From Iran Missiles to Merrill Downgrade, Not Much Good News for Dollar
July 9, 2008
Grace Cheng submits:
There is simply no direction in the financial markets, especially the currency markets, in the absence of major US economic data releases. Major currency pairs such as EUR/USD, USD/CHF and USD/JPY have been moving more or less sideways since Monday with the US dollar on the stronger side, but today the US currency is looking a bit vulnerable as US stocks dip into the red after Tuesday’s “rally”, and on news that Iran has test fired long and medium range missiles, capable of reaching Israel. The world - and the US dollar - doesn’t really need a combination of Middle East tensions and high oil prices to feel more skittish. Traders are still not willing to go long on the dollar as the latter is still haunted by the possibility of more turmoil in the US financial sector.
Today Fitch announced that it has placed its A+ rating of Merrill Lynch (MER) on Rating Watch Negative, and said it expects Merrill to have another loss in Q2 due to ongoing writedowns, mainly those associated with residential mortgage, bond insurance and ABS-CDO positions. Merrill Lynch is due to report its earnings next week.
From Iran Missiles to Merrill Downgrade, Not Much Good News for Dollar
Q2’s Dividend Problems
July 9, 2008
IndexUniverse submits:
By Heather Bell
Chalk up another indicator of the increasingly grim economic situation in the U.S.: Standard & Poor’s says that, of the some 7,000 companies it tracks, 97 reduced their dividends in the second quarter of 2008 - the most to do so since the second quarter of 1990, when 108 companies reduced their dividends. In addition, the ratio of increases to decreases is at its lowest level since 1991. The trend appears to be continuing from last quarter, when 83 companies reduced their dividends and the dividend ratio was at similarly low levels.
09 Jul 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
July 9, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| QLGC | 285% |  15.15% |
news | |
| AFAM | 277% | 27.72% |
news | |
| MELI | 236% | 31.23% |
news | |
| VRSN | 218% | 33.78% |
news | |
| FSYS | 205% | 30.08% |
news | |
|
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09 Jul 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
Q1 Earnings ‘Triple Plays’
July 9, 2008
Hickey and Walters (Bespoke) submit:
An earnings "triple play" occurs when a stock beats earnings and revenue estimates and guides future earnings higher. There were about 70 stocks that had "triple plays" during the first quarter earnings season. As we enter the second quarter earnings season, investors may want to look at these stocks to find momentum plays or ones that had strong reports but fell by the wayside as the overall market declined.
In the first table below, we highlight "triple play" stocks from the first quarter that are up the most since they opened for trading following their last earnings report. These stocks had a solid earnings report and haven’t looked back since, even in one of the worst markets in decades. For momentum traders out there, these names currently have great relative strength.
Bearish Sentiment Highest in Decade
July 9, 2008
Hickey and Walters (Bespoke) submit:
In Pamplona they have the bulls, but in the US we have bears. Today’s weekly sentiment reading from Investors Intelligence showed that 47.3% of newsletter writers are currently bearish. This is the highest reading of bearish sentiment since September 1998 when Russia defaulted and Long Term Capital blew up.
Bearish Sentiment Highest in Decade
No Need To Fear the Bottom
July 9, 2008
Zignals submits:
By Dr. Declan Fallon
It’s hard to find a blogger who is not talking about the possibility of a bottom in this market. Some have taken an interesting spin on things; Bill Luby has an interesting study on the relationship between Financials and Oil ETFs; Headline charts had good things to say about Investors Business Daily’s Big Picture as a marker for a bottom; even Barry Ritholtz has talked about a pending bounce, but would like to see more fear in the market.
The Dividend-Cut Flood
July 9, 2008
David I. Templeton submits:
Today, Standard & Poor’s reported that:
- 97 companies out of the approximately 7,000 publicly owned companies that report dividend information to S&P decreased their dividend in the second quarter.
- This was the most since 1990, when 108 issues decreased their dividend payments.
- On a dollar basis the damage is coming from Financial issues, which saw reductions in annual payments by over $13 billion.
- Howard Silverblatt, Senior Index Analyst at Standard & Poor’s, "also notes that many issues that traditionally increase their dividend rate every few years now appear to be holding off. On the positive side, we are still seeing many dividend payers with positive EPS and positive cash flow.’"
Energy Recovery Shakes Up Dead IPO Market
July 9, 2008
Sramana Mitra submits:
Energy Recovery Inc, the clean-tech shining star, went public last week nearly 15 years after setting up shop in 1993. It will trade under the ticker ERII.
ERII is the world’s leading manufacturer of energy recovery devices for water desalination. Their product, the PX 220, is one of the most economical ceramic pressure exchangers, a device that desalinates sea water using a technique called Sea Water Reverse Osmosis.
Energy Recovery Shakes Up Dead IPO Market
Bond Expert: Anomalies Across the Curve
July 9, 2008
John Jansen submits:
The Treasury market has been quiet today and the price action has been rather uninteresting.
I did speak with a trader of the long end of the Treasury market who pointed out some interesting anomalies in his sector.
Bond Expert: Anomalies Across the Curve
Wednesday Options Update: XLE, XLF, WFC, GE, CSCO, ABK, EWT, PPH
July 9, 2008
VIX – Market conviction is limp today, with indexes drawing straws at directionality over the noon hour – torn between last night’s less-dire-than-expected Alcoa (AA) earnings and a rebound for oil on geopolitical concerns and a draw in weekly inventories. The CBOE Volatility Index is flat-to-lower at 23.11 at present dispatch, showing its almost-instinctual aversion to long stays above 25. Last week, as GM shares led the market sharply lower, we noticed a minor trend among option traders to sell butterfly spreads with calls in anticipation of choppy price action on the VIX away from the 25-strike – essentially playing long volatility on volatility. With little in the way of direct catalysts to push volatility one way or the other today, it looks like the short butterfly call spread returned today at strikes 25, 27.50 and 30 in the August contract, with a trader buying 2,000 lots of the middle strike and buying 1,000lots at the 25 and 30 strikes, again in anticipation of movement in the VIX either violently above or violently below the 27.50 level.
Energy Select Sector ETF (XLE) – Testy nerves over a series of nuclear missile test-launches in Iran and lower-than-expected oil inventories sent shares in the Energy Select Sector ETF 1.6% higher to $82.72 after yesterday’s generous pullback. With more than 105,000 options trading, the bias is to puts by a nearly 3-to-1 margin. Much of the early action here appears tied up in a single 35,000-lot trade in August 84 puts, which traded to the middle of the market at $4.40. A buyer of this position is playing against the geopolitical rumblings and looking for a pullback below the $80 level (another $3 more off current levels) by August 16.
Wednesday Options Update: XLE, XLF, WFC, GE, CSCO, ABK, EWT, PPH
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