Yesterday was a relatively quiet day as investors await the US Fed and their European counterparts' decisions regarding what moves to take to address the current economic situation. Many now expect the US to take a pass and let the Europeans take the lead here, and the Europeans better not under deliver here or else they will have a reckoning in both the stock and bond markets. We would expect another relatively quiet day with low volume and a lack of fireworks as investors prepare for the rest of the week.
We have a ton of economic news out today, and it is as follows (data set - consensus):
Personal Income - 0.4%
Personal Spending - 0.1%
PCE Prices Core - 0.2%
Employment Cost Index - 0.5%
Case-Schiller 20-City Index - (1.8%)
Chicago PMI - 52.5
Consumer Confidence - 61.0
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.53%
Shanghai Composite - down 0.30%
Nikkei 225 - up 0.69%
NZSE 50 - up 0.74%
Seoul Composite - up 2.07%
In Europe markets are higher:
CAC 40 - up 0.21%
DAX - up 0.46%
FTSE 100 - down 0.19%
OSE - down 0.30%
Sprint (S) had another solid up day as shares rose another $0.20 (4.64%) to close at $4.51/share in trading yesterday with volume of 126.8 million shares. Volume was about 2.5 times its three month daily average as interest grows around the story here. The stock finished at a new 52-week high, as shares rallied during the day and closed at the high for the day, a show of real momentum. Investors are buying into the growth story and it is apparent that the introduction of the iPhone on the company's network has aided results.
Clearwire (CLWR) was one we had questions about only a week ago, but so too did the rest of the market. It appeared that the company was poised to turn in an awful quarter and potentially have burnt through much of their cash. As it turns out the quarter was better than expected, or maybe not as bad is more proper, and the company has stated that they have enough cash to make it another 12 months at their current burn rate. This was another one of those stocks finishing at or near the highs of the day and has been rallying since the earnings report last week. Shares finished at $1.16/share yesterday after having risen $0.085 (7.91%) on volume of 20.4 million shares.
Investors saw shares of OCZ Technology Group (OCZ) fall $0.72 (10.17%) to close at $6.36/share on higher than normal volume of 19 million shares. The shares fell another $1/share in after hours trading as it now appears that Seagate is not interested in buying the company, contrary to recent rumors. Investors got worried after Seagate refused to discuss the company specifically in its conference call and analysts came out and stated that these comments made it highly likely that the company would not be an acquirer. This situation simply highlights the risks inherent in buying stocks to attempt to front run companies trying buy others. It is not a game we partake in, and this is why. Investors would do better to focus on well run companies with good balance sheets and income statements.
The big news from yesterday is that Chicago Bridge and Iron Co. (CBI) is buying Shaw (SHAW) in a cash and stock deal. Cash will be used from both companies' balance sheets but Chicago Bridge & Iron will also take on $1.9 billion in debt to finance the rest of the cash portion of the takeover bid. This is the largest deal in the industry here in the US thus far this year according to Bloomberg and will give the acquirer exposure to nuclear building services. In yesterday's trading session shares in Shaw traded higher by $14.80 (55.45%) to close at $41.49/share on volume of 38.3 million shares while Chicago Bridge and Iron finished lower by $5.76 (14.15%) to close at $34.94/share on volume of 20.3 million shares.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.