US futures are lower this morning, although only marginally so. Some Asian markets were closed today, so it is hard to gain anything from that trading and Europe is mixed. It is being reported this morning that Spain is now officially in recession, but the market is taking this in stride, one had to expect this with austerity measures beginning to take their toll not only in Spain but also in the other countries across the EU which have had to get a handle on the debt issue.
There is a lot of economic news due out today, starting with the Personal Income (Consensus 0.2%), Personal Spending (Consensus 0.5%), PCE Prices - Core (Consensus 0.2%) and Chicago PMI (Consensus 60).
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.76%
Shanghai Composite - CLOSED
Nikkei 225 - CLOSED
NZSE 50 - up 0.69%
Seoul Composite - down 0.10%
In Europe markets are mixed:
CAC 40 - down 0.79%
DAX - up 0.11%
FTSE 100 - down 0.07%
OSE - up 0.39%
Technology
There was an interesting article in Barron's this weekend discussing how the Dow has become irrelevant as it does not include stocks such as Apple (AAPL) and Google (GOOG) and that is due to some extent to their high stock prices. We had recently discussed this with some other professionals and we all agreed that the Dow needed some of these large tech stocks included as the economy is gravitating towards the digital economy but we all recognized the large influence these high-priced stocks would have on the index. The article is worth a read as it lays out a few ways in which this new breed of tech stocks (these high fliers which have no interest in stock splits) could be included in the Dow and the repercussions of these decisions.
Towerstream (TWER) continues to hang in strongly ahead of the company's earnings which are due out on May 10. We would expect further news on their conference call regarding the tie ups with national carriers (maybe not names, but at least further details) and the buildout in other markets. One would expect the company to significantly increase profits this year and next as almost all new revenue will flow to the bottom line. This might be one of the few stocks you can invest in over the summer and make money if you buy into the sell in May theory for this year.
Biotechnology
Human Genome's (HGSI) sixth largest shareholder came out and publicly stated that the Glaxo bid undervalues the company's shares. Taube Hodson Stonex, a 5.6% stake holder in the company, believes that the $13/share offer dramatically undervalues the shares and thinks that something in the neighborhood of $20/share is more reasonable. It has been obvious from the start that Glaxo would need to raise their bed as shares in Human Genome immediately shot above the $13/share offer when the bid was announced. We still believe that Glaxo will need to raise their bid, and based on current prices the market believes this too. See story here.
Manufacturing
Boeing (BA) has won a $6 billion contract from China Eastern Airlines for 20 777s and is buying 5 Airbus jets from the Chinese airline in the process. This has been a rumor floating around and is now legitimate. This could be the first of many deals in response to Europe's carbon tax on airlines that fly over EU skies, and this will put further pressure on the EU to revisit that decision. You can read the full story here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
