Ben Bernanke pushed markets higher yesterday by downplaying the strength in the economy and insinuating that the Fed may still yet have further work to do to prop up the job market. This forced investors to reevaluate the probability that the Fed was going to be forced to raise rates before 2014, which had been talked about recently. Today in economic news we have the Case Shiller Index (Consensus -3.8%) and the Consumer Confidence numbers (Consensus 70.1).
Looking at Asian markets we see markets higher:
All Ordinaries - up 0.84%
Shanghai Composite - down 0.15%
Nikkei 225 - up 2.36%
NZSE 50 - up 0.35%
Seoul Composite - up 1.02%
In Europe markets are up:
CAC 40 - up 0.25%
DAX - up 0.59%
FTSE 100 - up 0.25%
OSE - down 0.19%
Technology
Looking at Apple (AAPL) we see that the stock finished above the $600/share level in trading yesterday and is indicated higher in early morning trading as well. The CEO, Tim Cook, is in China doing a tour and addressing issues the company is facing. In minor news, the company is facing an issue in Australia in regards to advertising and how the iPad is unable to connect to a 4G network due to spectrum issues. It is not a big issue for Apple, but it is an interesting one which can be read about here for those interested.
Biotechnology
Arena Pharmaceuticals (ARNA) finally took off yesterday and was one of the most actives and largest percentage gainers. This was on news that the EU is reviewing their diet drug which is the safest of the three currently in late stages of the approval process with the FDA, but also the least effective. It is a tradeoff which many figure will make it an easier road for approval in worldwide markets and create billions in market value for Arena shareholders. For those trying to figure out how much this is worth to shareholders, simply take a look at the chart for Vivus (VVUS) which has been having successes here in America with the approval process and experienced shares nearly quadrupling over the past 12 months. It is obvious that the world needs diet pills to fight the growing obesity problem, now it is just a matter of whose diet drugs are going to help fight this battle.
Retailing
The Gap (GPS) continues to move higher and set a new 52-week high yesterday. If the consumer confidence numbers are strong today we could see the company continue its move higher. This move is one we have been behind for a few points now and believe that with their different concepts and price entry points, that the company can continue their turnaround and recent performance.
Banking
Banks continue to outperform and show strength. Although we recommended taking half of your profits already, we still believe that Regions Financial (RF) offers one of the more compelling plays on an improving economy and housing turnaround. There are far healthier banks, and even better managed ones, but we think that Regions has an opportunity to outpace those banks' returns to shareholders as their business turns a corner and earnings and the balance sheet improve.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
