Dec. 05, 2012 2:02 PM ETAAPL
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Long/Short Equity, Portfolio Strategy

Contributor Since 2008

Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political, and general opinions by several prestigious news organizations. Currently, Mr. Payne is a contributor to the Fox News Network and Fox Business Network. He also hosts his own radio show on KFIAM 640 every Saturday from 2-4pm PST. Mr. Payne recently released his first book entitled Be Smart Act Fast Get Rich. Our all-star analytical team is called first when the media needs to know. We are regularly featured on several well respected finance-oriented radio and television programs such as Fox, CNBC, BNN, WSJ to name a few and widely recognized in the media as a leaders in the analyst community. In addition, Wall Street Strategies is part of Factset, Jaywalk, and Thomson-Reuters Consensus Estimates. Meet our analysts: Brian Sozzi is an equity research analyst specializing in the softline/hardline goods sectors of the retail industry for Wall Street Strategies Inc. Mr. Sozzi graduated Summa Cum Laude from Dowling College, receiving his Bachelors of Business Administration with a concentration in Finance and Accounting. Routinely sought after as a trusted point of reference for opinions and insight on the global economy and retail sector stock evaluation, Mr. Sozzi is a frequent on air contributor to CNBC, Fox Business Network, and Bloomberg, and is cited regularly by online/print publications that include Forbes, Bloomberg, The Wall Street Journal,, CBS Marketwatch, Reuters, Seekingalpha, Associated Press, Crain’s NY Business, Fortune, Barron’s, AOL Finance, and the Financial Times. In 2009, Mr. Sozzi became recognized by Starmine as a top-ranked equity research analyst for stocks under coverage in such categories as EPS Estimate Accuracy and Industry Excess Return. David Silver is a Research Analyst for Wall Street Strategies. He is a graduate of Tulane University’s A.B. Freeman School of Business where he received his Bachelor of Science in Management with a dual degree in Finance and Accounting. David actively covers companies in the Transports, Autos, and Beverage sectors. He is routinely invited to appear on business oriented television and radio shows including CNBC, Fox News, Fox Business News, the Business News Network of Canada, WCBS Radio, and the Wall Street Journal Radio. In addition, David has been quoted in major business publications such as the Wall Street Journal, Forbes, Marketwatch, CNN Money, and Autoweek. David Urani is a research analyst with concentrations on the homebuilding, staffing, medical devices, and logistical services industries. Along with providing institutional clients with up-to-date reports of individual stocks within his industry coverage, David assists the rest of the Wall Street Strategies research desk with timely analysis of vital economic data. A graduate of the A.B. Freeman School of Business at Tulane University, David earned a Bachelor of Science in Management while majoring in finance. With prior training experience running small businesses, he has an eye for key fundamentals that keep Companies running efficiently. David’s insight has been featured in several outside sources, including the Fox Business Network, MarketWatch, and SeekingAlpha. Carlos Guillen is an Equity Research Analyst providing coverage of the technology sector for Wall Street Strategies, Inc. Mr. Guillen has had experience working in both the sell side and the buy side. Prior to working as an analyst, he was a Design Engineer for Lambda Electronics. Mr. Guillen holds an M.B.A. from NYU’s Stern School of Business, and he has a B.S. in Electrical Engineering from Manhattan College. Conley Tuner is a Research Analyst with Wall Street Strategies Inc. He is a frequent contributor to a number of media outlets including MarketWatch, Bloomberg, BBC news and Xinhua news. Conley holds a Masters in Business Administration and a Masters in International Affairs from the George Washington University. Jennifer N. Coombs is an Equity Research Analyst at Wall Street Strategies. She previously worked on the buy side as an Associate Equity Research Analyst covering the transportation subsector of the industrials sector at AIG SunAmerica Asset Management Corporation. Jennifer also covered Real Estate Investment Trusts (REITs) and has done broader research for the industrials, financials and consumer sectors. Prior to joining their research department, Jennifer worked as a Trading Assistant for SunAmerica’s index funds. She also worked briefly in the client portfolio management department at Dwight Asset Management Company – a fixed income subsidiary of Goldman Sachs. Jennifer graduated with distinction from Clarkson University where she earned a B.S. in Financial Information Analysis and Political Science, with minors in Economics and Law. Jennifer specialized in international markets, and briefly studied East Asian Economics at Sungkyunkwan University in Seoul, South Korea. Jennifer is currently a member of the New York Society of Security Analysts (NYSSA).

