financial condition. The bank was hit hard by falling home values in Florida on of the worst area for housing price delclines in the country. The FDIC will share in the losses in $10.7B in assets and will recieve warrent as well as share in the profits if the bank gooes public. The cost to the FDIC is a hefty $4.9B depleating their gund which totaled $53B at the end of Q1. The FDIC said they will have enough captial to deal with potential future bank failures. The FDIC said they will release guidlines for private equity in the future and it is the intention of the private equity group to aquire other troubled banks under the Bank United umbrella.
John Kanas along with a group of high prifile investors will serve as chairman and officers of the new bank.
Charttrader Investment Advisors Miami Florida. The name of the bank will not change and no member of the group will own more than 24.9%. All branches will remain open. | |
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| » S&P may downgrade UK Credit Rating from AAA | |
| Brittan could lose its top level credit rating for the first time due to increasing debt piled on after bank bailouts and stimulus packages. Stocks in Brittan are down by more than 2% today after standard and Poors said there is a 1 in 3 chance they will be downgrade the UK debt rating from AAA. This would mean higher interest payments on debt. Bond auctions would be more difficult. There is $344B in auctions coming up this fiscal year so this would be a very unfortunate development. William Sergautis, Charttrader.com
The IMF said the the UK debt level would reach 67% of GDP and while standard and poors said it could reach 100%. Prime Minister Gordon Brown had increased the countries borrowing, like in the U.S., to pay for stimulus and bank bailout programs. Brittan’s bank looses have totaled $120B since 2007. | |
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| » Premarket Up ahead of housing Data/ Saks beats est at $0.04 | |
| S&P futures called higher at 8:15am this Tues morning May 19. Charttrader Investment advisors. The market is looking good to extend yesterdays gains while housing starts data will be released at 8:30 and could change sentiment. Financials called higher Citi Group Bank of America and State Street all called higher. Banks want to give the tarp money back. Three major banks, JP Morgan, Goldman Sacs and Morgan Stanley will try to give $45B back to escape the extra scrutiny and restrictions on executive compensation. Home Depot beats estimates with profits climbing over 40%. India stocks very strong as well as European markets up for the fourth day. | |
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| » State Street Offering $1.5B in New Stock | |
| State Street Corp offering $1.5B in new common stock and will also be selling non FDIC guaranteed notes to repay the Federal governments tarp funds even after they passed last week’s stress test. Charttrader Investment advisors Miami. This is not one of the firms that the gov. said did not need to raise additional capital but State Street Corp (SST) wants to get out of the restrictions that may be imposed by accepting tarp funds. They see 2009 profit of $4.25 to
$4.50 better than analysts were expecting. Analysts also boosted shares of Bank of America(BAC) when Goldman Sacs added BAC to its conviction buy list saying it had a "Solid Quarter" for its mortgage and capital markets business. Goldman Sacs, (GS) higher in pre market trading after Citigroup(C) raised its price target and 2nd Quarter and 2009 profit estimates and upgraded to a hold at JMP securities. Morgan Stanley also higher after Citigroup raised its price target as well as its earnings estimates for 2nd Quarter and 2009.
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| » CPI Unchanged for April | |
| CPI Unchanged for April but down 0.7% for the year which brings up the debate of inflation vs. disinflation. This debate is going on around economic circles and within the Fed. Ex. Food and energy the CPI was up a modest 0.3% near expectations with the Empire State Mfg Index down 4.55% in May vs. a much larger 14.65% for April. Core CPI numbers were up a little more than core PPI showing signs that may indicate good news along with tightening credit spreads indicating that the wiliness of banks to lend to one and other is improving. | |
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| » Retail Sales Numbers Worse Than Expected/Dow Down 184 | |
| U.S. April import prices rise 1.6% down 0.4% ex autos down 0.5% worse than analysts expected with March numbers revised lower sent the Dow Jones Index down 184 pts Tues. May 14, 2009. After 2 improving months of retail sales numbers in Jan. and Feb. after a very week 4th Q the week April Retail numbers were a clear disappointment to the market. Bill Sergautis Charttrader Investment Advisors, Hollywood Florida.
Auto Sales were up 0.2% vs being up 2% the month earlier. U.S. April furniture sales were down 0.5% and Electronics sales down 2.8%. Building materials up 0.3% with food and beverage down 1%. Gas station sales were down 2.3% partly due to a rise in the cost of gas in April. Clothing sales down 0.5% and Sporting goods sales slightly higher for the month.
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| » Economy contracts 6.17% Much Greater Than Expected | |
| The biggest quarter to quarter decline in GDP growth since the late 1950’s but there is some good news in the latest numbers. Consumer spending was up 2.2% almost 2X expected which indicates that with the current low inventory numbers future growth is just around the corner. Stock piles otherwise known as business inventories were down $103.7B in the 1st quarter this year vs. just $26 B in the 4th quarter of 2008 indicating what a huge cut in inventories we are currently seeing. Businesses have cut their inventory levels as much as they possibly can.
Business investment is still weak because businesses still do not know how long this recession is going to last. Residential investment and housing starts are nearly flat. Future GDP numbers are expected to be much better in the coming quarters according to Christina Romer, Chair of the White House Council of Economic Advisers. “We are optimistic for positive growth in the 4th quarter GDP growth”
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