The news media today shall be full of talk regarding the elections in Europe. Less attention should be paid attention to the elections in France, as Sarkozy was expected to lose to the Socialist candidate, and far more attention should be paid attention to the situation in Greece. This debt issue in Europe has come full circle numerous times and it always reverts back to the Greeks, which should further highlight the fact that the situation has never been fully addressed and corrected. The Europeans have repeatedly used band aids to heal a patient with fatal wounds and unless the continent steps up to rectify the situation fully, the entire continent runs the risk of going under now that they have intertwined their debt. Markets now have to wait to see if the two largest parties in Greece can form a coalition government, and if they can how far to the left they will be forced to go in order to form it.
The only economic news due out today is the Consumer Credit (Consensus 11.0 billion), and this is not important enough to move the market, so today it will be all about Europe. In fact, Europe will hold us hostage until at least Wednesday and possibly Thursday when there will be important data released in the US, so the next two days shall be important for sentiment.
Looking at Asian markets we see markets are lower:
All Ordinaries - down 2.19%
Shanghai Composite - down 0.01%
Nikkei 225 - down 2.78%
NZSE 50 - down 0.27%
Seoul Composite - down 1.64%
In Europe markets are higher:
CAC 40 - down 0.67%
DAX - down 1.24%
FTSE 100 - down 1.93%
OSE - down 0.83%
Apple (AAPL) traded about 19 million shares on Friday and led the indices lower. Shares closed at $565.25, which were down $16.57 or 2.85%. We have been saying for the past week that Apple's Beta had left par (1) and we were seeing a decoupling with the general market. It either meant we were heading higher or lower, but it is always difficult for the market to move in one direction when one of the generals is heading in the other. When the leaders of the market rally begin to sputter, so to does the general market and it appears that this is what is happening.
LinkedIn (LNKD) had a good day Friday, rising $7.89 (7.21%) to close at $117.30/share. The company reported earnings, which was the catalyst, and earnings were up about 150% while revenues were up around 100%. The company demonstrated significant top and bottom line growth and sported solid growth across all business categories. LinkedIn also announced an acquisition of SlideShare, which one has to imagine that they will incorporate into their main platform to enable further sharing on the social network.
Renren (RENN), the Chinese social network, finished strongly for the week. In a down market, the company's shares rose $0.36 (5.68%) to close at $6.70/share. Volume was almost 11.5 million, which was a bit higher than the average over the past 3 months. The company did announce that they will release their 1st Quarter 2012 earnings on May 14th, so that will be something to look forward to in the near future for those who follow the company. Also to keep in mind is that this release could garner attention for the company's shares right as Facebook (FB) is going to be coming public - that could make all the difference in the world for shareholders.
This will be a big week for Arena Pharmaceuticals (ARNA), and probably a wild week with some wild swings in share price. The shares closed out last week lower, finishing down $0.18 (6.50%) to close at $2.59/share with volume coming in at 11.7 million. Thursday is the big day for the company, and everything leading up to that this week in regards to news articles has the potential to move shares like a whipsaw. The day traders will be moving into this one and volume shall rise, that is usually the pattern for these biotechs and nothing should be different here. This is certainly something for traders to take note of this morning.
Regions Financial (RF) was hit rather hard on Friday, with the shares closing down $0.28 or 4.01% to close at $6.70/share. Shares will probably trade lower today as weakness in Europe is highlighted in the media, so we would not be adding today. We would add to the ½ position some readers should still have on pullbacks, but we would be waiting until at least a 20% pullback off of the 52-week highs. Regions has come a long way in the past few years and the economy is slowly turning in their territory, which should further increase the company's earning power moving forward.