|
|
|
Need to Know
MAY 16, 2013
7 gut checks before the stock
market's opening bell
By Shawn Langlois
Good
morning.
Buyers are jumping all over Cisco Systems this morning after yesterday's
plucky earnings beat, but they're pulling the trigger in relative
isolation. U.S. stocks, in general, are rather limp in premarket trading.
This could be taken as a good sign for the gray beards, though. Hot tech
stocks of the bygone bubble era haven't really kept pace in this rally, but
if we revert to the mean and the broader advance continues (see below),
that could all change. In other words, there are still plenty of good
deals to be had in stocks that were once well out of reach for anybody who
paid attention to valuations.
The again, Dell, another member of the tech sector's old guard, could prove
the folly of this approach when it reports quarterly results later today.
Key market gauges: The Nikkei , despite some good economic data out of Japan, gave
back a small chunk of recent gains but managed to stay about the
newly-breached 15,000 level. The Shanghai Composite , on the other hand,
managed to tack on 1.2%. Meanwhile, Europe is gingerly adding to its recent multiyear highs
, bouncing off the lows of the day.
Futures on the Dow and the S&P are pointing to a muted start to the day, nothing too
drastic yet. Gold , however, is tanking to the tune of down 2%. Read: Soros splits with Chinese housewives on gold
.
The economy: Jobless claims climbed by 32,000 to
360,000, marking the highest level in a month and a half, while housing
starts dropped 16.5% to a lower level than forecast 853,000, the lowest
level since November. Later, the Philadelphia Fed is expected to report
that the manufacturing index rose to 2.0 in May from 1.3 in April. Any
number above zero signals expansion. There's also a bunch of Federal
Reserve officials slated to chirp throughout the day, including Philly Fed
President Charles Plosser, who is in Milan delivering a message along the same lines as his
previous European speech. Read: Spotlight on the economy .
Earnings: Dell's hurried quarterly report is the biggie later
today. Before that, investors get to wrestle with results from Wal-Mart
and Kohl's . The bad news early is that Wal-Mart is getting pinched
before the bell, down more than 2% after the company issued a disappointing outlook .
Joining Dell for some after-hours tech action, Applied Materials and
Brocade report. Short-seller favorite J.C. Penney and Nordstrom
will bring it from the retail sector.
The buzz: Cisco shares are on the move early, rising
some 9% premarket after the company posted a surprisingly strong third-quarter report
. As if this market needed another reason to push higher, this rally could
go a long way in keeping buyers sniffing around the tech sector.
Tesla is also one to watch (as if we ever stopped), with its stock rallying
hard yet again in the wee hours. Founder Elon Musk is buying $100 million in stock in an effort
to pay off Department of Energy loans early. Next stop, $100.
From page s-21 of $TSLA prospectus: Musk will borrow fr $GS
& pledge current holdings to buy new stock. Big margin call if all not
go well.
— Herb Greenberg (@herbgreenberg) May 16, 2013
For Google , that next stop could be $1,000 . The stock is on fire,
having pushed through $900 for the first time ever. The company's big
developers conference, during which it announced a new streaming music service , will keep
the stock in play today. It's leaning higher in premarket trading.
Apple , with its shares dipping in the early hours, is also trending after
it came to light that three prominent hedge funds, including Appaloosa , are scrambling
toward the exit doors. David Einhorn, however, is sticking with his
2.4-million stake.
The chart of the day: If your stomach is bleeding over
whether this market is getting overripe, chill out already, according to this chart from Ed Yardeni . "The
recent valuation-led rally in stocks isn't irrational exuberance. Rather,
it is a bullish rejection of the bearish and dreaded prediction of the
Endgame prognosticators pontificating that the end is near or even
imminent," he wrote. This illustration of the S&P 500 forward P/E
ratio shows there's room to run. Yardeni says if the metric just reverts to
2009's peak, the S&P would move all the way up to 1,744.
The
call of the day:Cisco should be hovering around
the $30 level within three years, but that's just a piece of money manager
Tim Travis's call to invest in value tech stocks ,
including Microsoft and Intel . "Perhaps years from now
books will be written illuminating the obvious opportunity to pick up some
of the finest large-cap technology companies at single-digit earnings
multiples, and we will wonder what market participants were thinking paying
well above-market multiples for slow growth companies based on the
perception of safety."
Travis likened the scenario to the popping of the bubble more than a decade
ago, a time when the bricks-and-mortars held relatively strong while tech
went bust. "I believe that we might see a reversal of fortunes over
the next few years," he wrote, "but the fall won't be as severe because
valuations are just buzzed instead of drunk."
Random reads: A brief history of Prince Harry's athletic exploits ,
courtesy of Buzzfeed. (Not listed: His graceful speed-walking away from my
10-year-old daughter who tried to flag him down for a picture in Hyde
Park).
Hockey had a choice over the past 15 years to either follow the path of
European football or that of NFL football. It made a mistake and chose the
latter. Now, it has become "not so much brutal as just dull."
"MIT engineers have transformed bacterial cells into living calculators. " Pardon?
"Never, ever pay for the minibar" and more hospitality tips from an industry
insider.
Teahupoo, wish I was there for this . Watching. From afar. With water
wings.
Need to Know starts early and is updated as needed until the opening
bell, but sign up here to get it delivered
once to your e-mail box. Be sure to check the Need to Know item. The
e-mailed version will be sent out at approximately 8:45 a.m. Eastern.
Follow @slangwise on Twitter.
MarketWatch
has sent you this newsletter because you signed up to receive it.
To ensure you receive this newsletter in the future, please add
marketwatchmail.com to your list of approved senders.
Sent to: alanrussell@princetoncap.com
Unsubscribe | Subscribe
Copyright
2013 MarketWatch, Inc. All rights reserved.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks
of MarketWatch, Inc.
By using this site, you agree to the Terms of Service and Privacy Policy (updated 6/26/07).
MarketWatch - Attn: Customer Service, 201 California St., San
Francisco, CA 94111
|
|
|
No comments:
Post a Comment