Perhaps a symbolic uprising, but an interesting development none the less….
Comments »Monthly Archives: November 2012
The Hottest Currency Trade In The World Is Coming To An End
“The Mexican peso trade has been a clear favorite of currency traders in recent months, owing to the country’s strong growth fundamentals, the Mexican economy’s apparent decoupling from the global economy, and the perception that the peso has been undervalued relative to other currencies and thus represents a good buy.
Recently, Societe Generale currency strategist Sebastian Galy wrote after returning from an investor trip, “If there as a ‘favourite currency’ amongst the investors I spoke with in North America, it was the Mexican peso.”
However, that interest may be waning.
The chart below shows the non-commercial long positions in the peso netted against short positions, per data from the CFTC’s weekly Commitment of Traders report.”
Comments »Auto Loan Bubble Looms if Hiring Does Not Pick Up
“A rebound in U.S. auto sales has been buoyed by the return of easy lending, even to borrowers with flawed credit histories. Some economists question whether the gains can be sustained without a boost in hiring.
Auto loans were up 5.5 percent in the second quarter from the same time last year, with riskier buyers accounting for 43.9 percent of the total, up from 42 percent in 2008, according toExperian Plc. (EXPGY) By contrast, hourly wages for non-managers climbed 1.1 percent on average over the past 12 months, the least since records began in 1965, Labor Department figures show.”
Comments »$ALV Warns of Bond Bubble Fueled by Low Interest Rates
“Allianz SE (ALV), Europe’s biggest insurer, said low interest rates have caused a bubble in the government bond market and may do the same to equities unless central banks tighten monetary policy.
“We have a bubble in sovereign debt, looking at German Bunds, with central banks flooding the markets with liquidity,” Maximilian Zimmerer, management board member in charge of finance and global life insurance, told reporters at an event in Frankfurt today.”
Comments »$AKS Get Hammered on Lower Guidance
$STT Suffers Weak FX Revs, Unable to Lower Compensation to Revenue Ratio
“(Reuters) – Weak foreign exchange revenue persists at State Street Corp , hurting the custody bank’s chances of lowering its high ratio of compensation expenses, top executives said on Tuesday.
Some shareholders, including activist investor Nelson Peltz, have criticized State Street’s compensation-to-revenue ratio, saying it is too high.
State Street’s goal is to keep the ratio at about 39 percent, compared with 40 percent in 2011. But that goal could be hard to meet as foreign currency trading revenue withers from slack volume and volatility while key customers shift away from transactions with higher profit margins.
State Street Chief Financial Officer Ed Resch said on Tuesday he expects the compensation-to-revenue ratio to be pressured, primarily because of weak trading revenue. He made his remarks during a presentation with State Street Chairman and Chief Executive Jay Hooley at the Bank of America Merrill Lynch Banking and Financial Services Conference in New York.
Comments »Market Update
So far we have classic circle jerk trade as the country awaits for news out of the lame duck session and the fiscal cliff.
