• The Buy List Soars
    Posted by on October 5th, 2010 at 6:39 pm

    I wanted to pass along a quick update today on the Buy List because we had an outstanding day. All told, the Buy List soared 2.13% which was better than 2.09% for the S&P 500.

    That’s actually a lot better than it looks because our Buy List is designed to have a lower “beta” than the rest of the market, so it’s a surprise to see us beat the market on such a big day.

    The other reason is that Nicholas Financial (NICK) ticked down to $9.19 per share right before the close. Even though NICK is a conservative company, it’s a very small-cap stock so it can get knocked around a lot on any given day. Bear in mind that just yesterday NICK reached a 52-week high of $9.60 per share.

    I’m not saying I love NICK but it’s allowed to eat cookies in my bed.

    Also, Joey Banks (JOSB) hit a new high and it’s up over 60% for us this year!

    The Buy List is now +6.84% for the year compared with 4.09% for the S&P 500 (not including dividends). The Buy List is now at its highest close in nearly five months. So far, we’re up 11.29% in the second half of 2010.

  • Mid-day Update
    Posted by on October 5th, 2010 at 1:01 pm

    This is turning into a very good day! As of 12:59 pm, the Dow is holding onto its gains, currently +171 points and within 80 points of breaking 11,000. Woo! The S&P 500 is also having a very strong day, up 21 and closing in on 1,160. The Nasdaq is up 50. The 30-year Treasury is currently at 3.73%.

    The stock market is holding on to its gains partly thanks to the Bank of Japan’s decision to cut its key interest rate to 0%. Also contributing to the good news is the Institute for Supply Management’s non-manufacturing ISM Index report which was released at 10 am today and featured a rise from 51.5% in August to 53.2% in September.

    The higher market is helping our Buy List. Jos. A. Bank (JOSB) just reached an all-time high, breaking through $45. It’s now up 60% for us year-to-date. Moog (MOG-A) is having a very nice day. The shares are up about 6%.

    Gold is very strong and it’s close to $1,340 an ounce.

    The market is looking nervously at Friday’s jobs report. We’ll get a preview of the jobs report tomorrow at 8:15 when the ADP report comes out (ADP is a private payroll firm).

  • Whitney: Safer Banking Rules Will Hurt the Middle Class
    Posted by on October 5th, 2010 at 10:23 am

    The money part starts around 3:50.

  • Dow +103 on BOJ Move
    Posted by on October 5th, 2010 at 10:06 am

    The market is moving up this morning thanks to a decision by the Central Bank of Japan to weaken the yen. They’re using some of the same medicine we are: cutting rates to zero and buying back bonds. This will hopefully help Japanese exporters. Right now, all the major indexes are higher and 19 of the 20 stocks on our Buy List are up (NICK is unchanged).

    Yesterday evening, Ben Bernanke gave more clues that the Fed is close to a second round of quantitative easing. The yield on the two-year note is still near a record low.

    “The additional purchases — although we don’t have precise numbers for how big the effects are — I do think they have the ability to ease financial conditions,” Bernanke said yesterday at a forum with college students in Providence, Rhode Island. He said the first wave that ended in March was an “effective program.”

    The Fed snapped up $300 billion of Treasuries last year, and said in August it would reinvest proceeds from maturing mortgage holdings into government debt. The central bank is scheduled today to buy Treasuries due from September 2016 to August 2020, and from March 2013 to August 2014 tomorrow.

    Walgreen (WAG) had good news to report. The company said that same-store sales rose 0.4% and the stock was upgraded by Jefferies. There was also a report showing that office vacancies are now at 17.5% which is the highest level in 17 years.

