U.S. futures are pointing to a higher open, but the world markets were down. We think that we may be in for a little bounce but think that a sell-off into the weekend is quite probable. Something investors need to think about, and it is really something we have vocally complained about, is how Europe strikes many deals but constantly find themselves back at the table renegotiating deals. The fact that Europe has promised Greece another deal-making session to redraw their agreement regarding the bailout is not a good thing as we once again have to relive that trying experience. Opening that back up is like opening Pandora's box. The continent needs to strike fair deals and stick to them. One cannot move forward when they constantly must revisit and relive what they have already done. We find this mentality of not moving forward and having finality to agreements more troubling than the situation in Spain right now as it makes it quite difficult to see the way forward.
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Looking at Asian markets we see markets are lower:
All Ordinaries - down 0.97%
Shanghai Composite - CLOSED
Nikkei 225 - up 0.29%
NZSE 50 - down 0.30%
Seoul Composite - down 2.21%
In Europe markets are down:
CAC 40 - down 0.35%
DAX - down 0.53%
FTSE 100 - down 0.56%
OSE - down 1.51%
Taking a look at Sirius XM (SIRI) we are a bit disappointed that after so much work the stock was unable to move above the $1.92/share level. Shares traded down $0.045 (2.34%) to close at $1.875/share on volume of 35.7 million yesterday. The rally here ended with the market's reaction to the economic news, which in a sense is good as it was not something company specific. Shares have fallen right back down to the middle of the range we have been highlighting for a few weeks now, so it will be interesting to see if we can find some support here and trend higher once again. We think that will be the case.
Talk about relative strength, Facebook (FB) is up on the second worst day of the year and only a few weeks ago no one would have been able to fathom that type of strength in this one. Shares rose $0.24 (0.76%) yesterday to close at $31.84/share on volume of 21.8 million. Some will try to write this off, but we like to say that up is up and little else matters when one makes money. Green on a red day always grabs our attention.
Many investors are rebalancing their portfolios and positioning themselves for what they expect to come out of Europe, the result of the presidential election and other elections here in the US, economic growth, etc at this time. We have been saying for a few weeks now that Apple (AAPL) is a $600/share stock and something we would want to hold. We see new products coming out before year end which will help close out the year on a positive note and boost revenues and the bottom line. We do not know exactly when the products will be announced, but a new iPhone is at the top of our list and we expect a decent chance that an iTV could be announced. If Apple were in our portfolio, we would position it as one of our pillars and build around it.
One cannot help but be impressed with Arena Pharmaceuticals (ARNA) which has been turning in one of the more impressive performances of the year. We love fireworks, and the trading in this one has been like a fireworks show as bulls push shares higher and force the bears to cover their positions. In a down market, shares rose $1.18 (11.24%) to close at $11.68/share on volume of 60.2 million shares. The volume was impressive and it was also high enough to make Arena the volume leader on the Nasdaq yesterday. It was a very strong day yesterday with the chart rising from the lower left to the upper right. The mass exodus of shorts coupled with day traders pushing this up in a down market, as they have done in the past a few times, really grabs the attention of traders and could propel this further. One thing to point out here as we like to tell the whole story is that if the company were not to get approval and Arena sold off, the shorts would not be there to help find support as they covered.
We saw Bed Bath & Beyond (BBBY) report earnings two nights ago with good earnings but a weak outlook. We figured shares would end lower, but we watched yesterday as shares fell $12.50 (16.97%) to close at $61.17/share from a level which was near a 52-week high. In this situation one must ask, "Is it broken?" If one thinks that it is not, this might very well be a good buying opportunity to set up a position in a company which has been one of the retailing success stories over the past decade plus.