Germany's Angela Merkel is now throwing her support behind the European Central Bank's effort to correct the situation that the continent finds itself in. This pushed up Asian and European markets; however, U.S. futures are ever so slightly lower. We have very little economic news out today and it looks like the week will finish on a rather boring day. We have continued to find success on the commodity side, and will continue to play that through the end of the year.
Investors should also pay attention to the U.S. 10-year where rates are creeping up. This seems to indicate that QE3 is going to happen later rather than sooner should it happen at all.
We have two pieces of economic news out today, with the Michigan Sentiment being the more important today (data set - consensus):
- Michigan Sentiment - 72.2
- Leading Indicators - 0.2%
Looking at Asian markets, we see markets are mostly higher:
- All Ordinaries - up 0.93%
- Shanghai Composite - up 0.13%
- Nikkei 225 - up 0.77%
- NZSE 50 - up 0.65%
- Seoul Composite - down 0.58%
In Europe markets are higher:
- CAC 40 - up 0.24%
- DAX - up 0.18%
- FTSE 100 - up 0.20%
- OSE - up 0.39%
Investors pushed up shares of Sina (SINA) yesterday after the company announced that revenues grew 10%, while they were able to greatly increase the bottom line in a not ideal advertisement environment in their home market of China. Shares rose $5.29 (10.39%) to close at $56.19/share on volume of 14.7 million shares. The operating results were great this quarter, but management did say that moving forward, their blogging site may not be nearly as profitable and that the company is losing market share. It will be interesting to see how much of an effect those two situations have on the company moving forward. If they can stem their market share losses and keep them small, it is possible to actually continue to grow so long as the overall pie gets larger. When it comes to Chinese stocks, this is one of the few non-government owned entities which we would be comfortable owning based on their operating results and history - not worried about the company being out of business tomorrow with management disgraced and another Muddy Waters story.
Shares in Agilent (A) fell $3.33 (8.23%) to close at $37.15/share on volume of 12.8 million shares. The company's earnings disappointed investors, and management also issued a soft outlook for the rest of the year. The company said there is weakening demand globally for its products and that government sales are lower, which is to be expected in the current environment. Based on analyst comments afterwards, it appears that this is not going to be a company specific event, but rather an industry-wide event.
NetEase (NTES) missed on both the top line and bottom line when they announced their most recent quarterly results, which pushed shares lower yesterday as investors voiced their disappointment. Volume was 5.7 million shares as the stock fell $8.62 (14.81%) to close at $49.56/share. This is another Chinese ADR, and the maker of online games for the Chinese market is disappointing investors. The net income miss was small, but the revenue miss was significant.
Idenix Pharmaceuticals (IDIX) saw shares fall $2.47 (29.72%) to close at $5.84/share on volume of 19.2 million shares. Investors moved to exit positions after the company's Hepatitis C drug's trial was put on hold when it came to light that one of their competitor's drugs was causing heart disease. This was a precautionary measure, but certainly not good news as it changes the company's timeline on getting the drug to approval. The FDA has begun an agency review of the drug and will continue to have a hold on clinical trials until it wraps up its investigation.
Roth Capital thinks that Peregrine Pharmaceuticals (PPHM) is a top biotech pick and placed a $5 price target on it moving forward. The company has a study due out on September 7th regarding bavi, and that should be the catalyst, according to the analyst. The shares closed up $0.20 (7.58%) to close at $2.84/share on volume of 5.9 million.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.