Large Cap Gainers
- HD (63.85 +4.40%): Beat quarterly EPS by $0.03 ($0.74 vs $0.71 estimate), revs rose 4.6% yoy to $18.13 bln vs $17.9 bln estimate; raised FY13 EPS guidance to $3.03 vs $2.99 estimate, raised FY13 rev guidance to +5.2% (~$73.63 bln) vs $73.78 bln estimate
- BRFS (18.29 +2.41%): Reported net sales reaced R$ 7.2 bln vs R$ 6.7 consensus
- CHK (17.55 +1.86%): Seeing reports hedge fund manager Mohnish Pabrai added to holdings of Chesapeake
Large Cap Losers
- NLY (14.25 -4.19%): Target lowered to $13.50 at FBR Capital – believes QE3 induced difficulties will persist for the foreseeable future
- BIDU (100.3 -4.11%): Article on Want China Times reporting that co is experiencing slowing growth and facing increased competition
- MSFT (27.16 -3.76%): Windows and Windows Live President Steven Sinofsky will be leaving the company
Mid Cap Gainers
- NS (41.09 +5.17%): Upgraded to Neutral from Underperform at Credit Suisse
- DKS (51.18 +5.09%): Beat quarterly EPS by $0.03 ($0.40 vs $0.37 estimate), revs rose 11.2% yoy to $1.31 bln vs $1.29 bln estimate; sees Q4 EPS of $1.03-1.05
- NTI (24.73 +4.66%): Reported Q3 operating income of $199.4 mln, revs rose 9% yoy to $1.264 bln vs $1.258 bln estimate
Mid Cap Losers
- TROX (15.69 -16.16%): Reported Q3 adjusted net income of $0.21 vs $0.36 single estimate, revs rose 5% yoy to $487.3 mln vs $492.8 mln two analyst estimate
- WFT (9.38 -13.83%): Reported Q3 revs of $3.82 bln vs $3.89 bln estimate; restated 1Q2012 results, revised prelim 2Q2012 results to correct errors in revenue and operating income amounts
- ACM (19.14 -12.04%): Reported Q4 adjusted earnings of $0.83 (in-line), revs fell 1.7% yoy to $2.08 bln vs $2.21 bln estimate; sees FY13 EPS of $2.40-2.50 vs $2.59 estimate, FY13 revs flat from $8.22 bln vs $8.57 bln estimate
Motor Trend Names $TSLA’s Model S as Car of the Year
The Market Oracle: Gold Prepares for Breakout as Stock Market Trends Towards a Crash
“We exited our short positions in gold for a modest but useful profit when it broke out of its downtrend towards the end of October. It then broke sharply lower on heavy turnover in a move that looks capitulative, but afterwards turned and rose quite sharply over the past week. So the question now is “has it bottomed?” Although the answer to this question is “Yes, it looks like it has”, it also looks like it may back and fill for a little while to complete a base pattern before a sustained advance can get underway. COTs, particularly for silver, continue to give grounds for caution and warn that the current turn may be the B-wave trap of a A-B-C correction. We are aware of this danger and place stops accordingly to protect us from it.”
Comments »800 Million Facebook Shares Set to Hit the Bid
Bob Janjuah Opines on The “Greater Fool Theory” , Updates Market Outlook
” A mere three weeks ago, Nomura’s Bob Janjuah forcefully suggested that complacency warranted a tactical risk-off position given the misplaced confidence heading into the plethora of event-risk ahead. It seems, 60 points later, that he is on to something; but this time he is more critically concerned: “Investment decisions based largely on the greater fool theory and predicated by the assumption that central bankers can sustainably and credibly misprice money, supporting a significant misallocation of capital, without any major negative consequences, are in general not good investments.”
Comments »$BK Unit to Pay $210 Million in Madoff Settlement
“A Bank of New York Mellon Corp. BK -0.02% unit will pay $210 million to resolve a series of lawsuits by clients who claimed they suffered losses in Bernard Madoff’s massive fraud, New York Attorney General Eric Schneiderman said on Tuesday.
The settlement with Ivy Asset Management LLC resolves litigation by the attorney general’s office, the U.S. Department of Labor and investors. An additional $9 million will be contributed by other individual defendants in the cases.
Combined with future amounts investors anticipate receiving in the Madoff bankruptcy proceeding, the settlement is expected to return all or nearly all the original investment to those Ivy investors defrauded by Mr. Madoff’s Ponzi scheme.
“Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients,” Mr. Schneiderman said.
“An investment adviser should apprise its clients of risks, but Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees. As a result, its clients suffered massive and avoidable losses.”
Comments »Global Business Confidence Hits 2009 Levels
“In spite of positive economic news recently from the US and China, global business sentiment remains subdued. In fact according to Markit, business confidence is at the lowest level since the financial crisis.”
Comments »$GE and $CLNE Announce a LNG Collaboration
“General Electric Co. (NYSE: GE) and Clean Energy Fuels Corp. (NASDAQ: CLNE) have announced a collaboration to expand the infrastructure for natural gas transportation. As it turns out, the agreement was signed on November 7 as part of a credit agreement for Clean Energy to borrow up to $200 million to finance the development, construction and operation of two liquefied natural gas production facilities with an expected production capacity of approximately 250,000 LNG gallons per day at each facility.”