Carlos Guillen

Equity markets are reacting quite nicely to the slew of economic data presented earlier today. Well ... let's see; jobs are continuing to be added to the economy; businesses are benefiting from increasing productivity and decreasing unit labor costs; orders for consumer goods and capital goods continue to increase; and economic activity in the non-manufacturing sector continues expanding.

This morning's ADP report was rather concerning, but everyone will be looking at Friday's jobs numbers for a clearer snapshot of the current employment situation. According to ADP, 118,000 private sector jobs were gained during November, below the Street's consensus estimate calling for a gain of 125,000 jobs and significantly below the 157,000 added jobs in the prior month. The data showed that payroll gains were predominantly driven by large businesses, which added 66,000 jobs. Small and medium-sized business payrolls increased by 19,000 and 33,000, respectively. As usual, most of the added jobs came from the services sector, which ADP said added 114,000 jobs, while the goods-producing sector experienced a gain of 4,000 positions. Part of the reason why the nonfarm result missed expectations was that super-storm Sandy caused a large disturbance on the jobs market; in fact, it is estimated that 86,000 jobs could have been added to the actual result had it not been for Sandy. Moreover, in light of the current fiscal cliff dilemma, businesses are still not derailing from their hiring activities. Also a bit encouraging was that November represented the 33rd consecutive month in which jobs were added to the economy, and year to date, the average employment gain is 135,000. Nonetheless, given the data noise created by Sandy, the government's jobs data for November are likely to also land below expectations when they come out this Friday. At the moment, economists are predicting that private sector businesses will have added 120,000 jobs in November, and the unemployment rate will likely rise a bit to 8.0% from 7.9%. Sandy is expected to have an adverse effect to the tune of between 50,000 and 100,000 jobs for the month of November.

Perhaps also reflecting the improvements in the work force was that labor productivity continued to increase. According to the Bureau of Labor Statistics, worker productivity rose at an annual rate of 2.9% in the third quarter of this year, landing above the Street's consensus estimate calling for a 2.7% rise. This increase in productivity comes after another rise in the second quarter of 1.9%. However, the increase in productivity may not lead to more hiring in the near term as concerns about slowing global demand and the looming fiscal may prevent businesses from adding more staff. Also discouraging was that unit labor costs in nonfarm businesses declined 1.9% in the third quarter, a sharper drop than the Street's estimate of 0.8% decline. Given that there are still many without jobs, labor costs are likely to continue to decline.

While Monday's data from the Institute for Supply Management (ISM) showed that US economic activity in the manufacturing sector (PMI) contracted in November for the first time in three months, ISM data posted today showed that economic activity in the non-manufacturing sector (NMI) continued expanding during the same time period. The ISM non-manufacturing index increased to 54.7 in November from 54.2 in the prior month, landing higher than the Street's estimate of 53.7 and representing the 35th consecutive month of growth. Rather discouraging, however, was that employment activity in the non-manufacturing sector decreased by 4.6 percentage points to 50.3%, indicating growth in employment for the fourth consecutive month but at a slower rate.

In all, the economic data presented today is overall encouraging and has stocks up sharply higher, with the Dow Jones industrial Average up over 110 points. Of course, things could take a turn for the worse if Friday's jobs numbers come in below expectations.

Factory Orders Improve
David Silver

In a report, the U.S. Census Bureau said factory orders rose by a seasonally adjusted 0.8% in October, compared to expectations for a 0.1% decline. Factory orders in September rose by 4.5%. The figure was revised down from a previously repotted increase of 4.8%. It was a strong report across the board, and while it doesn't show a robust economy, it does show an economy that is shrugging off the potential for a Fiscal Cliff and actually looking towards a stronger 2013. Manufacturing is not nearly as important to the overall economy as it once was, but many of the hopes of the middle class moving forward will be pegged to manufacturing.

In a sign that Apple (AAPL) has a lot of influence on the market, take a look at the Nasdaq today. The Dow is up more than 100 points, almost 1%, while the Nasdaq is down more than 12 points or about 0.4%. AAPL is coming under more pressure because, despite its huge cash position, it is not paying a special dividend, while at the same time, the 50 and 200 day moving averages are at risk of crossing, which is bearish sign when the stock is falling.

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