Asian shares are up strongly this morning with Europe being only slightly higher. Looking at US markets we see that markets are set to open lower, but we suspect that the housing numbers could reverse that so long as today's earnings before the bell are alright. We would look to home builders if we were day traders this morning as we believe that housing numbers are going to continue trending higher over the next few years as we see demand return to the market. In fact, we know of a few situations where people want new houses but are unable to move due to the first time home buyer credit. There is pent up demand for upgraded housing and we will need to revisit our thinking on our thesis of the homebuilders going forward with that information we came across this weekend. At this point it appears that it might be best to focus on the mid to upper tier markets going forward.
We have economic news out today, it is as follows (data set - consensus).
MBA Mortgage Index - N/A
Housing Starts - 768K
Building Permits - 815K
Crude Inventories - N/A
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.82%
Shanghai Composite - up 0.32%
Nikkei 225 - up 1.21%
NZSE 50 - up 0.62%
Seoul Composite - up 0.70%
In Europe markets are slightly higher:
CAC 40 - up 0.07%
DAX - up 0.04%
FTSE 100 - up 0.14%
OSE - down 0.40%
Sirius XM (SIRI) continues to receive upgrades from analysts as auto sales continue to outpace estimates and the company is showing success in converting customers, having raised their subscriber growth estimates numerous times over the past year. Yesterday the company's shares rose above the $2.80/share level as share rose $0.04 (1.43%) to close at $2.84/share with 87.6 million shares traded. The shares hit a new 52-week high during the day as well and shares closed off of those highs by a mere penny. The wind is behind investors' backs here and it appears that the way to play Sirius now is to simply ride the momentum higher.
Shares in Bankrate (RATE) caught our eye yesterday as they traded lower by $3.24 (22.34%) to close at $11.26/share as the company traded 11 million shares. The company announced that they would miss both their third quarter revenue and earnings numbers. The revenue miss was not extremely bad, but it did cause the earnings number to be almost have of what analysts were expecting. With yesterday's price action the shares not only set a new 52-week low, but a new all-time low as well. Investors will have to wait until November 1st for the entire earnings release, so that will be a date to watch for those who follow the company.
PNC Financial Services Group (PNC) reported some pretty solid numbers yesterday with growth on both the top and bottom line. Numbers were boosted by the sale of a portion of the company's stake in Visa, but adjusted numbers still missed analysts' expectations. This is one of the premier banking franchises in the US right now and we believe that with yesterday's weakness that investors have been presented with a buying opportunity. With shares having traded lower by $2.53 (4.02%) and closing at $60.40/share we think the entry point is quite attractive especially when one considers the fact that the company is forecasting growth to continue forward and the fact that we may have reached a bit of support for shares with yesterday's fall.
Regions Financial (RF) shares traded down to a level where support has been put in before as earnings in the sector disappointed both investors and analysts yesterday. The shares finished at the lows for the day and we are reminded that this stock has been a buy all the way up on these pullbacks. We will know more about how the banking sector's earnings are going to look this quarter as we have more earnings on deck for today. We are interested to see some more data on what is driving the earnings story at banks which will help us figure out whether we believe adding shares around these levels is the prudent thing to do. Long-term the answer is a yes, but for those traders looking to hold shares for a year or less we want to do some further research before making that blanket statement buy.
Investors saw shares in ISIS Pharmaceuticals (ISIS) fall $2.88 (21.90%) to close at $10.27/share on volume of 17.5 million shares after the company announced that the lead drug in its pipeline raised some red flags after growths were found in 3.1% of the patients in the drug's clinical trials. We like to shy away from red flag situations, and although we have in the past been bullish of shares of companies with drugs that were said to cause growths in later stages (under extremely high doses) we stay away from situations when they show up this early in the process, especially when the growths are in humans and not rats or other lab animals.