Comments »$SKS Posts In Line, Warns on Q4 Results Due to Frankenstorm Sandy
“Saks Inc. (NYSE: SKS) this morning shared in-line earnings results for the third quarter but warned that fourth-quarter results would take a hit due to Hurricane Sandy.
The New York-based department store operator posted adjusted earnings per share (EPS) of $0.12 on revenues of $713.2 million for the quarter. In the same period a year ago, it reported a EPS of $0.11 per share on revenue of $692.3 million. This quarter’s results also compare with the Thomson Reuters estimates for adjusted EPS of $0.12 and $726.1 million in revenues.
Chairman and Chief Executive Officer Stephen I. Sadove said:”
Comments »Michael $KORS Posts A Nice Beat, Guides Lower
Michael Kors Holdings Ltd. (NYSE: KORS) reported second fiscal quarter 2013 adjusted diluted earnings per share (EPS) of $0.49 and $532.9 million in revenues before markets opened this morning. In the same period a year ago, the luxury apparel maker and retailer reported EPS of $0.25 on revenue of $287.9 million. Second-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.40 and $519.3 million in revenue.
Global same-store sales for the quarter rose 41.3% year-over-year, and the company says it has opened 66 new stores since the end of the second fiscal quarter of 2012.
Kors’s CEO said:”
Comments »Retailer $TJX Posts YoY Growth, Beating a a Penny
“TJX Companies Inc. (NYSE: TJX) this morning reported solid fiscal third-quarter results and boosted its guidance.
The Framingham, Mass.-based off-price retailer posted adjusted earnings per share (EPS) of $0.62 on revenues of $6.41 billion for the quarter. In the same period a year ago, it reported a profit of $0.53 per share on revenue of $5.79 billion. This quarter’s results also compare with the Thomson Reuters estimates for adjusted EPS of $0.61 and $6.39 billion in revenues.”
Comments »Conference Board Sees Economy Slowing More in 2013, Followed by an Even Slower Decade
“The long-term growth scenario keeps getting weaker and weaker. The Conference Board has released data showing that world economic growth will drop from 3.2% in 2012 to 3.0% in 2013. While mature economies are a drag, emerging markets did not pick up the slack in 2012 and the Conference Board does not expect them to in 2013. Sluggish trade and low foreign direct investment are being hampered by the coming fiscal cliff, reform in Europe, and even the leadership change in China.
On advanced economies and Europe: ”
Comments »Wealthy Dump Assets Amid Worries About Going Over ‘Cliff’
“For many of the wealthy, 2012 is becoming a good year to sell.
They’re worried about the “fiscal cliff,” which is when tax cuts expire and spending cuts are set to go into effect at the end of the year.
Fearing an increase in capital gains and dividend taxes, many of the rich are unloading stocks, businesses and homes before the end of the year.
Wealth advisors say that with capital-gains taxes potentially going to 25 percent from 15 percent, and other possible increases in the dividend tax, estate tax and other taxes, many clients are selling now to save millions in taxes.
“Under almost any scenario, it makes sense to take the gains this year,” said Gregory Curtis, chairman and managing director of Greycourt & Co. “Clients aren’t selling willy nilly. But if they can and they have a huge gain, they’re selling now.”
Comments »Small-Business Sentiment Nearly Flat as ‘Fiscal Cliff’ Looms
“U.S. small-business sentiment ticked up 0.3 in October—nearly unchanged—as uncertainty about future business conditions reached a record high.
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The National Federation of Independent Business said its optimism index rose to 93.1 last month, after slipping in September.
“We haven’t been above 95 during this entire recovery” that started in July 2009, said William Dunkelberg, NFIB’s chief economist.
The survey, conducted before the presidential election, found that the percentage of owners uncertain about whether business conditions would be better or worse in six months reached a record high of 23 percent, the NFIB said. This eclipsed the pre-recession record of 15 percent reached during the Carter Administration.
“The Index still remains in solidly pessimistic—and recessionary—territory,” said Dunkelberg in a prepared statement.”
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