World markets are rebounding today as both Asia and Europe are trading higher this morning. US futures are trading slightly lower, but close enough to the unchanged level to not concern us too much at this hour in the morning. We think that with the rally yesterday in the general markets that we could see a decent up day so long as US markets do not get hit with bad European news this morning. There is not a lot of economic news out today, with only the ISM Services (Consensus 53.1) coming out, however we do have some speeches which will be given by important people in the US Fed and that could give markets reason to move higher should they discuss a need to be dovish for a bit longer to see the economy to better times. Tomorrow will be a big day economic news-wise.
Looking at Asian markets we see markets are higher:
All Ordinaries - up 1.46%
Shanghai Composite - up 0.15%
Nikkei 225 - up 1.04%
NZSE 50 - down 0.90%
Seoul Composite - up 1.05%
In Europe markets are higher:
CAC 40 - up 0.32%
DAX - down 0.73%
FTSE 100 - CLOSED
OSE - up 0.47%
Technology
Sirius XM (SIRI) showed real strength bouncing off of the support we have talked about. In hindsight we wish we had the conviction to have moved in - but that is how hindsight works, really making you regret those trades which worked out and you were not present for. One issue we have with this rally is that volume is still light, having come in at 35 million yesterday and off about 30% of the three month average. At the end of the day up is up, and with yesterday's market no investor is going to complain about the stock rising $0.06 (3.26%) to close at $1.90/share.
We also saw light volume in trading of Apple (AAPL) with the finally tally coming in at about 20 million. The company's shares closed up $3.30 (0.59%) to finish trading at $564.29/share and the move in the shares mirrored that of the move in the general market. The beta is still rather close to 1 on the stock, and we think that if the market is headed higher then Apple will lead the way. It seems that this is how the past few rallies have either been started or maintained, and it seems that events are once again falling into place to allow this to happen once again.
Facebook (FB) is a real disappointment to put it lightly. There were many looking to this to take the market to the next level, and we were in that group. A successful IPO of a company which many can relate to and follow seemed like the perfect sidekick to help Apple push the general market higher, but alas it was not to be. The shares actually hit another 52-week low in yesterday's session closing down $0.82 (2.96%) to finish at $26.90/share. Worse yet for shareholders, although the market rallied back, we saw Facebook shares sell off considerably into the close. This is not at all what the retail investors had in mind when they invested in shares at the IPO, contrary to what the Morgan Stanley CEO says, and we like others are left to simply shake our head and be thankful that we were not involved in any material way in that IPO. It has cost many serious money.
Biotechnology
Arena Pharmaceuticals (ARNA) rose $0.03 (0.47%) to $6.43/share yesterday on volume of 8.5 million. The company's shares have held in strongly, even in the horrible market we have found ourselves in due largely to the news due out. We think that the company was wise to raise the cash that they did after the last batch of good news as it now gives the company the required cash to move forward. It is always best to raise money when you do not need to rather than when you need it. It will be interesting to watch this one over the next few weeks.
Dendreon (DNDN) had a rough day yesterday as shares fell $0.85 (12.57%) to close at $5.91/share on volume of 14.4 million. Shares fell on concerns about new competition from better drugs after a competitor announced very positive results. Analysts said that Provenge could lose market share moving forward as these new drugs come to market. The company has had a tough go of it recently, but most of it is their own fault as they continue to guide expectations lower.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
