S&P 500 Earnings Update
July 21, 2008
Hickey and Walters (Bespoke) submit:
Monday afternoon’s earnings flow was poor, as American Express (AXP), SanDisk (SNDK) and Texas Instruments (TXN) all missed EPS forecasts. Additionally, while Apple (AAPL) beat, their guidance was extremely weak. That coupled with questions surrounding the health of Steve Jobs sent the stock down by over 10% in after-hours trading. The end result is that since the start of July, nearly 20% of the stocks in the S&P 500 have reported EPS, and of those companies, 67% have beat EPS forecasts. While this is down from the levels in the low seventies that we saw last week, it is still above the average of the last ten years. Let’s hope the news flow turns for the better in the morning and helps sentiment improve.
Correlation Between the Dollar and Fed Fund Futures
July 21, 2008
Kathy Lien submits:
For currency traders, the most interesting article in today’s Wall Street Journal is the one about volatility in the financial markets causing trading relationships to be in flux.
This article examines some of the correlations that we talk about regularly, between USD/JPY and stocks or the EUR/USD and oil. The premise of this article is that these correlations may be fading, even though USD/JPY has traded in sync with the Dow today while the positive correlation between the EUR/USD and oil prices remain intact.
Correlation Between the Dollar and Fed Fund Futures
Yikes, But Duh: Housing Bottom Could Be Two Years Off
July 21, 2008
Jeffrey Lin submits:
The bounce by the financials from the depths of hell last week was definitely a sigh of relief. The “less abysmal” earnings from first Wells Fargo (WFC) [that stagecoach really can run!], JP Morgan (JPM), and US Bancorp (USB) told us the sweeping assumption that all banks are goners was premature. Well, premature at least for now.
Regardless of which side of the argument talking heads take on picking the bottom in financials, most (if not all) would agree that housing needs to bottom if the banks want to be out of the woods. When will housing bottom? Citigroup Chairman Win Bischoff offers his opinion in this Reuters report. Remember, however, Citigroup hasn’t exactly been on the right side of the trade on this whole housing crisis, as made evident by its shares dropping from the $50’s to being a teenager.
Yikes, But Duh: Housing Bottom Could Be Two Years Off
21 Jul 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
July 21, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| EZCH | 213% |  17.35% |
news | |
| ROCK | 212% | 15.61% |
news | |
| PPDI | 180% | 40.49% |
news | |
| RBCAA | 176% | 28.62% |
news | |
| PMTI | 159% | 10.97% |
news | |
|
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21 Jul 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
Crazy Dividends
July 21, 2008
Hickey and Walters (Bespoke) submit:
At the market’s recent low on July 15th, there were numerous stocks with astronomical indicated dividend yields. With the gains in Financials and the overall market since then, however, these estimated yields have dropped significantly (although many remain high).
Below we highlight the biggest percentage drops in yields for stocks in the S&P 500 since 7/15. The first six stocks either discontinued or cut their dividends since then. After these six names comes FNM and FRE, whose yields fell by roughly 50% as their share prices increased roughly 100%. Bank of America (BAC) was yielding a ridiculous 13.82% on 7/15, and with no cut announced with their earnings report today, it looks like a buy at those levels could have been an opportunity of a lifetime (or maybe not). Regions Financial (RF) was yielding 22% on 7/15, but now yields 14.34%. If they’re able to pay out, what a return that would be!
Gannon On Investing’s July 2008 Blogger Roundtable
July 21, 2008
Geoff Gannon submits:
Note: My continuing weekly commentary on Benjamin Graham’s ‘Security Analysis’ is being bumped for this roundtable; the commentary will appear here tomorrow morning. Sorry for the inconvenience.
This is a new format for Gannon On Investing – a pseudo-roundtable, where the same questions were posed to different bloggers simultaneously (via email). In this first post, we have answers from the authors of four of my favorite blogs: Fat Pitch Financials (George), Cheap Stocks (Jon), Bill Rempel (Bill), and Controlled Greed (John).
Gannon On Investing’s July 2008 Blogger Roundtable
Hovnanian Chairman Shows the Midas Touch
July 21, 2008
Hickey and Walters (Bespoke) submit:
Within each sector of the market, there are certain individuals whose success has earned them a reputation that when they speak or act, people listen. Every move or comment that Warren Buffett makes is analyzed for potential clues as to what companies he may be interested in buying. More specifically, in the energy sector, when T. Boone Pickens makes comments on where he thinks the price of oil is going, his words move the market and are carried by all the major news outlets.
While most people may not be aware of it, the homebuilding sector has its own "EF Hutton", as in when this person speaks (or acts), people should listen. The chart below shows the price of homebuilding stock Hovnanian Eneterprises (HOV) since October 2004. We also highlight large insider buys and sells by the company’s chairman Kevork Hovnanian.
Hovnanian Chairman Shows the Midas Touch
S&P 500 Sector EPS Growth for Q2
July 21, 2008
Hickey and Walters (Bespoke) submit:
With 19% of the S&P 500 having reported through Friday, at right we highlight the current year over year earnings growth for sectors in the second quarter (click to enlarge). We also highlight what the growth estimates were for Q2 at the start of earnings season to show how each sector is doing thus far.
As shown, the 21% of Tech stocks that have reported have seen year over year growth of 24.7% in Q2, which is almost double the 13.1% estimate at the start of July. Tech is followed by Materials at 17.5%, Healthcare at 13%, Energy at 12.7%, and Consumer Staples at 12.6%.
S&P 500 Sector EPS Growth for Q2
A ‘Buy the Loser’ Rally
July 21, 2008
Hickey and Walters (Bespoke) submit:
If you didn’t own the dregs of the S&P 500 going into the rally that started last Wednesday, chances are you have underperformed over the last few days.
We broke the S&P 500 into deciles (50 stocks in each decile) based on stock performance from the 5/19 high to the 7/15 low and calculated the average performance of stocks in each decile since the 7/15 low. The average stock in the S&P 500 has risen 6.44% since then. The 50 stocks that were down the most from 5/19-7/15 are up 26.4%. Conversely, the 50 stocks that held up the best during the recent market declines are only up an average of 0.99%.
Looking for Action? Most Volatile Stocks
July 21, 2008
Hickey and Walters (Bespoke) submit:
For traders with a more short-term time horizon, we have compiled a list of the S&P 1500 stocks that have the largest intraday high-low ranges (based on the average percent spread between the intraday high and low over the last fifty days). We then grouped the stocks based on whether they have a rising or falling 50-day moving average.
Given the large number of stocks in the S&P 1500 currently trading below $10 per share, we also filtered the list to show only the five most volatile stocks (50-days rising and falling) trading in double digits. As shown, most of the volatile stocks that are in uptrends come from the energy and materials sectors, while the most volatile stocks with declining moving averages come from the financial sector, which even after last week’s gains are still in downtrends.
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