Welcome to The Stock Locker: Your Stock Market Run Down and Forecast
Tuesday March 1
The month started with a bang having oil surpassing $100 and gold closing at an all time high of $1432/oz. Ben Bernanke’s testimony of an upbeat economy and an acknowledgement that food and energy costs are on the rise caused treasuries to rally. Basically, rates go down as they have an inverse effect to treasury prices. The inverse correlation that started last month between stocks and oil prices continued as the dow lost 168 pts to start the month and oil surpassed $100/barrel.
Notable news: a SEC investigation into Las Vegas Sands (NYSE ticker: LVS) Macau division. MET Life (MET) announced a 150,000,000 share secondary offering (most of which was held by AIG). All this said and CNBC had not 1, not 2, but 3 breaking news reports on yes….Charlie Sheen’s Twitter account! Go figure!
Wednesday March 2
The big news of the day was that Steve Jobs, Apple CEO, was at the launch of Apple’s new iPad2. Pretty major announcement given the stock moved higher all day, reassuring investors’ confidence that he is alive and well and “still running the company”.
Internationally recognized billionaire Warren Buffett was a special guest for three hours on CNBC to talk about the economy and business in general. He did say that the economy is continuing it’s improvement and doesn’t need as much government help (through quantitative easing, at least) as it has been getting. According to Buffet, we have now seen the economy get better for 2 years and have reason to be optimistic about the future strength and resiliency of the U.S. system. Who argues with Warren? Not me.
And lastly, the markets were flat to small gains on the back of strong ADP employment data.
Thursday March 3
NFL owners and the players union agreed to a 24-hour extension of their collective-bargaining agreement, temporarily putting off a potential season-threatening lockout.
Major market news: Walmart (WMT) increased their dividend by 20%.
Gold lost $21 and oil was down $1. This along with the initial jobless claims that came out at 8:30AM (360,000 vs. the expected 400,000) caused the market to rally 191 pts. In addition, the Institute for Supply Management (ISM) said its measure of hiring by service companies rose to the highest level since April 2006. The index covers a broad range of industries including retail, health care and financial services. The ISM number is a widely followed economic indicator.
Stocks put together their best performance in 3 months due to the drop in oil prices and some encouraging economic data.
Friday March 4
Stocks lost 88 points as oil rose $3.19 to almost $105 as fighting in Libya continues to intensify. The Dow was down triple digits all day. In the last 30 minutes of trading, the Dow rallied over 100 points
Employment data was released early this morning. Employers hired last month at the fastest rate in almost a year as the unemployment rate fell to 8.9% which is almost a 2 year low. We have been stuck in the 9-10% unemployment range for nearly 24 months.
The economy added a net 189,000 jobs.
The market retreated as profit taking kicked in on the news of this positive economic report. This does not mean that we have recovered. It just means we are knee deepinto a recovery.
Notable analyst calls: Bank Of America downgraded Citigroup (Ticker: C) and Goldman Sachs (Ticker: GS) to neutral as they cite expectations for a weak Q1 results due to a slowdown in client activity and Mideast turmoil.
One week ends and another one begins! What to keep an eye out for:
Earnings releases for next week include, CIEN, URBN, DKS, SAM, JCG, JRCC, PLCE,GYMB,ARO,ZUMZ,NSM,ANN.
Events and conferences next week:
- BMY, TMO, GILD at Cowen and Company 31st Annual Health Care Conference
- T, S, CMCSA at The Deutsche Bank Media and Telecommunications Conference
- Fed’s Lockhart and Fisher
- NYX Investor Day
- BTU, PCX, CSX, at American Coal Council Spring Coal Forum
- INTU, ASML, STM at UBS Technology Conference
- CME, MA, BK at 2011 Citi Financial Services Conference
- XOM Analyst Day
- UTX Analysts and Portfolio Managers Meeting
- TSO, SUN, HOC at Bank of America Merrill Lynch Refining Conference
- CI Investor Day