The German court reviewing the EU bailout plans has approved the plan for the most part. This news has given Asian and European markets a nice bounce this morning and we would expect this momentum to carry over into trading in the US. Our futures are up, along with gold, silver and oil so it appears that we could see an across the board rally. We would like to see this rally last throughout the day rather than a sell-off into the close. For investors not paying attention, although we have had lower volume in the markets across the board here in the US, we are now sitting at or near multi-year highs.
We have economic news out today, and it is as follows (data set - consensus):
MBA Mortgage Index - N/A
Export Prices ex-ag. - N/A
Import Prices ex-oil - N/A
Wholesale Inventories - 0.3%
Crude Inventories - N/A
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.80%
Shanghai Composite - up 0.28%
Nikkei 225 - up 1.78%
NZSE 50 - up 1.20%
Seoul Composite - up 1.56%
In Europe markets are higher:
CAC 40 - up 0.60%
DAX - up 0.75%
FTSE 100 - up 0.31%
OSE - up 0.61%
Palo Alto Networks (PANW) saw shares fall $5.15 (7.18%) to close at $66.60/share on volume of 3 million shares, which is the largest fall since its IPO. The company beat the consensus numbers for its current quarter, however it fell short of the most optimistic numbers some analysts on the street had. Next quarter should be good, much like this quarter was and the company guided us to the higher end of the range analysts had (increased it over the consensus to be sure). This is a story we like and if we can get a bit more of a pullback we would feel comfortable with readers moving in.
Cell Therapeutics (CTIC) closed at $3.56/share after rising $0.99 (38.52%) on volume of 12.9 million shares. Investors pushed shares up after the company announced that they had launched their recently approved cancer drug, Pixuvri, in the European Union yesterday. The drug treats a form of cancer which affects 37,000 new people per year in the EU. We are interested to see how many patients the company is able to sign up for its drug and how the revenues ramp up moving forward. In recent years we have seen even really good drugs struggle to sign up patients based on sales force issues and patients' ability to pay for the drugs without assistance.
American International Group (AIG) saw shares rise $0.15 (0.45%) to close at $33.45/share on volume of 322.5 million shares after the US Treasury sold most of its stake in the company via a secondary which will lower its ownership level to the 16% level. The company's CEO, Robert Benmosche, told CNBC that the company should be able to pay a dividend as the government sells down its remaining 16% stake, which should be quick as he does not feel that large secondaries will be needed to sell into the market. The company has built up $11.5 billion in cash and should be able to raise more once they are able to sell their noncore assets such as the aircraft leasing business.
We would like to update our readers as we have received a few emails recently regarding one of our picks from a few months ago. The stock is Ulta Salon & Cosmetics (ULTA) which has risen to $99.34/share on the back of strong earnings and revenue growth each quarter. We are still bullish on this one as the earnings for this past quarter pleased both investors and analysts alike and the metrics are still coming in strong. We are in the middle of that sweet spot most retailers have in the growth trajectory, where store openings and sales at older stores continue to grow to power the results. Looking forward we would figure to remain bullish until the company has built out its footprint across the nation and new store openings fall dramatically. That is usually where the issues arise in stories such as this.
We have a few rules which we trade by, and one of the more important ones is that when you no longer understand a situation you should be neither bullish nor bearish and stick to being neutral until which time that you can grasp what the situation is. That is the case with Green Mountain Coffee Roasters (GMCR) which saw shares rise $1.80 (5.93%) to close at $32.16/share on volume of 19 million shares. There are too many rumors floating around on a daily basis these days and some of them actually conflict with one another. We can no longer remain bearish, or suggest that readers be bearish as the bulls have taken over the story here and appear to be performing a raid to force shorts to cover. In fact one rumor we heard had one big name hedge fund manager covering his short position a few days ago.