David White

Closing Update for Monday, August 17: Global Sell-Off Visits U.S.

Excluding one time items Agilent earned $.15 vs an average estimate of $.11. The stock was up after hours.

I tend to agree with Bill L. The sell off has likely started. Still declines led advances by a more than 6 to 1 margin. Plus the building permits and the housing starts numbers tomorrow will be good if they keep with their recent trend (and housing market recent trends). On top of the good empire state manufacturing numbers this morning, this should allow the market to rebound tomorrow morning.

Plus some companies are expected to do well. TJX and GYMB may perform well in the retail sector. They report Tuesday. This may relieve some of the distress about the retail sector.

I am not expecting the PPI data to be a huge factor.

HPQ reports after the market closes on Tuesday. Its results may big a big factor in Wednesday's performance. HD reports Tuesday also.

Expected Volatility: 20 Option Straddle Ideas for High Beta Stocks

Automakers have done better of late due to the "cash for clunkers" program. Don't think HOG will do better just because the automakers have picked up (due in no small part to this program). "Cash for clunkers" does not extend to motorcycles. HOG is out of luck.

Expected Volatility: 20 Option Straddle Ideas for High Beta Stocks

CreditSights says GE Capital (GE +6.9%) may need as much as $14.7B in additional capital over the next two years to cover $65.5B in losses if if the economy deteriorates more than expected. (Bloomberg) Some are citing this report as the reason for the sudden selloff in the final half hour today, 7-30-09.

The same would be true of HDFS (HOG's finance arm), except the amounts would be proportionately smaller.

Overbought Stocks (7/21/09)

radicall: I believe the implication was that the stocks that were far under their 50-dma's were possibly oversold.

Lehman Hangover - Fast Money Recap (9/9/08)

Cramer has said commodities stock may still have farther to tumble, especially because China has dried up. He was hedging his comment by saying that you have to believe all of these stocks growth was due to high commodities prices to believe that this will happen. I actually don't believe that. I know for certian that the figures with regard to China were skewed due to the Olympics. The government kept 1.5 million cars off the road in Beijing during the Olympics. It also effectively shut down many polluting factories during the Olympics. This curbed demand for coal, iron ore, etc. during this time. Further 2 earthquakes have left China with a lot of repair work. They will need commodity resources for this. I am looking for the numbers on China to bounce back soon. I do believe they are being hurt by the slow down to some extent, just not to the extent some analysts (such as Cramer) are now claiming.

I do believe the inflated valuations of commoditiy related stocks were due to high commodities prices to a large extent. However, these valuations are no longer inflated for many stocks. The food related stocks are a good example of this. Food is a staple. There will be high demand even in recessionary times. After Q3 results are reported, POT will have a PE of about 15 and MOS one of about 12. These are both substantially below their historic average values. Further after Q4 results these PE's will be substantially lower than that. Longer term the FPE of MOS is 4.5 and POT's FPE is 6.6 (yahoo finance). They both have very strong cash positions. In fact POT has been buying back stock to cancel it. Further CHK's CEO has been buying a lot of that stock, even though many have been predicting natural gas prices to go down. At the very least it would seem that POT and MOS are in for a short term bounce upward. TRA and CF have also been hit hard recently. They look like good values too.

Lehman Hangover - Fast Money Recap (9/9/08)

POT: FCX announced today that it will defer 200,000 ounces of gold and 150M pounds of copper that were expected for 2008 delivery. This should prop up these commodity prices. Any upward movement in commodities (or cessation of downward movement) is generally good for POT and MOS. This is another positive indicator for grain futures and POT.

Lehman Hangover - Fast Money Recap (9/9/08)

POT: OPEC cut production by 500,000 barrels a day. It currently looks like Ike will strengthen again, but it will hit the Texas coast around Corpus Christi -- well south of the main oil infrastructure. Still the bulk of oil and gas in the Gulf has been shut in. Expect the US Petroleum Stocks report to reflect this today. It will actaully reflect the shut ins from Gustav, but that should give us a good idea what next weeks report is likely to be also. Oil is up slightly at this time. The Euro is down vs. the US Dollar. Grains are roughly even. Total publicly stated today that they believed $100/barrel oil was a stable price (i.e. oil is not likely to fall much further). The financials are still a problem for the market. However, the market seems likely to rebound today after its big losses yesterday. Further Lehman seems to be saying that they can survive. They are planning a number of sales to bolster their bottom cash position in order to pay for coming losses. The fact that they have a cogent plan is a good thing. The news that KDB is no longer considering investing in Lehman is old news. It brought the market down yesterday. Ditto AIG. All told these indicators seem to be neutral to up for POT and MOS. These two stocks have been battered recently. They seem to be relative bargains at their current prices. The analysts' 1 year target price for each is double or more the current value. This may be a great time to buy for the short term. They are each due to rebound. The health of the overall market may determine whether you want to keep them longer for the short term. However, if you are thinking long term, you probably won't go too far wrong at these prices.