Today we are bringing you a shortened version due to the half day we had on Monday. With that said, U.S. futures have been closed due to the Christmas holidays, but they did open at 6:00 AM EST this morning, so right now we doubt that this is a good indicator of where things are going, especially as many of the European markets are closed today and a decent portion of Asian markets. Canada will be closed today as well, and if any readers can explain to us what Boxing Day is we would be grateful (one of those Holidays from the U.K. which always creeps up on us during the holiday season and is celebrated in many former areas of the crown).
Please find attached the latest graph we have of the Cash Schiller Index, which does a pretty good job of summarizing the housing market, probably better than words.
We have economic news due out today, and it is as follows (these are the consensus estimates):
- MBA Mortgage Index (7:00 AM EST) : N/A
- Case Schiller 20-City Index (9:00 AM EST) : 3.9%
Asian markets finished higher today:
- All Ordinaries - CLOSED
- Shanghai Composite - up 0.25%
- Nikkei 225 - up 1.49%
- NZSE 50 - CLOSED
- Seoul Composite - up 0.02%
In Europe markets are for the most part closed this morning:
- CAC 40 - CLOSED
- DAX - CLOSED
- FTSE 100 - CLOSED
- OSE - CLOSED
It certainly looks like investors will have to wait until 2013 to get news from Research in Motion (RIMM) to prop up shares. The company released their quarterly results last week and the market was less than impressed pushing shares down over 20% since then. This is most certainly a Dr. Jekyll, Mr. Hyde stock and part of that may very well be the fact that investors' expectations got a little too far ahead of what the company could actually deliver.
When it comes to technology these days, we try not to be surprised by any news which comes out and rather just sit back and laugh at some of the situations which arise from the convoluted world which is the modern technology world. One of the more ironic situations we have seen came to light this holiday season when it was announced that the reason Netflix (NFLX) went down was due to their reliance on Amazon's (AMZN) web servers, which to us indicates that Netflix had outsourced a major part of their IT infrastructure to Amazon Web Services. This is humorous due to the fact that Amazon and Netflix compete in the streaming entertainment business, yet Netflix utilizes Amazon's servers which effectively puts their service at the mercy of a large competitor.
The big story that ends 2012 could be the big story of 2013, especially if the SEC gets involved and begins to sniff around the Herbalife (HLF) story. We have not been through all of the research put out there on the short thesis, but as we continue to slowly work through it, it does seem to mirror many of our own thoughts on the MLM (multi-level marketing) sector. We are more than happy to welcome arguments for why Herbalife is not some sort of pyramid scheme, however the fact that it has been around for 30 years does not suffice in our opinion. Some of the best ponzi and pyramid schemes have lasted over many decades including Madoff's multi-billion dollar fraud which came to light a few years ago.
Last week saw Hovnanian (HOV) shares hit a new 52-week high on extremely high volume. The chart has been strong as was the case in Friday's session and we would like to point out that the shares did not go ballistic until they broke through the old high, and once that was accomplished it was off to the races. It is clear to us that the housing market is recovering, and based on the housing data the recovery is in fact getting stronger. So long as Washington does not interfere with this recovery, it does seem that 2013 shall be the year where we turn a corner, a major milestone after all of the down years we have seen in the market. This news will be bullish for homebuilders as a strong housing market, resell market and overall demand only servers to buoy their business.