Futures are higher this morning and we are following the lead of Europe after those markets turned higher this morning. Shares in Asia finished the trading session lower although Hong Kong saw a move higher which put it at monthly highs. Much is being made about this market, but we find it difficult to move bearish here as new highs continue to dramatically outpace new lows and the ratio is still in favor of bulls in a big way right now. We would rather ride the momentum than try to swim against the current here, so we will continue to ride the momentum until either earnings confirm troubles ahead or issues creep up in Europe once again.
We have economic news out today, it is as follows (data set - consensus).
Retail Sales - 0.7%
Retail Sales ex-auto - 0.6%
Empire Manufacturing - -2.8
Business Inventories - 0.5%
Looking at Asian markets we see markets are mostly lower:
All Ordinaries - down 0.10%
Shanghai Composite - down 0.30%
Nikkei 225 - down 0.51%
NZSE 50 - up 0.51%
Seoul Composite - down 0.40%
In Europe markets are higher:
CAC 40 - up 1.04%
DAX - up 0.66%
FTSE 100 - up0.33%
OSE - up 0.14%
Advanced Micro Devices (AMD) saw shares fall $0.46 (14.38%) on volume of 83.9 million shares on Friday after the company announced guidance that came in below analysts' expectations for the 3rd quarter. That was a disappointment, however there are rumors swirling that the company is going to lay off a large portion of the workforce. Nothing has been confirmed, but it is believed that the number is either 20 or 30%, depending upon the source one uses. It has been tough for investors in this stock over the years, and with an 800 pound gorilla to go up against each and every day it is tough to succeed. This is one of the examples of why we hate to go up against the big tech titans, and don't these days. When their big rival sneezes like they did, AMD gets the flu.
The bloodbath at OCZ Technology Group (OCZ) continues, with shares hitting a new 52-week low in trading on Friday and closing at a new 52-week low as well. Shares fell $0.39 (20.97%) to close at $1.47/share on volume of 13.5 million shares. As we have said before, we moved from being bearish to bullish on the shares too quickly, believing we had reached a point of real value. In hindsight that was the wrong play, and this is a lesson learned and which will be applied so as not to make the same mistake twice. The holding is in our retirement portfolio, and was a long-term play so we are still holders at this point.
The rally higher continues at Sirius XM (SIRI) as shares rose $0.05 (1.83%) to close at $2.78/share on volume of 58 million shares. The shares traded Friday within a penny of its 52-week high and with the way markets are moving this morning in the futures market it sure does appear that the company will move higher today through those levels and set some fresh highs. It will be interesting to see if shares can take out the $1.80/share level here as these takeover traders may feel emboldened after their successes in the wireless telecom industry. We think that it could be a real possibility that we see a short-term blip as those players allocate a portion of their portfolio to other takeover plays.
Shares in Best Buy (BBY) fell $0.18 (1.01%) to close at $17.66/share on volume of 2.3 million shares as the company announced that they would be price matching some of their online competitors. This might stop some of the bleeding but the company has far more serious problems. The company has become so segmented and has so many various programs that when you go ask for one they do not know what you are talking about. It is quite frustrating as one of their supposed top customers to not be able to collect your benefits - a lot could be learned from those running the black card program at AmEx…just saying.
The entire financial sector was down on Friday, including Regions Financial (RF) which saw shares fall $0.34 (4.46%) to close at $7.28/share with nearly 22 million shares traded. Readers will remember that we believe the $7-7.10/share level is an ideal area to accumulate on pullbacks. The company's competitors have been reporting solid numbers on the back of mortgage origination and refinancing activities which is a portion of Region's business we have been expecting to pick up and drive both top and bottom line results moving forward. This should be the quarter when we see a nice bump up in those numbers.