Today - Friday, November 28, 2014
- Citing concerns about margin pressure, Pac Crest has downgraded Perfect World (NASDAQ:PWRD) to Sector Perform in the wake of the company's Q3 report.
- Perfect World reported an 880 bps Y/Y drop in gross margin on Tuesday, and a 33% increase in opex (above revenue growth of 17%). On the CC (transcript), CFO Kelvin Lau noted Perfect World's gross margin for mobile games is typically lower than that for PC games due to revenue-sharing agreements."I think the trend is to give away 30% to 40%, less than 50% of the revenue sharing."
- Best Buy's (BBY +1.8%) website is back up and running.
- In a statement to the media, Best Buy said a spike in mobile traffic caused its ill-timed outage earlier today.
- The company has been touting its price-match guarantee this holiday season which is believed to be creating large interest with shoppers.
- Macy's (M +2.5%) CEO Terry Lundgren says an estimated 15K shoppers visited the company's store in Manhattan's Herald Square yesterday.
- The department store chain opened up stores across the U.S. at 6:00 p.m. on Thanksgiving.
- The early read on Black Friday traffic from Macy's is that it's seeing a year-over-year increase.
- Lundgren also said in interviews that handbags and watches have sold well - particularly items made by Michael Kors.
- Macy's is one of a boatload of retail stocks that have set an all-time high today.
- JPMorgan and Morgan Stanley have joined Barclays, UBS, and Raymond James in downgrading Ctrip (CTRP -1.3%) to neutral ratings on account of its soft Q4 sales and margin guidance.
- Like several peers, both JPMorgan and Morgan Stanley expect Ctrip to continue spending heavily to build its brand and stave off rivals in a very competitive Chinese online travel market.
- Rival eLong (LONG -5%) has sold off hard, albeit on volume of just 3.3K shares.
- The ruble hit an all-time low of 49.90 vs the dollar after OPEC yesterday declined to cut production, sending oil plunging below $70 per barrel.
- Moving to try and stem the decline, the Bank of Russia today announced an extension of time in which $2B currency swap operations are allowed.
- RSX -4.3%
- ETFs: RSX, RUSL, RUSS, RSXJ, ERUS, RBL
- Automobile stocks are higher as a group after oil prices slide.
- General Motors (NYSE:GM) is up 2.3% and Toyota is 1.1% higher, while shares of Ford (NYSE:F) are just poking out a modest 0.1% gain.
- There's some concerns that Ford's big bet on aluminum loses some of its relevance if gas prices shoot lower.
- Daimler (OTCPK:DDAIF) and BMW (OTCPK:BAMXY) are both beating broad market averages with +1% gains.
- EV automaker Tesla Motors (NASDAQ:TSLA) is down 2.1% on the day.
- Bankrupt biotech Affymax (OTCPK:AFFY +127.6%) jumps on an 8x surge in volume as traders move to capture the $0.05 dividend payable to shareholders of record December 2, 2014.
- Previously: Affymax declares cash distribution, names new chief
- Previously: The end for Affymax
- The teaser trailer for Star Wars: The Force Awakens is being played at movie theaters across the U.S. this weekend for the first time.
- The Lucasfilm movie is slated to premiere on December 18, 2015 with a return of original stars Harrison Ford, Carrie Fisher, and Mark Hamill.
- Most analysts expect Disney (NYSE:DIS) to generate close to $1.2B-$1.3B in global box office receipts and +$700M in profit. The tally moves higher if consumer products, video games, and streaming rights are all fully factored in.
- There's a vibrant debate on SA between Disney investors on how much of the Star Wars payoff is already baked into Disney trading at +$90 per share.
- Star Wars YouTube channel
- Solar stocks are getting hit hard (TAN -5.1%) after OPEC opted against cutting oil production, leading crude prices to plunge below $70/barrel and sparking huge selloffs in energy/commodity stocks. Fuel cell stocks aren't faring much better.
- Solar decliners: FSLR -6.8%. SPWR -6%. SUNE -5.7%. SCTY -2.9%. CSIQ -10.7%. SOL -9.1%. YGE -7.3%. DQ -7.2%. ENPH -6.8%. TSL -6.9%. JASO -7.5%. RGSE -3.9%. JKS -6.9%. CSUN -3.5%. VSLR -3.7%. HSOL -3.8%.
- Fuel cell decliners: BLDP -6.1%. FCEL -4.5%. PLUG -2.3%. HYGS -5.3%.
- The Nuveen Global Income Opportunities Fund (NYSE:JGG) and the Nuveen Diversified Currency Opportunities Fund (NYSE:JGT) were combined into a single new fund on November 24th; the Nuveen Global High Income Fund (NYSE:JGH).
