Asian markets are mixed, with China being the big loser today on the back of the economic news out over the weekend. It will be a tough road ahead to getting back to high single digit growth rates for the economy, but it is apparent that China is trying to sustain what has been the greatest growth story over the past decade. In Europe all the markets which we follow are lower, however the smaller markets are all higher.
Earnings season continues today along with economic news including: Retail Sales (Consensus 0.2%), Retail Sales Ex-Auto (Consensus 0.1%), Empire Manufacturing (Consensus 3.8) and Business Inventories (Consensus 0.2%).
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Looking at Asian markets we see markets are mixed:
All Ordinaries - up 0.60%
Shanghai Composite - down 1.74%
Nikkei 225 - CLOSED
NZSE 50 - down 0.80%
Seoul Composite - up 0.27%
In Europe markets are mixed:
CAC 40 - down 0.35%
DAX - down 0.18%
FTSE 100 - down 0.21%
OSE - down 0.30%
Technology
One bit of sobering news from Friday was the price action in Sirius XM (SIRI), which continues to trade within the range we thought that it would consolidate around. When the market is up like it was on Friday, one would hope that you would not see red on your screen for the day - which is exactly what the case was for Sirius. The move was not large, but our mentor always told us 'down is down'. The stock was the volume leader on the tech heavy exchange with 45.1 million shares traded. The shares closed at $2.05/share after falling $0.015 (0.73%). We are now right in the middle of the $2-2.10/share range we discussed and will be interested to see how John Malone's vision for the company affects the outlook for the shares. If they are in fact used as the currency for any transaction, then obviously there will be no premium for shareholders and we could see the shares diluted. The relationship status between the two parties is best summed up by an 'it's complicated' status.
Sprint (S) saw its shares rise $0.13 (4.06%) to close at $3.33/share on Friday. Volume was a bit weak from what we are accustomed to with around 27.5 million shares having traded hands. That was a bit worrisome, however the company's market capitalization is about to surpass the $10 billion mark. The stock has bounced back from the beating it took at the end of last year over financial projections moving forward and iPhone costs going forward. Shares are now near 6 month highs and appear to be setting up for another move higher.
Biotechnology
Arena Pharmaceuticals (ARNA) rebounded on Friday continuing their bounce which started during Thursday's trading session. Shares rose $0.57 (5.37%) to close at $11.18/share on volume of 21.3 million shares, which appears to be where volume is settling down now. We want to reiterate today that we think shares are a buy at the $10/share level for both long-term and short-term trading purposes.
Financial
Regions Financial (RF) is one of the financial stocks which we have highlighted over the past few months due to our belief in regional banks outperforming their national peers. The shares were up with other financials on Friday on the back of industry earnings. Shares are now back up to $6.70/share after having risen $0.23 (3.55%) on volume of 10.9 million shares. We think that this earnings season will highlight the points we have been making regarding the financials. After earnings we will review whether this is still a hold or if that capital is best put to work at one of the other regional banks.
Retail
This one is like a bad Law & Order episode as shares continue to fall on high volume. SUPERVALU (SVU) shares finished Friday's session at $2.32/share as they fell $0.37 (13.75%) on volume of 40.6 million shares. The stock hit a new 52-week low, which was sadly the closing price. The daily chart was from the upper left to the lower right, and our readers know exactly our thoughts on an intraday chart resembling that. We would stay far away from this one and invest in other retailers which we have previously covered here as those retailers are growing and have balance sheets which SUPERVALU's cannot compare to.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
