Markets are lower this morning as the HSBC Flash Purchasing Managers Index (PMI) contracted once again. This marks six straight months of contraction for the index, however it appears that things are getting better as the data indicates China already bottomed earlier in the year. We got a number of 49.1 which was up from the 48s, yet below 50. One will remember that anything above 50 signals growth, and anything below signals contraction.
The economic data in the U.S. will begin to trickle out tomorrow and will be a heavy dose of housing and industrial news for the week.
Looking at Asian markets we see markets are down:
All Ordinaries - down 0.32%
Shanghai Composite - down 0.76%
Nikkei 225 - down 0.20%
NZSE 50 - down 0.08%
Seoul Composite - down 0.10%
In Europe markets are lower:
CAC 40 - down 1.90%
DAX - down 2.45%
FTSE 100 - down 1.58%
OSE - down 1.76%
There is now talk about whether Apple (AAPL) has run its course and is now done. The stock has been on a tear for the past few months and was due for a pullback if only to build a base to make its next run. To think that the market has overnight decided to dump Apple and that the game is over is rather silly. First there is too much good news awaiting the company should their product pipeline resemble any of the rumors which are floating around. The shares finished last week at $572.98, and have traded down right before earnings, which they will report tomorrow. Everyone is expecting a beat, and for the company to carry the S&P and tech earnings higher.
Sirius XM (SIRI) closed last week above the $2.20 level, and today will be interesting to see where they trade from the open ($2.225). We want to see the shares hold $2.20 as things could get ugly if we fall below that. Good tech earnings could propel this higher, however poor tech earnings could very well break this one and make the summer quite painful. We feel that this next week could be pivotal for the shares prior to their own earnings release on May 1st.
It appears that action in Renren (RENN) has cooled off in the past few days. The company is one to keep on the watch list however as they do have a link to social media and are in China. This could be a good story for day traders to buy into when the Facebook IPO hits the market and we could return to the huge volume and large percentage gains this stock has seen in the past. This is just something to keep in mind and pay attention to moving forward, no purchases at this time.
Regions Financial (RF) has trended lower as of late. The company reports earnings tomorrow, and by all indications they should beat. SunTrust, one of their peers, which has overlapping territories with Regions, beat on earnings this morning which leads us to believe that banking in the Southeast has turned the corner. Some of the worst franchises are now profitable and have purged their balance sheets of the most problematic assets, and we continue to think that Regions is one of the better ways to play this uptick in the industry.
Deere (DE) has earnings coming up in May, and we think that they could very well beat. That has not been the problem with the company recently, but rather what the management team says about the outlook for business - which has been negative lately. We know that Europe will have been weak, but of interest should be sales in North America, Asia and South America. If growth in those three markets remains at recent levels and management does not get overly negative on the call, then this could be a good story. One can only hope that they have taken a page out of Apple's book where they talked down this quarter only to beat and give the shares a boost.