News broke last night at about 6 PM here on the East Coast of the U.S. that Europe had reached a deal to continue to fund the Greek bailout so long as the country continues down the path to fixing their financial issues. It will supply European markets with a bump higher, but most of the world's markets have been inoculated to so-called good news from Europe and shall only be impacted by negative news from the continent as investors here focus solely on the fiscal cliff facing us should politicians fail to reach a compromise. One bit of good news which we have noticed over the past few days is that new highs once again outpace new lows, which could be signaling building strength with that momentum to carry forward on any fiscal cliff resolution.
We have economic news due out today and it is as follows:
- Durable Orders - (0.4%)
- Durable Orders - ex Transportation - (0.4%)
- Case Schiller 20 City Index - 3.1%
- Consumer Confidence - 73.0
- FHFA Housing Price Index - N/A
Asian markets finished mostly higher today:
- All Ordinaries - up 0.67%
- Shanghai Composite - down 1.30%
- Nikkei 225 - up 0.37%
- NZSE 50 - down 0.06%
- Seoul Composite - up 0.87%
In Europe markets are higher this morning:
- CAC 40 - up 0.47%
- DAX - up 0.72%
- FTSE 100 - up 0.53%
- OSE - up 0.18%
Shares in Macy's (M) were lower on Monday by $1.87 (4.48%) closing at $39.86/share on volume of 7.9 million shares. Although retailers saw a rise in foot traffic for the four days of the holiday shopping season over last year analysts are calling for sales to be lower in November due to the effects of Sandy on the northeast. It also appears that online retailers will see higher sales growth again this year than their bricks and mortar brethren. Macy's came under fire (no pun intended) for using various celebrities in their advertising this holiday season, it will be interesting to see if that keeps some away early on or if the majority of consumers will ignore the polarizing figures and instead shop based upon their wallets. It is usually a good bet that they shop based upon their wallets.
Pandora (P) had a very strong day yesterday as the stock finished very near the highs for the day. The chart was a thing of beauty as it rose from the bottom left to the upper right and simply got stronger as the day went on. Pandora shares finished at $8.58/share after rising $0.74 (9.44%) on volume of 5.8 million shares. The company rose as chatter started to pick up regarding their efforts to get the Internet Radio Fairness Act passed which could essentially lower the company's royalty payments by half as they switch from a flat fee system to paying out a percentage of revenues associated with the content they use. It is interesting in that it would immediately help Pandora in their efforts to achieve profitability, however it does put a twist on the royalty system as it tells artists what their work is worth on the bare bones internet/streaming radio services. This will be a story to watch moving forward.
Investors pushed shares of Facebook (FB) higher as analysts came out and upgraded their outlook on the company's prospects moving forward. Shares moved higher by $1.94 (8.09%) to close at $25.94/share with 123.8 million shares traded yesterday. Looking at the site yesterday we also noticed that the company debuted a new 'Gifts' function on the website whereby one can purchase an actual gift for their friends' birthday or other special events through the site simply by clicking through a link. It is not a new function altogether, but it certainly has been updated from earlier versions where gifts were free, and until the pop up yesterday we were unaware of this feature. It could be another avenue for revenue growth moving forward.
Facebook is now at 4 month highs, but Yahoo (YHOO) is an even more impressive story with its stock having set new 52-week highs on an intraday basis yesterday and for closing price as well. Volume was also impressive during yesterday's session with 34 million shares being traded as the shares closed at $18.75/share. The company seems to be embracing the online content niche they created and capitalizing on their joint ventures announced with the likes of ABC News and CNBC. It is our opinion that the company can continue this content generation growth and possibly even crank out a few more websites to draw in more eyeballs in the years to come. Their namesake website allows for this and it appears that now that they have a competent CEO at the helm that better days are ahead for the company.
News broke Friday about a potential sale of business units at Knight Capital Group (KCG) with more stories breaking over the weekend offering more details and the CEO of the company coming out and downplaying the talk. On Monday we saw an analyst upgrade and chatter about a deal only grow with names and potential prices being attached to the story. Shares rose $0.33 (13.25%) to close at $2.82/share on volume of 21.9 million shares as investors braced for an announcement on a potential deal for its market-making business which is the company's largest business unit. Where there is smoke there is usually fire and it appears that it is but a matter of time before this deal comes to fruition.