We are hearing a lot of what we will label 'bearish' news this morning with the IMF having discussed slower worldwide growth and saying that both the US and Europe need to get their financial houses in order. You cannot argue with getting the finances in order, however we are headed into an earnings season which nearly everyone believes will be disappointing. When everyone is thinking alike, it provides the opportunity for markets to move big if the group thinking is incorrect and that shall certainly be something to watch during the upcoming earnings season which kicks off tonight.
We will not have any economic news out today and investors will have to wait until Wednesday until the first batch this week.
Looking at Asian markets we see markets are mixed:
All Ordinaries - up 0.55%
Shanghai Composite - up 1.97%
Nikkei 225 - down 1.06%
NZSE 50 - down 0.41%
Seoul Composite - down 0.14%
In Europe markets are lower:
CAC 40 - up 0.10%
DAX - down 0.59%
FTSE 100 - down 0.34%
OSE - down 0.11%
A lot is being made of the introduction of the iPhone 5 and what could be a possible iPad Mini. We know from checking with Verizon that the iPhone 5 is back order by about a month right now and that this holiday season will see that as a popular gift. The rumors about the iPad Mini seem to grow by the day and with the very recent, detailed reports we have read it has to be closer to a reality than not at this point. We think the best way for most investors to play this is via Cirrus Logic (CRUS) with an entry point around these levels. The shares trade ended yesterday's session at $37.47/share after falling $0.47 (1.24%) on volume of 1.7 million shares. We think that this one will hit new highs on iPhone 5 results alone, but couple that with the possibility of a new iPad model and we could see this testing the mid to high forties.
Vringo, Inc. (VRNG) is seeing some serious volatility as of late. Shares finished yesterday at $5.43 after rising by $0.89 (19.60%) with volume coming in at 28 million shares. We would expect continuing volatility through the end of their legal proceedings and that could make this an ideal play for our readers who do a bit of day trading. The volume and volatility indicate that it is a perfect target and the low stock price makes it even more attractive as many more people can afford entering into a play at that level. We continue to watch this technology patent play.
Investors saw shares in Vivus (VVUS) rise $1.89 (10.19%) to $20.44/share on volume of 5.6 million shares after the company announced that Express Scripts had joined the Qsymia Certified Home Delivery Pharmacy Network. This seems like a big win for the company as it was believed that their lack of a sales network or big partner would hinder their ability to get their drug into all of the retail outlets and drug programs. It will be important to be available in as many places as possible to give consumers easy access to the drug so they are not forced to move prescriptions around, something that in the past has annoyed us personally with our prescriptions. This is the third big win for Vivus and it will be interesting to see how much they can capitalize on this.
Eli Lilly's (LLY) drug solanezumab had positive results in a trial which displayed that the experimental drug was effective against mild forms of Alzheimer's. This is the same drug which disappointed with late stage results in other studies a few months ago. This is not a cure all, but the drug could very well be the first available to attack the progression of the memory robbing disease. Shares in Lilly rose $2.55 (5.29%) to $50.78/share on volume of 28.6 million shares in trading during yesterday's session. To quantify the potential of the drug for readers, it is a potential multi-billion dollar drug.
As we have mentioned before, competitors will be moving onto Green Dot's (GDOT) turf. Shares fell $2.60 (20.23%) to close at $10.25/share on volume of 6.1 million shares after news yesterday that American Express will be offering prepaid cards in Wal Mart. That is fertile ground for prepaid sales and the largest segment of Green Dot's business. Over the past six months the company did derive about two thirds of its revenue from Wal Mart so the fact that Amex is getting increased exposure should hurt the top line at Green Dot (which will affect the bottom line as well).