It will be interesting to see what today's jobs numbers tell us and whether these numbers have an ability to change the election outcome with only a few more days left to go. We suspect that they will be a bit disappointing, but that is merely a suspicion based off of the funny business which has gone on lately with the numbers here. The stock market has been remarkably resilient in the face of all of this, but after the election (and assuming if a new president is not in place) then we believe investors will be less forgiving and will push shares down on bad news. Up until November 6th bad news is good, after then bad news will revert to being bad news.
We have economic news due out today, and it is as follows:
- Nonfarm Payrolls - 125K
- Nonfarm Private Payrolls - 130K
- Unemployment Rate - 7.9%
- Hourly Earnings - 0.2%
- Average Workweek - 34.5
- Factory Orders - 4.5%
Asian markets finished higher:
- All Ordinaries - up 0.08%
- Shanghai Composite - up 0.60%
- Nikkei 225 - up 1.17%
- NZSE 50 - down 0.45%
- Seoul Composite - up 1.07%
In Europe markets are trading slightly lower this morning:
- CAC 40 - down 0.19%
- DAX - down 0.26%
- FTSE 100 - down 0.21%
- OSE - down 0.30%
Yesterday saw shares in OCZ Technology Group (OCZ) rise $0.22 (16.30%) to close at $1.57/share after the company announced that they would be cutting the workforce by almost 30% and that they were continuing to work through their issues to issue their financials. It appears that the company is going to streamline the product offering and will be focusing more on the upper end of the market going forward. We think that the financials will be key to getting this on the path to better returns and until the company issues those numbers the shares will have an anchor on them.
Cirrus Logic (CRUS) got caught up in the 'buy on the rumor and sell on the news' phenomenon. Investors pushed shares down $4.64 (11.38%) to close at $36.14/share on strong volume of 17.5 million shares after the company reported impressive earnings. The company even stated that next quarter would be strong but the issues that investors latched on to was the company's margins and the guidance given for the quarter after the next, which they stated would be down. We have liked this one for a while, and with their main customer rolling out new product lines and still growing smartly we have to believe that the rise in Cirrus Logic shares has not yet ended. Buy on the weakness here.
Yesterday's session saw VeriSign (VRSN) shares rise midday after the company issued a press release commenting on the .com registry that they run and has been a cause for concern among investors since the earnings report as their paperwork appears to have gotten tied up. You can read the company's announcement here for some background on the entire situation, which appears less bleak than only a few trading sessions ago. Shares finished the day up $4.08 (11.01%), finishing at $41.15/share on volume of 16.7 million shares. It looks like fears were overblown about the company not getting the Department of Justice to approve their agreement, and that investors are now rotating back into shares ahead of that approval.
We had been getting beat up with the emails coming in regarding Starbucks (SBUX) and our bullishness on the company and its prospects lately. We had investors riding this one higher earlier in the year and then the music stopped and we saw shares retreat, but in our eyes nothing had changed except a stronger US dollar. Yes that could hurt international sales moving forward, but the company is stepping up global growth in areas such as Germany, China and India and should continue to see the United States provide steady cash flow and revenue growth via their long-term growth plans here. Those plans to diversify the offerings and increase traffic helped drive same store sales growth and the shares took off in after hours trading with shares rising $3.49 (7.49%) above where the shares closed at 4 PM. Guidance was strong, and we remain bullish but most important it appears that a trend is developing and shares will be able to move higher at least through the end of the year.
Exelon (EXC) saw shares fall $2.20 (6.15%) to close at $33.58/share on increased volume of 30.9 million shares after the company's Chief Executive Officer said that the company may need to cut its dividend at some point in the future. It must be pointed out that the company has never cut its dividend in the past, but with today's environment they think that it may be needed in order to maintain the company's investment grade credit rating. The company did report good earnings, beating on the EPS figures and raising their guidance but the big news was the potential for the dividend to get a haircut. This will be a story to watch moving forward for dividend investors.