US markets rallied yesterday off of the lows as European fears abated a bit. We did see US markets rise after the markets closed in Europe, so looking ahead we think that the trend will continue and for those readers of ours who are traders that will most certainly be something to pay attention to. This morning we see some better economic news out of China, and markets around the world are mixed today. US futures are looking for some guidance and are trading around breakeven currently.
Looking at today's economic news due out, we see that the FHFA Housing Price Index is the only news due out. Tomorrow will have much more news, so another day to get a glimpse into how the economy is doing. The news through Wednesday will be heavily weighted towards the housing market with news after that being general economic news.
Looking at Asian markets we see markets are mixed:
All Ordinaries - up 0.05%
Shanghai Composite - up 0.24%
Nikkei 225 - down 0.24%
NZSE 50 - down 0.13%
Seoul Composite - up 0.25%
In Europe markets are mixed:
CAC 40 - up 0.06%
DAX - down 0.17%
FTSE 100 - up 0.11%
OSE - down 0.00%
As Sirius XM (SIRI) lingered above our stated range and at time traded in and out of the upper level we remained mum as we figured it would come back to us as we have discussed. The shares did that in trading yesterday as shares fell $0.015 (0.72%) to close at $2.08/share, certainly nothing to write home about, especially when considering the duress that the general market found itself under throughout the day. There was no sell-off in the shares, in fact volume was light with only 21.8 million shares trading hands, so there is no need to panic right now. We think that the $2/share level is the floor here, barring of course some outside announcement from say John Malone or any of his controlled entities regarding the company. Although it is not the next level of support that the stock will find, we would pay attention to the $2.02 level and only when the shares reach that area would be begin to reassess our outlook.
As fears begin to spread through the market and investors look to diversify away from European risks, they may want to look at Verizon (VZ). It has been said before, but warrants repeating here - investors attempting to minimize exposure to Europe should look to Verizon as they generate zero revenue from Europe, unlike many of their peers in the global communications industry. The shares have been on a tear over the past few months until recently when the company released their earnings. For interested investors the shares finished lower by $0.14 (0.31%) to close at $44.35/share and best of all the shares provide a yield of 4.50% which pays you to sit around should the stock cool off or head lower.
The Gap (GPS) showed considerable strength yesterday rising from the lows set near the open back to breakeven for the day. Shares finished down $0.03 (0.10%) to close at $29.17/share on volume of 8.1 million shares. The stock is still trading around its 52-week high with earnings but a few weeks off and it is our belief that the report will confirm that the company continues to increase sales with the flagship Gap brand leading the way followed by Banana Republic with Old Navy bringing up the rear.
Arena Pharmaceuticals (ARNA) saw shares rise $0.42 (4.41%) to close at $9.94/share on volume of 22.1 million shares. Shares were green most of the day except at the open due to the news out of Europe. We traded above the $10/share level for most of the day and we want to say that we still think that the $10/share level is where one would want to initiate a position either for trading purposes or for investing. Yes, news out of Europe could take us lower, but this is a growth story here and we think that the upside far outweighs the downside at these levels.
NRG Energy (NRG) saw shares rise $1.47 (8.14%) to close at $19.52/share on volume of 22 million shares. This was one of those rare situations where you see an acquirer's stock rise when a deal is announced. It appears that the company has made another good acquisition as shareholders approved of the transaction in the stock price action and the talking heads spoke very favorably of the deal on all of the business programs.