We had a mixed day yesterday, with banks rallying late and commodities down almost all day. It appears that markets will open up today in the US, and it is important to note that the new highs to new lows ratios have been pretty steadily in favor of new highs lately. Looking at the economic news today, we see that there will be:
-Initial Claims (Consensus of 355k)
-Continuing Claims (Consensus of 3415k)
-Empire Manufacturing (Consensus 15)
-PPI (Consensus of 0.5%)
-Core PPI (Consensus of 0.2%)
-Philadelphia Fed (Consensus of 12.5)
Looking at Asian markets we see a mixed bag:
All Ordinaries - down 0.20%
Shanghai Composite - down 0.73%
Nikkei 225 - up 0.72%
NZSE 50 - up 0.99%
Seoul Composite - down 0.06%
In Europe we see nearly all green across the continent:
CAC 40 - up 0.43%
DAX - up 0.35%
FTSE 100 - down 0.05%
OSE - up 0.65%
Apple (AAPL) continues to move higher and set what seems as daily new 52-week highs. It seems our prediction about the stock moving higher due to its ability to attract new capital in the market is coming true and honestly it has moved up much faster than we had anticipated. It is a trend which appears to be building momentum and we are a bit disappointed we did not take our own advice and move into the stock back in the $480/share range. We know some of our readers and subscribers did, and for that we are thankful. We think that this is one of the great growth stories out there and that it has further room to move higher going forward.
Rite-Aid (RAD) shares soared yesterday by nearly 10% as an analyst speculated that Walgreens (WAG) could be interested in purchasing the company at a large multiple. We would point out that investing on the hope of a buyout is usually a fool's game, especially when it is a lone analyst proposing the idea. This is far-fetched, but we do understand that it points out the value of the franchise. Rite-Aid has been poorly run for so long and had many problems, a purchase by Walgreens would be great for investors but we see the probability as rather low at this point.
Starbucks (SBUX) continues its march higher, setting another 52-week high yesterday. That was an intraday high and a closing high. The stock is strong and we would continue to ride out the move higher if you hold shares and look at accumulating on a pullback. As discussed yesterday, we feel that the stock has a bit of room to run higher in the short-term and the long-term as well.
Regions (RF) came alive yesterday and rallied along with the rest of the banks. The stock finished the day up 6.93% and was one of the better performing banking stocks. This is what we thought might happen should banks come into favor again, and think that the company could outperform long-term as it rehabilitates its balance sheet.