Yesterday we saw the first quarter gains carry over to the first day of trading in the second quarter. It was a low volume day, which worries some of the talking heads, and we must admit it was a bit troublesome, but as we like to say up is up. It seems that the US economy is moving forward, somewhat insulated from all that is going on abroad but this cannot continue and eventually the rest of the world will need to start pulling their own weight. Investors would be wise to start paying attention to Europe once again as it seems their problems are creeping up once again to the headlines.
Looking to the economic news today, we see the FOMC Minutes are to be released today along with the Factory Orders (Consensus 1.4%), Auto Sales and Truck Sales. One would imagine the auto figures to be strong, but in the big picture to still be below our 10-year average, as has been a big talking point for the talking heads on TV.
Looking at Asian markets we see markets mostly higher:
All Ordinaries - up 0.18%
Shanghai Composite - up 0.47
Nikkei 225 - down 0.59%
NZSE 50 - down 0.59%
Seoul Composite - up 0.99%
In Europe markets are mostly lower:
CAC 40 - down 0.43%
DAX - down 0.09%
FTSE 100 - down 0.22%
OSE - down 0.63%
Technology
Towerstream (TWER) rose $0.47 (9.89%) to close at $5.22/share. The stock has been rising in since the company announced their earnings as they stated that they would soon announce their first WI-FI deal with a national carrier. Well they filed with the SEC stating that they had entered an agreement, however they did not name the carrier, and will not at this time. This is very good news for Towerstream and should pave the way to revenue and earnings growth. You can read a brief overview here.
Sirius (SIRI) was a buy yesterday in nonpersonal accounts, and the stock has been performing quite well since its last test of $2.20/share. One would expect a company to rise significantly when it is having a battle with a serial takeover specialist like John Malone and his Liberty Media vying for control, as is apparently the case. The auto figures could give a glimpse into how Sirius is doing in that space, and from everything we read the company should fair pretty well this next quarter due to new sales and their inroads into the used car market.
Apple (AAPL) had a rather strong day yesterday rising $19.58, or 3.18%, to $618.63/share. This was a day after closing below $600/share for the first time in a while and on the day that an analyst came out with a $1001/share price target. The price target is interesting as it looks like a top call, but also in that it is symmetrical - symmetry is a beautiful thing. Throwing out numbers like that makes one ponder whether Apple could be the first $1 Trillion market cap company - and at this time they are the best positioned so one would have to play the odds on that one.
Consumer Goods
Yesterday Avon Products (AVP) received an offer, unsolicited, to buy the company for $10 billion. The company was altering the board and later in the morning announced that they were turning the offer down. The shares finished up $3.34, or 17.25%, to close at $22.70/share. Investors are now left to hope that either Coty returns with a sweeter offer or that someone else emerges with a higher offer. You can read an article on the situation here, from Bloomberg.
Biotechnology
Based on the price action of Arena Pharmaceuticals (ARNA), we think that the most recent bull run may be coming to an end. The stock opened strongly, then wavered into the close. This is a news driven stock and can pop at any time, but for those readers who were using this as a day trading vehicle, we would exit those positions and only hold shares which were categorized as medium to long-term investments.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