- "This restructuring seeks to increase demand for the combined fund’s common shares and help the new fund’s shares trade at prices close to Net Asset Value by implementing a more understandable investment mandate within the well- established global high income market segment," as stated in a note to the shareholders released when the merger was approved in October.
- JGH will employ Nuveen’s global high income investment strategy, which seeks to identify securities from around the world, as well as across the capital structure and credit spectrum that offer a high level of current income.
- Medtronic (MDT +1.3%) secures EU approval for its $43B acquisition of Covidien plc (COV +1%) contingent on, as expected, Covidien selling Stellarex, its drug-coated angioplasty balloon. Spectranetics (SPNC +1.9%) agreed to purchase Stellarex several weeks ago for $30M. The FTC recently gave its blessing to the transaction as well.
- Previously: FTC clears Medtronic/Covidien marriage
- Previously: Spectranetics buys Covidien's DCB platform
- Dispelling rumors that it might jettison its consumer healthcare unit after acquiring Sigma-Aldrich for $17B, Merck KGaA (OTC:MKGAF) (OTCPK:MKGAY) says that it has no intention of selling the business which is expected to hit the $1B sales mark in 2014.
- The OTC market has consolidated this year led by Bayer's acquisition of U.S. Merck's consumer healthcare unit, Glaxo and Novartis' deal and Perrigo's buy of Omega Pharma.
- Previously: Perrigo buys consumer health products firm
- Previously: FTC gives thumbs up to Glaxo/Novartis transaction
- Previously: Bayer buying Merck consumer care unit for $14.2B
- Oil service companies mull OPEC's threat to the U.S. shale boom by its decision to hold production and the resulting tumble in oil prices.
- C&J Energy (CJES -17.6%), RPC, Inc. (RES -14.5%), GreenHunter Resources (GRH -9.5%), Seventy Seven Energy (SSE -16.5%), Pioneer Energy (PES -13%).
- Larger names: Halliburton (HAL -11.5%), Schlumberger (SLB -9.7%), Superior Energy (SPN -15%), Baker Hughes (BHI -9.1%).
- Shares of Wal-Mart (NYSE:WMT) cleared $88 for the first time before easing back a bit.
- Earlier today, the retailer gushed about the awesomeness of its level of Thanksgiving Day sales, although some channel checks by analysts indicate store traffic was light compared to a year ago.
- Online sales appear to be where Wal-Mart is shining.
- The Bentonville giant may be out-performing other retail chains on the day with its far-flung network of stores making the drop in oil prices a bit more significant.
- Previously: Online sales sizzle for Wal-Mart on Thanksgiving
- Ladenburg Thalman throws in the towel on Oasis Petroleum (OAS -30%), Denbury Resources (DNR -14.9%), Resolute Energy (REN -18.3%) following OPEC's decision yesterday to hold production levels and the resulting tumble in crude oil, with WTI crude -6.4% to $69.95 per barrel.
- Some others: Bonanza Creek (BCEI -21.5%), Northern Oil & Gas (NOG -16.2%), Warren Resources (WRES -16.3%), Halcon Resources (HK -22%), Triangle Petroleum (TPLM -21%), Emerald Oil (EOX -26.4%), Kodiak Oil & Gas (KOG -19.3%).
- There's a positive vibe across retail as early reports from major chains indicate strong e-commerce sales and an easing off of the promotional fervor that has wrecked profit margins in the sector.
- Though there's some vibrant debate on the degree of impact of lower oil prices on consumer spending, nearly all retail analysts see some trickle-down benefit for Q4.
- The catch-all S&P Retail ETF (NYSEARCA:XRT) is up 1.7% on the day.
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, FXG, RETL, PBJ, IYK, PEJ, FXD, IYC, FDIS, RHS, SCC, FSTA, UCC, PMR, PSL, UGE, RCD, PEZ, PSCC, PSCD, SZK.
- OPEC's Thursday decision to keep oil production unchanged has sparked a commodity stock rout, one that hasn't left coal stocks unscathed.
- Major decliners: BTU -6%. ACI -6.6%. ANR -6.2%. CLD -4.3%. CNX -2.8%. NRP -3.5%. ARLP -3%. CLF -3.6%.
- Thermal coal prices have already fallen sharply this year.
- ETF: KOL
10:20 AM| 2 Comments
- Best Buy's (BBY +1.8%) website is down at the moment.
- A message on the retailer's home page to Black Friday consumers: "Check back soon."
- Shares of BBY have trimmed off some of their early gains, but could feel a sharper sting if the outage minutes stretch into hours.