We were a bit surprised with the market action yesterday as the jobs numbers were surprisingly good, but it seems that traders and the market in general embraced the ISM numbers which were a disappointment, but not that big of a surprise. It seems that investors are torn between selling now that it is May or placing new bets on the market so as to avoid missing any run we may have this summer. It seems as quickly as money comes into the market is moves out of the market.
The economic news due out today consists of Nonfarm Payrolls (Consensus 162k), Nonfarm Private Payrolls (167k), Unemployment Rate (8.2%), Hourly Earnings (0.2%) and Average Workweek (34.5).
Looking at Asian markets we see markets are trading mostly lower:
All Ordinaries - down 0.78%
Shanghai Composite - up 0.49%
Nikkei 225 - CLOSED
NZSE 50 - down 0.75%
Seoul Composite - down 0.30%
In Europe markets are mostly lower:
CAC 40 - down 0.70%
DAX - down 0.79%
FTSE 100 - down 0.88%
OSE - down 0.79%
Technology
Apple (AAPL) was down yesterday $4.16 to close at $581.82. The shares never broke below $580, which was a good sign, possibly some support building around a psychologically significant number. The Beta on Apple is no longer at par, it is now less than par and this is significant as it has been par for some time now. So this is big and interesting at the same time because we see that the general market and Apple are becoming less intertwined. It remains to be seen whether this means that the general market is headed for rough times or if Apple is headed for a deeper correction or some consolidation but the bottom line is that this should be watched.
Renren (RENN) shares have fallen to $6.34 since we last wrote about it. The volume is still strong on this one and although it is not the best way to play a Facebook (FB) IPO, it is a way nevertheless. A few things weighing on this stock is the fact it is a Chinese company and it must deal with the Chinese censorship activities which have really cranked up over the past few weeks.
Retail
Herbalife (HLF) once again had a rough day as shares fell $6.50 (12.33%) to close at $46.20/share. Once again volume was high, with the company having over 25 million shares traded. There is a battle brewing here and it appears investors are voting with their feet and getting out of Einhorn's way. One can sympathize with their logic as he uses his and his investor's money to place bets and Wall Street analysts simply analyze - and have a long history of missing things such as this. With the upgrades that have come in, it is very interesting - and telling - that this has not bounced back at all.
Biotechnology
Investors need to watch Arena Pharmaceuticals (ARNA) which closed at $2.77 up by $0.17 (6.54%) on volume of 14 million. It is now less than a week away from the FDA committee review, which takes place next Thursday. No matter what happens on Thursday there are sure to be fireworks on the news. Volume will rise in anticipation of the news in the days leading up, but we cannot begin to guess where the FDA will place its recommendation - for or against.
Banking
Regions Financial (RF) rose $0.17 (2.5%) to $6.98. Volume is picking up here, as the company traded 34 million shares and investor interesting is rising. Shares continue their march upwards after finding support at the $6/share level and breaking through some resistance which was present at $6.60/share. Regions closed at the high for the day, and the next milestone for the company to take out before it can take a run at the 52-week high is $7/share. This has long been a favorite of ours and readers should still have half of the original position we recommended buying.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
