We found out this morning that Spain has officially asked for a bailout of its banking sector, but has conveniently left the price tag off of the package. We have an EU summit, but it looks like some of the top Greek leaders will not be in attendance as they are in the hospital. It is quite dangerous to reopen the topic of the bailout, but such is Europe's habit. Looking at the economic news we have today, investors need only look for the New Home Sales numbers (Consensus 350k). This week we will get a healthy dose of housing data in the economic numbers.
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Looking at Asian markets we see markets are lower:
All Ordinaries - down 0.53%
Shanghai Composite - down 1.63%
Nikkei 225 - down 0.72%
NZSE 50 - up 0.06%
Seoul Composite - down 1.19%
In Europe markets are down:
CAC 40 - down 1.47%
DAX - down 1.42%
FTSE 100 - down 0.74%
OSE - down 0.32%
Facebook (FB) continues to show strength and move higher off of the low it put in after the IPO. Shares traded higher in trading Friday rising $1.21 (3.8%) to close at $33.05/share. Volume remains strong with 74.8 million shares, so we are inclined to believe that this is a real move higher and not a dead cat bounce. It will be interesting to see how the company's numbers look when they announce earnings, but historically companies tend to beat their projections the first few quarters of being a public company.
Sirius XM (SIRI) is moving back up towards the $1.92/share level, as shares rose $0.015 (0.80%) to close at $1.89/share in trading Friday. Volume came in at 41.1 million shares, which shows us that interest is rising once again in the stock as it is up considerably from just a few weeks ago. We were asked what we thought about in regards to new internet competition and how it affects the company. We think that it is less of a problem for Sirius than its internet competitors as it fragments the industry and weakens Sirius' competitors. Until somebody comes up with an idea that changes everything, Sirius will remain the envy of everyone else and we think that earnings will continue to increase at a respectable rate. The only question facing investors will be at what price are the shares fairly priced.
Sprint (S) has also continued its move upwards which has been taking place over the past few weeks. The company's shares remain over the $3/share level and we believe this to be an important psychological level. The business is looking good, and the addition of the iPhone has proven to be good for business. Once the company is able to add the iPad to its product offerings we think that the company could grab a large chunk of that market as one is not required to sign a contract with that product and Sprint's flat price data plans will be quite attractive for consumers. Shares rose $0.11 (3.46%) to close at $3.29/share in Friday's trading on volume of 79.2 million shares.
Arena Pharmaceuticals (ARNA) was hit hard on Friday with shares finishing down $1.80 (15.41%) to close at $9.88/share on volume of 89.2 million shares. We saw some news that the sell-off was a results of an article on Seeking Alpha, but we read the article and we are quite doubtful that that was the reason for the sell-off in shares. Rather, it was due to the past week plus of gains in the shares without a pullback. Remember we had speculated that the run needed a breather as is customary in these situations but it never happened. Retail investors are in this one heavily, and this is the week which they have been waiting for as in a few days the FDA will have given us their answer.
Rite-Aid (RAD) has seen its shares come alive in recent trading session, with shares rising $0.09 (7.20%) to close at $1.34/share on volume of 22.5 million shares in Friday's trading. Investors liked the latest numbers but although the sales are up, we are not sold on the stock and history says this is a trade always and an investment never. Every time it appears that the company is turning the corner, something goes wrong and thus we are inclined to stay out of this play.