  • Morning News: October, 5, 2010
    Posted by on October 5th, 2010 at 7:58 am

    Bank of Japan Cuts Rates to as Low as Zero Percent

    Rogue Trader at Société Générale Gets Jail Term

    China’s Snub of Yuan Pleas Fuels Doubts on Europe Growth

    Europe Services, Manufacturing Cool as Retail Sales Decline

    Stock Futures Rise on Bank of Japan Move, ISM Data Due

    Bernanke Says More Fed Asset Purchases Could Help

    Moody’s Warns it May Downgrade Ireland’s Debt

    Televisa to Buy Stake in Univision

    Flash Crash Magnet Syndrome

  • Citi Gave Back One-Third of Profits to Financial, Legal or Regulatory Costs
    Posted by on October 4th, 2010 at 2:47 pm

    Mike Mayo, an analyst at CLSA, raised his price target on Citigroup (C) from $3.50 to $4 and maintained his underperform rating. (Nope, I don’t get it either.) But this caught my eye.

    For every $3 of profit the last decade, Citi gave back a dollar because of regulatory, legal, financial or accounting losses, observes Mayo. That means Citi’s main problem is how not to “mess up,” in Mayo’s view.

    Sandler O’Neill notes that the Treasury’s stake in Citigroup — meaning the taxpayers — has fallen from 27% to 12%.

  • Abby Joseph Cohen: Stocks Are Still Atttractive
    Posted by on October 4th, 2010 at 12:56 pm

  • Beware Friday’s Jobs Report
    Posted by on October 4th, 2010 at 11:14 am

    This is the first full week of the fourth quarter. The big economic news will come on Friday with the September jobs report. This will also be the last jobs report before the election. The bad news is that the labor market is still in very rough shape. Wall Street expects that unemployment will tick up from 9.6% in August to 9.7% in September. This means that despite impressive growth in profits, it’s not trickling down to new jobs.

    Fed Chairman Ben Bernanke will speak later today and Wall Street will be paying even closer attention than usual. The reason is that the Fed is expected to announce another round of “quantitative easing” which is a fancy name for a money dump. Bernanke, of course, won’t say this explicitly. Instead, he’ll imply his actions under a blizzard of econo-speak. Any clue we can find will be a big deal. Personally, I don’t think a QE announcement will come until after the election. Bear in mind that the two-year Treasury just hit an all-time low of 0.375%. Ouch!

    The other big news for this week is the start of earnings season. Alcoa (AA) is set to report this Thursday. Wall Street expects to see Alcoa report earnings of six cents per share which is a big bust from the 28 cents per share they earned a year ago. Earnings season won’t kick into high gear for the rest of Wall Street until next week and the week after.

    Interestingly, Wall Street analysts are beginning to pare back some of their earnings estimates. It’s not big but it’s noticeable because the analyst community hasn’t done this in a long time. Almost continuously since the world exploded, analysts have raised and raised their forecasts. More than 70% of S&P 500 companies have topped Wall Street’s forecast for four-straight quarters. That’s the longest streak since 1993.

    Last month, Wall Street’s consensus earnings forecast for S&P 500 earnings for 2011 got as high as $96.16. Now it’s down to $95.17. Like I said, it’s not a major change but it’s the first move lower in a long time. I’d also point out that eight of the 22 worst days ever have come in October.

    Finally, here’s a look at how many Americans have been unemployed for 15 weeks or longer. This shows you how different this (former??) recession is from previous ones.

  • Morning News: October 4, 2010
    Posted by on October 4th, 2010 at 7:31 am

    Unconventional Wisdom: Stocks Do Beat Funds

    6 Things You Think Add Value to Your Home — But Really Don’t

    Cheap Debt for Corporations Fails to Spur Economy

    Fed Bond Buying’s Unintended Consequences May Mean Higher Rates

    Verizon Wireless to Pay Millions in Refunds

    Sanofi Launches Hostile $18.5 Billion Bid for Genzyme

    Kuwait Commits $1 Billion to AIA IPO

    Flawed Paperwork Aggravates a Foreclosure Crisis

    Americans Sour on Trade

    Structured Notes: The Retail Broker’s Own Little Synthetic CDO

  • About that Tiger Picture
    Posted by on October 3rd, 2010 at 9:01 pm

    If you haven’t seen it yet, this amazing picture of Tiger Woods at the Ryder Cup will soon reach iconic status.