• Weird Al Yankovic’s “Mission Statement”
    Posted by on July 17th, 2014 at 10:48 am

  • Microsoft Soars on Job Cuts
    Posted by on July 17th, 2014 at 10:37 am

    The stock market is down this morning. I’m pleased to see that eBay (EBAY) is up after yesterday’s earnings report. This one was not a favorite of traders. The shares slid from nearly $60 in March to $48 last month. It’s now up to $51.49 per share.

    Microsoft ($MSFT) is doing very well today. MSFT has been as high as $45.70. The company just announced 18,000 job cuts. Obviously, these job cuts are unfortunate, but I think they need to streamline their operations. Like any U.S. president who blames the previous administration, Nadella will be able to claim that he’s cleaning up Ballmer’s mess.

    big.chart07172014

    Earnings are due later today from IBM (IBM) and Stryker (SYK). That will be it for this week’s Buy List earnings, but we have seven coming next week.

  • “How Russian Hackers Stole the Nasdaq”
    Posted by on July 17th, 2014 at 10:09 am

    There’s a fascinating article at BloombergBusinessWeek by Michael Riley titled “How Russian Hackers Stole the Nasdaq.” Here’s a sample:

    Whoever hit Nasdaq had done similar prep work and had similar resources. The clincher was the hackers’ malware pulled from Nasdaq’s computer banks. The NSA had seen a version before, designed and built by the Federal Security Service of the Russian Federation (FSB), that country’s main spy agency. And it was more than spyware: Although the tool could be used to steal data, it also had a function designed to create widespread disruption within a computer network. The NSA believed it might be capable of wiping out the entire exchange.

    In early January, the NSA presented its conclusions to top national security officials: Elite Russian hackers had breached the stock exchange and inserted a digital bomb. The best case was that the hackers had packed their malware with a destruction module in case they were detected and needed to create havoc in Nasdaq computer banks to throw off their pursuers. The worst case was that creating havoc was their intention. President Obama was briefed on the findings.

    Read the whole thing.

  • Morning News: July 17, 2014
    Posted by on July 17th, 2014 at 6:53 am

    India to Head the BRICS Bank for First Five Years; Hopes High on Safeguarding Nation’s Interests

    Euro Winning Back Popularity with International Investors

    Supply Setbacks Will Push Oil Price Higher

    Obama Takes Aim at Firms That Shift Profits Overseas to Avoid Taxes

    Justice Department, Bank of America Remain at Odds Over Mortgage Settlement

    Fox Bid for Time Warner Could Reach $91 Billion, Analyst Says

    Liberty Global in Advanced Talks to Buy BSkyB’s Stake in ITV

    Yahoo to Keep More of Alibaba After IPO, Return Cash

    Fiat Shares Rise on Report of VW Merger Talks

    EBay Forecasts Sales Short of Estimates After Data Breach

    Novartis Cites Momentum in 3% Profit Rise

    SAP Sees Edge in Cloud Security, Raises Sales Forecast

    Wall Street Techs Take Secrets to Next Job at Their Peril

    Joshua Brown: Notes From Delivering Alpha 2014, Part I, II, III

    Credit Writedowns: Bad Debt Cannot Simply Be ‘Socialized’

    Be sure to follow me on Twitter.

  • eBay Earned 69 Cents Per Share for Q2
    Posted by on July 16th, 2014 at 4:30 pm

    For Q2, eBay ($EBAY) earned 69 cents per share which beat estimates by a penny per share. Quarterly revenue rose 13% to $4.37 billion. The stock initially dropped after-hours, but now seems to be up a bit.

    For Q3, eBay expects earnings between 65 and 67 cents per share, and revenue between $4.3 billion and $4.4 billion. Wall Street had been expecting 70 cents per share on $4.42 billion.

    For the full year, eBay reiterated their guidance of $2.95 to $3.00 per share. They lowered the top-end of their revenue guidance to $18.3 billion from $18.5 billion. The low-end is still $18 billion.

  • Humphrey–Hawkins on SNL
    Posted by on July 16th, 2014 at 1:03 pm

    Janet Yellen has been giving her Humphrey-Hawkins testimony this week. The name comes from the Humphrey-Hawkins Full Employment Act which mandates that the Fed Chair go to Capitol Hill twice a year and explain what they’re doing.

    Interestingly, the bill started out as a Keynesian effort, but it gradually became taken over by monetarist ideology. The bill lasted in Congress for a few years, and was eventually passed after Hubert Humphrey died in 1978.

    The bill was referred to in a classic Saturday Night Live skit:

    SNL-No-Math from Dez on Vimeo.

  • IBM Is Starting to Break Out
    Posted by on July 16th, 2014 at 12:13 pm

    IBM ($IBM) has not been a strong performer this year, but it’s perked up recently. Earnings are due out tomorrow.

    big07162014

    The stock is getting a nice bounce today on news that it’s teaming up with Apple on business software:

    In a deal that could deepen Apple’s sales to corporations and strengthen IBM’s position in business software, the two companies announced a wide-ranging partnership intended to spread advanced mobile and data analysis technology in the corporate world.

    IBM and Apple have been working together on the venture for several months, and they are jointly working on more than 100 business software programs developed exclusively for Apple’s iOS operating system and for use on iPhones and iPads. The applications will be tailored for use in industries including retail, health care, transportation, banking, insurance and telecommunications.

    “We’ve already seen some unbelievable work,” Timothy D. Cook, Apple’s chief executive, said in an interview conducted along with Virginia M. Rometty, IBM’s chief executive. Mr. Cook described the venture with IBM as “a landmark partnership” for both companies.

  • For the Patient, the Crash Wasn’t a Crash
    Posted by on July 16th, 2014 at 10:52 am

    Whenever the stock market rallies, we start hearing how the current environment is “just like 1987.” These comparisons are pretty silly because the investing environment is always changing. It’s never the same.

    But even if we consider a major crash, we have to remember how strongly the market rallied before the 1987 crash, and how well it recovered. If we dial back the clock to a year prior to Black Monday, and go out five months after the crash, the market looks just fine. If a modern Rumpelstiltskin has slept for several months, he would not have been surprised by the market’s move.

    Consider these numbers: From September 29, 1986 to March 17, 1988, the Dow rose by 18.8%. Sure, that includes an historic drop in between. You can also say I’m cherry-picking, but so is looking at a one-day crash.

    My point is that if an investor is patient, even major crashes don’t look so bad.

    sc07162014

  • Industrial Production Rose 0.2% in June
    Posted by on July 16th, 2014 at 9:59 am

    The stock market is up in early trading today. The S&P 500 has been as high as 1,983.94 which is just below its intra-day high of 1,985.59 from July 3. Yesterday we got as high as 1,982.52.

    I don’t claim to be a technical analyst but chart readers pay attention to these “resistance levels.” If an index isn’t able to break through, that can be a negative sign. But the big news this week is earnings season. According to numbers from Bloomberg, the S&P 500 is expected to show an earnings increase of 4.5% for Q2, while sales are expected to rise by 3.1%.

    On the economic front, the Federal Reserve reported that Industrial Production rose by 0.2% in June. They also revised the May number up to 0.5%. IP rose at an annualized rate of 5.5% during Q2, and Manufacturing Production increased at a 6.7% annualized clip.

    The big news for our Buy List today will be eBay’s (EBAY) earnings which are due after the close. Wall Street expects 69 cents per share. Time Warner (TWX) is doing very well today after the company shot down a buyout offer from Rupert Murdoch (aka Twentieth Century Fox). He’s offering $85 per share for TWX which closed yesterday at $71.01. It’s been as high as $83.20 today.