Today is Jobs Friday with a ton of economic data due out today regarding the employment picture. Both Asia and Europe are up this morning, with the US futures up marginally. Look for the employment numbers to move the market and put a spotlight on the political picture for the next week, at the very least. Good numbers would be a boost for the President while poor numbers would benefit Governor Romney. As awful as it is going to be, the next month's market activity will be impacted greatly by the election process here in the US, so much of the news and analysis will have a political twist to it.
We have economic news out today, it is as follows (data set - consensus).
Nonfarm Payrolls - 120K
Nonfarm Private Payrolls - 130K
Unemployment Rate - 8.1%
Hourly Earnings - 0.2%
Average Workweek - 34.4
Consumer Credit - $5.0B
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.92%
Shanghai Composite - CLOSED
Nikkei 225 - up 0.44%
NZSE 50 - down 0.59%
Seoul Composite - up 0.12%
In Europe markets are lower:
CAC 40 - up 0.73%
DAX - up 0.25%
FTSE 100 - up 0.22%
OSE - up 0.64%
Vringo, Inc (VRNG) rose $0.95 (22.09%) to close at $5.25/share yesterday on volume of 35.2 million shares. The stock hit a new 52-week high as investors cheered the fact that a judge will allow their patent lawsuit versus two large tech giants to move forward. This is an interesting play whereby investors can essentially get involved in the patent gold rush taking place in the tech industry right now. The company is small with a market cap below $200 million, so court victories with multi-million dollar settlements could really move the shares. This shall be an interesting play to watch moving forward, especially if they continue to build out their patent portfolio.
Investors saw shares in NuVasive, Inc (NUVA) decline sharply after the orthopedic device maker announced that they would miss on their top line numbers. Shares fell $7.43 (32.85%) to close at $15.19/share on volume which was sharply higher at 11.2 million shares. It is obvious that competition is heating up in the industry and that prices are being hurt. We would be hesitant to invest in the smaller players here and if we needed to invest in the industry we would focus upon the larger names. Among the larger names we would look first to those companies with a bit of diversification across the healthcare industry and next to the pure-play players.
It appears that the housing and construction are leading shares of Cemex (CX) higher. The shares hit a new 52-week high as the company resumed giving guidance after three years of refraining to do so. Cemex announced that they would see higher EBITDA as they have delivered the balance sheet, refinanced their debt load and are witnessing a rebound in their business. Shares closed at $8.97/share after rising $0.41 (4.79%) on volume of 24.5 million shares. This was a stock we were in a few years back during the financial crisis to play a bounce, and it worked and we made money. It may be time to revisit the company now that they have taken care of some of their larger issues.
We are going to move today towards a position of wanting readers to purchase shares of Regions Financial (RF) anytime it gets into the $7-7.15 range and use those shares for trading purposes. It seems every time the shares go down to test that level that they find support and bounce back sharply, as is currently the case. Yesterday shares closed at $7.51/share after rising $0.18 (2.53%) on volume of 44.8 million. This bank gives investors exposure to the southeast United States and is a deleveraging story coupled with an improving business model.
As much as we like Regions, we do recognize the fact that in the southeast US the premier banking franchise is BB&T (BBT) right now. The company is aggressively seeking customers with offers for credit cards, mortgages and checking and savings accounts all competitively priced. We are now customers at the bank and have to say that it reminds us a lot of the days before the financial crisis where banks had real customer service representatives and performed relationship banking with real people and not via phone calls, call centers and/or mailings. This is one of the country's healthiest banks, and at $33.58/share we think the company offers an attractive entry point for long-term conservative investors.