U.S. futures are lower this morning, however not by much. The market has had difficulty putting two winning days together, but one good sign we saw was yesterday's close as the market rallied into it. That beat the previous day's sell-off but we still find ourselves expecting more bad news rather than good. It is the whole mess in Europe, which has spread to China, that has us worried and it needs to be fixed. This has been an underlying theme to trading now for far too long, two years, and if we can ever get a resolution the market would rally sharply.
Regarding economic news today here in the U.S., investors can expect to see the MBA Mortgage Index, Retail Sales (Consensus -0.2%), Retail Sales ex Autos (Consensus 0.0%), PPI (Consensus -0.7%), Core PPI (Consensus 0.2%), Business Inventories (Consensus 0.2%) and Crude Inventories.
Looking at Asian markets we see markets are mostly higher:
All Ordinaries - down 0.17%
Shanghai Composite - up 1.27%
Nikkei 225 - up 0.60%
NZSE 50 - down 1.28%
Seoul Composite - up 0.25%
In Europe markets are lower:
CAC 40 - down 0.14%
DAX - down 0.50%
FTSE 100 - down 0.05%
OSE - down 1.02%
Zynga (ZNGA) was the most active issue on the Nasdaq market yesterday as it traded 57.5 million shares as the company hit a new 52-week low of $4.78/share in trading. The stock closed at $4.98/share down $0.57 (10.27%). Shares tumbled again as an analyst at Cohen wrote a note stating that he believes the trend is for lower usage via social media sites and that a decoupling is taking place. Being down big in an up market is quite bearish and it is apparent now that investors fear that the company is not up to the task of transitioning their client base from others' networks to their own site and apps. It will be interesting to watch this one play out and to see whether the recent IPOs in the sector marked a top rather than an opportunity - so far it is obvious that it was not an opportune to be involved with the IPOs for any extended period of time for most.
Sirius XM (SIRI) saw low volume of 19.7 million and shares were unchanged closing at $1.86/share for the second day in a row. We have been watching the stock for a while now at these levels and the shares appear poised to break out one way or the other sooner rather than later. We would look for a move to happen on big volume and to be in the 5-10% range. Very general, and not too specific, but we call them like we see them and that is what we see coming up for the stock. If we knew the direction we would obviously want to be involved.
A123 Systems (AONE) had a monster day yesterday with shares rising $0.54 (51.92%) to close at $1.58/share on volume of 35.2 million which was roughly 11 times higher than the three month average. The company announced a breakthrough in their lithium ion battery technology and think that this will provide further opportunities within the automotive and telecommunications industries. The technology allows the batteries to operate at extreme temperatures without thermal management, so this is an improvement on current designs. It will be interesting to see what roads this opens up for the company moving forward.
Apple (AAPL) was up $4.99 (0.87%) to close at $576.16/share in yesterday's trading. Investors traded 15.5 million shares in the wake of their announcement of new notebook computers and software upgrades. The more we look at Apple and their recent actions, the more it appears like its old nemesis located in Seattle which branched out into new categories and essentially took on any and all during the 90s. This is most certainly Apple's heyday and it is something which investors should take note of and appreciate.
The melt-up continues in shares of Arena Pharmaceuticals (ARNA) as investors eagerly await word on the FDA and the company's diet drug. Shares finished up $0.81 (11.38%) to close at $7.88/share on volume of 37.7 million. The day traders and probably some computers are back in this one and we have seen this story play out a few times with this stock. As we have been saying, there are other ways to play the news via the other two companies with diet drugs seeking approval but the best way remains placing your bet via Arena shares or options. We do think that the risk/reward ratio is looking less favorable with the recent gains here
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.