Both Asia and Europe are up strongly this morning, and this could be good for our markets although currently U.S. futures are lower. It appears that maybe we are backing off due to yesterday's big day, but if we do not have any bad news out of Europe we could once again see markets get a boost as investors come into the market to pick up some bargains.
The only economic data we have out today is the Existing Home Sales with a consensus of 4.65 million units.
Looking at Asian markets we see markets are higher:
All Ordinaries - up 1.19%
Shanghai Composite - up 1.06%
Nikkei 225 - up 1.10%
NZSE 50 - up 1.04%
Seoul Composite - up 1.64%
In Europe markets are higher:
CAC 40 - up 0.67%
DAX - up 0.82%
FTSE 100 - up 0.91%
OSE - up 0.92%
Technology
Sirius XM (SIRI) was up $0.095 (5.04%) to close at $1.98/share on volume of 56.6 million. The shares initially opened lower, but moved from the lower left to the upper right of the chart and in the process closing at the day's highs. We have seen a nice bounce off of the $1.80 level, which is where the shares had some major support, and now if the shares can take out the $2/share level investors will then have their sights set on $2.20/share. We really like the strength we have seen over the past 2 days and shares are up over 10%, so we may be in for a rest before resuming higher.
Apple (AAPL) could possibly be resuming its leadership role, but to do so we believe that it would need to trade over the 22.5 million shares that it traded yesterday. The shares had a great day yesterday, one of its best days from recent history with shares rising $30.90 (5.83%) to close at $561.28/share. We were looking at the price action in Apple yesterday and realized that the possibility exists that Apple was sold in order to buy shares in the Facebook IPO. It could help explain the fall prior to, and rise right after. If investors were getting all that they asked for, the money had to come from somewhere and we all know that a few shares of Apple can equal a nice sum of capital to allocate elsewhere in the portfolio for a time. It is a simple theory and easily comprehensible, and if it did not happen on a large scale one has to imagine that it took place on some level.
Speaking of Facebook (FB) the shares had a rough second day of trading as shares finished down $4.20 (10.99%) to close at $34.03/share. The shares did not even have an opportunity to fall through the $38/level where the underwriters had supported the shares on Friday, because they opened lower. Volume was again high at 168 million, and one has to wonder exactly how much of that was computer driven…always a question we ask when we see high volume such as that. A few things to take away from this IPO is that the underwriters got full value for the shares which was good for the company but it is apparent that Nasdaq's trading system dropped the ball. Looking ahead, this company needs to become a market leader to help push the market higher and get the animal juices flowing.
Biotechnology
Arena Pharmaceuticals (ARNA) traded higher on volume of 12.5 million. The shares closed at $5.92/share which was higher by $0.40 (7.25%) and pushed the company's market capitalization over the $1 billion threshold. After the close they announced the completion of the secondary and the over allotment was exercised, which was no surprise to us as we figured that it would all be purchased. The company finished near its highs for the day, but not at the high of the day. Now that the secondary is completed, investors can once again look to Arena as a day trading vehicle.
Banking
Regions Financial (RF) has been trending lower for since the Europeans began discussing Greece again, and the JP Morgan news regarding their trading loss. None of this really applies to the regional banks unless one thinks that this will immediately impact the US economy and take us down as quickly or faster than the credit crisis of recent memory. We think that this is an interesting time to once again look at shares not just for Regions, but for the other well run regionals out there.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
