Today is 'Jobs Thursday' and we expect a meet or disappointment as has been the trend as of late. There is a ton of other news out today and this will have the potential to mute the gains the rest of the world is enjoying after China's central bank created even more liquidity for its economy. We expect China to get even more aggressive in the future, and this is but one step in the right direction but even more drastic steps shall be required. Their economy's size now prevents the country's leaders from being able to turn it around on a dime and now they must learn the lessons on managing such a large economy back to health after pullbacks in the growth rates.
We have economic news out today, it is as follows (data set - consensus).
- Initial Claims - 379K
- Continuing Claims - 3270K
- Durable Orders - -5.0%
- Durable Orders -ex Transportation - -0.2%
- GDP - Third Estimate - 1.7%
- GDP Deflator - Third Estimate - 1.6%
- Pending Home Sales - 0.5%
Looking at Asian markets we see markets are mostly higher:
- All Ordinaries - up 0.46%
- Shanghai Composite - up 2.60%
- Nikkei 225 - up 0.48%
- NZSE 50 - down 0.01%
- Seoul Composite - up 0.42%
In Europe markets are higher:
- CAC 40 - up 0.78%
- DAX - up 0.42%
- FTSE 100 - up 0.27%
- OSE - up 0.21%
We bought OCZ Technology Group (OCZ) shares yesterday morning, just as we said we would. Unfortunately we did not get in at the day's lows, but we also did not buy at the day's highs so we can live with the entry point even though it was not perfect. We purchased shares for the retirement account and that makes this a long-term trade for us as we wait for the company to hire a new CEO and get control over the supply chain - the two events we believe will be the key to driving the share price higher in the coming months.
We have been surprised by the strength in Sirius XM (SIRI) shares as the rest of the Nasdaq listed market has retreated in recent sessions. Investors continue to peg the company's shares to the $2.50/share level and volume remains strong - yesterday it was 72.9 million shares. There was a lot of fear during the last product launch from Apple and investors thought that the new radio feature would steal business from Sirius, but on second look people with iPods already listen to Sirius so it appears that this shall affect Sirius little moving forward.
VeriFone (PAY) continues to face headwinds, and one must begin to wonder just how much new competition the company will face in the coming years for its gear. Competition is heating up and it seems there are new entrants seeking lower and lower margins. Some new entrants to the business are giving the equipment away for free in order to profit from the merchant fees collected on sales, and that VeriFone cannot compete with. The internet has changed many industries and upset many entrenched players. It will not be popular to say so, but the payment business appears to be next and it seems that VeriFone shareholders have already recognized this as shares have sold off with the company's recent operating performance. Yesterday shares closed at $28.19/share after falling $1.83 (6.10%) to close near their 52-week low. We continue to urge readers to steer clear of these shares.
We called this pullback right after the pop higher and our advice then was to accumulate and/or add to positions already established in companies that were performing well already. A company that fits that description is Gap (GPS), which has backed off a bit from its 52-week highs and should be a big winner during the Fall and Winter seasons. Christmas should be the kicker here, and we are calling for new highs by the end of the year. We really like the company's prospects moving forward, and with shares approaching that 10% pullback area we believe that the current area provides an attractive entry point for those who have not opened positions yet.
Las Vegas Sands (LVS) appears to be a buy to us with shares over $45/share and ticking higher. Yesterday the shares rose $0.83 (1.82%) to close at $46.36/share and even with the state of the market we believe that the stock has set itself up for a near-term rise. This could be a top and we pull back to lower levels, so we want to set up a trade whereby we place a stop on at the $45/share level. For our option traders, some $45 calls could be the play - and those will be what we look at should we enter a trade here, but that is dependent upon the premiums required. With the housing market getting stronger, real estate in general recovering and the American consumer spending again it might very well be a perfect storm for a rebound for the casino owners in the U.S.
Disclosure: I am long OCZ.