Recently the Democrats have been talking down the possibility of compromise on the fiscal cliff talks, which in turn have served to talk down investor confidence and by extension stock prices. Yesterday we saw the House Speaker, a Republican, discuss his optimism which pushed markets higher. That rally is carrying through to today and has helped Asian and European markets show strength thus far today.
We have GDP data out today and the all important job figures. It will be interesting to see the next few weeks and what impact retail hiring has on these numbers.
We have economic news due out today and it is as follows:
Initial Claims - 395k
Continuing Claims - 3325k
GDP - Second Estimate - 2.8%
GDP Deflator - Second Estimate - 2.8%
Pending Home Sales - 1.0%
Asian markets finished higher today:
All Ordinaries - up 0.62%
Shanghai Composite - down 0.51%
Nikkei 225 - up 0.99%
NZSE 50 - up 0.12%
Seoul Composite - up 1.15%
In Europe markets are higher this morning:
CAC 40 - up 1.12%
DAX - up 0.84%
FTSE 100 - up 0.92%
OSE - up 1.17%
Groupon (GRPN) has been a disappointment for investors as the company's business has changed considerably since going public. Investors did push shares up yesterday by $0.46 (11.62%) after the company's current CEO and founder stated that he would be willing to step down if it was what was best for the company. The board will be meeting to decide his fate shortly and with the shares closing at $4.42/share and this upward momentum based off of his comments and investors' anticipation that fresh leadership could be on the way in only seems to be indicating that his remaining time with the company will be short. Either way we are not interested in purchasing shares as the industry is cut throat right now with competitors who are doing well actually laying off staff. Until the space becomes less crowded, we will not be looking here and advise readers to move on as well.
Yesterday there was a lot of interest in retailers, especially those which have been showing strength over the past few quarters. One of those companies, American Eagle Outfitters (AEO), saw investors push shares higher by $1.38 (7.12%) to close at $20.77/share on volume of 13.8 million shares after the company announced their third quarter results. The quarter was positive as the company's numbers rose significantly and the company indicated that they felt the fourth quarter would be good as it is already off to a great start. To add some color to that, the Chief Executive Officer stated that the company has seen record sales over the Thanksgiving weekend period.
Whereas American Eagle Outfitters had been setting new 52-week highs recently, Express (EXPR) was one of those retailers which had been heading lower and setting new 52-week lows due to poor performance at their stores and their results. Shares turned higher yesterday, closing at $14.15/share after rising $1.16 (8.93%) on volume of 9.7 million shares after the company reported quarterly results which beat their lowered expectations. With the company stating that they experienced record sales on Black Friday it also appears that the company has potentially fixed some of its major problems which plagued prior results. If Express truly has figured out their advertising issues and found a way to once again energize their customer base, then the shares could rally significantly as they are trading well off of the yearly highs and very near the yearly lows even after the news of sales over this past weekend. The fact that this retailer and other previously poor performers are doing so well is further evidence of our theory that this holiday season was going to be big.
Investors saw shares in Green Mountain Coffee Roasters (GMCR) rise $7.91 (27.32%) on the back of good quarterly results to close at $36.86/share. Volume was above normal levels with 29.5 million shares traded as shorts were forced to cover their positions after the company blew past Wall Street's estimates for EPS and revenue. It seems that the company's business may have turned before the new CEO, Brian Kelley, from Coke arrives on the job. It is always nice to have a company headed in the correct direction when going through a leadership transition like Green Mountain is rather than the turmoil the company was facing only a few months ago.
The melt-up at Knight Capital Group (KCG) continues as it does appear there is fire where all this smoke is coming from. It now seems that there are two interested parties for the assets and both are offering $3/share cash in order to take control of the assets they desire. Shares in Knight may have gotten ahead of themselves based on those reported figures as shares closed at $3.42/share after rising $0.45 (15.15%) on volume of 47.3 million shares. If the Virtu deal does value the firm at $1 billion then we could see another step higher, and that news could come out as early as the next week as bids are submitted to Knight's board
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.